G.R. No. 83578 March 16, 1989 operative and investigator of the PADS Task Force.
operative and investigator of the PADS Task Force. Said Josefin M. Castro is likewise
THE PRESIDENTIAL ANTI-DOLLAR SALTING TASK FORCE, petitioner,
vs.
HONORABLE COURT OF APPEALS, HONORABLE TEOFILO L, GUADIZ,
JR.,Presiding Judge, REGIONAL TRIAL COURT, Branch 147: NCR (MAKATI),
and KARAMFIL IMPORT-EXPORT CO., INC., respondents.
K. V. Faylona & Associates for respondents.
SARMIENTO, J.:
The petitioner, the Presidential Anti-Dollar Salting Task Force, the President's arm
assigned to investigate and prosecute so-called "dollar salting" activities in the
country (per Presidential Decree No. 1936 as amended by Presidential Decree No.
2002), asks the Court to hold as null and void two Resolutions of the Court of
Appeals, dated September 24, 1987 1 and May 20, 1988, 2 reversing its Decision,
dated October 24, 1986. 3 The Decision set aside an Order, dated April 16, 1985, of
the Regional Trial Court, 4 as well as its Order, dated August 21, 1985. The
Resolution, dated September 24, 1987 disposed of, and granted, the private
respondent Karamfil Import-Export Co., Inc.'s motion for reconsideration of the
October 24, 1986 Decision; the Resolution dated May 20, 1988, in turn, denied the
petitioner's own motion for reconsideration.
The facts are not in controversy. We quote:
On March 12, 1985, State Prosecutor Jose B. Rosales, who is assigned with
the Presidential Anti-Dollar Salting Task Force hereinafter referred to as
PADS Task Force for purposes of convenience, issued search warrants Nos.
156, 157, 158, 159, 160 and 161 against the petitioners Karamfil Import-
Export Co., Inc., P & B Enterprises Co., Inc., Philippine Veterans
Corporation, Philippine Veterans Development Corporation, Philippine
Construction Development Corporation, Philippine Lauan Industries
Corporation, Inter-trade Development (Alvin Aquino), Amelili U. Malaquiok
Enterprises and Jaime P. Lucman Enterprises.
The application for the issuance of said search warrants was filed by Atty. Napoleon
Gatmaytan of the Bureau of Customs who is a deputized member of the PADS Task
Force. Attached to the said application is the affidavit of Josefin M. Castro who is an
the sole deponent in the purported deposition to support the application for the
issuance of the six (6) search warrants involved in this case. The application filed by
Atty. Gatmaytan, the affidavit and deposition of Josefin M. Castro are all dated March
12, 1985. 5
Shortly thereafter, the private respondent (the petitioner below) went to the Regional
Trial Court on a petition to enjoin the implementation of the search warrants in
question. 6 On March 13, 1985, the trial court issued a temporary restraining order
[effective "for a period of five (5) days notice " 7 ] and set the case for hearing on
March 18, 1985.
In disposing of the petition, the said court found the material issues to be:
1) Competency of this Court to act on petition filed by the petitioners;
2) Validity of the search warrants issued by respondent State Prosecutor;
3) Whether or not the petition has become moot and academic because all
the search warrants sought to be quashed had already been implemented
and executed. 8
On April 16, 1985, the lower court issued the first of its challenged Orders, and held:
WHEREFORE, in view of all the foregoing, the Court hereby declares
Search Warrant Nos. 156, 157, 158, 159, 160, and 161 to be null and void.
Accordingly, the respondents are hereby ordered to return and surrender
immediately all the personal properties and documents seized by them from
the petitioners by virtue of the aforementioned search warrants.
SO ORDERED. 9
On August 21, 1985, the trial court denied reconsideration.
On April 4, 1986, the Presidential Anti-Dollar Salting Task Force went to the
respondent Court of Appeals to contest, on certiorari, the twin Order(s) of the lower
court.
In ruling initially for the Task Force, the Appellate Court held:
1
 Herein petitioner is a special quasi-judicial body with express powers
enumerated under PD 1936 to prosecute foreign exchange violations
defined and punished under P.D. No. 1883.
The petitioner, in exercising its quasi-judicial powers, ranks with the Regional
Trial Courts, and the latter in the case at bar had no jurisdiction to declare
the search warrants in question null and void.
Besides as correctly pointed out by the Assistant Solicitor General the
decision of the Presidential Anti-Dollar Salting Task Force is appealable to
the Office of the President.10
On November 12, 1986, Karamfil Import-Export Co., Inc. sought a reconsideration, on
the question primarily of whether or not the Presidential Anti-Dollar Salting Task Force
is "such other responsible officer' countenanced by the 1973 Constitution to issue
warrants of search and seizure.
As we have indicated, the Court of Appeals, on Karamfil's motion, reversed itself and
issued its Resolution, dated September 1987, and subsequently, its Resolution, dated
May 20, 1988, denying the petitioner's motion for reconsideration.
In its petition to this Court, the petitioner alleges that in so issuing the Resolution(s)
above-mentioned, the respondent Court of Appeals "committed grave abuse of
discretion and/or acted in excess of its appellate jurisdiction," 11 specifically:
a) In deviating from the settled policy and rulings of the Supreme Court that
no Regional Trial Courts may countermand or restrain the enforcement of
lawful writs or decrees issued by a quasi-judicial body of equal and
coordinate rank, like the PADS Task Force;
b) For resorting to judicial legislation to arrive at its erroneous basis for
reconsidering its previous Decision dated October 24, 1986 (see Annex "I")
and thus promulgated the questioned Resolutions (Annexes "A" and "B"),
which violated the constitutional doctrine on separation of powers;
c) In not resolving directly the other important issues raised by the petitioner
in its Petition in CA-G.R. No. 08622-SP despite the fact that petitioner has
demonstrated sufficiently and convincingly that respondent RTC, in issuing
the questioned Orders in Special Proceeding No. M-624 (see Annexes "C"
and 'D"), committed grave abuse of discretion and/or acted in excess of
jurisdiction:
1. In ruling that (a) the description of the things to be seized as stated in the
contested search warrant were too general which allegedly render the
search warrants null and void; (b) the applications for the contested search
warrants actually charged two offenses in contravention of the 2nd
paragraph, Section 3, Rule 126 of the Rules of Court; and (c) this case has
not become moot and academic, even if the contested search warrants had
already been fully implemented with positive results; and
2. In ruling that the petitioner PADS Task Force has not been granted under
PD 1936 'judicial or quasi-judicial jurisdiction. 12
We find, upon the foregoing facts, that the essential questions that confront us are- (i)
is the Presidential Anti-Dollar Salting Task Force a quasi-judicial body, and one co-
equal in rank and standing with the Regional Trial Court, and accordingly, beyond the
latter's jurisdiction; and (ii) may the said presidential body be said to be "such other
responsible officer as may be authorized by law" to issue search warrants under the
1973 Constitution questions we take up seriatim.**
In submitting that it is a quasi-judicial entity, the petitioner states that it is endowed
with "express powers and functions under PD No. 1936, to prosecute foreign
exchange violations as defined and punished under PD No. 1883." 13 "By the very
nature of its express powers as conferred by the laws," so it is contended, "which are
decidedly quasi-judicial or discretionary function, such as to conduct preliminary
investigation on the charges of foreign exchange violations, issue search warrants or
warrants of arrest, hold departure orders, among others, and depending upon the
evidence presented, to dismiss the charges or to file the corresponding information in
court of Executive Order No. 934, PD No. 1936 and its Implementing Rules and
Regulations effective August 26, 1984), petitioner exercises quasi-judicial power or
the power of adjudication ." 14
The Court of Appeals, in its Resolution now assailed, 15 was of the opinion that "[t]he
grant of quasi-judicial powers to petitioner did not diminish the regular courts' judicial
power of interpretation. The right to interpret a law and, if necessary to declare one
unconstitutional, exclusively pertains to the judiciary. In assuming this function, courts
do not proceed on the theory that the judiciary is superior to the two other coordinate
branches of the government, but solely on the theory that they are required to declare
the law in every case which come before them." 16
This Court finds the Appellate Court to be in error, since what the petitioner puts to
question is the Regional Trial Court's act of assuming jurisdiction over the private
respondent's petition below and its subsequent countermand of the Presidential Anti-
Dollar Salting Task Force's orders of search and seizure, for the reason that the
presidential body, as an entity (allegedly) coordinate and co-equal with the Regional
2
Trial Court, was (is) not vested with such a jurisdiction. An examination of the
Presidential Anti-Dollar Salting Task Force's petition shows indeed its recognition of
judicial review (of the acts of Government) as a basic privilege of the courts. Its
objection, precisely, is whether it is the Regional Trial Court, or the superior courts,
that may undertake such a review.
Under the Judiciary Reorganization Act of 1980, 17 the Court of Appeals exercises:
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Court and quasi-judicial
agencies, instrumentalities, boards or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948. 18
xxx xxx xxx
Under the present Constitution, with respect to its provisions on Constitutional
Commissions, it is provided, in part that:
... Unless otherwise provided by this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the Supreme Court
on certiorari by the aggrieved party within thirty days from receipt of a copy
thereof. 19
On the other hand, Regional Trial Courts have exclusive original jurisdiction:
(6) In all cases not within the exclusive jurisdiction of any court, tribunal,
person or body exercising judicial or quasi-judicial functions. 20
xxx xxx xxx
Likewise:
... The Supreme Court may designate certain branches of the Regional Trial
Court to handle exclusively criminal cases, juvenile and domestic relations
cases, agrarian case, urban land reform cases which do not fall under the
jurisdiction of quasi- judicial bodies and agencies and/or such other special
cases as the Supreme Court may determine in the interest of a speedy and
efficient administration of justice. 21
xxx xxx xxx
Under our Resolution dated January 11, 1983: 22
... The appeals to the Intermediate Appellate Court [now, Court of Appeals]
from quasi-judicial bodies shall continue to be governed by the provisions of
Republic Act No. 5434 insofar as the same is not inconsistent with the
provisions of B.P. Blg. 129. 23
The pertinent provisions of Republic Act No. 5434 are as follows:
SECTION 1. Appeals from specified agencies. Any provision of existing
law or Rule of Court to the contrary notwithstanding, parties aggrieved by a
final ruling, award, order, decision, or judgment of the Court of Agrarian
Relations; the Secretary of Labor under Section 7 of Republic Act Numbered
Six hundred and two, also known as the "Minimum Wage Law"; the
Department of Labor under Section 23 of Republic Act Numbered Eight
hundred seventy-five, also known as the "Industrial Peace Act"; the Land
Registration Commission; the Securities and Exchange Commission; the
Social Security Commission; the Civil Aeronautics Board; the Patent Office
and the Agricultural Inventions Board, may appeal therefrom to the Court of
Appeals, within the period and in the manner herein provided, whether the
appeal involves questions of fact, mixed questions of fact and law, or
questions of law, or all three kinds of questions. From final judgments or
decisions of the Court of Appeals, the aggrieved party may appeal
by certiorari to the Supreme Court as provided in Rule 45 of the Rules of
Court. 24
Because of subsequent amendments, including the abolition of various special
courts, 25 jurisdiction over quasi-judicial bodies has to be, consequently, determined
by the corresponding amendatory statutes. Under the Labor Code, decisions and
awards of the National Labor Relations Commission are final and executory, but,
nevertheless, 'reviewable by this Court through a petition for certiorari and not by way
of appeal." 26
Under the Property Registration Decree, decisions of the Commission of Land
Registration, en consults, are appealable to the Court of Appeals. 27
The decisions of the Securities and Exchange Commission are likewise appealable to
the Appellate Court, 28 and so are decisions of the Social Security Commission.29
As a rule, where legislation provides for an appeal from decisions of certain
administrative bodies to the Court of Appeals, it means that such bodies are co-equal
3
with the Regional Trial Courts, in terms of rank and stature, and logically, beyond the
control of the latter.
As we have observed, the question is whether or not the Presidential Anti-Dollar
Salting Task Force is, in the first place, a quasi-judicial body, and one whose
decisions may not be challenged before the regular courts, other than the higher
tribunals the Court of Appeals and this Court.
A quasi-judicial body has been defined as "an organ of government other than a court
and other than a legislature, which affects the rights of private parties through either
adjudication or rule making." 30 The most common types of such bodies have been
listed as follows:
(1) Agencies created to function in situations wherein the government is
offering some gratuity, grant, or special privilege, like the defunct Philippine
Veterans Board, Board on Pensions for Veterans, and NARRA, and
Philippine Veterans Administration.
(2) Agencies set up to function in situations wherein the government is
seeking to carry on certain government functions, like the Bureau of
Immigration, the Bureau of Internal Revenue, the Board of Special Inquiry
and Board of Commissioners, the Civil Service Commission, the Central
Bank of the Philippines.
(3) Agencies set up to function in situations wherein the government is
performing some business service for the public, like the Bureau of Posts,
the Postal Savings Bank, Metropolitan Waterworks & Sewerage Authority,
Philippine National Railways, the Civil Aeronautics Administration.
(4) Agencies set up to function in situations wherein the government is
seeking to regulate business affected with public interest, like the Fiber
Inspections Board, the Philippine Patent Office, Office of the Insurance
Commissioner.
(5) Agencies set up to function in situations wherein the government is
seeking under the police power to regulate private business and individuals,
like the Securities & Exchange Commission, Board of Food Inspectors, the
Board of Review for Moving Pictures, and the Professional Regulation
Commission.
(6) Agencies set up to function in situations wherein the government is
seeking to adjust individual controversies because of some strong social
policy involved, such as the National Labor Relations Commission, the Court
of Agrarian Relations, the Regional Offices of the Ministry of Labor, the
Social Security Commission, Bureau of Labor Standards, Women and
Minors Bureau. 31
As may be seen, it is the basic function of these bodies to adjudicate claims and/or to
determine rights, and unless its decision are seasonably appealed to the proper
reviewing authorities, the same attain finality and become executory. A perusal of the
Presidential Anti-Dollar Salting Task Force's organic act, Presidential Decree No.
1936, as amended by Presidential Decree No. 2002, convinces the Court that the
Task Force was not meant to exercise quasi-judicial functions, that is, to try and
decide claims and execute its judgments. As the President's arm called upon to
combat the vice of "dollar salting" or the blackmarketing and salting of foreign
exchange, 32 it is tasked alone by the Decree to handle the prosecution of such
activities, but nothing more. We quote:
SECTION 1. Powers of the Presidential Anti-Dollar Salting Task Force.-The
Presidential Anti-Dollar Salting Task Force, hereinafter referred to as Task
Force, shall have the following powers and authority:
a) Motu proprio or upon complaint, to investigate and prosecute all dollar
salting activities, including the overvaluation of imports and the
undervaluation of exports;
b) To administer oaths, summon persons or issue subpoenas requiring the
attendance and testimony of witnesses or the production of such books,
papers, contracts, records, statements of accounts, agreements, and other
as may be necessary in the conduct of investigation;
c) To appoint or designate experts, consultants, state prosecutors or fiscals,
investigators and hearing officers to assist the Task Force in the discharge of
its duties and responsibilities; gather data, information or documents;
conduct hearings, receive evidence, both oral and documentary, in all cases
involving violation of foreign exchange laws or regulations; and submit
reports containing findings and recommendations for consideration of
appropriate authorities;
d) To punish direct and indirect contempts with the appropriate penalties
therefor under Rule 71 of the Rules of Court; and to adopt such measures
and take such actions as may be necessary to implement this Decree.
xxx xxx xxx
4
 f. After due investigation but prior to the filing of the appropriate criminal
charges with the fiscal's office or the courts as the case may be, to impose a
fine and/or administrative sanctions as the circumstances warrant, upon any
person found committing or to have committed acts constituting
blackmarketing or salting abroad of foreign exchange, provided said person
voluntarily admits the facts and circumstances constituting the offense and
presents proof that the foreign exchange retained abroad has already been
brought into the country.
Thereafter, no further civil or criminal action may be instituted against said
person before any other judicial regulatory or administrative body for
violation of Presidential Decree No. 1883.
The amount of the fine shall be determined by the Chairman of the
Presidential Anti- Dollar Salting Task Force and paid in Pesos taking into
consideration the amount of foreign exchange retained abroad, the
exchange rate differentials, uncollected taxes and duties thereon,
undeclared profits, interest rates and such other relevant factors.
The fine shall be paid to the Task Force which shall retain Twenty percent
(20 %) thereof. The informer, if any, shall be entitled to Twenty percent (20
%) of the fine. Should there be no informer, the Task Force shall be entitle to
retain Forty percent (40 %) of the fine and the balance shall accrue to the
general funds of the National government. The amount of the fine to be
retained by the Task Force shall form part of its Confidential Fund and be
utilized for the operations of the Task Force . 33
The Court sees nothing in the aforequoted provisions (except with respect to the Task
Force's powers to issue search warrants) that will reveal a legislative intendment to
confer it with quasi-judicial responsibilities relative to offenses punished by
Presidential Decree No. 1883. Its undertaking, as we said, is simply, to determine
whether or not probable cause exists to warrant the filing of charges with the proper
court, meaning to say, to conduct an inquiry preliminary to a judicial recourse, and to
recommend action "of appropriate authorities". It is not unlike a fiscal's office that
conducts a preliminary investigation to determine whether or not prima facie evidence
exists to justify haling the respondent to court, and yet, while it makes that
determination, it cannot be said to be acting as a quasi-court. For it is the courts,
ultimately, that pass judgment on the accused, not the fiscal.
It is not unlike the Presidential Commission on Good Government either, the
executive body appointed to investigate and prosecute cases involving "ill-gotten
wealth". It had been vested with enormous powers, like the issuance of writs of
sequestration, freeze orders, and similar processes, but that did not, on account
thereof alone, make it a quasi-judicial entity as defined by recognized authorities. It
cannot pronounce judgement of the accused's culpability, the jurisdiction to do which
is exclusive upon the Sandiganbayan. 34
If the Presidential Anti-Dollar Salting Task Force is not, hence, a quasi-judicial body, it
cannot be said to be co-equal or coordinate with the Regional Trial Court. There is
nothing in its enabling statutes that would demonstrate its standing at par with the
said court.
In that respect, we do not find error in the respondent Court of Appeal's resolution
sustaining the assumption of jurisdiction by the court a quo.
It will not do to say that the fact that the Presidential Task Force has been empowered
to issue warrants of arrest, search, and seizure, makes it, ergo, a "semi-court".
Precisely, it is the objection interposed by the private respondent, whether or not it
can under the 1973 Charter, issue such kinds of processes.
It must be observed that under the present Constitution, the powers of arrest and
search are exclusive upon judges. 35 To that extent, the case has become moot and
academic. Nevertheless, since the question has been specifically put to the Court, we
find it unavoidable to resolve it as the final arbiter of legal controversies, pursuant to
the provisions of the 1973 Constitution during whose regime the case was
commenced.
Since the 1973 Constitution took force and effect and until it was so unceremoniously
discarded in 1986, its provisions conferring the power to issue arrest and search
warrants upon an officer, other than a judge, by fiat of legislation have been at best
controversial. In Lim v. Ponce de Leon, 36 a 1975 decision, this Court ruled that a
fiscal has no authority to issue search warrants, but held in the same vein that, by
virtue of the responsible officer" clause of the 1973 Bill of Rights, "any lawful officer
authorized by law can issue a search warrant or warrant of arrest.37 Authorities,
however, have continued to express reservations whether or not fiscals may, by
statute, be given such a power. 38
Less than a year later, we promulgated Collector of Customs v. Villaluz, 39 in which
we categorically averred: Until now only the judge can issue the warrant of
arrest." 40 "No law or presidential decree has been enacted or promulgated vesting
the same authority in a particular responsible officer ." 41
Apparently, Villaluz had settled the debate, but the same question persisted following
this Courts subsequent rulings upholding the President's alleged emergency arrest
powers .42 [Mr. Justice Hugo Gutierrez would hold, however, that a Presidential
Commitment Order (PCO) is (was) not a species of "arrest" in its technical sense, and
5
that the (deposed) Chief Executive, in issuing one, does not do so in his capacity as a
"responsible officer" under the 1973 Charter, but rather, as Commander-in-Chief of
the Armed Forces in times of emergency, or in order to carry out the deportation of
undesirable aliens.43 In the distinguished Justice's opinion then, these are acts that
can be done without need of judicial intervention because they are not, precisely,
judicial but Presidential actions.]
In Ponsica v. Ignalaga,44 however, we held that the mayor has been made a
"responsible officer' by the Local Government Code, 45 but had ceased to be one
with the approval of the 1987 Constitution according judges sole authority to issue
arrest and search warrants. But in the same breath, we did not rule the grant under
the Code unconstitutional based on the provisions of the former Constitution. We
were agreed, though, that the "responsible officer" referred to by the fundamental law
should be one capable of approximating "the cold neutrality of an impartial judge." 46
In striking down Presidential Decree No. 1936 the respondent Court relied on
American jurisprudence, notably, Katz v. United States, 47 Johnson v. United
States, 48 and Coolidge v. New Hampshire 49 in which the American Supreme Court
ruled that prosecutors (like the petitioner) cannot be given such powers because of
their incapacity for a "detached scrutiny" 50 of the cases before them. We affirm the
Appellate Court.
We agree that the Presidential Anti-Dollar Salting Task Force exercises, or was meant
to exercise, prosecutorial powers, and on that ground, it cannot be said to be a
neutral and detached "judge" to determine the existence of probable cause for
purposes of arrest or search. Unlike a magistrate, a prosecutor is naturally interested
in the success of his case. Although his office "is to see that justice is done and not
necessarily to secure the conviction of the person accused," 51 he stands, invariably,
as the accused's adversary and his accuser. To permit him to issue search warrants
and indeed, warrants of arrest, is to make him both judge and jury in his own right,
when he is neither. That makes, to our mind and to that extent, Presidential Decree
No. 1936 as amended by Presidential Decree No. 2002, unconstitutional.
It is our ruling, thus, that when the 1973 Constitution spoke of "responsible officer" to
whom the authority to issue arrest and search warrants may be delegated by
legislation, it did not furnish the legislator with the license to give that authority to
whomsoever it pleased. It is to be noted that the Charter itself makes the qualification
that the officer himself must be "responsible". We are not saying, of course, that the
Presidential Anti-Dollar Salting Task Force (or any similar prosecutor) is or has been
irresponsible in discharging its duty. Rather, we take "responsibility", as used by the
Constitution, to mean not only skill and competence but more significantly, neutrality
and independence comparable to the impartiality presumed of a judicial officer. A
prosecutor can in no manner be said to be possessed of the latter qualities.
According to the Court of Appeals, the implied exclusion of prosecutors under the
1973 Constitution was founded on the requirements of due process, notably, the
assurance to the respondent of an unbiased inquiry of the charges against him prior
to the arrest of his person or seizure of his property. We add that the exclusion is also
demanded by the principle of separation of powers on which our republican structure
rests. Prosecutors exercise essentially an executive function (the petitioner itself is
chaired by the Minister, now Secretary, of Trade and Industry), since under the
Constitution, the President has pledged to execute the laws. 52 As such, they cannot
be made to issue judicial processes without unlawfully impinging the prerogative of
the courts.
At any rate, Ponsica v. Ignalaga should foreclose all questions on the matter, although
the Court hopes that this disposition has clarified a controversy that had generated
often bitter debates and bickerings.
The Court joins the Government in its campaign against the scourge of "dollar-
salting", a pernicious practice that has substantially drained the nation's coffers and
has seriously threatened its economy. We recognize the menace it has posed (and
continues to pose) unto the very stability of the country, the urgency for tough
measures designed to contain if not eradicate it, and foremost, the need for
cooperation from the citizenry in an all-out campaign. But while we support the State's
efforts, we do so not at the expense of fundamental rights and liberties and
constitutional safeguards against arbitrary and unreasonable acts of Government. If in
the event that as a result of this ruling, we prove to be an "obstacle" to the vital
endeavour of stamping out the blackmarketing of valuable foreign exchange, we do
not relish it and certainly, do not mean it. The Constitution simply does not leave us
much choice.
WHEREFORE, the petition is DISMISSED. No costs. SO ORDERED.
SECOND DIVISION
[G.R. No. 131255. May 20, 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.
DECISION
6
PUNO, J.:
The case at bar involves the validity of the suspension from office of petitioner
Eduardo Nonato Joson as Governor of the province of Nueva Ecija. Private
respondent Oscar C. Tinio is the Vice-Governor of said province while private
respondents Loreto P. Pangilinan, Crispulo S. Esguerra, Solita C. Santos, Vicente C.
Palilio and Napoleon G. Interior are members of the Sangguniang Panlalawigan.
On September 17, 1996, private respondents filed with the Office of the
President a letter-complaint dated September 13, 1997 charging petitioner with grave
misconduct and abuse of authority. Private respondents alleged that in the morning of
September 12, 1996, they were at the session hall of the provincial capitol for a
scheduled session of the Sangguniang Panlalawigan when petitioner belligerently
barged into the Hall; petitioner angrily kicked the door and chairs in the Hall and
uttered threatening words at them; close behind petitioner were several men with long
and short firearms who encircled the area.Private respondents claim that this incident
was an offshoot of their resistance to a pending legislative measure supported by
petitioner that the province of Nueva Ecija obtain a loan of P150 million from the
Philippine National Bank; that petitioner's acts were intended to harass them into
approving this loan; that fortunately, no session of the Sangguniang Panlalawigan
was held that day for lack of quorum and the proposed legislative measure was not
considered; that private respondents opposed the loan because the province of
Nueva Ecija had an unliquidated obligation of more than P70 million incurred without
prior authorization from the Sangguniang Panlalawigan; that the provincial budget
officer and treasurer had earlier disclosed that the province could not afford to
contract another obligation; that petitioner's act of barging in and intimidating private
respondents was a serious insult to the integrity and independence of the
Sangguniang Panlalawigan; and that the presence of his private army posed grave
danger to private respondents' lives and safety. Private respondents prayed for the
suspension or removal of petitioner; for an emergency audit of the provincial treasury
of Nueva Ecija; and for the review of the proposed loan in light of the financial
condition of the province, to wit:
"In this regard, we respectfully request for the following assistance from your
good office:
1. To immediately suspend Governor N. [sic] Joson considering the actual dangers
that we are facing now, and provide adequate police security detail for the
Sangguniang Panlalawigan of Nueva Ecija. Should the evidence warrant after
investigation, to order his removal from office.
2. To conduct an emergency audit of the provincial treasury of Nueva Ecija by the
auditors from the Commission on Audit Central Office with adequate police security
assistance. Should the evidence so warrant, to file necessary charges against
responsible and accountable officers.
3. To advise the Philippine National Bank to review the capability of the province of
Nueva Ecija to secure more loans and the feasibility of the same in the light of the
present financial condition of the province. Or if said loan will be contrary to sound
banking practice, recommend its disapproval."[1]
The letter-complaint was submitted with the joint affidavit of Elnora Escombien
and Jacqueline Jane Perez, two (2) employees of the Sangguniang Panlalawigan
who witnessed the incident. The letter was endorsed by Congressmen Eleuterio
Violago and Pacifico Fajardo of the Second and Third Districts of Nueva Ecija, former
Congressman Victorio Lorenzo of the Fourth District, and Mayor Placido Calma,
President of the Mayors' League of said province.[2]
The President acted on the complaint by writing on its margin the following:
"17 Sep 96
To: SILG info Exec. Sec. and Sec. of Justice:
1. Noted. There appears no justification for the use of force,
intimidation or armed followers in the situation of 12 Sep at the
Session Hall. 2. Take appropriate preemptive and investigative
actions. 3. BREAK NOT the PEACE.
FIDEL V. RAMOS
(Signed)."[3]
President Ramos noted that the situation of "12 Sep at the Session Hall," i.e.,
the refusal of the members of the Sangguniang Panlalawigan to approve the
proposed loan, did not appear to justify "the use of force, intimidation or armed
followers." He thus instructed the then Secretary of the Interior and Local
Governments (SILG) Robert Barbers to "[t]ake appropriate preemptive and
investigative actions," but to "[b]reak not the peace."
The letter-complaint together with the President's marginal notes were sent to
Secretary Robert Z. Barbers on September 20, 1996. Acting upon the instructions of
the President, Secretary Barbers notified petitioner of the case against him [4] and
attached to the notice a copy of the complaint and its annexes. In the same notice,
Secretary Barbers directed petitioner "to submit [his] verified/sworn answer thereto,
not a motion to dismiss, together with such documentary evidence that [he] has in
support thereof, within fifteen (15) days from receipt."[5]
Immediately thereafter, Secretary Barbers proceeded to Nueva Ecija and
summoned petitioner and private respondents to a conference to settle the
controversy. The parties entered into an agreement whereby petitioner promised to
maintain peace and order in the province while private respondents promised to
refrain from filing cases that would adversely affect their peaceful co-existence.[6]
The peace agreement was not respected by the parties and the private
respondents reiterated their letter-complaint. Petitioner was again ordered to file his
answer to the letter-complaint within fifteen days from receipt. Petitioner received a
copy of this order on November 13, 1996. On the same day, petitioner requested for
an extension of thirty (30) days to submit his answer because he was "trying to
secure the services of legal counsel experienced in administrative law practice." [7] The
Department of the Interior and Local Government (DILG), acting through Director
Almario de los Santos, Officer-In-Charge of the Legal Service, granted the motion,
with the thirty-day extension to be reckoned, however, from November 13, 1996, i.e.,
the day petitioner received the order to answer.[8]
In a letter dated December 9, 1996, petitioner moved for another extension of
thirty (30) days to file his answer. He stated that he had already sent letters to various
law firms in Metro Manila but that he had not yet contracted their services; that the
7
advent of the Christmas season kept him busy with "numerous and inevitable official
engagements."[9] The DILG granted the request for extension "for the last time up to
January 13 only."[10]
On January 7, 1997, petitioner requested for another extension of thirty (30)
days to file his answer. According to him, the Christmas season kept him very busy
and preoccupied with his numerous official engagements; that the law firms he invited
to handle his case have favorably replied but that he needed time to confer with them
personally; and that during this period, he, with the help of his friends, was exploring
the possibility of an amicable settlement of the case. [11] The DILG granted petitioner's
request "for the last time" but gave him an extension of only ten (10) days from
January 13, 1997 to January 23, 1997. The DILG also informed him that his "failure to
submit answer will be considered a waiver and that the plaintiff [shall] be allowed to
present his evidence ex-parte."[12]
Petitioner moved for reconsideration of the order. He reiterated his prayer for an
extension of thirty (30) days on the following grounds: (a) that he was still in the
process of choosing competent and experienced counsel; (b) that some law firms
refused to accept his case because it was perceived to be politically motivated; and
(c) the multifarious activities, appointments and official functions of his office hindered
his efforts to secure counsel of choice.[13]
Three months later, on April 22, 1997, Undersecretary Manuel Sanchez, then
Acting Secretary of the DILG, issued an order declaring petitioner in default and to
have waived his right to present evidence.Private respondents were ordered to
present their evidence ex-parte. The order reads as follows:
"ORDER
It appearing that respondent failed to submit his answer to the complaint
despite the grant to him of three (3) extensions, such unreasonable failure
is deemed a waiver of his right to present evidence in his behalf pursuant
to Section 4, Rule 4 of Administrative Order No. 23 dated December 17,
1992, as amended.
Respondent is hereby declared in default, meanwhile, complainants are
directed to present their evidence ex-parte. However, considering the
prohibition on the conduct of administrative investigation due to the
forthcoming barangay elections, complainants will be notified on the date
after the barangay election for them to present their evidence.
SO ORDERED."[14]
Two days later, on April 24, 1997, the law firm of Padilla, Jimenez, Kintanar &
Asuncion, representing petitioner, filed with the DILG an "Entry of Appearance with
Motion for Time to File Answer Ad Cautelam."
Petitioner received a copy of the order of default on May 2, 1997. Through
counsel, he moved for reconsideration. On May 19, 1997, Undersecretary Sanchez
reconsidered the order of default in the interest of justice. He noted the appearance of
petitioner's counsel and gave petitioner "for the last time" fifteen (15) days from
receipt to file his answer.[15]
On June 23, 1997, Undersecretary Sanchez issued an order stating that
petitioner's counsel, whose office is in Manila, should have received a copy of the
May 19, 1997 order ten days after mailing on May 27, 1997. Since petitioner still
failed to file his answer, he was deemed to have waived his right to present evidence
in his behalf. Undersecretary Sanchez reinstated the order of default and directed
private respondents to present their evidence ex-parte on July 15, 1997.[16]
The following day, June 24, 1997, petitioner, through counsel, filed a "Motion to
Dismiss." Petitioner alleged that the letter-complaint was not verified on the day it was
filed with the Office of the President; and that the DILG had no jurisdiction over the
case and no authority to require him to answer the complaint.
On July 4, 1997, petitioner filed an "Urgent Ex-Parte Motion for Reconsideration"
of the order of June 23, 1997 reinstating the order of default. Petitioner also prayed
that the hearing on the merits of the case be held in abeyance until after the "Motion
to Dismiss" shall have been resolved.
On July 11, 1997, on recommendation of Secretary Barbers, Executive
Secretary Ruben Torres issued an order, by authority of the President, placing
petitioner under preventive suspension for sixty (60) days pending investigation of the
charges against him.[17]
Secretary Barbers directed the Philippine National Police to assist in the
implementation of the order of preventive suspension. In petitioner's stead, Secretary
Barbers designated Vice-Governor Oscar Tinio as Acting Governor until such time as
petitioner's temporary legal incapacity shall have ceased to exist.[18]
Forthwith, petitioner filed a petition for certiorari and prohibition with the Court of
Appeals challenging the order of preventive suspension and the order of default.[19]
Meanwhile, the proceedings before the DILG continued. On August 20, 1997,
Undersecretary Sanchez issued an order denying petitioner's "Motion to Dismiss" and
"Urgent Ex-Parte Motion for Reconsideration." In the same order, he required the
parties to submit their position papers within an inextendible period of ten days from
receipt after which the case shall be deemed submitted for resolution, to wit:
"WHEREFORE, for lack of merit, both motions are denied. However, for
this office to have a better appreciation of the issues raised in the instant
case, the parties, through their respective counsels are hereby directed to
submit their position papers within a period of ten (10) days from receipt
hereof, which period is inextendible, after which the case is deemed
submitted for resolution."[20]
On August 27, 1997, petitioner filed with the DILG a "Motion to Lift Order of
Preventive Suspension." On September 10, 1997, petitioner followed this with a
"Motion to Lift Default Order and Admit Answer Ad Cautelam."[21] Attached to the
motion was the "Answer Ad Cautelam"[22] and sworn statements of his witnesses. On
the other hand, complainants (private respondents herein) manifested that they were
submitting the case for decision based on the records, the complaint and affidavits of
their witnesses.[23]
8
 In his Answer Ad Cautelam, petitioner alleged that in the morning of September
12, 1996, while he was at his district office in the town of Munoz, he received a phone
call from Sangguniang Panlalawigan member Jose del Mundo. Del Mundo, who
belonged to petitioner's political party, informed him that Vice-Governor Tinio was
enraged at the members of the Sangguniang Panlalawigan who were in petitioner's
party because they refused to place on the agenda the ratification of the
proposed P150 million loan of the province. Petitioner repaired to the provincial
capitol to advise his party-mates on their problem and at the same time attend to his
official functions. Upon arrival, he went to the Session Hall and asked the members
present where Vice-Governor Tinio was. However, without waiting for their reply, he
left the Hall and proceeded to his office.
Petitioner claimed that there was nothing in his conduct that threatened the
members of the Sangguniang Panlalawigan or caused alarm to the employees. He
said that like Vice-Governor Tinio, he was always accompanied by his official security
escorts whenever he reported for work. He also alleged that the joint affidavit of
Elnora Escombien and Jacqueline Jane Perez was false. Escombien was purportedly
not inside the session hall during the incident but was at her desk at the office and
could not in any way have seen petitioner in the hall. To attest to the truth of his
allegations, petitioner submitted three (3) joint affidavits -- two (2) affidavits executed
by six (6) and ten (10) employees, respectively, of the provincial government, and a
third by four members of the Sangguniang Panlalawigan.[24]
On September 11, 1997, petitioner filed an "Urgent Motion for Reconsideration"
of the order of August 20, 1997 denying his motion to dismiss. The "Urgent Motion for
Reconsideration" was rejected by Undersecretary Sanchez on October 8,
1997. Undersecretary Sanchez, however, granted the "Motion to Lift Default Order
and to Admit Answer Ad Cautelam" and admitted the "Answer Ad Cautelam" as
petitioner's position paper pursuant to the order of August 20, 1997.[25]
On October 15, 1997, petitioner filed a "Motion to Conduct Formal
Investigation." Petitioner prayed that a formal investigation of his case be conducted
pursuant to the provisions of the Local Government Code of 1991 and Rule 7 of
Administrative Order No. 23; and that this be held at the province of Nueva Ecija.
[26]
On October 29, 1997, petitioner submitted a "Manifestation and Motion" before the
DILG reiterating his right to a formal investigation.
In the meantime, on October 24, 1997, the Court of Appeals dismissed
petitioner's petition.[27]
Hence this recourse.
The proceedings before the DILG continued however. In an order dated
November 11, 1997, the DILG denied petitioner's "Motion to Conduct Formal
Investigation" declaring that the submission of position papers substantially complies
with the requirements of procedural due process in administrative proceedings.[28]
A few days after filing the petition before this Court, petitioner filed a "Motion for
Leave to File Herein Incorporated Urgent Motion for the Issuance of a Temporary
Restraining Order and/or a Writ of Preliminary Injunction." Petitioner alleged that
subsequent to the institution of this petition, the Secretary of the Interior and Local
Governments rendered a resolution on the case finding him guilty of the offenses
charged.[29] His finding was based on the position papers and affidavits of witnesses
submitted by the parties. The DILG Secretary found the affidavits of complainants'
witnesses to be "more natural, reasonable and probable" than those of herein
petitioner Joson's.[30]
On January 8, 1998, the Executive Secretary, by authority of the President,
adopted the findings and recommendation of the DILG Secretary. He imposed on
petitioner the penalty of suspension from office for six (6) months without pay, to wit:
"WHEREFORE, as recommended by the Secretary of the Interior and
Local Government, respondent Nueva Ecija Governor Eduardo Nonato
Joson is hereby found guilty of the offenses charged and is meted the
penalty of suspension from office for a period of six (6) months without
pay."[31]
On January 14, 1998, we issued a temporary restraining order enjoining the
implementation of the order of the Executive Secretary.
On January 19, 1998, private respondents submitted a Manifestation informing
this Court that the suspension of petitioner was implemented on January 9, 1998; that
on the same day, private respondent Oscar Tinio was installed as Acting Governor of
the province; and that in view of these events, the temporary restraining order had
lost its purpose and effectivity and was fait accompli.[32] We noted this Manifestation.
In his petition, petitioner alleges that:
"I THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT
RULES OF PROCEDURE AND EVIDENCE SHOULD NOT BE STRICTLY
APPLIED IN THE ADMINISTRATIVE DISCIPLINARY AND CLEARLY
PUNITIVE PROCEEDINGS IN THE CASE AGAINST PETITIONER
GOVERNOR EDNO JOSON;
II THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE
ALTER-EGO PRINCIPLE BECAUSE, CONTRARY TO LAW, IT WAS THE
SECRETARY OF THE DILG WHO WAS EXERCISING THE POWERS OF
THE PRESIDENT WHICH ARE CLEARLY VESTED BY LAW ONLY UPON
HIM OR THE EXECUTIVE SECRETARY.
III THE COURT OF APPEALS ERRED IN RULING THAT THE
PETITIONER WAS PROPERLY DECLARED IN DEFAULT WHEN HE
FILED A MOTION TO DISMISS INSTEAD OF AN ANSWER, AS
DIRECTED BY THE DILG, BECAUSE A MOTION TO DISMISS BASED
ON JURISDICTIONAL GROUNDS IS NOT A PROHIBITIVE [sic]
PLEADING IN ADMINISTRATIVE DISCIPLINARY CASES.
IV THE COURT OF APPEALS ERRED IN RULING THAT THE
IMPOSITION OF PREVENTIVE SUSPENSION AGAINST THE
PETITIONER WAS PROPER BECAUSE THERE WAS NO JOINDER OF
ISSUES YET UPON ITS IMPOSITION AND THERE WAS NO EVIDENCE
OF GUILT AGAINST PETITIONER."[33]
In his "Motion for Leave to File Herein Incorporated Urgent Motion for the Issuance of
a Temporary Restraining Order and/or a Writ of Preliminary Injunction," petitioner also
claims that:
9
 "I THE RESOLUTION OF JANUARY 8, 1998 AND THE MEMORANDA
ISSUED PURSUANT THERETO (i.e., ANNEXES "C," "D," "E," "F," AND
"G" HEREOF) WERE ISSUED WITH UNDUE HASTE, IN VIOLATION OF
THE PERTINENT PROVISIONS OF THE 1991 LOCAL
GOVERNMENT CODE AND ADMINISTRATIVE ORDER NO. 23, AND IN
COMPLETE DISREGARD OF PETITIONER'S CONSTITUTIONAL RIGHT
TO DUE PROCESS.
II THE IMPLEMENTATION OF THE INVALID RESOLUTION OF JANUARY
8, 1998 (ANNEX "C" HEREOF) BY THE PUBLIC RESPONDENTS
ENTITLES PETITIONER TO THE IMMEDIATE ISSUANCE OF THE
TEMPORARY RESTRAINING ORDER/WRIT OF PRELIMINARY
INJUNCTION HEREIN PRAYED FOR."[34]
We find merit in the petition.
Administrative disciplinary proceedings against elective local officials are
governed by the Local Government Code of 1991, the Rules and Regulations
Implementing the Local Government Code of 1991, and Administrative Order No. 23
entitled "Prescribing the Rules and Procedures on the Investigation of Administrative
Disciplinary Cases Against Elective Local Officials of Provinces, Highly Urbanized
Cities, Independent Component Cities, and Cities and Municipalities in Metropolitan
Manila."[35] In all matters not provided in A.O. No. 23, the Rules of Court and the
Administrative Code of 1987 apply in a suppletory character.[36]
I was not verified by private respondents and was not supported by the joint affidavit of
Section 60 of Chapter 4, Title II, Book I of the Local Government Code
enumerates the grounds for which an elective local official may be disciplined,
suspended or removed from office. Section 60 reads:
"Sec. 60. Grounds for Disciplinary Actions. -- An elective local official may
be disciplined, suspended, or removed from office on any of the following
grounds:
(a) Disloyalty to the Republic of the Philippines;
(b) Culpable violation of the Constitution;
(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of
duty;
(d) Commission of any offense involving moral turpitude or an offense punishable by
at least prision mayor;
(e) Abuse of authority;
(f) Unauthorized absence for fifteen (15) consecutive working days, except in the
case of members of the sangguniang panlalawigan, sangguniang panlunsod,
sangguniang bayan, and sangguniang barangay;
(g) Application for, or acquisition of, foreign citizenship or residence or the status of an
immigrant of another country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated
above by order of the proper court."
When an elective local official commits an act that falls under the grounds for
disciplinary action, the administrative complaint against him must be verified and filed
with any of the following:
"Sec. 61. Form and Filing of Administrative Complaints.-- A verified
complaint against any erring local elective official shall be prepared as
follows:
(a) A complaint against any elective official of a province, a highly urbanized city, an
independent component city or component city shall be filed before the Office of the
President.
(b) A complaint against any elective official of a municipality shall be filed before the
sangguniang panlalawigan whose decision may be appealed to the Office of the
President; and
(c) A complaint against any elective barangay official shall be filed before the
sangguniang panlungsod or sangguniang bayan concerned whose decision shall be
final and executory."[37]
An administrative complaint against an erring elective official must be verified
and filed with the proper government office. A complaint against an elective provincial
or city official must be filed with the Office of the President. A complaint against an
elective municipal official must be filed with the Sangguniang Panlalawigan while that
of a barangay official must be filed before the Sangguniang Panlungsod or
Sangguniang Bayan.
In the instant case, petitioner Joson is an elective official of the province of
Nueva Ecija. The letter-complaint against him was therefore properly filed with the
Office of the President. According to petitioner, however, the letter-complaint failed to
conform with the formal requirements set by the Code. He alleges that the complaint
the two witnesses named therein; that private respondents later realized these
defects and surreptitiously inserted the verification and sworn statement while the
complaint was still pending with the Office of the President.[38] To prove his
allegations, petitioner submitted: (a) the sworn statement of private respondent Solita
C. Santos attesting to the alleged fact that after the letter-complaint was filed, Vice-
Governor Tinio made her and the other members of the Sangguniang Panlalawigan
sign an additional page which he had later notarized; and (b) the fact that the
verification of the letter-complaint and the joint affidavit of the witnesses do not
indicate the document, page or book number of the notarial register of the notary
public before whom they were made.[39]
We find no merit in the contention of the petitioner. The absence of the
document, page or book number of the notarial register of the subscribing officer is
insufficient to prove petitioner's claim. The lack of these entries may constitute proof
of neglect on the part of the subscribing officer in complying with the requirements for
notarization and proper verification. They may give grounds for the revocation of his
notarial commission.[40] But they do not indubitably prove that the verification was
inserted or intercalated after the letter-complaint was filed with the Office of the
President.
Nor is the fact of intercalation sufficiently established by the affidavit of Solita C.
Santos. Private respondent Santos was one of the signatories to the letter-
complaint. In her affidavit, she prayed that she be dropped as one of the
complainants since she had just joined the political party of petitioner Joson. She
decided to reveal the intercalation because she was disillusioned with the "dirty
tactics" of Vice-Governor Tinio to grab power from petitioner Joson.[41] Private
10
respondent Santos cannot in any way be considered an unbiased witness. Her motive
and change of heart render her affidavit suspect.
Assuming, nonetheless, that the letter-complaint was unverified when submitted
to the Office of the President, the defect was not fatal. The requirement of verification
was deemed waived by the President himself when he acted on the complaint.
Verification is a formal, not jurisdictional requisite. [42] Verification is mainly
intended to secure an assurance that the allegations therein made are done in good
faith or are true and correct and not mere speculation. [43] The lack of verification is a
mere formal defect.[44] The court may order the correction of the pleading, if not
verified, or act on the unverified pleading if the attending circumstances are such that
a strict compliance with the rule may be dispensed with in order that the ends of
justice may be served.[45]
II
In his second assigned error, petitioner questions the jurisdiction and authority of
the DILG Secretary over the case. He contends that under the law, it is the Office of
the President that has jurisdiction over the letter-complaint and that the Court of
Appeals erred in applying the alter-ego principle because the power to discipline
elective local officials lies with the President, not with the DILG Secretary.
Jurisdiction over administrative disciplinary actions against elective local officials
is lodged in two authorities: the Disciplining Authority and the Investigating
Authority. This is explicit from A.O. No. 23, to wit:
"Sec. 2. Disciplining Authority. All administrative complaints, duly verified,
against elective local officials mentioned in the preceding Section shall be
acted upon by the President. The President, who may act through the
Executive Secretary, shall hereinafter be referred to as the Disciplining
Authority."
Sec. 3. Investigating Authority. The Secretary of the Interior and Local
Government is hereby designated as the Investigating Authority. He may
constitute an Investigating Committee in the Department of the Interior and
Local Government for the purpose.
The Disciplining Authority may, however, in the interest of the service,
constitute a Special Investigating Committee in lieu of the Secretary of the
Interior and Local Government."[46]
Pursuant to these provisions, the Disciplining Authority is the President of the
Philippines, whether acting by himself or through the Executive Secretary. The
Secretary of the Interior and Local Government is the Investigating Authority, who
may act by himself or constitute an Investigating Committee. The Secretary of the
DILG, however, is not the exclusive Investigating Authority. In lieu of the DILG
Secretary, the Disciplining Authority may designate a Special Investigating
Committee.
The power of the President over administrative disciplinary cases against
elective local officials is derived from his power of general supervision over local
governments. Section 4, Article X of the 1987 Constitution provides:
"Sec. 4. The President of the Philippines shall exercise general supervision
over local governments. Provinces with respect to component cities and
municipalities, and cities and municipalities with respect to component
barangays shall ensure that the acts of their component units are within
the scope of their prescribed powers and functions."[47]
The power of supervision means "overseeing or the authority of an officer to see that
the subordinate officers perform their duties."[48] If the subordinate officers fail or
neglect to fulfill their duties, the official may take such action or step as prescribed by
law to make them perform their duties. [49] The President's power of general
supervision means no more than the power of ensuring that laws are faithfully
executed, or that subordinate officers act within the law.[50] Supervision is not
incompatible with discipline.[51] And the power to discipline and ensure that the laws
be faithfully executed must be construed to authorize the President to order an
investigation of the act or conduct of local officials when in his opinion the good of the
public service so requires.[52] Thus:
"Independently of any statutory provision authorizing the President to
conduct an investigation of the nature involved in this proceeding, and in
view of the nature and character of the executive authority with which the
President of the Philippines is invested, the constitutional grant to him of
power to exercise general supervision over all local governments and to
take care that the laws be faithfully executed must be construed to
authorize him to order an investigation of the act or conduct of the
petitioner herein. Supervision is not a meaningless thing. It is an active
power. It is certainly not without limitation, but it at least implies authority to
inquire into facts and conditions in order to render the power real and
effective. If supervision is to be conscientious and rational, and not
automatic and brutal, it must be founded upon a knowledge of actual facts
and conditions disclosed after careful study and investigation."[53]
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. The President remains the Disciplining
Authority. What is delegated is the power to investigate, not the power to discipline.[54]
Moreover, the power of the DILG to investigate administrative complaints is
based on the alter-ego principle or the doctrine of qualified political agency. Thus:
"Under this doctrine, 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
11
 regular course of business, are, unless disapproved or reprobated by the
Chief Executive presumptively the acts of the Chief Executive."[55]
This doctrine is corollary to the control power of the President. [56] The power of
control is provided in the Constitution, thus:
"Sec. 17. The President shall have control of all the executive
departments, bureaus, and offices. He shall ensure that the laws be
faithfully executed."[57]
Control is said to be the very heart of the power of the presidency.[58] 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.[59] 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.[60]
The procedure how the Disciplining and Investigating Authorities should
exercise their powers is distinctly set forth in the Local Government Code and A.O.
No. 23. Section 62 of the Code provides:
"Sec. 62. Notice of Hearing.-- (a) Within seven (7) days after the
administrative complaint is filed, the Office of the President or the
sanggunian concerned, as the case may be, shall require the respondent
to submit his verified answer within fifteen (15) days from receipt thereof,
and commence investigation of the case within ten (10) days after receipt
of such answer of the respondent.
xxx."
Sections 1 and 3, Rule 5[61] of A.O. No. 23 provide:
"Sec. 1. Commencement. Within forty-eight (48) hours from receipt of the
answer, the Disciplining Authority shall refer the complaint and answer,
together with their attachments and other relevant papers, to the
Investigating Authority who shall commence the investigation of the case
within ten (10) days from receipt of the same.
"x x x
"Sec. 3. Evaluation. Within twenty (20) days from receipt of the complaint
and answer, the Investigating Authority shall determine whether there is
a prima facie case to warrant the institution of formal administrative
proceedings."
When an administrative complaint is therefore filed, the Disciplining Authority shall
issue an order requiring the respondent to submit his verified answer within fifteen
(15) days from notice. Upon filing of the answer, the Disciplining Authority shall refer
the case to the Investigating Authority for investigation.
In the case at bar, petitioner claims that the DILG Secretary usurped the power
of the President when he required petitioner to answer the complaint. Undisputably,
the letter-complaint was filed with the Office of the President but it was the DILG
Secretary who ordered petitioner to answer.
Strictly applying the rules, the Office of the President did not comply with the
provisions of A.O. No. 23. The Office should have first required petitioner to file his
answer. Thereafter, the complaint and the answer should have been referred to the
Investigating Authority for further proceedings. Be that as it may, this procedural lapse
is not fatal. The filing of the answer is necessary merely to enable the President to
make a preliminary assessment of the case.[62] The President found the complaint
sufficient in form and substance to warrant its further investigation. The judgment of
the President on the matter is entitled to respect in the absence of grave abuse of
discretion.
III
In his third assigned error, petitioner also claims that the DILG erred in declaring
him in default for filing a motion to dismiss. He alleges that a motion to dismiss is not
a pleading prohibited by the law or the rules and therefore the DILG Secretary should
have considered it and given him time to file his answer.
It is true that a motion to dismiss is not a pleading prohibited under the Local
Government Code of 1991 nor in A.O. No. 23. Petitioner, however, was instructed not
to file a motion to dismiss in the order to file answer. Thrice, he requested for
extension of time to file his answer citing as reasons the search for competent
counsel and the demands of his official duties. And thrice, his requests were
granted. Even the order of default was reconsidered and petitioner was given
additional time to file answer. After all the requests and seven months later, he filed a
motion to dismiss!
Petitioner should know that the formal investigation of the case is required by
law to be finished within one hundred twenty (120) days from the time of formal notice
to the respondent. The extensions petitioner requested consumed fifty-five (55) days
of this period.[63] Petitioner, in fact, filed his answer nine (9) months after the first
notice. Indeed, this was more than sufficient time for petitioner to comply with the
order to file answer.
The speedy disposition of administrative complaints is required by public
service. The efficiency of officials under investigation is impaired when a case hangs
over their heads. Officials deserve to be cleared expeditiously if they are innocent,
also expeditiously if guilty, so that the business of government will not be prejudiced.
[64]
IV
In view of petitioner's inexcusable failure to file answer, the DILG did not err in
recommending to the Disciplining Authority his preventive suspension during the
investigation. Preventive suspension is authorized under Section 63 of the Local
Government Code, viz:
"Sec. 63. Preventive Suspension.-- (a) Preventive suspension may be imposed:
(1) By the President, if the respondent is an elective official of a
province, a highly urbanized or an independent component city;
x x x.
(b) Preventive suspension may be imposed at any time after the issues are
joined, when the evidence of guilt is strong, and given the gravity of the
offense, there is great probability that the continuance in office of the
respondent could influence the witnesses or pose a threat to the safety
12
 and integrity of the records and other evidence; Provided, That, any single
preventive suspension of local elective officials shall not extend beyond
sixty (60) days: Provided, further, That in the event that several
administrative cases are filed against an elective official, he cannot be
preventively suspended for more than ninety (90) days within a single year
on the same ground or grounds existing and known at the time of the first
suspension.
x x x."
In sum, preventive suspension may be imposed by the Disciplining Authority at any
time (a) after the issues are joined; (b) when the evidence of guilt is strong; and (c)
given the gravity of the offense, there is great probability that the respondent, who
continues to hold office, could influence the witnesses or pose a threat to the safety
and integrity of the records and other evidence.
Executive Secretary Torres, on behalf of the President, imposed preventive
suspension on petitioner Joson after finding that:
"x x x
DILG Secretary Robert Z. Barbers, in a memorandum for the President,
dated 23 June 1997, recommends that respondent be placed under
preventive suspension considering that all the requisites to justify the same
are present. He stated therein that:
'Preventive suspension may be imposed at any time after the
issues are joined, that is, after respondent has answered the
complaint, when the evidence of guilt is strong and, given the
gravity of the offense, there is a great possibility that the
continuance in office of the respondent could influence the
witnesses or pose a threat to the safety and integrity of the
records and other evidence (Sec. 3, Rule 6 of Administrative
Order No. 23).
The failure of respondent to file his answer despite several
opportunities given him is construed as a waiver of his right to
present evidence in his behalf (Sec. 4, Rule 4 of Administrative
Order No. 23). The requisite of joinder of issues is squarely met
with respondent's waiver of right to submit his answer. The act
of respondent in allegedly barging violently into the session hall
of the Sangguniang Panlalawigan in the company of armed
men constitutes grave misconduct. The allegations of
complainants are bolstered by the joint-affidavit of two (2)
employees of the Sangguniang Panlalawigan. Respondent who
is the chief executive of the province is in a position to influence
the witnesses. Further, the history of violent confrontational
politics in the province dictates that extreme precautionary
measures be taken.'
Upon scrutiny of the records and the facts and circumstances attendant to
this case, we concur with the findings of the Secretary of the Interior and
Local Government and find merit in the aforesaid recommendation.
WHEREFORE, and as recommended by the Department of the Interior
and Local Government, respondent EDUARDO N. JOSON, Governor of
Nueva Ecija, is hereby placed under PREVENTIVE SUSPENSION FOR A
PERIOD OF SIXTY (60) DAYS, effective 11 July 1997, pending
investigation of the charges filed against him.
SO ORDERED."[65]
Executive Secretary Torres found that all the requisites for the imposition of
preventive suspension had been complied with. Petitioner's failure to file his answer
despite several opportunities given him was construed as a waiver of his right to file
answer and present evidence; and as a result of this waiver, the issues were deemed
to have been joined. The Executive Secretary also found that the evidence of
petitioner Joson's guilt was strong and that his continuance in office during the
pendency of the case could influence the witnesses and pose a threat to the safety
and integrity of the evidence against him.
V
We now come to the validity of the January 8, 1998 Resolution of the Executive
Secretary finding petitioner guilty as charged and imposing on him the penalty of
suspension from office for six (6) months from office without pay.
Petitioner claims that the suspension was made without formal investigation
pursuant to the provisions of Rule 7 of A.O. No. 23. Petitioner filed a "Motion To
Conduct Formal Investigation" three months before the issuance of the order of
suspension and this motion was denied by the DILG for the following reasons:
"On November 19, 1997, complainants, through counsel, filed a
Manifestation calling our attention to the Decision dated October 24, 1997
of the Court of Appeals, Fifth Division in CA-G.R. SP No. 44694, entitled
"Eduardo Nonato Joson versus Executive Secretary Ruben D. Torres, et.
al." In the aforestated decision, the Court of Appeals resolved to sustain the
authority of this Department to investigate this administrative case and has
likewise validated the order of default as well as the order of preventive
suspension of the respondent.
We offer no objection and concur with the assertion of respondent that he
has the right for the conduct of formal investigation. However, before there
shall be a formal investigation, joinder of issues must already be present or
respondent's answer has already been filed. In the case at bar, the
admission of respondent's answer after having been declared in default
was conditioned on the fact of submission of position papers by the parties,
after which, the case shall be deemed submitted for
resolution. Respondent, instead of submitting his position paper filed his
subject motion while complainants manifested to forego the submission of
position paper and submit the case for resolution on the basis of the
pleadings on hand.
Settled is the rule that in administrative proceedings, technical rules of
procedure and evidence are not strictly applied (Concerned Officials of the
Metropolitan Waterworks and Sewerage System v. Vasquez, 240 SCRA
13
 502). The essence of due process is to be found in the reasonable
opportunity to be heard and to submit evidence one may have in support of
one's defense (Tajonera v. Lamaroza, 110 SCRA 438). To be heard does
not only mean verbal arguments in court; one may be heard also through
pleadings. Where opportunity to be heard, either through oral arguments or
pleadings, is accorded, there is no denial of procedural due process
(Juanita Y. Say, et. al;. vs. IAC, G.R. No. 73451). Thus, when respondent
failed to submit his position paper as directed and insisted for the conduct
of formal investigation, he was not denied of his right of procedural
process.
WHEREFORE, the Motion for the Conduct of Formal Investigation, for lack
of merit, is DENIED.
SO ORDERED."[66]
The denial of petitioner's Motion to Conduct Formal Investigation is
erroneous. Petitioner's right to a formal investigation is spelled out in the following
provisions of A.O. No. 23, viz:
"SEC. 3 Evaluation. Within twenty (20) days from receipt of the complaint
and answer, the Investigating Authority shall determine whether there is
a prima facie case to warrant the institution of formal administrative
proceedings.
SEC. 4. Dismissal motu proprio. If the Investigating Authority determines
that there is no prima facie case to warrant the institution of formal
administrative proceedings, it shall, within the same period prescribed
under the preceding Section, submit its recommendation to the Disciplining
Authority for the motu proprio dismissal of the case, together with the
recommended decision, resolution, and order.
SEC. 5. Preliminary conference. If the Investigating Authority determines that
there is prima facie case to warrant the institution of formal administrative
proceedings, it shall, within the same period prescribed under the preceding
Section, summon the parties to a preliminary conference to consider
the following:
a) whether the parties desire a formal investigation or are willing to
submit the case for resolution on the basis of the evidence on
record; and
b) If the parties desire a formal investigation, to consider the
simplification of issues, the possibility of obtaining stipulation
or admission of facts and of documents, specifically affidavits
and depositions, to avoid unnecessary proof, the limitation of
number of witnesses, and such other matters as may be aid
the prompt disposition of the case.
The Investigating Authority shall encourage the parties and their counsels
to enter, at any stage of the proceedings, into amicable settlement,
compromise and arbitration, the terms and conditions of which shall be
subject to the approval of the Disciplining Authority.
After the preliminary conference, the Investigating Authority shall issue an
order reciting the matters taken up thereon, including the facts stipulated
and the evidences marked, if any. Such order shall limit the issues for
hearing to those not disposed of by agreement or admission of the parties,
and shall schedule the formal investigation within ten (10) days from its
issuance, unless a later date is mutually agreed in writing by the parties
concerned."[67]
The records show that on August 27, 1997, petitioner submitted his Answer Ad
Cautelam where he disputed the truth of the allegations that he barged into the
session hall of the capitol and committed physical violence to harass the private
respondents who were opposed to any move for the province to contract a P150
million loan from PNB. In his Order of October 8, 1997, Undersecretary Sanchez
admitted petitioner's Answer Ad Cautelam but treated it as a position paper. On
October 15, 1997, petitioner filed a Motion to Conduct Formal Investigation. Petitioner
reiterated this motion on October 29, 1997.Petitioner's motion was denied on
November 11, 1997. Secretary Barbers found petitioner guilty as charged on the
basis of the parties' position papers. On January 8, 1998, Executive Secretary Torres
adopted Secretary Barbers' findings and recommendations and imposed on petitioner
the penalty of six (6) months suspension without pay.
The rejection of petitioner's right to a formal investigation denied him procedural
due process. Section 5 of A. O. No. 23 provides that at the preliminary conference,
the Investigating Authority shall summon the parties to consider whether they desire a
formal investigation. This provision does not give the Investigating Authority the
discretion to determine whether a formal investigation would be conducted. The
records show that petitioner filed a motion for formal investigation. As respondent, he
is accorded several rights under the law, to wit:
"Sec. 65. Rights of Respondent. -- The respondent shall be accorded full
opportunity to appear and defend himself in person or by counsel, to
confront and cross-examine the witnesses against him, and to require the
attendance of witnesses and the production of documentary evidence in
his favor through compulsory process of subpoena or subpoena duces
tecum."
An erring elective local official has rights akin to the constitutional rights of an
accused.[68] These rights are essentially part of procedural due process.[69] The local
elective official has the (1) right to appear and defend himself in person or by counsel;
(2) the right to confront and cross-examine the witnesses against him; and (3) the
right to compulsory attendance of witness and the production of documentary
evidence.These rights are reiterated in the Rules Implementing the Local Government
Code[70] and in A.O. No. 23.[71] Well to note, petitioner formally claimed his right to a
formal investigation after his Answer Ad Cautelam has been admitted by
Undersecretary Sanchez.
Petitioner's right to a formal investigation was not satisfied when the complaint
against him was decided on the basis of position papers. There is nothing in the Local
Government Code and its Implementing Rules and Regulations nor in A.O. No. 23
that provide that administrative cases against elective local officials can be decided
on the basis of position papers. A.O. No. 23 states that the Investigating Authority
may require the parties to submit their respective memoranda but this is only after
14
formal investigation and hearing.[72] A.O. No. 23 does not authorize the Investigating requiring position papers in lieu of a hearing in administrative cases is expressly
Authority to dispense with a hearing especially in cases involving allegations of fact allowed with respect to appointive officials but not to those elected. An elective
which are not only in contrast but contradictory to each other. These contradictions official, elected by popular vote, is directly responsible to the community that elected
are best settled by allowing the examination and cross-examination of him. The official has a definite term of office fixed by law which is relatively of short
witnesses.Position papers are often-times prepared with the assistance of lawyers duration. Suspension and removal from office definitely affects and shortens this term
and their artful preparation can make the discovery of truth difficult. The jurisprudence of office. When an elective official is suspended or removed, the people are deprived
cited by the DILG in its order denying petitioner's motion for a formal investigation of the services of the man they had elected. Implicit in the right of suffrage is that the
applies to appointive officials and employees. Administrative disciplinary proceedings people are entitled to the services of the elective official of their choice. [88] Suspension
against elective government officials are not exactly similar to those and removal are thus imposed only after the elective official is accorded his rights and
against appointiveofficials. In fact, the provisions that apply to elective local officials the evidence against him strongly dictates their imposition.
are separate and distinct from appointive government officers and employees. This
can be gleaned from the Local Government Code itself. IN VIEW WHEREOF, the Resolution of January 8, 1998 of the public
respondent Executive Secretary is declared null and void and is set aside. No Cost.
In the Local Government Code, the entire Title II of Book I of the Code is SO ORDERED.
devoted to elective officials. It provides for their qualifications and election, Regalado, (Chairman), Melo, Mendoza, and Martinez, JJ., concur.
[73]
vacancies and succession,[74] local legislation,[75]disciplinary actions,[76] and recall.
[77]
Appointive officers and employees are covered in Title III of Book I of the Code SECOND DIVISION
entitled "Human Resources and Development." All matters pertinent to human
resources and development in local government units are regulated by "the civil
service law and such rules and regulations and other issuances promulgated thereto, G.R. No. L-34526 August 9, 1988
unless otherwise provided in the Code."[78] The "investigation and adjudication of
administrative complaints against appointive local officials and employees as well as HIJO PLANTATION INC., DAVAO FRUITS CORPORATION, TWIN RIVERS
their suspension and removal" are "in accordance with the civil service law and rules
PLANTATION, INC. and MARSMAN & CO., INC., for themselves and in behalf of
and other pertinent laws," the results of which "shall be reported to the Civil Service
Commission."[79] other persons and entities similarly situated, petitioners,
vs.
It is the Administrative Code of 1987, specifically Book V on the Civil Service, CENTRAL BANK OF THE PHILIPPINES, respondent.
that primarily governs appointive officials and employees. Their qualifications are set
forth in the Omnibus Rules Implementing Book V of the said Code. The grounds for
administrative disciplinary action in Book V are much more in number and are specific
than those enumerated in the Local Government Code against elective local officials.
[80]
The disciplining authority in such actions is the Civil Service PARAS, J.:
Commission[81] although the Secretaries and heads of agencies and instrumentalities,
provinces, cities and municipalities are also given the power to investigate and decide
disciplinary actions against officers and employees under their jurisdiction. [82] When a This is a petition for certiorari and prohibition which seeks: (1) to declare Monetary
complaint is filed and the respondent answers, he must "indicate whether or not he Board Resolution No. 1995, series of 1971, as null and void; (2) to prohibit the Central
elects a formal investigation if his answer is not considered satisfactory." [83] If the Bank from collecting the stabilization tax on banana exports shipped during the period
officer or employee elects a formal investigation, the direct evidence for the January 1, 1972 to June 30, 1982; and (3) a refund of the amount collected as
complainant and the respondent "consist[s] of the sworn statement and documents stabilization tax from the Central Bank.
submitted in support of the complaint and answer, as the case may be, without
prejudice to the presentation of additional evidence deemed necessary x x x, upon
which the cross-examination by respondent and the complainant, respectively, is The facts of this case as culled from the records are as follows:
based."[84] The investigation is conducted without adhering to the technical rules
applicable in judicial proceedings."[85] Moreover, the appointive official or employee Hijo Plantation, Inc., Davao Fruits Corporation, Twin Rivers Plantation, Inc. and
may be removed or dismissed summarily if (1) the charge is serious and the evidence
Marsman Plantation (Manifestation, Rollo, P. 18), collectively referred to herein as
of guilt is strong; (2) when the respondent is a recidivist; and (3) when the respondent
is notoriously undesirable.[86] petitioners, 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
The provisions for administrative disciplinary actions against elective local in and from Mindanao.
officials are markedly different from appointive officials.[87] The rules on the removal
and suspension of elective local officials are more stringent. The procedure of

15
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 entitled "an act imposing STABILIZATION TAX ON
CONSIGNMENTS ABROAD TO ACCELERATE THE ECONOMIC DEVELOPMENT
OF THE PHILIPPINES AND FOR OTHER PURPOSES," approved and made
effective on May 1, 1970 (Comment on Petition, Rollo, p, 32), to eliminate the
necessity for said circular and to stabilize the peso. Among others, it provides as
follows:
SECTION 1. There shall be imposed, assessed and collected a stabilization
tax on the gross F.O.B. peso proceeds, based on the rate of exchange
prevailing at the time of receipt of such proceeds, whether partial or total, of
any exportation of the following products in accordance with the following
schedule:
a. In the case of logs, copra, centrifugal sugar, and copper ore and
concentrates:
Ten per centum of the F.O.B. peso proceeds of exports received on or after the date
of effectivity of this Act to June thirty, nineteen hundred seventy one;
Eight per centum of the F.O.B. peso proceeds of exports received from July first,
nineteen hundred seventy-one to June thirty, nineteen hundred seventy-two;
Six per centum of the F.O.B. peso proceeds of exports received from July
first, nineteen hundred seventy two to June thirty, nineteen hundred seventy-
three; and
Four per centum of the F.O.B. peso proceeds of exports received from July
first, nineteen hundred seventy-three to June thirty, nineteen hundred
seventy-four.
b. In the case of molasses, coconut oil, dessicated coconut, iron ore and
concentrates, chromite ore and concentrates, copra meal or cake, unmanufactured
abaca, unmanufactured tobacco, veneer core and sheets, plywood (including
plywood panels faced with plastics), lumber, canned pineapples, and bunker fuel oil;
Eight per centum of the F.O.B. peso proceeds of exports shipped on or after
the date of effectivity of this Act to June thirty, nineteen hundred seventy-
one;
Six per centum of the F.O.B. peso proceeds of exports shipped from July
first, nineteen hundred seventy one to June thirty nineteen hundred seventy-
two;
Four per centum of the F.O.B. peso proceeds of exports shipped from July
first, nineteen hundred seventy-two to June thirty nineteen hundred seventy-
three; and
Two per centum of the F.O.B. peso proceeds of exports shipped from July first,
nineteen hundred seventy three to June thirty nineteen hundred seventy-four.
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. (Emphasis supplied).
During the first nine (9) months of calendar year 1971, the total banana export
amounted to an annual aggregate F.O.B. value of P8,949,000.00 (Answer, Rollo, p.
73) thus exceeding the aggregate F.O.B. value of five million United States Dollar,
bringing it within the ambit of Republic Act No. 6125. Consequently, the banana
industry was in a dilemma as to when the stabilization tax was to become due and
collectible from it and under what schedule of Section 1 (b) of Republic Act 6125
should said tax be collected. Accordingly, petitioners through their counsel, by letter
dated November 5, 1971, sought the authoritative pronouncement of the Central
Bank (herein referred to as respondent), therein advancing the opinion that the
stabilization tax does not become due and collectible from the petitioners until July 1,
1972 at the rate of 4% of the F.O.B. peso proceeds of the exports shipped from July
1, 1972 to June 30,1973. Replying by letter dated December 17,1971 (Rollo, p. 11),
the Central Bank called attention to Monetary Board Resolution No. 1995 dated
December 3, 1971 which clarified that:
1) For exports of bananas shipped during the period from January 1, 1972 to
June 30, 1972; the stabilization tax shall be at the rate of 6%;
2) For exports of bananas shipped during the period from July 1, 1972 to
June 30, 1973, the stabilization tax shall be at the rate of 4%; and
3) For exports of bananas shipped during the period from July 1, 1973, to
June 30, 1974, the stabilization tax shall be at the rate of 2%."
Contending that said Board Resolution No. 1995 was manifestly contrary to the
legislative intent, petitioners sought a reconsideration of said Board Resolution by
letter dated December 27, 1971 (Rollo, p. 12) which request for reconsideration was
16
denied by the respondent, also by letter dated January 20, 1972 (Rollo, p. 24). With
the denial of petitioners' request for reconsideration, respondent thru its agent Bank,
Rizal Commercial Banking Corporation has been collecting from the petitioners who
have been forced to pay under protest, such stabilization tax.
Petitioners view respondent's act as a clear violation of the provision of Republic Act
No. 6125, and as an act in excess of its jurisdiction, hence, this petition.
The sole issue in this case is whether or not respondent acted with grave abuse of
discretion amounting to lack of jurisdiction when it issued Monetary Board Resolution
No. 1995, series of 1971 which in effect reaffirmed Central Bank Circular No. 309,
enacted pursuant to Monetary Board Resolution No. 1179.
There is here no dispute that the banana industry is liable to pay the stabilization tax
prescribed under Republic Act No. 1995, it being the admission of both parties, that
the Industry has indeed reached and for the first time in the calendar year 1971, a
total banana export exceeding the aggregate annual F.O.B. value of five million
United States dollars. The crux of the controversy, however, is the manner of
implementation of Republic Act No. 6125.
Section 1 of R.A. 6125 clearly provides as follows:
An export product the aggregate annual F.O.B. value of which shall exceed
five million US dollars in any one calendar year during the effectivity of the
act shall likewise be subject to the rates of tax in force during the fiscal year
following its reaching the said aggregate value."
Petitioners contend that the stabilization tax to be collected from the banana industry
does not become due and collectible until July 1, 1972 at the rate of 4% of the F.O.B.
peso proceeds of the export shipped from July 1, 1972 to June 30,1973. They further
contend that respondent gave retroactive effect to the law (RA 6125) by ruling in
Monetary Board Resolution No. 1995 dated December 3, 1 971, that the export
stabilization tax on banana industry would start to accrue on January 1, 1972 at the
rate of 6% of the F.O.B. peso proceeds of export shipped from July 1, 1971 to June
30, 1972 (Rollo, pp. 3-4).
Respondent, on the other hand, contends that the aforecited provision of RA 6125
merely prescribes the rates that may be imposed but does not provide when the tax
shall be collected and makes no reference to any definite fixed period when the tax
shall begin to be collected (Rollo, pp. 77-78).
There is merit in this petition.
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).
Pursuant to the aforecited provision, the Monetary Board issued Resolution No. 1179
which contained the rules and regulations for the implementation of said provision
which Board resolution was subsequently embodied in Central Bank Circular No. 309,
dated August 10, 1970 (duly published in the Official Gazette, Vol. 66, No. 34, August
24, 1940, p. 7855 and in three newspapers of general circulation throughout the
Philippines namely, the Manila Times, Manila Chronicle and Manila Daily Bulletin).
Section 3 of Central Bank Circular No. 309, "provides that the stabilization tax shall
begin to apply on January first following the calendar year during which such export
products shall have reached the aggregate annual F.O.B. value of more than $5
million and the applicable tax rates shall be the rates prescribed in schedule (b) of
Section 1 of RA No. 6125 for the fiscal year following the reaching of the said
aggregate value." Central Bank Circular No. 309 was subsequently reaffirmed in
Monetary Board Resolution No. 1995 herein assailed by petitioners for being null and
void (Rollo, pp. 97- 98).
In its comment (Rollo, p. 40), respondent argues that the request for authoritative
pronouncement of petitioners was made because there was no express provision in
Section 1 of RA 6125 which categorically states, when the stabilization tax shall begin
17
to accrue on those aggregate annual F.O.B. values exceeding five (5) million United
States dollars in any one calendar year during the effectivity of said act. For which
reason, the law itself authorized it under Section 7 to promulgate rules and
regulations to carry out the provisions of said law.
In petitioner's reply (Rollo, p. 154) they argue that since the Banana Exports reached
the aggregate annual F.O.B. value of US $5 million in August 1971, the stabilization
tax on banana should be imposed only on July 1, 1972, the fiscal year following the
calendar year during which the industry attained the $5 million mark. Their argument
finds support in the very language of the law and upon congressional record where a
clarification on the applicability of the law was categorically made by the then Senator
Aytona who stated that the tax shall be applicable only after the $5 million aggregate
value is reached, making such tax prospective in application and for a period of one
year- referring to the fiscal year (Annex 8, Comment of Respondent; Rollo, p. 60).
Clearly such clarification was indicative of the legislative intent. Further, they argue
that respondent bank through the Monetary Board clearly overstepped RA 6125
which empowered it to promulgate rules and regulations for the purpose of carrying
out the provisions of said act, because while Section 1 of the law authorizes it to levy
a stabilization tax on petitioners only in the fiscal year following their reaching the
aggregate annual F.O.B. value of US $5 million, that is, the fiscal year July 1, 1972 to
June 30, 1973, at a tax rate of 4% of the F.O.B. peso proceeds, respondent in gross
violation of the law, instead issued Resolution No. 1995 which impose a 6%
stabilization tax for the calendar year January 1, 1972 to June 30, 1972, which
obviously is in excess of its jurisdiction. It was further argued that in directing its agent
bank to collect the stabilization tax in accordance with Monetary Board Resolution No.
1995, it acted whimsically and capriciously. (Rollo, p. 155).
It will be observed that while Monetary Board Resolution No. 1995 cannot be said to
be the product of grave abuse of discretion but rather the result of respondent's
overzealous desire to carry into effect the provisions of RA 6125, it is evident that the
Board acted beyond its authority under the law and the Constitution. Hence, the
petition for certiorari and prohibition in the case at bar, is proper.
Moreover, there is no dispute that in case of discrepancy between the basic law and a
rule or regulation issued to implement said law, the basic law prevails because said
rule or regulation cannot go beyond the terms and provisions of the basic law (People
vs. Lim, 108 Phil. 1091). Rules that subvert the statute cannot be sanctioned
(University of Sto. Tomas v. Board of Tax Appeals, 93 Phil. 376; Del Mar v. Phil.
Veterans Administration, 51 SCRA 340). Except for constitutional officials who can
trace their competence to act to the fundamental law itself, a public official must
locate to the statute relied upon a grant of power before he can exercise it.
Department zeal may not be permitted to outrun the authority conferred by statute
(Radio Communications of the Philippines, Inc. v. Santiago L-29236, August 21, 1974,
58 SCRA 493; cited in Tayug Rural Bank v. Central Bank, L-46158, November
28,1986,146 SCRA 120,130).
PREMISES CONSIDERED, this petition is hereby GRANTED.
SO ORDERED.
Melencio-Herrera (Chairperson), Padilla and Sarmiento JJ., concu
SECOND DIVISION
G.R. No. L-27520 January 21, 1987
GLOBE WIRELESS LTD., petitioner,
vs.
PUBLIC SERVICE COMMISSION and ANTONIO B. ARNAIZ, respondents.
RESOLUTION
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.
18
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 TWOHUNDRED [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].
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.

Its motion for reconsideration having been denied, petitioner instituted the instant HOLY SPIRIT HOMEOWNERS G.R. No. 163980
petition. ASSOCIATION, INC. and NESTORIO
F. APOLINARIO, in his personal
capacity and as President of Holy
We find for petitioner.
Spirit Homeowners Association, Inc., Present:
Petitioners,
Verily, Section 13 of Commonwealth Act No. 146, as amended otherwise known as PANGANIBAN, C.J.,
the Public Service Act, vested in the Public Service Commission jurisdiction, - versus - PUNO,
supervision and control over all Public services and their franchises, equipment and QUISUMBING,
other properties. However, Section 5 of Republic Act No. 4630, the legislative YNARES-SANTIAGO,
SECRETARY MICHAEL DEFENSOR, SANDOVAL-GUTIERREZ,
franchise under which petitioner was operating, limited respondent Commission's
in his capacity as Chairman of the CARPIO,
jurisdiction over petitioner only to the rate which petitioner may charge the Public. Housing and Urban Development AUSTRIA-MARTINEZ,
Thus, Coordinating Council (HUDCC), CORONA,
ATTY. EDGARDO PAMINTUAN, CARPIO MORALES,
Sec. 5. The Public Service Commission is hereby given jurisdiction over the in his capacity as General Manager of CALLEJO, SR.,
grantee only with respect to the rates which the grantee may charge the the National Housing Authority (NHA), AZCUNA,
MR. PERCIVAL CHAVEZ, in his TINGA,
public subject to international commitments made or adhered to by the capacity as Chairman of the Presidential CHICO-NAZARIO,
Republic of the Philippines. (Emphasis supplied.) Commission for the Urban Poor (PCUP), GARCIA, and
MAYOR FELICIANO BELMONTE, in VELASCO, JR., JJ.
The act complained of consisted in petitioner having allegedly failed to deliver the his capacity as Mayor of Quezon City,
telegraphic message of private respondent to the addressee in Madrid, Spain. SECRETARY ELISEA GOZUN, in her
capacity as Secretary of the Department
Obviously, such imputed negligence had nothing whatsoever to do with the subject
of Environment and Natural Resources
matter of the very limited jurisdiction of the Commission over petitioner. (DENR) and SECRETARY FLORENTE Promulgated:
SORIQUEZ, in his capacity as Secretary
Moreover, under Section 21 of C.A. No. 146, as amended, the Commission was of the Department of Public Works and
empowered to impose an administrative fine in cases of violation of or failure by a Highways (DPWH) as ex-officio members
Public service to comply with the terms and conditions of any certificate or any orders, of the NATIONAL GOVERNMENT August 3, 2006
CENTER ADMINISTRATION
decisions or regulations of the Commission. petitioner operated under a legislative
COMMITTEE,
franchise, so there were no terms nor conditions of any certificate issued by the Respondents.
Commission to violate. Neither was there any order, decision or regulation from the
Commission applicable to petitioner that the latter had allegedly violated, disobeyed, x ---------------------------------------------------------------------------------- x
defied or disregarded. DECISION

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
TINGA, J.:
The instant petition for prohibition under Rule 65 of the 1997 Rules of Civil Procedure, with
prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction,
seeks to prevent respondents from enforcing the implementing rules and regulations (IRR) of
19
Republic Act No. 9207, otherwise known as the National Government Center (NGC) Housing
and Land Utilization Act of 2003.
Petitioner Holy Spirit Homeowners Association, Inc. (Association) is a homeowners
association from the West Side of the NGC. It is represented by its president, Nestorio F.
Apolinario, Jr., who is a co-petitioner in his own personal capacity and on behalf of the
association.
Named respondents are the ex-officio members of the National Government Center
Administration Committee (Committee). At the filing of the instant petition, the Committee
was composed of Secretary Michael Defensor, Chairman of the Housing and Urban
Development Coordinating Council (HUDCC), Atty. Edgardo Pamintuan, General Manager of
the National Housing Authority (NHA), Mr. Percival Chavez, Chairman of the Presidential
Commission for Urban Poor (PCUP), Mayor Feliciano Belmonte of Quezon City, Secretary
Elisea Gozun of the Department of Environment and Natural Resources (DENR), and
Secretary Florante Soriquez of the Department of Public Works and Highways (DPWH).
Prior to the passage of R.A. No. 9207, a number of presidential issuances authorized the
creation and development of what is now known as the National Government Center (NGC).
On March 5, 1972, former President Ferdinand Marcos issued Proclamation No.
1826, reserving a parcel of land in Constitution Hills, Quezon City, covering a little over 440
hectares as a national government site to be known as the NGC. [1]
On August 11, 1987, then President Corazon Aquino issued Proclamation No. 137,
excluding 150 of the 440 hectares of the reserved site from the coverage of Proclamation No.
1826 and authorizing instead the disposition of the excluded portion by direct sale to the bona
fide residents therein.[2]
In view of the rapid increase in population density in the portion excluded by
Proclamation No. 137 from the coverage of Proclamation No. 1826, former President Fidel
Ramos issued Proclamation No. 248 on September 7, 1993, authorizing the vertical
development of the excluded portion to maximize the number of families who can effectively
become beneficiaries of the governments socialized housing program. [3]
On May 14, 2003, President Gloria Macapagal-Arroyo signed into law R.A. No.
9207. Among the salient provisions of the law are the following:
SEC. 2. Declaration of Policy. It is hereby declared the policy of
the State to secure the land tenure of the urban poor. Toward this end,
lands located in the NGC, Quezon City shall be utilized for housing,
socioeconomic, civic, educational, religious and other purposes.
SEC. 3. Disposition of Certain Portions of
the National Government Center Site to Bona Fide Residents.
Proclamation No. 1826, Series of 1979, is hereby amended by excluding
from the coverage thereof, 184 hectares on the west side and 238 hectares
on the east side of Commonwealth Avenue, and declaring the same open
for disposition to bona fide residents therein: Provided, That the
determination of the bona fide residents on the west side shall be based on
the census survey conducted in 1994 and the determination of the bona
fide residents on the east side shall be based on the census survey
conducted in 1994 and occupancy verification survey conducted in
2000: Provided, further, That all existing legal agreements, programs and
plans signed, drawn up or implemented and actions taken, consistent with
the provisions of this Act are hereby adopted.
SEC. 4. Disposition of Certain Portions of
the National Government Center Site for Local Government or
Community Facilities, Socioeconomic, Charitable, Educational and
Religious Purposes. Certain portions of land within the aforesaid area for
local government or community facilities, socioeconomic, charitable,
educational and religious institutions are hereby reserved for disposition
for such purposes: Provided, That only those institutions already
operating and with existing facilities or structures, or those occupying the
land may avail of the disposition program established under the provisions
this Act; Provided, further, That in ascertaining the specific areas that may
be disposed of in favor of these institutions, the existing site allocation
shall be used as basis therefore: Provided, finally. That in determining the
reasonable lot allocation of such institutions without specific lot
allocations, the land area that may be allocated to them shall be based on
the area actually used by said institutions at the time of effectivity of this
Act. (Emphasis supplied.)
In accordance with Section 5 of R.A. No. 9207, [4] the Committee formulated the
Implementing Rules and Regulations (IRR) of R.A. No. 9207 on June 29, 2004. Petitioners
subsequently filed the instant petition, raising the following issues:
WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1)
AND 3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC
ACT NO. 9207, OTHERWISE KNOWN AS NATIONAL
GOVERNMENT CENTER (NGC) HOUSING AND LAND
UTILIZATION ACT OF 2003 SHOULD BE DECLARED NULL AND
VOID FOR BEING INCONSISTENT WITH THE LAW IT SEEKS TO
IMPLEMENT.
WHETHER OR NOT SECTION 3.1 (A.4), 3.1 (B.2), 3.2 (A.1)
AND 3.2 (C.1) OF THE RULES AND REGULATIONS OF REPUBLIC
ACT NO. 9207, OTHERWISE KNOWN AS NATIONAL
GOVERNMENT CENTER (NGC) HOUSING AND LAND
UTILIZATION ACT OF 2003 SHOULD BE DECLARED NULL AND
VOID FOR BEING ARBITRARY, CAPRICIOUS AND WHIMSICAL.[5]
First, the procedural matters.
The Office of the Solicitor General (OSG) argues that petitioner Association cannot
question the implementation of Section 3.1 (b.2) and Section 3.2 (c.1) since it does not claim
any right over the NGC East Side. Section 3.1 (b.2) provides for the maximum lot area that
20
may be awarded to a resident-beneficiary of the NGC East Side, while Section 3.2 (c.1)
imposes a lot price escalation penalty to a qualified beneficiary who fails to execute a contract
to sell within the prescribed period. [6] Also, the OSG contends that since petitioner association
is not the duly recognized peoples organization in the NGC and since petitioners not qualify as
beneficiaries, they cannot question the manner of disposition of lots in the NGC. [7]
Legal standing or locus standi has been defined as a personal and substantial interest
in the case such that the party has sustained or will sustain direct injury as a result of the
governmental act that is being challenged. The gist of the question of standing is whether a
party alleges such personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions. [8]
Petitioner association has the legal standing to institute the instant petition, whether
or not it is the duly recognized association of homeowners in the NGC. There is no dispute
that the individual members of petitioner association are residents of the NGC. As such they
are covered and stand to be either benefited or injured by the enforcement of the IRR,
particularly as regards the selection process of beneficiaries and lot allocation to qualified
beneficiaries. Thus, petitioner association may assail those provisions in the IRR which it
believes to be unfavorable to the rights of its members. Contrary to the OSGs allegation that
the failure of petitioner association and its members to qualify as beneficiaries effectively bars
them from questioning the provisions of the IRR, such circumstance precisely operates to
confer on them the legal personality to assail the IRR. Certainly, petitioner and its members
have sustained direct injury arising from the enforcement of the IRR in that they have been
disqualified and eliminated from the selection process. While it is true that petitioners claim
rights over the NGC West Side only and thus cannot be affected by the implementation of
Section 3.1 (b.2), which refers to the NGC East Side, the rest of the assailed provisions of the
IRR, namely, Sections 3.1 (a.4), 3.2 (a.1) and 3.2 (c.1), govern the disposition of lots in the
West Side itself or all the lots in the NGC.
We cannot, therefore, agree with the OSG on the issue of locus standi. The petition
does not merit dismissal on that ground.
There are, however, other procedural impediments to the granting of the instant
petition. The OSG claims that the instant petition for prohibition is an improper remedy
because the writ of prohibition does not lie against the exercise of a quasi-legislative function.
[9]
Since in issuing the questioned IRR of R.A. No. 9207, the Committee was not exercising
judicial, quasi-judicial or ministerial function, which is the scope of a petition for prohibition
under Section 2, Rule 65 of the 1997 Rules of Civil Procedure, the instant prohibition should
be dismissed outright, the OSG contends. For their part, respondent Mayor of Quezon
City[10] and respondent NHA[11] contend that petitioners violated the doctrine of hierarchy of
courts in filing the instant petition with this Court and not with the Court of Appeals, which
has concurrent jurisdiction over a petition for prohibition.
The cited breaches are mortal. The petition deserves to be spurned as a consequence.
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.[12]
In questioning the validity or constitutionality of a rule or regulation issued by an
administrative agency, a party need not exhaust administrative remedies before going to
court. This principle, however, applies only where the act of the administrative agency
concerned was performed pursuant to its quasi-judicial function, and not when the assailed act
pertained to its rule-making or quasi-legislative power.[13]
The assailed IRR was issued pursuant to the quasi-legislative power of the
Committee expressly authorized by R.A. No. 9207. The petition rests mainly on the theory
that the assailed IRR issued by the Committee is invalid on the ground that it is not germane to
the object and purpose of the statute it seeks to implement. 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.[14]
Since the regular courts have jurisdiction to pass upon the validity of the assailed
IRR issued by the Committee in the exercise of its quasi-legislative power, the judicial course
to assail its validity must follow the doctrine of hierarchy of courts. Although the Supreme
Court, Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue
writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of court forum. [15]
True, this Court has the full discretionary power to take cognizance of the petition
filed directly with it if compelling reasons, or the nature and importance of the issues raised,
so warrant.[16]A direct invocation of the Courts original jurisdiction to issue these writs should
be allowed only when there are special and important reasons therefor, clearly and specifically
set out in the petition.[17]
In Heirs of Bertuldo Hinog v. Melicor,[18] the Court said that it will not entertain
direct resort to it unless the redress desired cannot be obtained in the appropriate courts, and
exceptional and compelling circumstances, such as cases of national interest and of serious
implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for
the exercise of its primary jurisdiction. [19] A perusal, however, of the petition for prohibition
shows no compelling, special or important reasons to warrant the Courts taking cognizance of
the petition in the first instance. Petitioner also failed to state any reason that precludes the
lower courts from passing upon the validity of the questioned IRR. Moreover, as provided in
Section 5, Article VIII of the
Constitution,[20] the Courts power to evaluate the validity of an implementing rule or
regulation is generally appellate in nature. Thus, following the doctrine of hierarchy of courts,
the instant petition should have been initially filed with the Regional Trial Court.
A petition for prohibition is also not the proper remedy to assail an IRR issued in the
exercise of a quasi-legislative function. Prohibition is an extraordinary writ directed against
any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial
or ministerial functions, ordering said entity or person to desist from further proceedings when
said proceedings are without or in excess of said entitys or persons jurisdiction, or are
accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy
and adequate remedy in the ordinary course of law. [21] Prohibition lies against judicial or
21
ministerial functions, but not against legislative or quasi-legislative functions. Generally, the
purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction in
order to maintain the administration of justice in orderly channels. [22] Prohibition is the proper
remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or
when, in the exercise of jurisdiction in handling matters clearly within its cognizance the
inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate
remedy available in the ordinary course of law by which such relief can be obtained. [23] Where
the principal relief sought is to invalidate an IRR, petitioners remedy is an ordinary action for
its nullification, an action which properly falls under the jurisdiction of the Regional Trial
Court. In any case, petitioners allegation that respondents are performing or threatening to
perform functions without or in excess of their jurisdiction may appropriately be enjoined by
the trial court through a writ of injunction or a temporary restraining order.
In a number of petitions, [24] the Court adequately resolved them on other grounds
without adjudicating on the constitutionality issue when there were no compelling reasons to
pass upon the same. In like manner, the instant petition may be dismissed based on the
foregoing procedural grounds. Yet, the Court will not shirk from its duty to rule on the merits
of this petition to facilitate the speedy resolution of this case. In proper cases, procedural rules
may be relaxed or suspended in the interest of substantial justice. And the power of the Court
to except a particular case from its rules whenever the purposes of justice require it cannot be
questioned.[25]
Now, we turn to the substantive aspects of the petition. The outcome, however, is
just as dismal for petitioners.
Petitioners assail the following provisions of the IRR:
Section 3. Disposition of Certain portions of the NGC Site to the bonafide
residents
3.1. Period for Qualification of Beneficiaries
xxxx
(a.4) Processing and evaluation of qualifications shall be based on the
Code of Policies and subject to the condition that a beneficiary is qualified
to acquire only one (1) lot with a minimum of 36 sq. m. and maximum of
54 sq. m. and subject further to the availability of lots.
xxxx
(b.2) Applications for qualification as beneficiary shall be
processed and evaluated based on the Code of Policies including the
minimum and maximum lot allocation of 35 sq. m. and 60 sq. m.
xxxx
3.2. Execution of the Contract to Sell
(a) Westside
(a.1) All qualified beneficiaries shall execute Contract
to Sell (CTS) within sixty (60) days from the effectivity of the
IRR in order to avail of the lot at P700.00 per sq. m.
xxxx
(c) for both eastside and westside
(c.1) Qualified beneficiaries who failed to execute
CTS on the deadline set in item a.1 above in case of westside
and in case of eastside six (6) months after approval of the
subdivision plan shall be subjected to lot price escalation.
The rate shall be based on the formula to be set by the
National Housing Authority factoring therein the affordability
criteria. The new rate shall be approved by the NGC-
Administration Committee (NGC-AC).
Petitioners contend that the aforequoted provisions of the IRR are constitutionally
infirm as they are not germane to and/or are in conflict with the object and purpose of the law
sought to be implemented.
First. According to petitioners, the limitation on the areas to be awarded to qualified
beneficiaries under Sec. 3.1 (a.4) and (b.2) of the IRR is not in harmony with the provisions of
R.A. No. 9207, which mandates that the lot allocation to qualified beneficiaries shall be based
on the area actually used or occupied by bona fide residents without limitation to area. The
argument is utterly baseless
The beneficiaries of lot allocations in the NGC may be classified into two groups,
namely, the urban poor or the bona fide residents within the NGC site and certain government
institutions including the local government. Section 3, R.A. No. 9207 mandates the allocation
of additional property within the NGC for disposition to its bona fide residents and the manner
by which this area may be distributed to qualified beneficiaries. Section 4, R.A. No. 9207, on
the other hand, governs the lot disposition to government institutions. While it is true that
Section 4 of R.A. No. 9207 has a proviso mandating that the lot allocation shall be based on
the land area actually used or occupied at the time of the laws effectivity, this proviso applies
only to institutional beneficiaries consisting of the local government, socioeconomic,
charitable, educational and religious institutions which do not have specific lot allocations, and
not to the bona fide residents of NGC. There is no proviso which even hints that a bona
fide resident of the NGC is likewise entitled to the lot area actually occupied by him.
Petitioners interpretation is also not supported by the policy of R.A. No. 9207 and
the prior proclamations establishing the NGC. The governments policy to set aside public
property aims to benefit not only the urban poor but also the local government and various
government institutions devoted to socioeconomic, charitable, educational and
religious purposes.[26] Thus, although Proclamation No. 137 authorized the sale of lots to bona
fide residents in the NGC, only a third of the entire area of the NGC was declared open for
disposition subject to the condition that those portions being used or earmarked for public or
quasi-public purposes would be excluded from the housing program for NGC residents. The
same policy of rational and optimal land use can be read in Proclamation No. 248 issued by
then President Ramos. Although the proclamation recognized the rapid increase in the
population density in the NGC, it did not allocate additional property within the NGC for
urban poor housing but instead authorized the vertical development of the same 150 hectares
identified previously by Proclamation No. 137 since the distribution of individual lots would
not adequately provide for the housing needs of all the bona fide residents in the NGC.
In addition, as provided in Section 4 of R.A. No. 9207, the institutional beneficiaries
shall be allocated the areas actually occupied by them; hence, the portions intended for the
institutional beneficiaries is fixed and cannot be allocated for other non-institutional
beneficiaries. Thus, the areas not intended for institutional beneficiaries would have to be
22
equitably distributed among the bona fide residents of the NGC. In order to accommodate all
qualified residents, a limitation on the area to be awarded to each beneficiary must be fixed as
a necessary consequence.
Second. Petitioners note that while Sec. 3.2 (a.1) of the IRR fixes the selling rate of a
lot at P700.00 per sq. m., R.A. No. 9207 does not provide for the price. They add Sec. 3.2 (c.1)
penalizes a beneficiary who fails to execute a contract to sell within six (6) months from the
approval of the subdivision plan by imposing a price escalation, while there is no such penalty
imposed by R.A. No. 9207. Thus, they conclude that the assailed provisions conflict with R.A.
No. 9207 and should be nullified. The argument deserves scant consideration.
Where a rule or regulation has a provision not expressly stated or contained in the
statute being implemented, that provision does not necessarily contradict the statute. A
legislative rule is in the nature of subordinate legislation, designed to implement a primary
legislation by providing the details thereof. [27] All that is required is that the regulation should
be germane to the objects and purposes of the law; that the regulation be not in contradiction
to but in conformity with the standards prescribed by the law.[28]
In Section 5 of R.A. No. 9207, the Committee is granted the power to
administer, formulate guidelines and policies, and implement the disposition of the areas
covered by the law. Implicit in this authority and the statutes objective of urban poor housing
is the power of the Committee to formulate the manner by which the reserved property may be
allocated to the beneficiaries. Under this broad power, the Committee is mandated to fill in the
details such as the qualifications of beneficiaries, the selling price of the lots, the terms and
conditions governing the sale and other key particulars necessary to implement the objective
of the law. These details are purposely omitted from the statute and their determination is left
to the discretion of the Committee because the latter possesses special knowledge and
technical expertise over these matters.
The Committees authority to fix the selling price of the lots may be likened to the
rate-fixing power of administrative agencies. In case of a delegation of rate-fixing power, the
only standard which the legislature is required to prescribe for the guidance of the
administrative authority is that the rate be reasonable and just. However, it has been held that
even in the absence of an express requirement as to reasonableness, this standard may be
implied.[29] In this regard, petitioners do not even claim that the selling price of the lots is
unreasonable.
The provision on the price escalation clause as a penalty imposed to a beneficiary
who fails to execute a contract to sell within the prescribed period is also within the
Committees authority to formulate guidelines and policies to implement R.A. No. 9207. The
Committee has the power to lay down the terms and conditions governing the disposition of
said lots, provided that these are reasonable and just. There is nothing objectionable about
prescribing a period within which the parties must execute the contract to sell. This condition
can ordinarily be found in a contract to sell and is not contrary to law, morals, good customs,
public order, or public policy.
Third. Petitioners also suggest that the adoption of the assailed IRR suffers from a
procedural flaw. According to them the IRR was adopted and concurred in by several
representatives of peoples organizations contrary to the express mandate of R.A. No. 9207 that
only two representatives from duly recognized peoples organizations must compose the
NGCAC which promulgated the assailed IRR. It is worth noting that petitioner association is
not a duly recognized peoples organization.
In subordinate legislation, as long as the passage of the rule or regulation had the
benefit of a hearing, the procedural due process requirement is deemed complied with. That
there is observance of more than the minimum requirements of due process in the adoption of
the questioned IRR is not a ground to invalidate the same.
In sum, the petition lacks merit and suffers from procedural deficiencies.
WHEREFORE, the instant petition for prohibition is DISMISSED. Costs against
petitioners.
SO ORDERED.
G.R. No. L-46496 February 27, 1940
ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION,
INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court
of Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.
LAUREL, J.:
The Solicitor-General in behalf of the respondent Court of Industrial Relations in the
above-entitled case has filed a motion for reconsideration and moves that, for the
reasons stated in his motion, we reconsider the following legal conclusions of the
majority opinion of this Court:
1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo
de duracion o que no sea para una determinada, termina o bien por
voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado
para el pago de los salarios segun costumbre en la localidad o cunado se
termine la obra;
2. Que los obreros de una empresa fabril, que han celebrado contrato, ya
individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto
23
 obligados a cesar en sus tarbajos por haberse declarando paro forzoso en
la fabrica en la cual tarbajan, dejan de ser empleados u obreros de la
misma;
3. Que un patrono o sociedad que ha celebrado un contrato colectivo de
trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra
determiminada y que se niega a readmitir a dichos obreros que cesaron
como consecuencia de un paro forzoso, no es culpable de practica injusta in
incurre en la sancion penal del articulo 5 de la Ley No. 213 del
Commonwealth, aunque su negativa a readmitir se deba a que dichos
obreros pertenecen a un determinado organismo obrero, puesto que tales
ya han dejado deser empleados suyos por terminacion del contrato en virtud
del paro.
The respondent National Labor Union, Inc., on the other hand, prays for the vacation
of the judgement rendered by the majority of this Court and the remanding of the case
to the Court of Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was
shortage of leather soles in ANG TIBAY making it necessary for him to
temporarily lay off the members of the National Labor Union Inc., is entirely
false and unsupported by the records of the Bureau of Customs and the
Books of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro
was but a scheme to systematically prevent the forfeiture of this bond
despite the breach of his CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29,
1938, (re supposed delay of leather soles from the States) was but a
scheme to systematically prevent the forfeiture of this bond despite the
breach of his CONTRACT with the Philippine Army.
4. That the National Worker's Brotherhood of ANG TIBAY is a company or
employer union dominated by Toribio Teodoro, the existence and functions of
which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)
5. That in the exercise by the laborers of their rights to collective bargaining,
majority rule and elective representation are highly essential and
indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)
6. That the century provisions of the Civil Code which had been (the)
principal source of dissensions and continuous civil war in Spain cannot and
should not be made applicable in interpreting and applying the salutary
provisions of a modern labor legislation of American origin where the
industrial peace has always been the rule.
7. That the employer Toribio Teodoro was guilty of unfair labor practice for
discriminating against the National Labor Union, Inc., and unjustly favoring
the National Workers' Brotherhood.
8. That the exhibits hereto attached are so inaccessible to the respondents
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.
9. That 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 herein.
The petitioner, Ang Tibay, has filed an opposition both to the motion for
reconsideration of the respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to
the motion for a new trial of the respondent National Labor Union, Inc., we are of the
opinion that it is not necessary to pass upon the motion for reconsideration of the
Solicitor-General. We shall proceed to dispose of the motion for new trial of the
respondent labor union. Before doing this, however, we deem it necessary, in the
interest of orderly procedure in cases of this nature, in interest of orderly procedure in
cases of this nature, to make several observations regarding the nature of the powers
of the Court of Industrial Relations and emphasize certain guiding principles which
should be observed in the trial of cases brought before it. We have re-examined the
entire record of the proceedings had before the Court of Industrial Relations in this
case, and we have found no substantial evidence that the exclusion of the 89 laborers
here was due to their union affiliation or activity. The whole transcript taken contains
what transpired during the hearing and is more of a record of contradictory and
conflicting statements of opposing counsel, with sporadic conclusion drawn to suit
their own views. It is evident that these statements and expressions of views of
counsel have no evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically
stated in the law of its creation (Commonwealth Act No. 103). It is more an
administrative than a part of the integrated judicial system of the nation. It is not
intended to be a mere receptive organ of the Government. Unlike a court of justice
which is essentially passive, acting only when its jurisdiction is invoked and deciding
only cases that are presented to it by the parties litigant, the function of the Court of
24
Industrial Relations, as will appear from perusal of its organic law, is more active,
affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the
determination of disputes between employers and employees but its functions in the
determination of disputes between employers and employees but its functions are far
more comprehensive and expensive. It has jurisdiction over the entire Philippines, to
consider, investigate, decide, and settle any question, matter controversy or dispute
arising between, and/or affecting employers and employees or laborers, and regulate
the relations between them, subject to, and in accordance with, the provisions of
Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of
prevention, arbitration, decision and settlement, of any industrial or agricultural
dispute causing or likely to cause a strike or lockout, arising from differences as
regards wages, shares or compensation, hours of labor or conditions of tenancy or
employment, between landlords and tenants or farm-laborers, provided that the
number of employees, laborers or tenants of farm-laborers involved exceeds thirty,
and such industrial or agricultural dispute is submitted to the Court by the Secretary of
Labor or by any or both of the parties to the controversy and certified by the Secretary
of labor as existing and proper to be by the Secretary of Labor as existing and proper
to be dealth with by the Court for the sake of public interest. (Section 4, ibid.) It shall,
before hearing the dispute and in the course of such hearing, endeavor to reconcile
the parties and induce them to settle the dispute by amicable agreement. (Paragraph
2, section 4, ibid.) When directed by the President of the Philippines, it shall
investigate and study all industries established in a designated locality, with a view to
determinating the necessity and fairness of fixing and adopting for such industry or
locality a minimum wage or share of laborers or tenants, or a maximum "canon" or
rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid.)
In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes;
may employ mediation or conciliation for that purpose, or recur to the more effective
system of official investigation and compulsory arbitration in order to determine
specific controversies between labor and capital industry and in agriculture. There is
in reality here a mingling of executive and judicial functions, which is a departure from
the rigid doctrine of the separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673,
promulgated September 13, 1939, we had occasion to joint out that the Court of
Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had
occasion to point out that the Court of Industrial Relations is not narrowly constrained
by technical rules of procedure, and the Act requires it to "act according to justice and
equity and substantial merits of the case, without regard to technicalities or legal
forms and shall not be bound by any technicalities or legal forms and shall not be
bound by any technical rules of legal evidence but may inform its mind in such
manner as it may deem just and equitable." (Section 20, Commonwealth Act No.
103.) It shall not be restricted to the specific relief claimed or demands made by the
parties to the industrial or agricultural dispute, but may include in the award, order or
decision any matter or determination which may be deemed necessary or expedient
for the purpose of settling the dispute or of preventing further industrial or agricultural
disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this
Court have been especially regulated by the rules recently promulgated by the rules
recently promulgated by this Court to carry into the effect the avowed legislative
purpose. The fact, however, that the Court of Industrial Relations may be said to be
free from the rigidity of certain procedural requirements does not mean that it can, in
justifiable cases before it, entirely ignore or disregard the fundamental and essential
requirements of due process in trials and investigations of an administrative
character. There are primary rights which must be respected even in proceedings of
this character:
(1) The first of these rights is 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. In the language of Chief Hughes, in Morgan v.
U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and
property of the citizen shall be protected by the rudimentary requirements of
fair play.
(2) 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. (Chief Justice Hughes in
Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the
language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to
adduce evidence, without the corresponding duty on the part of the board to
consider it, is vain. Such right is conspicuously futile if the person or persons
to whom the evidence is presented can thrust it aside without notice or
consideration."
(3) "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 it is a nullity, a place when directly attached."
(Edwards vs. McCoy, supra.) This principle emanates from the more
fundamental is contrary to the vesting of unlimited power anywhere. Law is
both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion
(City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29,
1937, XXXVI O. G. 1335), but the evidence must be "substantial."
(Washington, Virginia and Maryland Coach Co. v. national labor Relations
Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means
such relevant evidence as a reasonable mind accept as adequate to support
a conclusion." (Appalachian Electric Power v. National Labor Relations
Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v.
25
Thompson Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v.
National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute
provides that "the rules of evidence prevailing in courts of law and equity
shall not be controlling.' The obvious purpose of this and similar provisions is
to free administrative boards from the compulsion of technical rules so that
the mere admission of matter which would be deemed incompetent inn
judicial proceedings would not invalidate the administrative order. (Interstate
Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48
Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville
R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v.
Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this
assurance of a desirable flexibility in administrative procedure does not go
far as to justify orders without a basis in evidence having rational probative
force. Mere uncorroborated hearsay or rumor does not constitute substantial
evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S.
Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(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. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88,
33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal
to the evidence disclosed to the parties, can the latter be protected in their
right to know and meet the case against them. It should not, however,
detract from their duty actively to see that the law is enforced, and for that
purpose, to use the authorized legal methods of securing evidence and
informing itself of facts material and relevant to the controversy. Boards of
inquiry may be appointed for the purpose of investigating and determining
the facts in any given case, but their report and decision are only advisory.
(Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations
may refer any industrial or agricultural dispute or any matter under its
consideration or advisement to a local board of inquiry, a provincial fiscal. a
justice of the peace or any public official in any part of the Philippines for
investigation, report and recommendation, and may delegate to such board
or public official such powers and functions as the said Court of Industrial
Relations may deem necessary, but such delegation shall not affect the
exercise of the Court itself of any of its powers. (Section 10, ibid.)
(6) The Court of Industrial Relations 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. It may be that the volume of work is such that it is literally Relations
personally to decide all controversies coming before them. In the United
States the difficulty is solved with the enactment of statutory authority
authorizing examiners or other subordinates to render final decision, with the
right to appeal to board or commission, but in our case there is no such
statutory authority.
(7) The Court of Industrial Relations 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 decision rendered.
The performance of this duty is inseparable from the authority conferred
upon it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that,
except as to the alleged agreement between the Ang Tibay and the National Worker's
Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a
factual basis upon which to predicate, in a national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for
the by respondent National Labor Union, Inc., it is alleged that "the supposed lack of
material claimed by Toribio Teodoro was but a scheme adopted to systematically
discharged all the members of the National Labor Union Inc., from work" and this
avernment is desired to be proved by the petitioner with the "records of the Bureau of
Customs and the Books of Accounts of native dealers in leather"; that "the National
Workers Brotherhood Union of Ang Tibay is a company or employer union dominated
by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial
avernments" are so inaccessible to the respondents that even within the exercise of
due diligence they could not be expected to have obtained them and offered as
evidence in the Court of Industrial Relations", and that the documents attached to the
petition "are of such far reaching importance and effect that their admission would
necessarily mean the modification and reversal of the judgment rendered herein." We
have considered the reply of Ang Tibay and its arguments against the petition. By and
large, after considerable discussions, we have come to the conclusion that the
interest of justice would be better served if the movant is given opportunity to present
at the hearing the documents referred to in his motion and such other evidence as
may be relevant to the main issue involved. The legislation which created the Court of
Industrial Relations and under which it acts is new. The failure to grasp the
fundamental issue involved is not entirely attributable to the parties adversely affected
by the result. Accordingly, the motion for a new trial should be and the same is hereby
granted, and the entire record of this case shall be remanded to the Court of Industrial
Relations, with instruction that it reopen the case, receive all such evidence as may
be relevant and otherwise proceed in accordance with the requirements set forth
hereinabove. So ordered.
Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur
26
 On May 11, 2000, respondent also instituted a criminal case against petitioner before the
Municipal Trial Court of New Corella, docketed as Criminal Case No. 1712, for Violation of
FIRST DIVISION Section 5 (b), Article III of Republic Act No. 7610, otherwise known as the Child Abuse Act.

SPO1 LEONITO ACUZAR,

Petitioner, On May 15, 2000, petitioner filed his Counter-Affidavit [5] before the PLEB vehemently
- versus - denying all the accusations leveled against him. In support thereof, petitioner attached the
affidavit of complainants daughter, Rigma A. Jorolan, who denied having any relationship
with the petitioner or having kissed him despite knowing him to be a married person.
APRONIANO JOROLAN and HON. EDUARDO A. APRESA, PEOPLES LAW
ENFORCEMENT BOARD (PLEB) Chairman, New Corella, Davao del Norte, On July 24, 2000, petitioner filed a motion to suspend the proceedings before the PLEB
Respondents. G.R. No. 177878 pending resolution of the criminal case filed before the regular court. The PLEB denied his
motion for lack of merit and a hearing of the case was conducted. The PLEB also denied
Present: petitioners motion for reconsideration on August 9, 2000 for allegedly being dilatory.
PUNO, C.J., Chairperson,
CARPIO MORALES, On August 17, 2000, after due proceedings, the PLEB issued a decision, the decretal portion of
LEONARDO-DE CASTRO, which reads:
BERSAMIN, and
VILLARAMA, JR., JJ. WHEREFORE, premises considered, the Board finds the respondent,
SPO1 Leonito Acuzar, PNP New Corella, Davao del Norte Police Station
Promulgated: GUILTY of GRAVE MISCONDUCT (Child Abuse) which is punishable
by DISMISSAL effective immediately.

April 7, 2010 SO ORDERED.[6]

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, filed by petitioner SPO1 Leonito Acuzar assailing the March 23, 2007
Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 77110. The assailed decision
reversed and set aside the October 15, 2002 Decision[2] of the Regional Trial Court (RTC) of
Tagum City, Branch 31, which had annulled the Decision [3] of the Peoples Law Enforcement
Board (PLEB) of the Municipality of New Corella, Davao del Norte, finding petitioner guilty
of Grave Misconduct and ordering his dismissal from service.
Immediately upon receipt of the decision, petitioner filed a Petition for Certiorari with Prayer
for Preliminary Mandatory Injunction and Temporary Restraining Order [7] with the RTC of
Tagum City, Branch 31, docketed as Special Civil Case No. 384. Petitioner alleged that the
subject decision was issued without giving him an opportunity to be heard. He likewise
averred that the respondent Board acted without jurisdiction in proceeding with the case
without the petitioner having been first convicted in the criminal case before the regular court.
Petitioner pointed out that under the PLEB Rules of Procedure, prior conviction was required
before the Board may act on the administrative case considering that the charge was actually
for violation of law, although denominated as one (1) for grave misconduct.
On September 16, 2000, petitioner was ordered dismissed from the Philippine National Police
(PNP) by the Chief Regional Directorial Staff of the PNP, Police Regional Office 11, effective
September 7, 2000.

The facts are as follows:

On October 15, 2002, the trial court rendered a Decision annulling the Decision of the
PLEB. The trial court noted:
On May 2, 2000, respondent Aproniano Jorolan filed Administrative Case No. 2000-
01[4] against petitioner before the PLEB charging the latter of Grave Misconduct for allegedly xxxx
having an illicit relationship with respondents minor daughter.
But nothing in the record would show that the Board scheduled
a hearing for the reception of the evidence of the petitioner. In a nutshell,

27
 the petitioner was not given his day in Court. The Board could have
scheduled the hearing for the reception of petitioners evidence and if he
failed to appear, then the Board could have considered the non-appearance
of the petitioner as a waiver to present his evidence. It was only then that
the decision could have been rendered.
xxxx
The hearing at the Peoples Law Enforcement Board, although
administrative in nature, has penal sanction of dismissal and for forfeiture
of benefits of the petitioner. It is along this context that the petitioner
should be afforded all the opportunities of hearing which principally
includes the reception of his evidence consistent with our established
rules. Due process of law embraces not only substantive due process, but
also procedural due process.
xxxx
While this Court does not tolerate any form of misconduct
committed by members of the Philippine National Police, yet it equally
considers the right of the petitioner enshrined under the Bill of Rights and
the deprivation of petitioners gainful employment which is the economic
life blood of the family, especially the innocent dependents. [8]
Respondent thereafter elevated the case to the CA. On March 23, 2007, the CA rendered its
Decision reversing and setting aside the trial courts decision.
The CA found merit in respondents argument that the petition for certiorari filed by petitioner
before the RTC was not the proper remedy because (1) appeal was available and (2) the issues
raised were not pure questions of law but both questions of law and fact. According to the CA,
the existence and availability of the right of appeal proscribes resort to certiorari because one
(1) of the requirements for its availment is the absence of the remedy of appeal or any other
plain, speedy or adequate remedy. The CA ruled that petitioner should have appealed the
decision of the PLEB to the regional appellate board of the PNP before resorting to certiorari
before the court. The CA added that while it is true that there are instances where the
extraordinary remedy of certiorari may be resorted to despite the availability of an appeal,
petitioner, however, failed to demonstrate any ground to warrant immediate resort to it. Thus,
it held that the trial court erred in giving due course to the petition.
Petitioner now assails the Decision of the CA in this recourse raising the following assigned
errors:
1. The Honorable Court of Appeals erred in ruling that Certiorari was
not a proper remedy [to assail] the Decision of the Respondent-
Peoples Law Enforcement Board (PLEB), New Corella, Davao del
Norte, because (1) appeal was available; and (2) the issue raised were
not pure questions of law but both questions of law and fact. And that
herein Petitioner failed to exhaust administrative remedies.
2. The Honorable Court of Appeals erred in ruling that Petitioner was
accorded with due process before the Respondent-Peoples Law
Enforcement Board (PLEB), New Corella, Davao del Norte, and was
given his day in court for his defense.[9]
In essence, the issue is whether or not the CA erred in ruling that petitioners resort to certiorari
was not warranted as the remedy of appeal from the decision of the PLEB was available to
him.
Petitioner contends that the petition he filed before the trial court was appropriate because the
instant case falls under the exceptions to the rule on exhaustion of administrative remedies, the
decision being patently illegal. Petitioner maintains that a conviction should have been first
obtained in the criminal case filed against him for child abuse before the PLEB can acquire
jurisdiction over his administrative case. He also maintains that the Boards decision was
reached without giving him an opportunity to be heard and his right to due process was
violated. The Boards decision having been rendered without jurisdiction, appeal was not an
appropriate remedy.
We affirm the appellate courts ruling.
To reiterate, petitioner opted to file a petition for certiorari before the trial court on the pretext
that the PLEB had no jurisdiction to hear the administrative case until petitioner is convicted
before the regular court. According to petitioner, although the case filed before the PLEB was
captioned as Grave Misconduct, the offense charged was actually for Violation of Law, which
requires prior conviction before a hearing on the administrative case can proceed. Thus,
petitioner insists that the PLEB should have awaited the resolution of the criminal case before
conducting a hearing on the administrative charge against him.
The contention however is untenable. A careful perusal of respondents affidavit-complaint
against petitioner would show that petitioner was charged with grave misconduct for engaging
in an illicit affair with respondents minor daughter, he being a married man, and not for
violation of law, as petitioner would like to convince this Court. Misconduct generally means
wrongful, improper or unlawful conduct, motivated by premeditated, obstinate or intentional
purpose.[10] It usually refers to transgression of some established and definite rule of action,
where no discretion is left except what necessity may demand; it does not necessarily imply
corruption or criminal intention but implies wrongful intention and not to mere error of
judgment.[11] On the other hand, violation of law presupposes final conviction in court of any
crime or offense penalized under the Revised Penal Code or any special law or ordinance.
[12]
The settled rule is that criminal and administrative cases are separate and distinct from each
other.[13] In criminal cases, proof beyond reasonable doubt is needed whereas in administrative
proceedings, only substantial evidence is required. Verily, administrative cases may proceed
independently of criminal proceedings. [14] The PLEB, being the administrative disciplinary
28
body tasked to hear complaints against erring members of the PNP, has jurisdiction over the
case.
Moreover, Section 43 (e) of Republic Act No. 6975,[15] is explicit, thus:
SEC. 43. Peoples Law Enforcement Board (PLEB). - x x x
xxxx
(e) Decisions The decision of the PLEB shall become final and
executory: Provided, That a decision involving demotion or dismissal
from the service may be appealed by either party with the regional
appellate board within ten (10) days from receipt of the copy of the
decision.
It is apparent from the foregoing provision that the remedy of appeal from the decision of the
PLEB to the Regional Appellate Board was available to petitioner. Since appeal was
available, filing a petition for certiorari was inapt. The existence and availability of the right of
appeal are antithetical to the availment of the special civil action of certiorari. [16] Corollarily,
the principle of exhaustion of administrative remedies requires that before a party is allowed to
seek the intervention of the court, it is a precondition that he should have availed of the means
of administrative processes afforded to him. If a remedy is available within the administrative
machinery of the administrative agency, then this alternative should first be utilized before
resort can be made to the courts. This is to enable such body to review and correct any
mistakes without the intervention of the court.
Moreover, for a special civil action for certiorari to prosper, the following requisites must
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 to lack or excess of jurisdiction; and
(3) there is no appeal nor any plain, speedy and adequate remedy in the ordinary course of law.
[17]
For sure, petitioners bare allegation that appeal from the judgment of the Board may not be
adequate does not justify immediate resort to certiorari. Moreover, the extraordinary writ of
certiorari may be issued only where it is clearly shown that there is patent and gross abuse of
discretion as to amount to an evasion of positive duty or to virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an
arbitrary and despotic manner by reason of passion or personal hostility. [18] Here, not only was
an appeal available to petitioner as a remedy from the decision of the PLEB, petitioner also
failed to sufficiently show any grave abuse of discretion of the Board which would justify his
immediate resort to certiorari in lieu of an appeal.
Contrary to petitioners claim that he has not been afforded all the opportunity to present his
side, our own review of the records of the proceedings before the PLEB reveals
otherwise. The PLEB summarized its proceedings as follows:
The Board issued a summon to SPO1 Leonito Acuzar on May
03, 2000 informing him of the case filed against him. On May 4, 2000, the
respondents wife Mrs. Arcella Acuzar made an informal letter addressed to
the Chairman of the PLEB that the respondent cannot answer the summon
because he was still in a critical condition in the hospital as alleged. After
three days, May 9, 2000 the respondent through his legal counsel filed a
motion for extension of time to submit counter affidavit. The Board
received the sworn statement of the respondent on May 16,
2000. Subpoenas were sent to both parties informing them of the first
hearing which was set on June 01, 2000; 8:00 a.m. at the SB session hall,
New Corella, Davao del Norte. Then the Board set for a second hearing on
June 15, 2000; 8:30 a.m. but the respondents counsel moved for a
postponement because he was slated to appear before the Regional Trial
Court Branch 1, Tagum City of the same date and time; the third hearing
on June 21, 2000; 8:30 a.m.; the fourth hearing on July 13, 2000, 8:30
a.m.; the fifth hearing on July 19, 2000, 9:00 a.m.; [and] the sixth hearing
on July 26, 2000 [were] postponed because the respondents counsel filed
motions for postponement and to suspend proceedings pending resolution
of criminal case before the regular court and the final hearing was set on
August 03, 2000; 9:00 a.m. of the same place but the respondent walked
out during the hearing because of the non-appearance of his legal counsel
but the PLEB Members continued to hear the case without the respondent
and legal counsels presence based on sworn affidavit in the hands of the
PLEB Members.[19]
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 respondents legal rights; (2) a real opportunity to be heard personally or with the
assistance of counsel, to present witnesses and evidence in ones favor, and to defend ones
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. [20]
In the instant case, petitioner was notified of the complaint against him and in fact, he had
submitted his counter-affidavit and the affidavits of his witnesses. He attended the hearings
together with his counsel and even asked for several postponements. Petitioner therefore
cannot claim that he had been denied of due process. 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 due process. The requirements are satisfied where the parties are afforded fair and
reasonable opportunity to explain their side of the controversy. 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 direct testimony.Here, we note that petitioner
had more than enough opportunity to present his side and adduce evidence in support of his
defense; thus, he cannot claim that his right to due process has been violated.
WHEREFORE, the petition is DENIED. The Decision dated March 23, 2007 of the Court of
Appeals in CA-G.R. SP No. 77110 is hereby AFFIRMED.
29
Costs against petitioner.
SO ORDERED.
G.R. Nos. 90660-61 January 21, 1991
UTE PATEROK, petitioner-appellant,
vs.
BUREAU OF CUSTOMS and HON. SALVADOR N. MISON, respondents-appellees.
Untalan, Trinidad, Razon, Santos & Associate Law Offices for petitioner-appellant.
SARMIENTO, J.:
Before us is a special civil action for certiorari filed by Ute Paterok the petitioner
herein, seeking the annulment of the decision 1 rendered by the public respondent,
the Bureau of Customs, through its Commissioner, the Hon. Salvador N. Mison,
approving the order2 of forfeiture issued by the District Collector of Customs against
the shipment of one (1) unit of Mercedes Benz of the petitioner in favor of the
government.
The antecedent facts are as follows:
In March 1986, the petitioner shipped from Germany to the Philippines two (2)
containers, one with used household goods and the other with two (2) used
automobiles (one Bourgetti and one Mercedes Benz 450 SLC). The first container
was released by the Bureau of Customs and later on, the Bourgetti car, too. The
Mercedes Benz, however, remained under the custody of the said Bureau.
In December 1987, after earnest efforts to secure the release of the said Mercedes
Benz, the petitioner received a notice3 of hearing from the legal officer of the Manila
International Container Port, Bureau of Customs informing the former that seizure
proceedings were being initiated against the said Mercedes Benz for violation of
Batas Pambansa Blg. 73 in relation to Section 2530(F) of the Tariff and Customs
Code of the Philippines (TCCP), as amended, and Central Bank Circular (CBC) 1069.
While the said case was pending, the petitioner received only on April, 1988, a
letter4 informing her that a decision ordering the forfeiture of her Mercedes Benz had
been rendered on December 16, 1986 by the District Collector of Customs. The
petitioner had not been informed that a separate seizure case was filed on the same
Mercedes Benz in question before the said District Collector, an office likewise under
the Bureau of Customs.
The petitioner later found out that on November 13, 1986, a Notice of Hearing set on
December 2, 1986, concerning the said Mercedes Benz, was posted on the bulletin
board of the Bureau of Customs at Port Area, Manila.
The petitioner, thereafter, filed a motion for new trial5 before the Collector of Customs,
Port of Manila, but the latter, in an order6 dated May 30, 1988, denied the same,
invoking the failure of the former to appear in the said hearing despite the posting of
the notice on the bulletin board.
Moreover, the Collector of Customs contended that a reopening of the case was an
exercise in futility considering that the forfeited property, a Mercedes Benz 450 SLC,
had an engine displacement of more than 2800 cubic centimeters and therefore was
under the category of prohibited importation pursuant to B.P. Blg. 73.
Subsequently, the petitioner filed a petition for review 7 with the Department of
Finance, which petition the latter referred to the public respondent. The petitioner
likewise addressed a letter 8 to the Hon. Cancio Garcia, the Assistant Executive
Secretary for Legal Affairs, Office of the President, Malacaang, requesting the
latter's assistance for a speedy resolution of the said petition.
Finally, the public respondent rendered a decision on September 22, 1989 affirming
the previous order of the Collector of Customs for the Forfeiture of the Mercedes
Benz in question in favor of the government.
Hence, this petition for certiorari alleging that:
III-1. THE RESPONDENT-APPELLEE (Bureau of Customs) ERRED IN THE
RULING THAT A NOTICE OF HEARING POSTED IN [sic] THE BULLETIN
BOARD IS SUFFICIENT NOTICE AND FAILURE OF PETITIONER-
APPELLANT TO APPEAR CAUSED HER DECLARATION IN DEFAULT;
III-2. ERRED IN RULING THAT THEIR OFFICE WAS LEFT WITH NO
ALTERNATIVE BUT TO FORFEIT THE SHIPMENT AS MANDATED BY
BATAS PAMBANSA BLG. 73;
III-3. ERRED IN RULING THAT THE RESPONDENT OF OFFICE FINDS
THE RE-OPENING OF THE CASE AN EXERCISE IN FUTILITY AND THAT
THERE IS NO POINT IN DISTURBING THE DECISION DECREEING THE
FORFEITURE OF THE SHIPMENT. 9
As regards the first assignment of error, we agree with the petitioner that a notice of
hearing posted on the bulletin board of the public respondent in a forfeiture
proceeding where the owner of the alleged prohibited article is known does not
constitute sufficient compliance with proper service of notice and procedural due
process.
Time and again, the Court has emphasized the imperative necessity for
administrative agencies to observe the elementary rules of due process. 10 And no
rule is better established under the due process clause of the Constitution than that
which requires notice and opportunity to be heard before any person can be lawfully
deprived of his rights. 11
30
In the present case, although there was a notice of hearing posted on the bulletin
board, the said procedure is premised on the ground that the party or owner of the
property in question is unknown. This is clear from the provisions of the TCCP relied
upon by the public respondent, namely, Sections 2304 and 2306, captioned
"Notification of Unknown Owner and "Proceedings in Case of Property Belonging to
Unknown Parties," respectively, wherein the posting of the notice of hearing on the
bulletin board is specifically allowed.
But in the case at bar, the facts evidently show that the petitioner could not have been
unknown. The petitioner had previous transactions with the Bureau of Customs and in
fact, the latter had earlier released the first container consisting of household goods
and the Bourgetti car to the former at her address (as stated in the Bill of Lading).
Moreover, there was a similar seizure case 12 that had been instituted by the Manila
International Container Port, docketed as S.I. No. 86-224, covering the same
Mercedes Benz in question and involving the same owner, the petitioner herein.
If only the public respondents had exercised some reasonable diligence to ascertain
from their own records the identity and address of the petitioner as the owner and the
consignee of the property in question, the necessary information could have been
easily obtained which would have assured the sending of the notice of hearing
properly and legally. Then, the petitioner would have been afforded the opportunity to
be heard and to present her defense which is the essence of procedural due process.
But the public respondent regrettably failed to perform such basic duty.
Notwithstanding the procedural infirmity aforementioned, for which the Court
expresses its rebuke, the petition nonetheless can not be granted.
This brings us to the second and third assignments of error raised by the petitioner.
Batas Pambansa Blg. 73, a law intended to promote energy conservation, provides
that:
Sec. 3. Towards the same end and to develop a more dynamic and effective
program for the rational use of energy, the following acts are hereby
prohibited:
(a) The importation, manufacture or assembling of gasoline-powered
passenger motor cars with engine displacement of over 2,800 cubic
centimeters or Kerbweight exceeding 1,500 kilograms, including
accessories. 13
The petitioner does not dispute the fact that the motor car in question, a Mercedes
Benz 450 SLC, has an engine displacement of over 2,800 cubic centimeters which
clearly falls within the prohibited importation specified in the law aforequoted and as
such, is liable for seizure and forfeiture by the public respondents.
On the other hand, the petitioner claims that the said prohibition involves only "direct"
and not 'indirect" importation as when both the shipper and the consignee are one
and the same person which is the case at bar. Be that as it may, the law is clear and
when it does not make any distinction on the term "importation", we likewise must not
distinguish. "Ubi lex non distinguit nec nos distinguiere debemus."
Finally, the petitioner invokes Sec. 2307 of the TCCP, as amended by Executive
Order No. 38, dated August 6, 1986, which provides an alternative in lieu of the
forfeiture of the property in question, that is, the payment of fine or redemption of the
forfeited property. But the last paragraph of the said section, as amended,
categorically states that:
Redemption of forfeited property shall not be allowed in any case where the
importation is absolutely prohibited or where the surrender of the property to
the person offering to redeem the same would be contrary to law. (Emphasis
ours) 14
Inasmuch as it would be contrary to law, i.e., B.P. Blg. 73, to allow the petitioner to
redeem the Mercedes Benz in question, there is therefore no alternative, as correctly
claimed by the public respondents, but to forfeit the same.
We can not agree with the proposition that the Collector of Customs is authorized to
release the motor vehicle in question to the petitioner which, in effect, would absolve
the latter from any liability.
In the matter of disposing of contrabands, Section 2609(c) of the Tariff and Customs
Code specifically provides that the prerogative of the Collector of Customs is not the
release of the contraband like the Mercedes Benz in question but its sale, which
presupposes a prior custody pursuant to forfeiture and seizure proceedings as in the
case at bar.
As thus worded:
Sec. 2609. Disposition of Contraband. Article of prohibited importation or
exportation, known as contraband, shall, in the absence of special provision,
be dealt with as follows:
xxx xxx xxx
(c) Other contraband of commercial value and capable of legitimate
use may be sold under such restrictions as will insure its use for
legitimate purposes only . . .
There is nothing in the Code that authorizes the Collector to release the contraband in
favor of an importer.1wphi1 The Code, on the other hand, is clear that the thing may
be disposed of by sale alone "under such restrictions as will insure its use for
legitimate purposes." To be sure, the restrictions to be prescribed by the Collector
must coincide with the purpose underlying Batas Blg. 73, that is, to conserve energy.
Hence, he can not allow its use (after sale), in this case a Mercedes Benz with an
engine displacement of more than 2,800 cubic centimeters, that would set at naught
31
that purpose. He must make sure that the engine is changed before it is allowed to
ply Philippine soil.
In all cases, forfeiture is a must.
WHEREFORE, the petition for certiorari is DISMISSED. No costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Bidin, Grino-Aquino, Medialdea and Regalado, JJ., concur.
SECOND DIVISION
[G.R. No. 125735. August 26, 1999]
LORLENE A. GONZALES, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, FIFTH DIVISION, CAGAYAN DE ORO CITY, and ATENEO
DE DAVAO UNIVERSITY, respondents.
DECISION
BELLOSILLO, J.:
By way of certiorari under Rule 65 of the Rules of Court petitioner seeks the
nullification of the Decision of public respondent National Labor Relations Commission, Fifth
Division, which reversed and set aside that of Executive Labor Arbiter Conchita J. Martinez.
Lorlene Gonzales, petitioner, has been a schoolteacher in the Elementary Department of
private respondent Ateneo de Davao University (hereafter ATENEO) since 1974 assigned to
teach Reading, Mathematics, Language and Pilipino in the Grade VI class, while ATENEO is
an educational institution, a corporation duly organized under the laws of the Philippines, with
principal address at Jacinto St., Davao City.
Sometime in 1991 Fr. Oscar Millar, S.J., Ateneo Grade School Headmaster, sent a letter
dated 11 April 1991 informing petitioner Lorlene A. Gonzales of the complaints of two (2)
parents for alleged use of corporal punishment on her students. Petitioner claimed that she was
not informed of the identity of the parents who allegedly complained of the corporal
punishment she purportedly inflicted in school-year 1990-1991. She likewise claimed that she
was not confronted about it by private respondent ATENEO in 1991 and that it was only two
(2) years after the complaints were made that she discovered, through her students and their
parents, that ATENEO was soliciting complainants to lodge written complaints against her.
On 31 March 1993 she wrote a letter to Fr. Oscar Millar, S.J., demanding that she be
formally informed of the complaint and be duly investigated.
On 9 June 1993 petitioner was informed of the composition of an investigative
committee organized by Fr. Oscar Millar, S.J., to look into the alleged use of corporal
punishment by petitioner in disciplining her students. It can be gleaned from the records that
she was duly furnished with the rules of procedure, informed of the schedule of the hearings,
and given copies of the affidavits executed by the students who testified against her.
Petitioner refused to take part in the investigation unless the rules of procedure laid
down by the Committee be revised, contending that the same were violative of her right to due
process. Petitioner specifically objected to the provision which stated: x x x 3) Counsel for
Ms. Lorlene Gonzales shall not directly participate in the investigation but will merely advise
Ms. Gonzales x x x (par. 3).[1]
But the Committee was steadfast in its resolve to adopt the aforementioned rules. In its
letter dated 9 August 1993, private respondent informed petitioner that the rules of procedure
to be applied were substantially the same rules that were used in the investigation of a former
Ateneo employee and therefore we are under legal advice not to change these rules." [2] Over
the objection of petitioner the Committee commenced with its investigation without
petitioners participation. Out of the twenty -two (22) invitations sent out by ATENEO to
petitioners students and their parents to shed light on the matter of corporal punishment
allegedly administered by her, eleven (11) appeared and testified before the committee. The
eleven (11) witnesses also executed written statements denominated as affidavits.
On 10 November 1993 private respondent served a Notice of Termination on petitioner
pursuant to the findings and recommendation of the Committee. Thereafter, petitioner received
a letter from the president of ATENEO demanding her voluntary resignation a week from
receipt of the letter, otherwise, she would be considered resigned from the service.
On 29 November 1993 petitioner filed a complaint before the Labor Arbiter for illegal
dismissal. After trial, Executive Labor Arbiter Conchita J. Martinez found her dismissal illegal
for lack of factual basis and ordered ATENEO to award petitioner separation pay, back wages
and 13th month pay. In her decision, the Executive Labor Arbiter opined that although
petitioner was afforded procedural due process respondent institution failed to establish
substantial evidence as to the guilt of the complainant of the offense charged" [3] thus -
x x x the complainant was afforded procedural due process. There is convincing and sufficient
evidence x x x showing respondent complied with the notice and hearing requirement x x x x.
[4]
32
After considering the evidence, arguments and counter-arguments of the parties, this office
finds that the respondent failed to establish substantial evidence as to the guilt of complainant
of the offense charged x x x x. [5]
Complainant has sufficiently established that she is a very good teacher. She is equipped with
the appropriate educational qualifications, trainings, seminars and work experiences. Such fact
was affirmed by her present and former students, their parents, colleagues and the former
headmaster of the grade school x x x x[6]
As a matter of fact, six (6) out of the nine (9) students and their parents/guardians have
retracted and withdrawn their statements x x x x[7]
Both parties appealed to the NLRC which on 25 March 1996 reversed the decision of
the Executive Labor Arbiter by declaring petitioners dismissal valid and legal but added that
since ATENEO offered petitioner her retirement benefits it was but proper that she be
extended said benefits. Petitioner now seeks the reversal of the decision; hence, this petition.
The crux of the controversy is whether the NLRC committed grave abuse of discretion
in sustaining as valid and legal the dismissal of petitioner by private respondent ATENEO.
The NLRC, in our view, appears to have skirted several important issues raised by
petitioner foremost of which is the absence of due process. Upon being notified of her
termination, she has the right to demand compliance with the basic requirements of due
process. Compliance entails the twin requirements of procedural and substantial due
process. Ample opportunity must be afforded the employee to defend herself either personally
and/or with assistance of a representative; to know the nature of her offense; and, to cross
examine and confront face to face the witnesses against her. Likewise, due process requires
that the decision must be based on established facts and on a sound legal foundation.
It is precisely to demand compliance with these requirements that petitioner at the very
onset of the investigation demanded the revision of the rules laid down by the Investigative
Committee. The adamant refusal of the Committee to accede to this demand resulted in her
failure to confront and cross-examine her accusers. This is not harping at technicalities as
wrongfully pointed out by the NLRC but a serious violation of petitioner's statutory and
constitutional right to due process that ultimately vitiated the investigation.
Moreover, the failure of ATENEO to refute the contention of petitioner that the joint
affidavits executed by the students and parents were "pre-prepared" raises serious doubts as to
the probative value of this evidence. As correctly pointed out by the Executive Labor Arbiter,
there is more reason to disregard it especially where the same was challenged and has
remained unexplained. Hearsay evidence, in the strict sense, has no probative value whether
objected to or not.
In the instant case, ATENEO failed to prove by substantial evidence that petitioner had
inflicted corporal punishment on her students. In Ang Tibay v. CIR, the Court set the measure
of evidence to be presented in an administrative investigation when it said, substantial
evidence is more than mere scintilla. It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion. The evidence of private respondent did not
measure up to this standard. It relied solely on the witnesses affidavits with questionable
veracity. Moreover, the affidavit of recantation executed by some students and their parents all
the more weakened the case of private respondent. Failure in this regard negates the very
existence of the ground for dismissal.
On the other hand, petitioner adequately proved, by means of affidavits, letters of
petition and manifesto made by her students and co-teachers, that she was a competent and
dedicated teacher having spent seventeen (17) years of her life in the service of the very
institution which is now seeking her dismissal.
In view of the foregoing, the conclusion of the NLRC is unwarranted. Employment is
not merely a contractual relationship; it has assumed the nature of property right. It may spell
the difference whether or not a family will have food on their table, roof over their heads and
education for their children. It is for this reason that the State has taken up measures to protect
employees from unjustified dismissals. It is also because of this that the right to security of
tenure is not only a statutory right but, more so, a constitutional right.
WHEREFORE, the assailed Decision of public respondent National Labor Relations
Commission dated 25 March 1996 is REVERSED and SET ASIDE, and the decision of
Executive Labor Arbiter Conchita J. Martinez declaring the dismissal of complainant Lorlene
A. Gonzales illegal for lack of factual basis and ordering respondent Ateneo de Davao
University to pay complainant separation pay, back wages and 13th month pay in the total
amount of TWO HUNDRED SIXTEEN THOUSAND NINE HUNDRED THIRTY-EIGHT
and 70/100 PESOS (P216,938.70) x x x [f]urther, ordering respondent to pay 10% of the total
monetary award as attorney's fees to counsel for complainant x x x [d]ismissing all other
claims for lack of merit, is REINSTATED, AFFIRMED and ADOPTED herein as the decision
in the instant case.
SO ORDERED.
Mendoza, Quisumbing, and Buena JJ., concur.
[G.R. No. 139465. January 18, 2000]
33
SECRETARY OF JUSTICE, petitioner, vs. HON. RALPH C. LANTION, Presiding
Judge, Regional Trial Court of Manila, Branch 25, and MARK B.
JIMENEZ, respondents.
DECISION
MELO, J.:
The individual citizen is but a speck of particle or molecule vis--vis the vast and
overwhelming powers of government. His only guarantee against oppression and tyranny are
his fundamental liberties under the Bill of Rights which shield him in times of need. The Court
is now called to decide whether to uphold a citizens basic due process rights, or the
governments ironclad duties under a treaty. The bugle sounds and this Court must once again
act as the faithful guardian of the fundamental writ.
The petition at our doorstep is cast against the following factual backdrop:
On January 13, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1069
"Prescribing the Procedure for the Extradition of Persons Who Have Committed Crimes in a
Foreign Country". The Decree is founded on: the doctrine of incorporation under the
Constitution; the mutual concern for the suppression of crime both in the state where it was
committed and the state where the criminal may have escaped; the extradition treaty with the
Republic of Indonesia and the intention of the Philippines to enter into similar treaties with
other interested countries; and the need for rules to guide the executive department and the
courts in the proper implementation of said treaties.
On November 13, 1994, then Secretary of Justice Franklin M. Drilon, representing the
Government of the Republic of the Philippines, signed in Manila the "Extradition Treaty
Between the Government of the Republic of the Philippines and the Government of the United
States of America" (hereinafter referred to as the RP-US Extradition Treaty). The Senate, by
way of Resolution No. 11, expressed its concurrence in the ratification of said treaty. It also
expressed its concurrence in the Diplomatic Notes correcting Paragraph (5)(a), Article 7
thereof (on the admissibility of the documents accompanying an extradition request upon
certification by the principal diplomatic or consular officer of the requested state resident in
the Requesting State).
On June 18, 1999, the Department of Justice received from the Department of Foreign Affairs
U. S. Note Verbale No. 0522 containing a request for the extradition of private respondent
Mark Jimenez to the United States. Attached to the Note Verbale were the Grand Jury
Indictment, the warrant of arrest issued by the U.S. District Court, Southern District of
Florida, and other supporting documents for said extradition. Based on the papers submitted,
private respondent appears to be charged in the United States with violation of the following
provisions of the United States Code (USC):
A)......18 USC 371 (Conspiracy to commit offense or to defraud the United States;
two [2] counts; Maximum Penalty 5 years on each count);
B)......26 USC 7201 (Attempt to evade or defeat tax; four [4] counts; Maximum
Penalty 5 years on each count);
C)......18 USC 1343 (Fraud by wire, radio, or television; two [2] counts; Maximum
Penalty 5 years on each count);
D)......18 USC 1001 (False statement or entries; six [6] counts; Maximum Penalty 5
years on each count);
E)......2 USC 441f (Election contributions in name of another; thirty-three [33]
counts; Maximum Penalty less than one year).
(p. 14, Rollo.)
On the same day, petitioner issued Department Order No. 249 designating and authorizing a
panel of attorneys to take charge of and to handle the case pursuant to Section 5(1) of
Presidential Decree No. 1069. Accordingly, the panel began with the "technical evaluation and
assessment" of the extradition request and the documents in support thereof. The panel found
that the "official English translation of some documents in Spanish were not attached to the
request and that there are some other matters that needed to be addressed" (p. 15, Rollo)
Pending evaluation of the aforestated extradition documents, private respondent, through
counsel, wrote a letter dated July 1, 1999 addressed to petitioner requesting copies of the
official extradition request from the U. S. Government, as well as all documents and papers
submitted therewith; and that he be given ample time to comment on the request after he shall
have received copies of the requested papers. Private respondent also requested that the
proceedings on the matter be held in abeyance in the meantime.
Later, private respondent requested that preliminarily, he be given at least a copy of, or access
to, the request of the United States Government, and after receiving a copy of the Diplomatic
Note, a period of time to amplify on his request.
In response to private respondents July 1, 1999 letter, petitioner, in a reply-letter dated July 13,
1999 (but received by private respondent only on August 4, 1999), denied the foregoing
requests for the following reasons:
1. We find it premature to furnish you with copies of the extradition request and
supporting documents from the United States Government, pending evaluation by
this Department of the sufficiency of the extradition documents submitted in
34
accordance with the provisions of the extradition treaty and our extradition law.
Article 7 of the Extradition Treaty between the Philippines and the United States
enumerates the documentary requirements and establishes the procedures under
which the documents submitted shall be received and admitted as evidence.
Evidentiary requirements under our domestic law are also set forth in Section 4 of
P.D. No. 1069.
Evaluation by this Department of the aforementioned documents is not a preliminary
investigation nor akin to preliminary investigation of criminal cases. We merely
determine whether the procedures and requirements under the relevant law and
treaty have been complied with by the Requesting Government. The constitutionally
guaranteed rights of the accused in all criminal prosecutions are therefore not
available.
It is only after the filing of the petition for extradition when the person sought to be
extradited will be furnished by the court with copies of the petition, request and
extradition documents and this Department will not pose any objection to a request
for ample time to evaluate said documents.
2. The formal request for extradition of the United States contains grand jury
information and documents obtained through grand jury process covered by strict
secrecy rules under United States law. The United States had to secure orders from
the concerned District Courts authorizing the United States to disclose certain grand
jury information to Philippine government and law enforcement personnel for the
purpose of extradition of Mr. Jimenez. Any further disclosure of the said information
is not authorized by the United States District Courts. In this particular extradition
request the United States Government requested the Philippine Government to
prevent unauthorized disclosure of the subject information. This Departments denial
of your request is consistent with Article 7 of the RP-US Extradition Treaty which
provides that the Philippine Government must represent the interests of the United
States in any proceedings arising out of a request for extradition. The Department of
Justice under P.D. No. 1069 is the counsel of the foreign governments in all
extradition requests.
3. This Department is not in a position to hold in abeyance proceedings in
connection with an extradition request. Article 26 of the Vienna Convention on the
Law of Treaties, to which we are a party provides that "[E]very treaty in force is
binding upon the parties to it and must be performed by them in good faith".
Extradition is a tool of criminal law enforcement and to be effective, requests for
extradition or surrender of accused or convicted persons must be processed
expeditiously.
(pp. 77-78, Rollo.)
Such was the state of affairs when, on August 6, 1999, private respondent filed with the
Regional Trial Court of the National Capital Judicial Region a petition against the Secretary of
Justice, the Secretary of Foreign Affairs, and the Director of the National Bureau of
Investigation, for mandamus (to compel herein petitioner to furnish private respondent the
extradition documents, to give him access thereto, and to afford him an opportunity to
comment on, or oppose, the extradition request, and thereafter to evaluate the request
impartially, fairly and objectively); certiorari (to set aside herein petitioners letter dated July
13, 1999); and prohibition (to restrain petitioner from considering the extradition request and
from filing an extradition petition in court; and to enjoin the Secretary of Foreign Affairs and
the Director of the NBI from performing any act directed to the extradition of private
respondent to the United States), with an application for the issuance of a temporary
restraining order and a writ of preliminary injunction (pp. 104-105, Rollo).
The aforementioned petition was docketed as Civil Case No. 99-94684 and thereafter raffled
to Branch 25 of said regional trial court stationed in Manila which is presided over by the
Honorable Ralph C. Lantion.
After due notice to the parties, the case was heard on August 9, 1999. Petitioner, who appeared
in his own behalf, moved that he be given ample time to file a memorandum, but the same was
denied.
On August 10, 1999, respondent judge issued an order dated the previous day, disposing:
WHEREFORE, this Court hereby Orders the respondents, namely: the Secretary of
Justice, the Secretary of Foreign Affairs and the Director of the National Bureau of
Investigation, their agents and/or representatives to maintain the status quo by
refraining from committing the acts complained of; from conducting further
proceedings in connection with the request of the United States Government for the
extradition of the petitioner; from filing the corresponding Petition with a Regional
Trial court; and from performing any act directed to the extradition of the petitioner
to the United States, for a period of twenty (20) days from service on respondents of
this Order, pursuant to Section 5, Rule 58 of the 1997 Rules of Court.
The hearing as to whether or not this Court shall issue the preliminary injunction, as
agreed upon by the counsels for the parties herein, is set on August 17, 1999 at 9:00
oclock in the morning. The respondents are, likewise, ordered to file their written
comment and/or opposition to the issuance of a Preliminary Injunction on or before
said date.
SO ORDERED.
(pp. 110-111, Rollo.)
35
Forthwith, petitioner initiated the instant proceedings, arguing that:
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN ISSUING THE TEMPORARY
RESTRAINING ORDER BECAUSE:
I.
BY ORDERING HEREIN PETITIONER TO REFRAIN FROM COMMITTING
THE ACTS COMPLAINED OF, I. E., TO DESIST FROM REFUSING PRIVATE
RESPONDENT ACCESS TO THE OFFICIAL EXTRADITION REQUEST AND
DOCUMENTS AND FROM DENYING PRIVATE RESPONDENT AN
OPPORTUNITY TO FILE A COMMENT ON, OR OPPOSITION TO, THE
REQUEST, THE MAIN PRAYER FOR A WRIT OF MANDAMUS IN THE
PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION WAS, IN
EFFECT, GRANTED SO AS TO CONSTITUTE AN ADJUDICATION ON THE
MERITS OF THE MANDAMUS ISSUES;
II.
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM PERFORMING
LEGAL DUTIES UNDER THE EXTRADITION TREATY AND THE
PHILIPPINE EXTRADITION LAW;
III.
THE PETITION FOR (MANDAMUS), CERTIORARI AND PROHIBITION IS,
ON ITS FACE, FORMALLY AND SUBSTANTIALLY DEFICIENT; AND
IV.
PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS
PROTECTION AND ENFORCEMENT, AND WILL NOT SUFFER ANY
IRREPARABLE INJURY.
(pp. 19-20, Rollo.)
On August 17, 1999, the Court required private respondent to file his comment. Also issued, as
prayed for, was a temporary restraining order (TRO) providing: with the object of placing him at the disposal of foreign authorities to enable the requesting
NOW, THEREFORE, effective immediately and continuing until further orders
from this Court, You, Respondent Judge Ralph C. Lantion, your agents,
representatives or any person or persons acting in your place or stead are hereby
ORDERED to CEASE and DESIST from enforcing the assailed order dated August
9, 1999 issued by public respondent in Civil Case No. 99-94684.
GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice, Supreme Court
of the Philippines, this 17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999, after which the parties, as directed,
filed their respective memoranda.
From the pleadings of the opposing parties, both procedural and substantive issues are patent.
However, a review of these issues as well as the extensive arguments of both parties, compel
us to delineate the focal point raised by the pleadings: During the evaluation stage of the
extradition proceedings, is private respondent entitled to the two basic due process rights of
notice and hearing? An affirmative answer would necessarily render the proceedings at the
trial court, moot and academic (the issues of which are substantially the same as those before
us now), while a negative resolution would call for the immediate lifting of the TRO issued by
this Court dated August 24, 1999, thus allowing petitioner to fast-track the process leading to
the filing of the extradition petition with the proper regional trial court. Corollarily, in the
event that private respondent is adjudged entitled to basic due process rights at the evaluation
stage of the extradition proceedings, would this entitlement constitute a breach of the legal
commitments and obligations of the Philippine Government under the RP-US Extradition
Treaty? And assuming that the result would indeed be a breach, is there any conflict between
private respondents basic due process rights and the provisions of the RP-US Extradition
Treaty?
The issues having transcendental importance, the Court has elected to go directly into the
substantive merits of the case, brushing aside peripheral procedural matters which concern the
proceedings in Civil Case No. 99-94684, particularly the propriety of the filing of the petition
therein, and of the issuance of the TRO of August 17, 1999 by the trial
court.
To be sure, the issues call for a review of the extradition procedure. The RP-US Extradition
Treaty which was executed only on November 13, 1994, ushered into force the implementing
provisions of Presidential Decree No. 1069, also called as the Philippine Extradition Law.
Section 2(a) thereof defines extradition as "the removal of an accused from the Philippines
state or government to hold him in connection with any criminal investigation directed against
him or the execution of a penalty imposed on him under the penal or criminal law of the
36
requesting state or government." The portions of the Decree relevant to the instant case which
involves a charged and not convicted individual, are abstracted as follows:
The Extradition Request
The request is made by the Foreign Diplomat of the Requesting State, addressed to the
Secretary of Foreign Affairs, and shall be accompanied by:
1. The original or an authentic copy of the criminal charge and the warrant of arrest issued by
the authority of the Requesting State having jurisdiction over the matter, or some other
instruments having equivalent legal force;
2. A recital of the acts for which extradition is requested, with the fullest particulars as to the
name and identity of the accused, his whereabouts in the Philippines, if known, the acts or
omissions complained of, and the time and place of the commission of these
acts;
3. The text of the applicable law or a statement of the contents of said law, and the designation
or description of the offense by the law, sufficient for evaluation of the request; and
4. Such other documents or information in support of the request.
(Section 4, Presidential Decree No. 1069.)
Section 5 of the Presidential Decree, which sets forth the duty of the Secretary of Foreign
Affairs, pertinently provides:
. . . (1) Unless it appears to the Secretary of Foreign Affairs that the request fails to
meet the requirements of this law and the relevant treaty or convention, he shall
forward the request together with the related documents to the Secretary of Justice,
who shall immediately designate and authorize an attorney in his office to take
charge of the case.
The above provision shows only too clearly that the executive authority given the task of
evaluating the sufficiency of the request and the supporting documents is the Secretary of
Foreign Affairs. What then is the coverage of this task?
In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition Treaty, the
executive authority must ascertain whether or not the request is supported by:
1. Documents, statements, or other types of information which describe the identity and
probable location of the person sought;
2. A statement of the facts of the offense and the procedural history of the case;
3. A statement of the provisions of the law describing the essential elements of the offense for
which extradition is requested;
4. A statement of the provisions of law describing the punishment for the
offense;
5. A statement of the provisions of the law describing any time limit on the prosecution or the
execution of punishment for the offense;
6. Documents, statements, or other types of information specified in paragraph 3 or paragraph
4 of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree No. 1069.)
7. Such evidence as, according to the law of the Requested State, would provide probable
cause for his arrest and committal for trial if the offense had been committed there;
8. A copy of the warrant or order of arrest issued by a judge or other competent authority; and
9. A copy of the charging document.
(Paragraph 3, ibid.)
The executive authority (Secretary of Foreign Affairs) must also see to it that the
accompanying documents received in support of the request had been certified by the principal
diplomatic or consular officer of the Requested State resident in the Requesting State
(Embassy Note No. 052 from U. S. Embassy; Embassy Note No. 951309 from the Department
of Foreign Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that "[e]xtradition shall not be
granted if the executive authority of the Requested State determines that the request is
politically motivated, or that the offense is a military offense which is not punishable under
non-military penal legislation."
The Extradition Petition
Upon a finding made by the Secretary of Foreign Affairs that the extradition request and its
supporting documents are sufficient and complete in form and substance, he shall deliver the
same to the Secretary of Justice, who shall immediately designate and authorize an attorney in
his office to take charge of the case (Paragraph [1], Section 5, P. D. No. 1069). The lawyer
37
designated shall then file a written petition with the proper regional trial court of the province
or city, with a prayer that the court take the extradition request under consideration (Paragraph
[2], ibid.). of Justice has the ministerial duty of filing the extradition papers.
The presiding judge of the regional trial court, upon receipt of the petition for extradition,
shall, as soon as practicable, issue an order summoning the prospective extraditee to appear
and to answer the petition on the day and hour fixed in the order. The judge may issue a
warrant of arrest if it appears that the immediate arrest and temporary detention of the accused
will best serve the ends of justice (Paragraph [1], Section 6, ibid.), particularly to prevent the
flight of the prospective extraditee.
The Extradition Hearing
The Extradition Law does not specifically indicate whether the extradition proceeding is
criminal, civil, or a special proceeding. Nevertheless, Paragraph [1], Section 9 thereof
provides that in the hearing of the extradition petition, the provisions of the Rules of Court,
insofar as practicable and not inconsistent with the summary nature of the proceedings, shall
apply. During the hearing, Section 8 of the Decree provides that the attorney having charge of
the case may, upon application by the Requesting State, represent the latter throughout the
proceedings.
Upon conclusion of the hearing, the court shall render a decision granting the extradition and
giving the reasons therefor upon a showing of the existence of a prima facie case, or dismiss
the petition (Section 10, ibid.). Said decision is appealable to the Court of Appeals, whose
decision shall be final and immediately executory (Section 12, ibid.). The provisions of the
Rules of Court governing appeal in criminal cases in the Court of Appeals shall apply in the
aforementioned appeal, except for the required 15-day period to file brief (Section 13, ibid.).
The trial court determines whether or not the offense mentioned in the petition is extraditable
based on the application of the dual criminality rule and other conditions mentioned in Article
2 of the RP-US Extradition Treaty. The trial court also determines whether or not the offense
for which extradition is requested is a political one (Paragraph [1], Article 3, RP-US
Extradition Treaty).
With the foregoing abstract of the extradition proceedings as backdrop, the following query
presents itself: What is the nature of the role of the Department of Justice at the evaluation
stage of the extradition proceedings?
A strict observance of the Extradition Law indicates that the only duty of the Secretary of
Justice is to file the extradition petition after the request and all the supporting papers are
forwarded to him by the Secretary of Foreign Affairs. It is the latter official who is authorized
to evaluate the extradition papers, to assure their sufficiency, and under Paragraph [3], Article
3 of the Treaty, to determine whether or not the request is politically motivated, or that the
offense is a military offense which is not punishable under non-military penal legislation. Ipso
facto, as expressly provided in Paragraph [1], Section 5 of the Extradition Law, the Secretary
However, looking at the factual milieu of the case before us, it would appear that there was
failure to abide by the provisions of Presidential Decree No. 1069. For while it is true that the
extradition request was delivered to the Department of Foreign Affairs on June 17, 1999, the
following day or less than 24 hours later, the Department of Justice received the request,
apparently without the Department of Foreign Affairs discharging its duty of thoroughly
evaluating the same and its accompanying documents. The statement of an assistant secretary
at the Department of Foreign Affairs that his Department, in this regard, is merely acting as a
post office, for which reason he simply forwarded the request to the Department of Justice,
indicates the magnitude of the error of the Department of Foreign Affairs in taking lightly its
responsibilities. Thereafter, the Department of Justice took it upon itself to determine the
completeness of the documents and to evaluate the same to find out whether they comply with
the requirements laid down in the Extradition Law and the RP-US Extradition Treaty.
Petitioner ratiocinates in this connection that although the Department of Justice had no
obligation to evaluate the extradition documents, the Department also had to go over them so
as to be able to prepare an extradition petition (tsn, August 31, 1999, pp. 24-25). Notably, it
was also at this stage where private respondent insisted on the following: (1) the right to be
furnished the request and the supporting papers; (2) the right to be heard which consists in
having a reasonable period of time to oppose the request, and to present evidence in support of
the opposition; and (3) that the evaluation proceedings be held in abeyance pending the filing
of private respondent's opposition to the request.
The two Departments seem to have misread the scope of their duties and authority, one
abdicating its powers and the other enlarging its commission. The Department of Foreign
Affairs, moreover, has, through the Solicitor General, filed a manifestation that it is adopting
the instant petition as its own, indirectly conveying the message that if it were to evaluate the
extradition request, it would not allow private respondent to participate in the process of
evaluation.
Plainly then, the record cannot support the presumption of regularity that the Department of
Foreign Affairs thoroughly reviewed the extradition request and supporting documents and
that it arrived at a well-founded judgment that the request and its annexed documents satisfy
the requirements of law. The Secretary of Justice, eminent as he is in the field of law, could not
privately review the papers all by himself. He had to officially constitute a panel of attorneys.
How then could the DFA Secretary or his undersecretary, in less than one day, make the more
authoritative determination?
The evaluation process, just like the extradition proceedings proper, belongs to a class by
itself. It is sui generis. It is not a criminal investigation, but it is also erroneous to say that it is
purely an exercise of ministerial functions. At such stage, the executive authority has the
38
power: (a) to make a technical assessment of the completeness and sufficiency of the
extradition papers; (b) to outrightly deny the request if on its face and on the face of the
supporting documents the crimes indicated are not extraditable; and (c) to make a
determination whether or not the request is politically motivated, or that the offense is a
military one which is not punishable under non-military penal legislation (tsn, August 31,
1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, RP-US Extradition Treaty). Hence,
said process may be characterized as an investigative or inquisitorial process in contrast to a
proceeding conducted in the exercise of an administrative bodys quasi-judicial
power. provides that in case of urgency, a contracting party may request the provisional arrest of the
In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of
evidence; (b) determining facts based upon the evidence presented; and (c) rendering an order
or decision supported by the facts proved (De Leon, Administrative Law: Text and Cases,
1993 ed., p. 198, citing Morgan vs. United States, 304 U.S. 1). Inquisitorial power, which is
also known as examining or investigatory power, is one of the determinative powers of an
administrative body which better enables it to exercise its quasi-judicial authority (Cruz, Phil.
Administrative Law, 1996 ed., p. 26). This power allows the administrative body to inspect the
records and premises, and investigate the activities, of persons or entities coming under its
jurisdiction (Ibid., p. 27), or to require disclosure of information by means of accounts,
records, reports, testimony of witnesses, production of documents, or otherwise (De Leon, op.
cit., p. 64).
The power of investigation consists in gathering, organizing, and analyzing evidence, which is
a useful aid or tool in an administrative agencys performance of its rule-making or quasi-
judicial functions. Notably, investigation is indispensable to prosecution.
In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court had occasion to rule on the
functions of an investigatory body with the sole power of investigation. It does not exercise
judicial functions and its power is limited to investigating the facts and making findings in
respect thereto. The Court laid down the test of determining whether an administrative body is
exercising judicial functions or merely investigatory functions: Adjudication signifies the
exercise of power and authority to adjudicate upon the rights and obligations of the parties
before it. Hence, if the only purpose for investigation is to evaluate evidence submitted before
it based on the facts and circumstances presented to it, and if the agency is not authorized to
make a final pronouncement affecting the parties, then there is an absence of judicial
discretion and judgment. such as the right to counsel and the right against self-incrimination (tsn, August 31, 1999, p.
The above description in Ruperto applies to an administrative body authorized to evaluate
extradition documents. The body has no power to adjudicate in regard to the rights and
obligations of both the Requesting State and the prospective extraditee. Its only power is to
determine whether the papers comply with the requirements of the law and the treaty and,
therefore, sufficient to be the basis of an extradition petition. Such finding is thus merely
initial and not final. The body has no power to determine whether or not the extradition should
be effected. That is the role of the court. The bodys power is limited to an initial finding of
whether or not the extradition petition can be filed in court.
It is to be noted, however, that in contrast to ordinary investigations, the evaluation procedure
is characterized by certain peculiarities. Primarily, it sets into motion the wheels of the
extradition process. Ultimately, it may result in the deprivation of liberty of the prospective
extraditee. This deprivation can be effected at two stages: First, the provisional arrest of the
prospective extraditee pending the submission of the request. This is so because the Treaty
person sought pending presentation of the request (Paragraph [1], Article 9, RP-US Extradition
Treaty), but he shall be automatically discharged after 60 days if no request is submitted
(Paragraph 4). Presidential Decree No. 1069 provides for a shorter period of 20 days after
which the arrested person could be discharged (Section 20[d]). Logically, although the
Extradition Law is silent on this respect, the provisions only mean that once a request is
forwarded to the Requested State, the prospective extraditee may be continuously detained, or
if not, subsequently rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will
only be discharged if no request is submitted. Practically, the purpose of this detention is to
prevent his possible flight from the Requested State. Second, the temporary arrest of the
prospective extraditee during the pendency of the extradition petition in court (Section 6,
Presidential Decree No. 1069).
Clearly, there is an impending threat to a prospective extraditees liberty as early as during the
evaluation stage. It is not only an imagined threat to his liberty, but a very imminent
one.
Because of these possible consequences, we conclude that the evaluation process is akin to an
administrative agency conducting an investigative proceeding, the consequences of which are
essentially criminal since such technical assessment sets off or commences the procedure for,
and ultimately, the deprivation of liberty of a prospective extraditee. As described by petitioner
himself, this is a "tool" for criminal law enforcement (p. 78, Rollo). In essence, therefore, the
evaluation process partakes of the nature of a criminal investigation. In a number of cases, we
had occasion to make available to a respondent in an administrative case or investigation
certain constitutional rights that are ordinarily available only in criminal prosecutions. Further,
as pointed out by Mr. Justice Mendoza during the oral arguments, there are rights formerly
available only at the trial stage that had been advanced to an earlier stage in the proceedings,
135; Escobedo vs. Illinois, 378 U.S. 478; Gideon vs. Wainwright, 372 U.S. 335; Miranda vs.
Arizona, 384 U.S. 436).
In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we held that the right
against self-incrimination under Section 17, Article III of the 1987 Constitution which is
ordinarily available only in criminal prosecutions, extends to administrative proceedings
which possess a criminal or penal aspect, such as an administrative investigation of a licensed
39
physician who is charged with immorality, which could result in his loss of the privilege to
practice medicine if found guilty. The Court, citing the earlier case of Cabal vs. Kapunan (6
SCRA 1059 [1962]), pointed out that the revocation of ones license as a medical practitioner,
is an even greater deprivation than forfeiture of property.
Cabal vs. Kapunan (supra) involved an administrative charge of unexplained wealth against a
respondent which was filed under Republic Act No. 1379, or the Anti-Graft Law. Again, we
therein ruled that since the investigation may result in forfeiture of property, the administrative
proceedings are deemed criminal or penal, and such forfeiture partakes the nature of a penalty.
There is also the earlier case of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where the Court,
citing American jurisprudence, laid down the test to determine whether a proceeding is civil or
criminal: If the proceeding is under a statute such that if an indictment is presented the
forfeiture can be included in the criminal case, such proceeding is criminal in nature, although
it may be civil in form; and where it must be gathered from the statute that the action is meant
to be criminal in its nature, it cannot be considered as civil. If, however, the proceeding does
not involve the conviction of the wrongdoer for the offense charged, the proceeding is civil in
nature. Toward this effect and in order to avoid the confines of a legal straitjacket, the courts instead
The cases mentioned above refer to an impending threat of deprivation of ones property or
property right. No less is this true, but even more so in the case before us, involving as it does
the possible deprivation of liberty, which, based on the hierarchy of constitutionally protected
rights, is placed second only to life itself and enjoys precedence over property, for while
forfeited property can be returned or replaced, the time spent in incarceration is irretrievable
and beyond recompense.
By comparison, a favorable action in an extradition request exposes a person to eventual
extradition to a foreign country, thus saliently exhibiting the criminal or penal aspect of the
process. In this sense, the evaluation procedure is akin to a preliminary investigation since
both procedures may have the same result the arrest and imprisonment of the respondent or the
person charged. Similar to the evaluation stage of extradition proceedings, a preliminary
investigation, which may result in the filing of an information against the respondent, can
possibly lead to his arrest, and to the deprivation of his liberty.
Petitioners reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992]) (p. 8, Petitioners
Memorandum) that the extradition treaty is neither a piece of criminal legislation nor a
criminal procedural statute is not well-taken. Wright is not authority for petitioners conclusion
that his preliminary processing is not akin to a preliminary investigation. The characterization
of a treaty in Wright was in reference to the applicability of the prohibition against an ex post
facto law. It had nothing to do with the denial of the right to notice, information, and hearing.
As early as 1884, the United States Supreme Court ruled that "any legal proceeding enforced
by public authority, whether sanctioned by age or custom, or newly devised in the discretion
of the legislative power, in furtherance of the general public good, which regards and
preserves these principles of liberty and justice, must be held to be due process of law"
(Hurtado vs. California, 110 U.S. 516). Compliance with due process requirements cannot be
deemed non-compliance with treaty commitments.
The United States and the Philippines share a mutual concern about the suppression and
punishment of crime in their respective jurisdictions. At the same time, both States accord
common due process protection to their respective citizens.
The due process clauses in the American and Philippine Constitutions are not only worded in
exactly identical language and terminology, but more importantly, they are alike in what their
respective Supreme Courts have expounded as the spirit with which the provisions are
informed and impressed, the elasticity in their interpretation, their dynamic and resilient
character which make them capable of meeting every modern problem, and their having been
designed from earliest time to the present to meet the exigencies of an undefined and
expanding future. The requirements of due process are interpreted in both the United States
and the Philippines as not denying to the law the capacity for progress and improvement.
prefer to have the meaning of the due process clause "gradually ascertained by the process of
inclusion and exclusion in the course of the decisions of cases as they arise" (Twining vs. New
Jersey, 211 U.S. 78). Capsulized, it refers to "the embodiment of the sporting idea of fair play"
(Ermita-Malate Hotel and Motel Owners Association vs. City Mayor of Manila, 20 SCRA 849
[1967]). It relates to certain immutable principles of justice which inhere in the very idea of
free government (Holden vs. Hardy, 169 U.S. 366).
Due process is comprised of two components substantive due process which requires the
intrinsic validity of the law in interfering with the rights of the person to his life, liberty, or
property, and procedural due process which consists of the two basic rights of notice and
hearing, as well as the guarantee of being heard by an impartial and competent tribunal (Cruz,
Constitutional Law, 1993 Ed., pp. 102-106).
True to the mandate of the due process clause, the basic rights of notice and hearing pervade
not only in criminal and civil proceedings, but in administrative proceedings as well. Non-
observance of these rights will invalidate the proceedings. Individuals are entitled to be
notified of any pending case affecting their interests, and upon notice, they may claim the right
to appear therein and present their side and to refute the position of the opposing parties (Cruz,
Phil. Administrative Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory proceeding, Section 3,
Rule 112 of the Rules of Court guarantees the respondents basic due process rights, granting
him the right to be furnished a copy of the complaint, the affidavits, and other supporting
documents, and the right to submit counter-affidavits and other supporting documents within
ten days from receipt thereof. Moreover, the respondent shall have the right to examine all
other evidence submitted by the complainant.
40
These twin rights may, however, be considered dispensable in certain instances, such as:
1. In proceedings where there is an urgent need for immediate action, like the summary
abatement of a nuisance per se (Article 704, Civil Code), the preventive suspension of a public
servant facing administrative charges (Section 63, Local Government Code, B. P. Blg. 337),
the padlocking of filthy restaurants or theaters showing obscene movies or like establishments
which are immediate threats to public health and decency, and the cancellation of a passport of
a person sought for criminal prosecution;
2. Where there is tentativeness of administrative action, that is, where the respondent is not
precluded from enjoying the right to notice and hearing at a later time without prejudice to the
person affected, such as the summary distraint and levy of the property of a delinquent
taxpayer, and the replacement of a temporary appointee; and
3. Where the twin rights have previously been offered but the right to exercise them had not
been claimed.
Applying the above principles to the case at bar, the query may be asked: Does the evaluation
stage of the extradition proceedings fall under any of the described situations mentioned
above?
Let us take a brief look at the nature of American extradition proceedings which are quite
noteworthy considering that the subject treaty involves the U.S. Government.
American jurisprudence distinguishes between interstate rendition or extradition which is
based on the Extradition Clause in the U.S. Constitution (Art. IV, 2 cl 2), and international
extradition proceedings. In interstate rendition or extradition, the governor of the asylum state
has the duty to deliver the fugitive to the demanding state. The Extradition Clause and the
implementing statute are given a liberal construction to carry out their manifest purpose,
which is to effect the return as swiftly as possible of persons for trial to the state in which they
have been charged with crime (31A Am Jur 2d 754-755). In order to achieve extradition of an
alleged fugitive, the requisition papers or the demand must be in proper form, and all the
elements or jurisdictional facts essential to the extradition must appear on the face of the
papers, such as the allegation that the person demanded was in the demanding state at the time
the offense charged was committed, and that the person demanded is charged with the
commission of the crime or that prosecution has been begun in the demanding state before
some court or magistrate (35 C.J.S. 406-407). The extradition documents are then filed with
the governor of the asylum state, and must contain such papers and documents prescribed by
statute, which essentially include a copy of the instrument charging the person demanded with
a crime, such as an indictment or an affidavit made before a magistrate. Statutory requirements
with respect to said charging instrument or papers are mandatory since said papers are
necessary in order to confer jurisdiction on the governor of the asylum state to effect the
extradition (35 C.J.S. 408-410). A statutory provision requiring duplicate copies of the
indictment, information, affidavit, or judgment of conviction or sentence and other
instruments accompanying the demand or requisitions be furnished and delivered to the
fugitive or his attorney is directory. However, the right being such a basic one has been held
to be a right mandatory on demand (Ibid., p. 410, citing Ex parte Moore, 256 S.W. 2d 103,
158 Tex. Cr. 407 and Ex parte Tucker, Cr., 324, S.W.2d 853).
In international proceedings, extradition treaties generally provide for the presentation to the
executive authority of the Requested State of a requisition or demand for the return of the
alleged offender, and the designation of the particular officer having authority to act in behalf
of the demanding nation (31A Am Jur 2d 815).
In petitioners memorandum filed on September 15, 1999, he attached thereto a letter dated
September 13, 1999 from the Criminal Division of the U.S. Department of Justice,
summarizing the U.S. extradition procedures and principles, which are basically governed by a
combination of treaties (with special reference to the RP-US Extradition Treaty), federal
statutes, and judicial decisions, to wit:
1. All requests for extradition are transmitted through the diplomatic channel. In urgent cases,
requests for the provisional arrest of an individual may be made directly by the Philippine
Department of Justice to the U.S. Department of Justice, and vice-versa. In the event of a
provisional arrest, a formal request for extradition is transmitted subsequently through the
diplomatic channel.
2. The Department of State forwards the incoming Philippine extradition request to the
Department of Justice. Before doing so, the Department of State prepares a declaration
confirming that a formal request has been made, that the treaty is in full force and effect, that
under Article 17 thereof the parties provide reciprocal legal representation in extradition
proceedings, that the offenses are covered as extraditable offenses under Article 2 thereof, and
that the documents have been authenticated in accordance with the federal statute that ensures
admissibility at any subsequent extradition hearing.
3. A judge or magistrate judge is authorized to issue a warrant for the arrest of the prospective
extraditee (18 U.S.C. 3184). Said judge or magistrate is authorized to hold a hearing to
consider the evidence offered in support of the extradition request (Ibid.)
4. At the hearing, the court must determine whether the person arrested is extraditable to the
foreign country. The court must also determine that (a) it has jurisdiction over the defendant
and jurisdiction to conduct the hearing; (b) the defendant is being sought for offenses for
which the applicable treaty permits extradition; and (c) there is probable cause to believe that
the defendant is the person sought and that he committed the offenses charged
(Ibid.)
41
5. The judge or magistrate judge is vested with jurisdiction to certify extraditability after
having received a "complaint made under oath, charging any person found within his
jurisdiction" with having committed any of the crimes provided for by the governing treaty in
the country requesting extradition (Ibid.) [In this regard, it is noted that a long line of
American decisions pronounce that international extradition proceedings partake of the
character of a preliminary examination before a committing magistrate, rather than a trial of
the guilt or innocence of the alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for extradition are present, it incorporates its
determinations in factual findings and conclusions of law and certifies the persons
extraditability. The court then forwards this certification of extraditability to the Department of
State for disposition by the Secretary of State. The ultimate decision whether to surrender an
individual rests with the Secretary of State (18 U.S.C. 3186).
7. The subject of an extradition request may not litigate questions concerning the motives of
the requesting government in seeking his extradition. However, a person facing extradition
may present whatever information he deems relevant to the Secretary of State, who makes the
final determination whether to surrender an individual to the foreign government concerned.
From the foregoing, it may be observed that in the United States, extradition begins and ends
with one entity the Department of State which has the power to evaluate the request and the
extradition documents in the beginning, and, in the person of the Secretary of State, the power
to act or not to act on the courts determination of extraditability. In the Philippine setting, it is
the Department of Foreign Affairs which should make the initial evaluation of the request, and
having satisfied itself on the points earlier mentioned (see pp. 10-12), then forwards the
request to the Department of Justice for the preparation and filing of the petition for
extradition. Sadly, however, the Department of Foreign Affairs, in the instant case,
perfunctorily turned over the request to the Department of Justice which has taken over the
task of evaluating the request as well as thereafter, if so warranted, preparing, filing, and
prosecuting the petition for extradition.
Private respondent asks what prejudice will be caused to the U.S. Government should the
person sought to be extradited be given due process rights by the Philippines in the evaluation
stage. He emphasizes that petitioners primary concern is the possible delay in the evaluation
process.
We agree with private respondents citation of an American Supreme Court ruling:
The establishment of prompt efficacious procedures to achieve legitimate state ends
is a proper state interest worthy of cognizance in constitutional adjudication. But the
Constitution recognizes higher values than speed and efficiency. Indeed, one might
fairly say of the Bill of Rights in general, and the Due Process Clause, in particular,
that they were designed to protect the fragile values of a vulnerable citizenry from
the overbearing concern for efficiency and efficacy that may characterize
praiseworthy government officials no less, and perhaps more, than mediocre ones.
(Stanley vs. Illinois, 404 U.S. 645, 656)
The United States, no doubt, shares the same interest as the Philippine Government
that no right that of liberty secured not only by the Bills of Rights of the Philippines
Constitution but of the United States as well, is sacrificed at the altar of expediency.
(pp. 40-41, Private Respondents Memorandum.)
In the Philippine context, this Courts ruling is invoked:
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that
there be a valid objective; it is also necessary that the means employed to pursue it
be in keeping with the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral conviction or the
most urgent public need, subject only to a few notable exceptions, will excuse the
bypassing of an individuals rights. It is no exaggeration to say that a person invoking
a right guaranteed under Article III of the Constitution is a majority of one even as
against the rest of the nation who would deny him that right (Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA
343, 375-376 [1989]).
There can be no dispute over petitioners argument that extradition is a tool of criminal law
enforcement. To be effective, requests for extradition or the surrender of accused or convicted
persons must be processed expeditiously. Nevertheless, accelerated or fast-tracked proceedings
and adherence to fair procedures are, however, not always incompatible. They do not always
clash in discord. Summary does not mean precipitous haste. It does not carry a disregard of the
basic principles inherent in "ordered liberty."
Is there really an urgent need for immediate action at the evaluation stage? At that point, there
is no extraditee yet in the strict sense of the word. Extradition may or may not occur. In
interstate extradition, the governor of the asylum state may not, in the absence of mandatory
statute, be compelled to act favorably (37 C.J.S. 387) since after a close evaluation of the
extradition papers, he may hold that federal and statutory requirements, which are significantly
jurisdictional, have not been met (31 Am Jur 2d 819). Similarly, under an extradition treaty,
the executive authority of the requested state has the power to deny the behest from the
requesting state. Accordingly, if after a careful examination of the extradition documents the
Secretary of Foreign Affairs finds that the request fails to meet the requirements of the law and
the treaty, he shall not forward the request to the Department of Justice for the filing of the
42
extradition petition since non-compliance with the aforesaid requirements will not vest our
government with jurisdiction to effect the extradition.
In this light, it should be observed that the Department of Justice exerted notable efforts in
assuring compliance with the requirements of the law and the treaty since it even informed the
U.S. Government of certain problems in the extradition papers (such as those that are in
Spanish and without the official English translation, and those that are not properly
authenticated). In fact, petitioner even admits that consultation meetings are still supposed to
take place between the lawyers in his Department and those from the U.S. Justice Department.
With the meticulous nature of the evaluation, which cannot just be completed in an
abbreviated period of time due to its intricacies, how then can we say that it is a proceeding
that urgently necessitates immediate and prompt action where notice and hearing can be
dispensed with?
Worthy of inquiry is the issue of whether or not there is tentativeness of administrative action.
Is private respondent precluded from enjoying the right to notice and hearing at a later
time without prejudice to him? Here lies the peculiarity and deviant characteristic of the
evaluation procedure. On one hand, there is yet no extraditee, but ironically on the other, it
results in an administrative determination which, if adverse to the person involved, may cause
his immediate incarceration. The grant of the request shall lead to the filing of the extradition
petition in court. The "accused" (as Section 2[c] of Presidential Decree No. 1069 calls him),
faces the threat of arrest, not only after the extradition petition is filed in court, but even during
the evaluation proceeding itself by virtue of the provisional arrest allowed under the treaty and
the implementing law. The prejudice to the "accused" is thus blatant and manifest.
Plainly, the notice and hearing requirements of administrative due process cannot be dispensed
with and shelved aside.
Apart from the due process clause of the Constitution, private respondent likewise invokes
Section 7 of Article III which reads: 1996 ed., p. 337). Such information may be contained in official records, and in documents
Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The above provision guarantees political rights which are available to citizens of the
Philippines, namely: (1) the right to information on matters of public concern, and (2) the
corollary right of access to official records and documents. The general right guaranteed by
said provision is the right to information on matters of public concern. In its implementation,
the right of access to official records is likewise conferred. These cognate or related rights are
"subject to limitations as may be provided by law" (Bernas, The 1987 Phil. Constitution A
Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that ultimately it is an informed
and critical public opinion which alone can protect the values of democratic government
(Ibid.).
Petitioner argues that the matters covered by private respondents letter-request dated July 1,
1999 do not fall under the guarantee of the foregoing provision since the matters contained in
the documents requested are not of public concern. On the other hand, private respondent
argues that the distinction between matters vested with public interest and matters which are of
purely private interest only becomes material when a third person, who is not directly affected
by the matters requested, invokes the right to information. However, if the person invoking the
right is the one directly affected thereby, his right to information becomes absolute.
The concept of matters of public concern escapes exact definition. Strictly speaking, every act
of a public officer in the conduct of the governmental process is a matter of public concern
(Bernas, The 1987 Constitution of the Republic of the Philippines, 1996 ed., p. 336). This
concept embraces a broad spectrum of subjects which the public may want to know, either
because these directly affect their lives or simply because such matters arouse the interest of
an ordinary citizen (Legaspi v. Civil Service Commission, 150 SCRA 530 [1987]). Hence, the
real party in interest is the people and any citizen has "standing".
When the individual himself is involved in official government action because said action has
a direct bearing on his life, and may either cause him some kind of deprivation or injury, he
actually invokes the basic right to be notified under Section 1 of the Bill of Rights and not
exactly the right to information on matters of public concern. As to an accused in a criminal
proceeding, he invokes Section 14, particularly the right to be informed of the nature and
cause of the accusation against him.
The right to information is implemented by the right of access to information within the
control of the government (Bernas, The 1987 Constitution of the Republic of the Philippines,
and papers pertaining to official acts, transactions, or decisions.
In the case at bar, the papers requested by private respondent pertain to official government
action from the U. S. Government. No official action from our country has yet been taken.
Moreover, the papers have some relation to matters of foreign relations with the U. S.
Government. Consequently, if a third party invokes this constitutional provision, stating that
the extradition papers are matters of public concern since they may result in the extradition of
a Filipino, we are afraid that the balance must be tilted, at such particular time, in favor of the
interests necessary for the proper functioning of the government. During the evaluation
procedure, no official governmental action of our own government has as yet been done;
hence the invocation of the right is premature. Later, and in contrast, records of the extradition
hearing would already fall under matters of public concern, because our government by then
43
shall have already made an official decision to grant the extradition request. The extradition of
a fellow Filipino would be forthcoming.
We now pass upon the final issue pertinent to the subject matter of the instant controversy:
Would private respondents entitlement to notice and hearing during the evaluation stage of the
proceedings constitute a breach of the legal duties of the Philippine Government under the RP-
Extradition Treaty? Assuming the answer is in the affirmative, is there really a conflict
between the treaty and the due process clause in the Constitution?
First and foremost, let us categorically say that this is not the proper time to pass upon the
constitutionality of the provisions of the RP-US Extradition Treaty nor the Extradition Law
implementing the same. We limit ourselves only to the effect of the grant of the basic rights of
notice and hearing to private respondent on foreign relations. thereto, the law is silent as to these rights. Reference to the U.S. extradition procedures also
The rule of pacta sunt servanda, one of the oldest and most fundamental maxims of
international law, requires the parties to a treaty to keep their agreement therein in good faith.
The observance of our country's legal duties under a treaty is also compelled by Section 2,
Article II of the Constitution which provides that "[t]he Philippines renounces war as an
instrument of national policy, adopts the generally accepted principles of international law as
part of the law of the land, and adheres to the policy of peace, equality, justice, freedom,
cooperation and amity with all nations." Under the doctrine of incorporation, rules of
international law form part of the law of the land and no further legislative action is needed to
make such rules applicable in the domestic sphere (Salonga & Yap, Public International Law,
1992 ed., p. 12).
The doctrine of incorporation is applied whenever municipal tribunals (or local courts) are
confronted with situations in which there appears to be a conflict between a rule of
international law and the provisions of the constitution or statute of the local state. Efforts
should first be exerted to harmonize them, so as to give effect to both since it is to be
presumed that municipal law was enacted with proper regard for the generally accepted
principles of international law in observance of the Incorporation Clause in the above-cited
constitutional provision (Cruz, Philippine Political Law, 1996 ed., p. 55). In a situation,
however, where the conflict is irreconcilable and a choice has to be made between a rule of
international law and municipal law, jurisprudence dictates that municipal law should be
upheld by the municipal courts (Ichong vs. Hernandez, 101 Phil. 1155 [1957]; Gonzales vs.
Hechanova, 9 SCRA 230 [1963]; In re: Garcia, 2 SCRA 984 [1961]) for the reason that such
courts are organs of municipal law and are accordingly bound by it in all circumstances
(Salonga & Yap, op. cit., p. 13). The fact that international law has been made part of the law
of the land does not pertain to or imply the primacy of international law over national or
municipal law in the municipal sphere. The doctrine of incorporation, as applied in most
countries, decrees that rules of international law are given equal standing with, but are not
superior to, national legislative enactments. Accordingly, the principle lex posterior derogat
priori takes effect a treaty may repeal a statute and a statute may repeal a treaty. In states
where the constitution is the highest law of the land, such as the Republic of the Philippines,
both statutes and treaties may be invalidated if they are in conflict with the constitution
(Ibid.).
In the case at bar, is there really a conflict between international law and municipal or national
law? En contrario, these two components of the law of the land are not pitted against each
other. There is no occasion to choose which of the two should be upheld. Instead, we see a
void in the provisions of the RP-US Extradition Treaty, as implemented by Presidential Decree
No. 1069, as regards the basic due process rights of a prospective extraditee at the evaluation
stage of extradition proceedings. From the procedures earlier abstracted, after the filing of the
extradition petition and during the judicial determination of the propriety of extradition, the
rights of notice and hearing are clearly granted to the prospective extraditee. However, prior
manifests this silence.
Petitioner interprets this silence as unavailability of these rights. Consequently, he describes
the evaluation procedure as an "ex parte technical assessment" of the sufficiency of the
extradition request and the supporting documents.
We disagree.
In the absence of a law or principle of law, we must apply the rules of fair play. An application
of the basic twin due process rights of notice and hearing will not go against the treaty or the
implementing law. Neither the Treaty nor the Extradition Law precludes these rights from a
prospective extraditee. Similarly, American jurisprudence and procedures on extradition pose
no proscription. In fact, in interstate extradition proceedings as explained above, the
prospective extraditee may even request for copies of the extradition documents from the
governor of the asylum state, and if he does, his right to be supplied the same becomes a
demandable right (35 C.J.S. 410).
Petitioner contends that the United States requested the Philippine Government to prevent
unauthorized disclosure of confidential information. Hence, the secrecy surrounding the action
of the Department of Justice Panel of Attorneys. The confidentiality argument is, however,
overturned by petitioners revelation that everything it refuses to make available at this stage
would be obtainable during trial. The Department of Justice states that the U.S. District Court
concerned has authorized the disclosure of certain grand jury information. If the information is
truly confidential, the veil of secrecy cannot be lifted at any stage of the extradition
proceedings. Not even during trial.
A libertarian approach is thus called for under the premises.
One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as
American jurisprudence and procedures on extradition, for any prohibition against the
44
conferment of the two basic due process rights of notice and hearing during the evaluation
stage of the extradition proceedings. We have to consider similar situations in jurisprudence
for an application by analogy.
Earlier, we stated that there are similarities between the evaluation process and a preliminary
investigation since both procedures may result in the arrest of the respondent or the
prospective extraditee. In the evaluation process, a provisional arrest is even allowed by the
Treaty and the Extradition Law (Article 9, RP-US Extradition Treaty; Sec. 20, Presidential
Decree No. 1069). Following petitioners theory, because there is no provision of its
availability, does this imply that for a period of time, the privilege of the writ of habeas
corpus is suspended, despite Section 15, Article III of the Constitution which states that "[t]he
privilege of the writ of habeas corpus shall not be suspended except in cases of invasion or
rebellion when the public safety requires it"? Petitioners theory would also infer that bail is not
available during the arrest of the prospective extraditee when the extradition petition has
already been filed in court since Presidential Decree No. 1069 does not provide therefor,
notwithstanding Section 13, Article III of the Constitution which provides that "[a]ll persons,
except those charged with offenses punishable by reclusion perpetuawhen evidence of guilt is
strong, shall, before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not be impaired even when
the privilege of the writ of habeas corpus is suspended " Can petitioner validly argue that
since these contraventions are by virtue of a treaty and hence affecting foreign relations, the
aforestated guarantees in the Bill of Rights could thus be subservient thereto?
The basic principles of administrative law instruct us that "the essence of due process in
administrative proceedings is an opportunity to explain ones side or an opportunity to seek
reconsideration of the actions or ruling complained of (Mirano vs. NLRC, 270 SCRA 96
[1997]; Padilla vs. NLRC, 273 SCRA 457 [1997]; PLDT vs. NLRC, 276 SCRA 1
[1997]; Helpmate, Inc. vs. NLRC, 276 SCRA 315 [1997]; Aquinas School vs. Magnaye, 278
SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 632 [1997]). In essence, procedural due
process refers to the method or manner by which the law is enforced (Corona vs. United
Harbor Pilots Association of the Phils., 283 SCRA 31 [1997]). This Court will not tolerate the
least disregard of constitutional guarantees in the enforcement of a law or treaty. Petitioners
fears that the Requesting State may have valid objections to the Requested States non-
performance of its commitments under the Extradition Treaty are insubstantial and should not
be given paramount consideration.
How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the four
corners of Presidential Decree No. 1069?
Of analogous application are the rulings in Government Service Insurance System vs. Court of
Appeals (201 SCRA 661 [1991]) and Go vs. National Police Commission (271 SCRA 447
[1997]) where we ruled that in summary proceedings under Presidential Decree No. 807
(Providing for the Organization of the Civil Service Commission in Accordance with
Provisions of the Constitution, Prescribing its Powers and Functions and for Other Purposes),
and Presidential Decree No. 971 (Providing Legal Assistance for Members of the Integrated
National Police who may be charged for Service-Connected Offenses and Improving the
Disciplinary System in the Integrated National Police, Appropriating Funds Therefor and for
other purposes), as amended by Presidential Decree No. 1707, although summary dismissals
may be effected without the necessity of a formal investigation, the minimum requirements of
due process still operate. As held in GSIS vs. Court of Appeals:
... [I]t is clear to us that what the opening sentence of Section 40 is saying
is that an employee may be removed or dismissed even without formal
investigation, in certain instances. It is equally clear to us that an employee
must be informed of the charges preferred against him, and that the normal
way by which the employee is so informed is by furnishing him with a
copy of the charges against him. This is a basic procedural requirement
that a statute cannot dispense with and still remain consistent with the
constitutional provision on due process. The second minimum requirement
is that the employee charged with some misfeasance or malfeasance must
have a reasonable opportunity to present his side of the matter, that is to
say, his defenses against the charges levelled against him and to present
evidence in support of his defenses.
(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature, yet we upheld the due
process rights of the respondent.
In the case at bar, private respondent does not only face a clear and present danger of loss of
property or employment, but of liberty itself, which may eventually lead to his forcible
banishment to a foreign land. The convergence of petitioners favorable action on the
extradition request and the deprivation of private respondents liberty is easily comprehensible.
We have ruled time and again that this Courts equity jurisdiction, which is aptly described as
"justice outside legality," may be availed of only in the absence of, and never against, statutory
law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court of Appeals, 267 SCRA 530
[1997]; David-Chan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue in
the case at bar does not even call for "justice outside legality," since private respondents due
process rights, although not guaranteed by statute or by treaty, are protected by constitutional
guarantees. We would not be true to the organic law of the land if we choose strict
construction over guarantees against the deprivation of liberty. That would not be in keeping
with the principles of democracy on which our Constitution is premised.
45
Verily, as one traverses treacherous waters of conflicting and opposing currents of liberty and This is a petition for review on certiorari under Rule 45 of the Rules of Court,
government authority, he must ever hold the oar of freedom in the stronger arm, lest an errant seeking to reverse and set aside the Court of Appeals (CA) Decision [1] dated November 24,
and wayward course be laid. 2008 and Resolution[2] dated April 29, 2009 in CA-G.R. SP No. 101599.

Petitioner Clarita J. Carbonel was an employee of the Bureau of Jail Management

WHEREFORE, in view of the foregoing premises, the instant petition is hereby DISMISSED
for lack of merit. Petitioner is ordered to furnish private respondent copies of the extradition
request and its supporting papers, and to grant him a reasonable period within which to file his
comment with supporting evidence. The incidents in Civil Case No. 99-94684 having been
rendered moot and academic by this decision, the same is hereby ordered dismissed.
and Penology, Makati City. She was formally charged with Dishonesty, Grave Misconduct,
and Falsification of Official Documents by the Civil Service Commission Regional Office No.
IV (CSCRO IV).
The Civil Service Commission (CSC), as affirmed by the CA, established the
following facts:

SO ORDERED On May 21, 1999, petitioner went to the CSCRO IV to secure a copy of the result of
the Computer Assisted Test (CATS) Career Service Professional Examination given on March
CLARITA J. CARBONEL, 14, 1999, because she lost the original copy of her Career Service Professional Certificate of
Petitioner, Rating (hereafter referred to as certificate of rating). [3] Petitioner was directed to accomplish a
verification slip. The Examination Placement and Service Division noticed that petitioners
personal and physical appearance was entirely different from the picture of the examinee
- versus - attached to the application form and the picture seat plan. It was also discovered that the
signature affixed on the application form was different from that appearing on the verification
slip.[4] Because of these discrepancies, the Legal Affairs Division of the CSCRO IV conducted
an investigation.
CIVIL SERVICE COMMISSION,
Respondent. G.R. No. 187689 In the course of the investigation, petitioner voluntarily made a statement [5] before
Present: Atty. Rosalinda S.M. Gepigon, admitting that, sometime in March 1999, she accepted the
proposal of a certain Bettina J. Navarro (Navarro) for the latter to obtain for petitioner a
CORONA, C.J., Career Service Professional Eligibility by merely accomplishing an application form and
CARPIO, paying the amount of P10,000.00. Petitioner thus accomplished an application form to take the
CARPIO MORALES, CATS Career Service Professional Examination and gave Navarro P5,000.00 as down
VELASCO, JR., payment. Upon receipt of the original copy of the certificate of rating from Navarro, petitioner
NACHURA, gave the latter the remaining P5,000.00. Petitioner, however, misplaced the certificate of
LEONARDO-DE CASTRO, rating. This prompted her to secure another copy from the CSCRO IV.
BRION,*
PERALTA, Hence, the formal charge against petitioner.
BERSAMIN,
DEL CASTILLO, Denying her admissions in her voluntary statement before the CSCRO IV, petitioner,
ABAD, in her Answer,[6] traversed the charges against her. She explained that after filling up the
VILLARAMA, JR., application form for the civil service examination, she asked Navarro to submit the same to the
PEREZ, CSC. She, however, admitted that she failed to take the examination as she had to attend to her
MENDOZA, and ailing mother. Thus, when she received a certificate of eligibility despite her failure to take the
SERENO, JJ. test, she was anxious to know the mystery behind it. She claimed that she went to the CSCRO
IV not to get a copy of the certificate of rating but to check the veracity of the certificate. More
Promulgated: importantly, she questioned the use of her voluntary statement as the basis of the formal
charge against her inasmuch as the same was made without the assistance of counsel.
September 7, 2010
x------------------------------------------------------------------------------------x After the formal investigation, the CSCRO IV rendered its March 25, 2002 Decision
No. 020079[7] finding petitioner guilty of dishonesty, grave misconduct, and falsification of
DECISION official documents. The penalty of dismissal from the service, with all its accessory penalties,
NACHURA, J.: was imposed on her. Petitioners motion for reconsideration was denied by CSCRO IV on
November 14, 2003.[8]

46

Petitioner appealed, but the CSC dismissed [9] the same for having been filed almost three years
from receipt of the CSCRO IV decision. The CSC did not give credence to petitioners
explanation that she failed to timely appeal the case because of the death of her counsel. The
CSC opined that notwithstanding the death of one lawyer, the other members of the law firm,
petitioners counsel of record, could have timely appealed the decision. [10] Petitioners motion
for reconsideration was denied in Resolution No. 072049[11] dated November 5, 2007.
Unsatisfied, petitioner elevated the matter to the CA. On November 24, 2008, the CA rendered
the assailed decision affirming the decisions and resolutions of the CSCRO IV and the CSC.
Petitioners motion for reconsideration was denied by the CA on April 29, 2009.
Hence, the instant petition based on the following grounds:
I
SERIOUS ERROR OF FACT AND LAW AMOUNTING TO GRAVE
ABUSE OF DISCRETION WAS COMMITTED BY THE COURT OF
APPEALS IN ITS ASSAILED DECISION DATED NOVEMBER 24,
2008 BECAUSE PETITIONERS FINDING OF GUILT WAS
GROUNDED ENTIRELY ON HER UNSWORN STATEMENT THAT
SHE ADMITTED THE OFFENSES CHARGED AND WITHOUT THE
ASSISTANCE OF A COUNSEL.
II
THE CONCLUSION AND FINDING OF THE COURT OF APPEALS IN
ITS ASSAILED DECISION THAT PETITIONERS APPEAL WAS LOST
THRU HER OWN FAULT OR NEGLIGENCE WAS PREMISED ON
MISAPPREHENSION OF FACTS.
III
THE COURT OF APPEALS IN ITS ASSAILED DECISION HAS
DECIDED THE CASE NOT IN ACCORD WITH THE DECISIONS OF
THIS HONORABLE COURT.[12]
The petition is without merit.
It is undisputed that petitioner appealed the CSCRO IVs decision almost three years
from receipt thereof. Undoubtedly, the appeal was filed way beyond the reglementary period
when the decision had long become final and executory. As held in Bacsasar v. Civil Service
Commission,[13] citing Talento v. Escalada, Jr.[14]
The perfection of an appeal in the manner and within the period
prescribed by law is mandatory. Failure to conform to the rules regarding
appeal will render the judgment final and executory and beyond the power
of the Courts review. Jurisprudence mandates that when a decision
becomes final and executory, it becomes valid and binding upon the
parties and their successors-in-interest. Such decision or order can no
loner be disturbed or re-opened no matter how erroneous it may have
been.
This notwithstanding, on petition before the CA, the appellate court reviewed the
case and disposed of it on the merits, not on pure technicality.
To accentuate the abject poverty of petitioners arguments, we discuss hereunder the
issues she raised.
Petitioner faults the CSCs finding because it was based solely on her uncounselled
admission taken during the investigation by the CSCRO IV. She claims that her right to due
process was violated because she was not afforded the right to counsel when her statement was
taken.
It is true that the CSCRO IV, the CSC, and the CA gave credence to petitioners
uncounselled statements and, partly on the basis thereof, uniformly found petitioner liable for
the charge of dishonesty, grave misconduct, and falsification of official document. [15]
However, it must be remembered that the right to counsel under Section 12 of the
Bill of Rights is meant to protect a suspect during custodial investigation.[16] Thus, 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.[17]
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
petitioners capacity to represent herself, and no duty rests on such body to furnish the person
being investigated with counsel. [18] 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 the imposition of disciplinary measures against erring public
officers and employees, with the purpose of maintaining the dignity of government service. [19]
As such, the admissions made by petitioner during the investigation may be used as
evidence to justify her dismissal. [20] We have carefully scrutinized the records of the case
below and we find no compelling reason to deviate from the findings of the CSC and the CA.
The written admission of petitioner is replete with details that could have been known only to
her.[21] Besides, petitioners written statement was not the only basis of her dismissal from the
service. Records show that the CSCRO IVs conclusion was reached after consideration of all
the documentary and testimonial evidence submitted by the parties during the formal
investigation.
Now, on petitioners liability and penalty.
It has been established that petitioner accepted Navarros proposal for the latter to
obtain for petitioner a Career Service Professional Eligibility by merely accomplishing an
application form and in consideration of the amount of P10,000.00. Petitioner thus
accomplished an application form to take the CATS Career Service Professional Examination
and gave Navarro P5,000.00 as down payment. Upon receipt of the original copy of the
47
certificate of rating from Navarro, petitioner gave the latter the remaining P5,000.00.
Petitioner, however, misplaced the certificate of rating that prompted her to secure another
copy from the CSCRO IV. The CSCRO IV noticed that petitioners personal and physical
appearance was entirely different from the picture of the examinee attached to the application
form and the picture seat plan. It was also discovered that the signature affixed on the same
application form was different from that appearing on the verification slip. Clearly, petitioner
falsely represented that she took the civil service examination when in fact someone else took
the examination for her.
CSC Memorandum Circular No. 15, series of 1991, provides:
An act which includes the procurement and/or use of
fake/spurious civil service eligibility, the giving of assistance to ensure the
commission or procurement of the same, cheating, collusion,
impersonation, or any other anomalous act which amounts to any violation
of the Civil Service examination, has been categorized as a grave offense
of Dishonesty, Grave Misconduct or Conduct Prejudicial to the Best
Interest of the Service.[22]
It must be stressed that dishonesty is a serious offense, which reflects on the persons
character and exposes the moral decay which virtually destroys his honor, virtue, and integrity.
Its immense debilitating effect on the government service cannot be overemphasized. [23] If a
government officer or employee is dishonest or is guilty of oppression or grave misconduct,
even if said defects of character are not connected with his office, they affect his right to
continue in office. The government cannot tolerate in its service a dishonest official, even if he
performs his duties correctly and well, because by reason of his government position, he is
given more and ample opportunity to commit acts of dishonesty against his fellow men, even
against offices and entities of the government other than the office where he is employed; and
by reason of his office, he enjoys and possesses a certain influence and power which renders
the victims of his grave misconduct, oppression, and dishonesty less disposed and prepared to
resist and to counteract his evil acts and actuations. [24]
Under the Civil Service Rules, dishonesty is a grave offense punishable by dismissal which
carries the accessory penalties of cancellation of eligibility, forfeiture of retirement benefits
(except leave credits), and disqualification from reemployment in the government service. [25]
In Civil Service Commission v. Dasco,[26] Bartolata v. Julaton,[27] and Civil Service
Commission v. Sta. Ana,[28] we found the respondents-employees therein guilty of dishonesty
when they misrepresented that they took the Civil Service Examination when in fact someone
else took the examination for them. Because of such dishonesty, the employees were
dismissed from government service.
We find no reason to deviate from these previous rulings.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
The Court of Appeals Decision dated November 24, 2008 and Resolution dated April 29, 2009
in CA-G.R. SP No. 101599 are AFFIRMED.
SO ORDERED.
[G.R. No. 130196. February 26, 2001]
LUCIA MAPA VDA. DE DELA CRUZ, LEODIVINA DELA CRUZ, WILMA DELA
CRUZ, DARLITO DELA CRUZ, JUANITA DELA CRUZ, RICARDO DELA
CRUZ, ARSENIO DELA CRUZ, JUAN DELA CRUZ, and PACITA DELA
CRUZ, petitioners, vs. ADJUTO ABILLE, respondent.
DECISION
DE LEON, JR., J.:
Before us is an appeal of the Decision [1] dated December 5, 1996 of the Court of
Appeals[2] dismissing petitioners appeal from the judgment of the Secretary of the Department
of Agrarian Reform (DAR) denying their petition for issuance of an emancipation patent.
The facts are as follows:
Herminio Abille, now deceased, had a total landholding of 13.0561 hectares, located in
Infanta, Pangasinan, comprising of 9.2903 hectares of riceland; 2.0000 hectares of cogonland;
1.7658 hectares of coconut land and .4660 hectare of residential land. [3]
Since 1968, Balbino dela Cruz was an agricultural tenant in the riceland tilling an area of
2.84 hectares.[4] He died on June 14, 1981. After his death, Balbino dela Cruz was,
nevertheless, issued a Certificate of Land Transfer(CLT) No. 0-064711 [5] dated October 25,
1981 pursuant to Presidential Decree No. 27. [6] The certificate was entered in the Registration
Book of the Registry of Deeds of Pangasinan. Tax Declaration No. 3 in the name of Herminio
Abille was cancelled and Tax Declaration No. 1134 was issued in the name of Balbino dela
Cruz.[7]
On April 3, 1987, Herminio Abille filed a petition for exemption under Operation Land
Transfer (OLT) of his landholdings alleging, among others, that he was not notified of the
coverage of his land under OLT; that he learned of its coverage only on March 25, 1987; that
prior to the issuance of the Certificate of Land Transfer No. 0-064711, DAR did not notify him
or his representative; that he has been deprived of his constitutional right to due process. [8]
On April 19, 1989, Regional Director Antonio M. Nuesa of the Bureau of Agrarian
Legal Assistance, Region I, San Fernando, La Union, issued an Order, the dispositive
portion of which reads:
WHEREFORE, by virtue of the authority vested in me by DAR Memorandum Circular No. 5-
87, order is hereby issued:
48
 1. Denying the petition for exemption, instead the right of retention of not more
than seven (7) hectares is hereby granted;
2. Directing the petitioner to immediately select the retention area;
3. Canceling the Certificates of Land Transfer issued to the tenants on the retained
area;
4. Directing the MARO of Infanta, Pangasinan to prepare Agricultural Leasehold
Contracts between the petitioner and the tenants; and
5. Directing the MARO to implement this Order.
SO ORDERED.[9]
On July 24, 1989,[10] Herminio Abille selected the seven-hectare retention area, which
included the area covered by CLT No. 0-064711 issued to Balbino dela Cruz; hence, said CLT
was automatically cancelled.[11] After the finality and implementation of the said Order dated
April 19, 1989, Provincial Agrarian Reform Officer Eugenio B. Bernardo wrote a letter to the
Municipal Assessor of Infanta, Pangasinan requesting for the cancellation of Tax Declaration
No. 1134 in the name of Balbino dela Cruz and the re-issuance of Tax Declaration No. 3 in
favor of Herminio Abille.[12] On March 4, 1991, the Provincial Assessor of Pangasinan issued a
Notice of Cancellation of Assessment, cancelling Tax Declaration No. 1134 in the name of
Balbino dela Cruz for the reason that subject property was decided by the DAR to be retained
to Herminio Abille as per supporting documents attached. [13]
On June 29, 1992, petitioners, who are the compulsory heirs of the late Balbino dela
Cruz, filed with the Department of Agrarian Reform a petition for the issuance of
emancipation patent. The petition was referred to the Regional Director, Region I, San
Fernando, La Union, for appropriate action.[14]
In his Comment,[15] respondent Adjuto M. Abille, representing Herminio Abille, prayed
for the dismissal of the petition for the issuance of emancipation patent on the ground that
DAR Order dated April 19, 1989, ordering the cancellation of the Certificate of Land Transfer
of the retained area, had become final and had been implemented by the Provincial Agrarian
Officer of Pangasinan; hence, the petition had become moot and academic.
On October 21, 1992, Regional Director Eligio P. Pacis of the Bureau of Agrarian Legal
Assistance, Region I, San Fernando, La Union, issued an Order denying the petition for the
issuance of an emancipation patent as CLT No. 0-064711 issued in favor of Balbino dela Cruz
had already been cancelled by virtue of the Order dated April 19, 1989, which was supported
by substantial evidence, and that said Order had long become final. The dispositive portion of
the Order dated October 21, 1992 reads:
WHEREFORE, premises considered, by virtue of the authority vested in me by DAR Memo
No. 5, Series of 1987, and other implementing Rules and Regulations, an Order is hereby
issued:
1. Denying the instant Petition for the issuance of an Emancipation Patent (EP)
filed by the Petitioners;
2. Affirming in toto the Order dated 19 April 1989, issued by then Director Nuesa;
3. Directing the Provincial Agrarian Reform Officer (PARO) of Pangasinan or his
duly authorized representative to execute/implement this Order and
Deputizing the Chief of PNP-Infanta to provide the necessary police assistance
to the DAR Official concerned in the implementation of this Order.
SO ORDERED.[16]
Petitioners filed a motion for reconsideration praying that another Order be issued
declaring as null and void the Order dated April 19, 1989, which was issued allegedly without
giving them a day in court, hence, there was absence of due process of law, considering that
Balbino dela Cruz was already deemed owner of the subject property as of October 21,
1972. They sought the reinstatement of CLT No. 0-064711 and the issuance of an
emancipation patent in their favor as compulsory heirs of the late Balbino dela Cruz.
The said motion for reconsideration was treated as an appeal and elevated to the
Secretary of the Department of Agrarian Reform who rendered a Decision on June 20, 1994,
the dispositive portion of which reads:
WHEREFORE, premises considered, Order is hereby issued dismissing the instant motion for
lack of merit and the Order dated October 21, 1992 is hereby affirmed. The Regional Director
is hereby ordered to prepare Certificates of Agricultural Leasehold (CALs) to the tenants in the
retained area as lessees thereat.
SO ORDERED.[17]
In affirming the Order dated October 21, 1992, the Secretary of Agrarian Reform
declared that:
After a careful re-evaluation of the records of the instant case this Office finds merit in the
questioned Orders dated April 19, 1989 and October 21, 1992. When a CLT is issued in favor
49
of a farmer-beneficiary the said beneficiary became the owner of only an inchoate right over
the subject landholding thus, can still be cancelled administratively for justifiable reason. As
stated in the Order dated April 19, 1989, the previous owner Hermino Abille owned an area of
13.0561 hectares, more or less of landholding and of which a portion of 9.2903 hectares is a
riceland, an area of 2.0000 hectares is cogonal, 1.7658 hectare is a coconut land and .4660
hectare is a residential land. Of his riceland as provided for by PD No. 27, the said owner is
granted the right to retain an area of not exceeding seven (7) hectares and the right to select
and segregate the said area. The aforesaid CLT had already been cancelled since the area
covered by it was among those retained area selected by the landowner as evidenced by a
letter dated October 17, 1989 of PARO Eugenio B. Bernardo and the Notice of Cancellation of
Assessment dated March 4, 1991 issued by the provincial Assessor. The landowner of the
retained area has the right to choose the area which he wants to retain from his
landholding. Section 6 of R.A. 6657 provides that the right to choose the area to be retained,
which shall be compact or contiguous, shall pertain to the landowner.[18]
Petitioners motion for reconsideration of the said Decision of the Secretary of DAR
having been denied, they filed a petition for review with the Court of Appeals. However, the
Court of Appeals dismissed the said petition for review in a Decision promulgated on
December 5, 1996.[19] Their motion for reconsideration was denied by the appellate court in a
Resolution dated August 6, 1997.[20]
Hence, this petition seeking a review of the Decision dated December 5, 1996 of the
Court of Appeals.
Petitioners argued that it was incorrect for the Court of Appeals to hold that they were
accorded due process when the validity of the cancellation of Certificate of Land Transfer No.
0-064711 was resolved in the Order dated April 19, 1989; and that their petition for issuance
of an emancipation patent is a different proceeding from the petition filed by Herminio Abille
wherein Regional Director Antonio Nuesa ordered the cancellation of their predecessors
(Balbino dela Cruz) Certificate of Land Transfer; that in the said petition filed by Herminio
Abille, they were not notified and given the opportunity to be heard. Petitioners maintained
that they were denied due process so that the Order dated April 19, 1989 of Regional Director
Nuesa cancelling the Certificate of Land Transfer No. 0-064711 in the name of Balbino dela
Cruz is null and void, and cannot be used to deny their petition for the issuance of an
emancipation patent.
Citing P.D. No. 27, Locsin, et al. v. Valenzuela,[21] and Quiban v. Butalid,[22] petitioners
also assert that they became the owners of the lands they till as of the date of effectivity of P.D.
No. 27 on October 21, 1972; that they have religiously paid the annual rent of the property to
the late Herminio Abille, that is, continuously after October 21, 1972 until 1991 or
for nineteen (19) years; that by virtue of P.D. No. 27 in relation to the second paragraph,
[23]
section 2 of Executive Order No. 228, the price of said property had been fully paid thereby
entitling them to the issuance of an emancipation patent.
The petition is devoid of merit.
We agree with the Court of Appeals that although the petitioners were not given the
opportunity to be heard when Regional Director Antonio Nuesa in his Order dated April 19,
1989 ordered the cancellation of Certificate of Land Transfer No. 0-064711 on the retained
area, nevertheless, in their petition for issuance of an emancipation patent, petitioners were
given the opportunity to be heard as they raised in issue the validity of the cancellation of the
said CLT, which was resolved by DAR Regional Director Eligio P. Pacis in his Order dated
October 21, 1992,[24] and also in their (petitioners) motion for reconsideration,[25] which was
treated as an appeal by the Secretary of Agrarian Reform and resolved in his Order dated June
20, 1994.[26] The essence of due process is simply an opportunity to be heard or, as applied
to administrative proceedings, an opportunity to seek a reconsideration of the action or
ruling complained of (emphasis supplied).[27] Further, the petition filed by landowner
Herminio Abille, which was for exemption of his property from the coverage of Operation
Land Transfer, cognizable by Region I Director Antonio M. Nuesa of the Bureau of Agrarian
Legal Assistance,[28] did not require notice to petitioners. The subsequent Order dated April 19,
1989 of Regional Director Nuesa denying the petition for exemption and instead granting to
Herminio Abille the right of retention of not more than seven (7) hectares, and to select the
retention area, and cancelling the Certificates of Land Transfer issued to the tenants on the
retained area, including CLT No. 0-064711, directing the MARO of Infanta, Pangasinan to
prepare Agricultural Leasehold Contracts between the petitioner and the tenants, and directing
the PARO to implement said Order, became final even before Herminio Abille selected on July
24, 1989[29] the 7 hectares retained area which includes the 2.84 hectares covered
by Certificate of Land Transfer No. 0-064711 in the name of Balbino dela Cruz. Nevertheless,
petitioners were able to question the validity of said Order (cancelling CLT No. 0-064711) in
their petition for issuance of emancipation patent, which was resolved by the Secretary of
Agrarian Reform in his Decision dated June 20, 1994. Hence, petitioners were given an
opportunity to be heard.
We also agree with the Court of Appeals that Certificate of Land Transfer No. 0-064711
was validly cancelled. Said certificate was issued to petitioners predecessor, Balbino dela
Cruz, before landowner Herminio Abille was informed of such issuance and that his
landholding was subject to Operation Land Transfer. Subsequently, Herminio Abille, who was
found to own riceland with an area of 9.2903 hectares, was granted the right to retain an area
not exceeding seven (7) hectares, and the right to select and segregate such area under P.D.
No. 27.[30] Thus the Court of Appeals correctly ruled that:
The landowner Herminio Abille having selected as part of his seven-hectare retention the
area tilled by Balbino de la Cruz, covered by a certificate of land transfer in his name,
the CLT was correctly cancelled.
To hold otherwise would be to deprive the owner Herminio Abille of his right of
retention and to select the portion he wanted to retain.
50
The portion tilled by Balbino de la Cruz having been chosen by the owner Herminio
Abille as part of his seven-hectare retention, petitioners as heirs of Balbino de la Cruz
are not entitled to an emancipation patent over the same. Balbino de la Cruz was entitled
to an agricultural leasehold contract to the area tilled by him and this is what petitioners
inherited.[31]

In the case of Daez v. Court of Appeals, where the Certificates of Land Transfer of
farmer beneficiaries over some four (4) hectares of riceland were issued without the
landowner having been accorded her right to choose what to retain among her landholdings,
we held that the Transfer Certificate of Title issued on the basis of Certificates of Land
Transfer issued to the farmer-beneficiaries cannot operate to defeat the right of the heirs of the
deceased landowner to retain the said riceland. [32] Even the issuance of an emancipation
patent does not bar the landowner from retaining the area covered thereby.
[33]
Administrative Order No. 2, series of 1994[34] provides:

Emancipation patents or certificates of land ownership award issued to agrarian reform

beneficiaries may be corrected and cancelled for violations of agrarian laws, rules and
regulations. This includes cases of lands which are found to be exempted/excluded from P.D.
No. 27/E.O. No. 228 of CARP coverage, or part of the landowners retained G.R. No. 187854 November 12, 2013
area. (Emphasis supplied.)
RAY PETER O. VIVO, Petitioner,
The earlier cases of Locsin, et al. v. Valenzuela, et al. and Quiban v. Butalid, which were vs.
cited by the petitioners, did not involve any issue of retention rights of the landowner, and PHILIPPINE AMUSEMENT AND GAME CORPORATION (PAGCOR), Respondent.
hence, the said cases are not applicable to the case at bar.
DECISION
Where there is no showing, as in the case at bar, that there was fraud, collusion,
arbitrariness, illegality, imposition or mistake on the part of a department head, in rendering
BERSAMIN, J.:
his questioned decisions or of a total lack of substantial evidence to support the same, such
administrative decisions are entitled to great weight and respect and will not be interfered
with.[35] By petition for review on certiorari the petitioner seeks the review and reversal of the
decision promulgated on February 27, 2009,1 whereby the Court of Appeals CA)
reversed and set aside the resolutions of the Civil Service Commission CSC) dated
WHEREFORE, the petition is dismissed. The assailed Decision dated December 5,
April 20072 and August 1, 2007.3
1996 of the Court of Appeals, in CA G.R. SP No. 37338, upholding the judgment of the
Secretary of Agrarian Reform denying the issuance of an emancipation patent to petitioners, is
Also under review is the denial by the CA of the petitioners motion for reconsideration
hereby AFFIRMED. With costs against the petitioners.
through the resolution promulgated May 11, 2009.4

SO ORDERED.
Antecedents

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

The petitioner was employed by respondent Philippine Amusement and Gaming
Corporation (PAGCOR) on September 9, 1986, and was PAGCORs Managing Head
of its Gaming Department at the time of his dismissal from office.5 On February 21,
2002, he received a letter from Teresita S. Ela, the Senior Managing Head of
51
PAGCORs Human Resources Department, advising that he was being
administratively charged with gross misconduct, rumor-mongering, conduct prejudicial
to the interest of the company, and loss of trust and confidence;6 that he should
submit a written explanation of the charges; and that he was at the same time being
placed under preventive suspension.7
On February 26, 2002, the petitioners counsel, replying to Elas letter, assailed the
propriety of the show-cause memorandum as well as the basis for placing the
petitioner under preventive suspension.
On March 14, 2002, the petitioner received the summons for him to attend an
administrative inquiry, instructing him to appear before PAGCORs Corporate
Investigation Unit (CIU) on March 15, 2002.8 At the petitioners request, however, the
inquiry was conducted at his residence on said date. His statement was taken in a
question-and-answer format. He was also furnished the memorandum of charges that
recited the accusations against him and indicated the acts and omissions constituting
his alleged offenses. The memorandum of charges was based on the statements of
PAGCOR personnel who had personal knowledge of the accusations against him.
However, when his counsel requested to be furnished copies of the statements,
PAGCOR rejected the request on the ground that he had already been afforded the
sufficient opportunity to confront, hear, and answer the charges against him during
the administrative inquiry. The petitioner was then allowed to submit his answer on
March 26, 2002.
Thereafter, the CIU tendered its investigation report to PAGCORs Adjudication
Committee.9
The Adjudication Committee summoned the petitioner to appear before it on May 8,
2002 in order to address questions regarding his case. His counsel moved for the re-
scheduling of the meeting because he would not be available on said date, but the
Adjudication Committee denied the request upon the reason that the presence of
counsel was not necessary in the proceedings. His counsel moved for the
reconsideration of the denial of the request.10
The petitioner received the letter dated May 15, 2002 from Ela informing him of the
resolution of the PAGCOR Board of Directors in its May 14, 2002 meeting to the effect
that he was being dismissed from the service.11
After the petitioners motion for reconsideration vis--vis the resolution of the
PAGCOR Board of Directors dismissing him from the service was denied, he
appealed his dismissal to the CSC.
In its resolution dated April 11, 2007, the CSC ruled that PAGCOR had violated the
petitioners right to due process, and accordingly set aside his dismissal from the
service, viz:
In fine, the Commission finds that the right of Vivo to due process was violated when
he was ousted from his office without the corresponding Board Resolution that should
have set out the collegial decision of the PAGCOR Board of Directors.
WHEREFORE, foregoing premises considered, the appeal of Ray Peter O. Vivo is
hereby GRANTED. The letters dated May 15, 2002 and June 5, 2002 issued by
Teresita S. Ela, Senior Managing Head, Human Resource Department, Philippine
Amusement and Gaming Corporation (PAGCOR), are SET ASIDE.12
xxxx
The CSC remanded the case to PAGCOR with the instruction for PAGCOR to
complete its reinvestigation within three months from receipt of the resolution.
After the CSC denied its motion for reconsideration, PAGCOR elevated the case to
the CA.
On February 27, 2009, the CA promulgated its decision reversing and setting aside
the decision of the CSC upon its finding that the petitioner had been accorded
procedural due process. The CA remanded the case to the CSC for the determination
of the appeal of the petitioner on the merits, specifically the issue of whether the
dismissal had been for cause.13
Hence, this appeal.
Issue
The petitioner raises the following issues, namely:
1. The conclusion of the Court of Appeals that Petitioners right for (sic) due
process was not violated transgressed (sic) the fundamental rules in
administrative due process.
2. The Court of Appeals decision in setting aside CSC Resolutions Nos.
070732, dated 01 April 2007, and 071485, dated 01 August 2007, is contrary
to the Uniform Rules on Administrative Cases in the Civil Service and settled
jurisprudence.14
52
The petitioner would have the Court hold that PAGCORs failure to furnish him a copy
of the Board Resolutions authorizing his dismissal and denying his motion for
reconsideration was a fatal and irreparable defect in the administrative proceedings
that ultimately resulted in the illegality of his dismissal from the service. He further
argues that he was denied due process by PAGCORs refusal to re-schedule the
Adjudication Committee meeting in order to enable his counsel to attend the meeting
with him, because the refusal constituted a violation of his right to be represented by
counsel.
Ruling
The petition for review lacks merit.
The observance of fairness in the conduct of any investigation is at the very heart of
procedural due process. The essence of due process is to be heard, and, as applied
to administrative proceedings, this means a fair and reasonable opportunity to explain
ones side, or an opportunity to seek a reconsideration of the action or ruling
complained of.15 Administrative due process cannot be fully equated with due process
in its strict judicial sense, for in the former a formal or trial-type hearing is not always
necessary,16 and technical rules of procedure are not strictly applied. Ledesma v.
Court of Appeals17 elaborates on the well-established meaning of due process in
administrative proceedings in this wise:
x x x Due process, as a constitutional precept, does not always and in all situations
require a trial-type proceeding. Due process is satisfied when a person is notified of
the charge against him and given an opportunity to explain or defend himself. In
administrative proceedings, the filing of charges and giving reasonable opportunity for
the person so charged to answer the accusations against him constitute the minimum
requirements of due process. The essence of due process is simply to be heard, or
as applied to administrative proceedings, an opportunity to explain ones side, or an
opportunity to seek a reconsideration of the action or ruling complained of.18
The petitioner actively participated in the entire course of the investigation and
hearings conducted by PAGCOR. He received the letter from Ela apprising him of his
being administratively charged for several offenses, and directing him to submit an
explanation in writing. He was later on properly summoned to appear before the CIU,
which conducted its proceedings in his own residence upon his request. During the
administrative inquiry, the CIU served him a copy of the memorandum of charges,
which detailed the accusations against him and specified the acts and omissions
constituting his alleged offenses. He was also given the opportunity to appear before
the Adjudication Committee to answer clarificatory questions. Lastly, he was informed
through a memorandum of the decision of the Board of Directors dismissing him from
the service.
In contrast, the petitioner could not dispute the observance of his right to due process
by PAGCOR as set forth herein. He made no credible showing of the supposed
violation of his right to due process. He was heard through the written statement he
submitted in response to the memorandum of the charges against him. He actively
participated in the administrative inquiry conducted by the CIU at his own residence.
He was afforded the opportunity to clarify his position in the proceedings before the
Adjudication Committee. He was also able to appeal the adverse decision to dismiss
him from the service to the CSC. There is also no question that PAGCOR complied
with the twin-notice requirement prior to the termination of his employment, the first
notice being made through Elas letter dated February 21, 2002 informing him on his
being administratively charged for the offenses mentioned, and the second being
through the letter dated May 15, 2002 advising him that PAGCORs Board of
Directors had resolved to dismiss him from the service. It is settled that there is no
denial of procedural due process where the opportunity to be heard either through
oral arguments or through pleadings is accorded.19
The petitioner takes the CA to task for not considering: (1) PAGCORs failure to
furnish him copies of the Board Resolutions referred to by Ela in the memorandum
served on him, and (2) the refusal of PAGCOR to have him be represented by
counsel.
The petitioner cannot be sustained.
As the CA found, and correctly so, the petitioners pleadings explicitly admitted that
his dismissal had been effected through board resolutions. That he was not furnished
copies of the board resolutions did not negate the existence of the resolutions, and
did not invalidate the contents of the board resolutions. It is beyond question that he
was duly informed of the subject-matter of the board resolutions. Consequently, the
CSCs conclusion that his dismissal had been unauthorized was unfounded. In any
case, even assuming for the sake of argument that there was no board resolution
approving his dismissal, the lapse did not render his dismissal illegal but
unauthorized. However, as the CA succinctly put it, an unauthorized act could be the
subject of ratification.20
As regards the supposed denial of the petitioners right to counsel, it is underscored
that PAGCOR denied his request to re-schedule the conference before the
Adjudication Committee because his counsel would not be available on the day fixed
for that purpose. In its letter denying the request, the Adjudication Committee
asserted that the presence of counsel was not indispensable in the conduct of its
proceedings. We find nothing objectionable in the denial of the request. In an
administrative proceeding like that conducted against the petitioner, a respondent has
the option of engaging the services of counsel. As such, the right to counsel is not
imperative because administrative investigations are themselves inquiries conducted
53
only to determine whether there are facts that merit disciplinary measures against
erring public officers and employees, with the purpose of maintaining the dignity of
government service.21
It is noteworthy, however, that the petitioner was actually assisted by his counsel from
the outset of the administrative case against him. That counsel, Atty. Cesar B.
Jimenea Jr. of the Jimenea and Associates, ensured that the petitioners every
concern reached PAGCOR, and that he was clarified of any matter affecting his rights
all throughout the investigation and hearings. As the records indicate, his counsel
sent to Ela a letter calling attention to supposedly palpable violations of his clients
right to due process, and objecting to Elas right to place his client under preventive
suspension. The same counsel filed in behalf of the petitioner the letter-requests to be
furnished certain documents and records of the investigation,22 his answer to the
memorandum of charges,23 the letter-request for the re-setting of the conference
before the Adjudication Committee,24 the reconsideration of the letter denying the
request,25 and the motion to reconsider the decision of the Board of Directors to
dismiss him from the service.26
In any event, any procedural defect in the proceedings taken against the petitioner
was cured by his filing of the motion for reconsideration and by his appealing the
adverse result to the CSC.1wphi1 The Court held in Gonzales v. Civil Service
Commission27 that any defect in the observance of due process is cured by the filing
of a motion for reconsideration, and that denial of due process cannot be successfully
invoked by a party who was afforded the opportunity to be heard. In Autencio v.
Maara,28 the Court observed that defects in procedural due process may be cured
when the party has been afforded the opportunity to appeal or to seek reconsideration
of the action or ruling complained of.
The petitioner was not denied due process of law, for he was afforded the fair and
reasonable opportunity to explain his side. That, to us, was sufficient to meet the
requirements of due process.29 In Casimiro v. Tandog,30 the Court pronounced:
The essence of procedural due process is embodied in the basic requirement of
notice and a real opportunity to be heard. In administrative proceedings, such as in
the case at bar, procedural due process simply means the opportunity to explain
ones side or the opportunity to seek a reconsideration of the action or ruling
complained of. "To be heard" does not mean only verbal arguments in court; one may
be heard also thru pleadings. Where opportunity to be heard, either through oral
arguments or pleadings, is accorded, there is no denial of procedural due process.
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 respondents legal rights; (2) a real opportunity to be
heard personally or with the assistance of counsel, to present witnesses and
evidence in ones favor, and to defend ones 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.
In fine, the CA committed no reversible error in holding that P AGCOR had properly
observed the requirements of due process in its administrative proceedings against
the petitioner. WHEREFORE, the Court DENIES the petition for review on certiorari
AFFIRMS the decision promulgated on February 27, 2009 by the Court of Appeals;
REQUIRES the Civil Service Commission to determine the petitioner's appeal on the
merits, particularly the issue of whether the dismissal was for cause; and ORDERS
the petitioner to pay the costs of suit.
SO ORDERED.
G.R. No. L-12596 July 31, 1958
JOSE L. GUEVARA, petitioner,
vs.
THE COMMISSION ON ELECTIONS, respondent.
Enrique M. Fernando for petitioner.
Dominador D. Dayot for respondent.
BAUTISTA ANGELO, J.:
Petitioner was ordered by the Commissioner on Elections to show cause why he
should not be punished for contempt for having published in the Sunday Times issue
of June 2, 1957 an article entitled "Ballot Boxes Contract Hit", which tended to
interfere with and influence the Commission on Elections and its members in the
adjudication of a controversy then pending investigation and determination before
said body "arising from the third petition for reconsideration of May 20, 1957 and the
54
supplementary petition thereof of June 1, 1957 filed by Acme Steel Mfg. Co., Inc.,
praying for reconsideration of the resolutions of the Commission of May 4 and 13,
1957, awarding the contracts for the manufacture and supply of 34,000 ballot boxes
to the National Shipyards & Steel Corporation and the Asiatic Steel Mfg. Co., Inc. and
the respective answers of the latter two corporations to said petitions; and which
article likewise tended to degrade, bring into disrepute, and undermine the exclusive
constitutional function of this Commission and its Chairman Domingo Imperial and
Member Sixto Brillantes in the administration of all the laws relative to the conduct of
elections."
Petitioner, answering summons issued to him by the Commission, appeared and filed
a motion to quash on the following grounds:
a) The Commission has no jurisdiction to punish as contempt the publication
of the alleged contemptuous article, as neither in the Constitution nor in
statutes is the Commission granted a power to so punish the same, for
should Section 5 of Republic Act No. 180, vesting the Commission with
"power to punish contempts provided for in Rule of the Court under the
same procedure and with the same penalties provided therein," be applied
to the case at hand, said provision would be unconstitutional.
b) Assuming that the Commission's power to punish contempt exists, the
same cannot be applied to the instant case, where the Commission is
exercising a purely administrative function for purchasing ballot boxes.
c) Assuming that the Commission's power to punish contempt exists, said
power cannot apply to the present case because the matter of purchasing
the ballot boxes was already a closed case when the article in question was
published.
d) Assuming that controversy contemplated by the law was still pending, the
article in question was a fair report because it could be assumed that the
news report of the respondent was based on the motion for reconsideration
filed by the Acme Steel where there was an allegation of fraud, etc.
The Commission, after hearing, denied the motion to quash but granted petitioner a
period of fifteen (15) days within which to elevate the matter to the Supreme Court in
view of the issue raised which assails the jurisdiction of the Commission to investigate
and punish petitioner for contempt in connection with the alleged publication. Hence
the present petition for prohibition with preliminary injunction.
The facts which gave rise to the present contemptuous incident are: The Commission
on Elections, on May 4, 1957, after proper negotiations, awarded to the National
Shipyards & Steel Corporation (NASSCO), the Acme Steel Mfg. Co., Inc. (ACME),
and the Asiatic Steel Mfg. Co., Inc. (ASIATIC), the contracts to manufacture and
supply the Commission 12,000, 11,000 and 11,000 ballot boxes at P17.64, P14.00,
and P17.00 each, respectively. On May 8, 1957, both the NASSCO and the ASIATIC
signed with the Commission on Elections the corresponding contracts thereon. On
May 13, 1957, the Commission cancelled the award to the ACME for failure of the
latter to sign the contract within the designated time and awarded to the NASSCO
and the ASIATIC, one-half each, the 11,000 ballot boxes originally alloted to the
ACME. The corresponding contracts thereon were signed on May 16, 1957.
Then followed a series of petitions filed by the ACME for the reconsideration of the
resolution of the Commission of May 13, 1957. The first of these petitions was filed on
May 14, 1957 which, after hearing, was denied by the Commission in its resolution of
May 16, 1957. The second petition was filed on May 16, 1957 and was denied on
May 17, 1957. The third petition was filed on May 20, 1957, and because of the
seriousness of the grounds alleged therein for the annulment of its previous
resolutions, the Commission resolved to conduct a formal investigation on the matter
ordering the NASSCO and the ASIATIC to file their respective answers. Thereafter,
after these corporations had filed their answers, the Commission held a formal
hearing thereon on May 24, 1957. On May 28, 1957, the ACME filed a memorandum
on the points adduced during the hearing, and on June 4, 1957, the Commission
issued its resolution denying the third motion for reconsideration. The article signed
by petitioner was published in the June 2, 1957 issue of the Sunday Times, a
newspaper of nation-wide circulation.
The question to be determined is whether the Commission on Elections has the
power and jurisdiction to conduct contempt proceedings against petitioner with a view
to imposing upon him the necessary disciplinary penalty in connection with the
publication of an article in the Sunday Times issue of June 2, 1957 which, according
to the charge, tended to interfere with and influence said Commission in the
adjudication of a controversy then pending determination and to degrade and
undermine the function of the Commission and its members in the administration of
all laws relative to the conduct of elections.
The Commission on Elections is an independent administrative body which was
established by our Constitution to take charge of the enforcement of all laws relative
to the conduct of elections and devise means and methods that will insure the
accomplishment of free, orderly, and honest elections (Sumulong vs. Commission on
Elections, 73 Phil., 288; Nacionalista Party vs. The Solicitor General, 85 Phil., 101; 47
Off. Gaz. 2356). Its powers are defined in the Constitution. It provides that it "shall
have exclusive charge of the enforcement and administration of all laws relative to the
conduct of elections and shall exercise all other functions which may be conferred
upon it by law. It shall decide, save those involving the right to vote, all administrative
55
questions, affecting elections, including the determination of the number and location
of polling places, and the appointment of election inspectors and of other election
officials" (Section 2, Article X). The Revised Election Code supplements what other
powers may be exercised by said Commission. Among these powers are those
embodied in Section 5 thereof which, for ready reference, we quote:
SEC. 5. Powers of Commission. The Commission on Elections or any of
the members thereof shall have the power to summon the parties to a
controversy pending before it, issue subpoenas and subpoenas duces
tecum and otherwise take testimony in any investigation or hearing pending
before it, and delegate such power to any officer. Any controversy submitted
to the Commission on Elections shall be tried, heard and decided by it within
fifteen days counted from the time the corresponding petition giving rise to
said controversy is filed. The Commission or any of the members thereof
shall have the power to punish contempts provided for in rule sixty-four of
the Rules of Court, under the same procedure and with the same penalties
provided therein.
Any violation of any final and executory decision, order or ruling of the
Commission shall constitute contempt of the Commission.
Any decision, order or ruling of the Commission on Elections may be
reviewed by the Supreme Court by writ of certiorari accordance with the
Rules of Court or with such rules as may be promulgated by the Supreme
Court.
It would therefore appear that the Commission on Elections not only has the duty to
enforce and administer all laws relative to the conduct of elections but the power to
try, hear and decide any controversy that may be submitted to it in connection with
the elections. And as an incident of this power, it may also punish for contempt in
those cases provided for in Rule 64 of the Rules of Court under the same procedure
and with the same penalties provided therein. In this sense, the Commission,
although it cannot be classified as a court of justice within the meaning of the
Constitution (Section 13, Article VIII), for it is merely an independent administrative
body (The Nacionalista Party vs. Vera, 85 Phil., 126; 47 Off. Gaz. 2375), may
however exercise quasi-judicial functions in so far as controversies that by express
provision of the law come under its jurisdiction. As to what question may come within
this category, neither the Constitution nor the Revised Election Code specifies. The
former merely provides that it shall come under its jurisdiction, saving the right to
vote, all administrative questions affecting elections, including the determination of
the number and location of polling places, and the appointment of election inspectors
and other election officials, while the latter is silent as to what questions may be
brought it for determination. But it is clear that, to come under its jurisdiction, the
questions should be controversial in nature and must refer to the enforcement and
administration of all laws relative to the conduct of election. The difficulty lies in
drawing the demarcation line between a duty which inherently is administrative in
character and a function which is justiciable and which would therefore call for judicial
action by the Commission. But this much depends upon the factors that may
intervene when a controversy should arise.
Thus, it has been held that the Commission has no power to annul an election which
might not have been free, orderly and honest for such matter devolves upon other
agencies of the Government (Nacionalista Party vs. Commission on Elections, 85
Phil., 148; 47 Off. Gaz. 2851); neither does it have the power to decide the validity or
invalidity of votes cast in an election for such devolves upon the courts or the
electoral tribunals (Ibid.); it does not also have the power to order a recounting of the
votes before the proclamation of election even if there are discrepancies in the
election returns for it is a function of our courts of justice (Ramos vs. Commission on
Elections, 80 Phil., 722); nor does it have the power to order the correction of a
certificate of canvass after a candidate had been proclaimed and assumed office (De
Leon vs. Imperial, 94 Phil., 680); and only very recently this Court has held that the
Commission has no power to reject a certificate of candidacy except only when its
purpose is to create confusion in the minds of the electors (Abcede vs. Imperial, 103
Phil., 136).
On the other hand, it has been held that the Commission has the power to annul an
illegal registry list of voters (Feliciano, et al. vs. Lugay, et al., 93 Phil., 744; 49 Off.
Gaz. 3863); to annul an election canvass made by a municipal board of canvassers
(Mintu vs. Enage, et al., G. R. No. L-1834); and to investigate and act on the illegality
of a canvass of election made by a municipal board of canvassers (Ramos vs.
Commission on Elections, 80 Phil., 722). And as to what are the ministerial duties
which the Commission on Elections must perform in connection with the conduct of
elections, the following resume made by the Commission itself in a controversy which
was submitted to it for determination is very enlightening:
In the enforcement and administration of all laws relative to the conduct of elections,
the first duty of the Commission is to set in motion all the multifarious preparatory
processes ranging from the purchase of election supplies, printing of election forms
and ballots, appointments of members of the boards of inspectors, establishment of
precincts and designation of polling places to the preparation of the registry lists of
voters, so as to put in readiness on election day the election machinery in order that
the people who are legally qualified to exercise the right of suffrage may be able to
cast their votes to express their sovereign will. It is incumbent upon the Commission
to see that all these preparatory acts will insure free, orderly and honest elections. All
provisions of the Revised Election Code contain regulations relative to these
processes preparatory for election day. It is incumbent upon the Commission on
56
Elections to see that all these preparatory acts are carried out freely, honestly and in
an orderly manner. It is essential that the Commission or its authorized
representatives, in establishing precincts or designating polling places, must act
freely, honestly and in an orderly manner. It is also essential that the printing of
election forms and the purchase of election supplies and their distribution are done
freely, honestly and in an orderly manner. It is further essential that the political
parties or their duly authorized representatives who are entitled to be represented in
the boards of inspectors must have the freedom to choose the person who will
represent them in each precinct throughout the country. It is further essential that
once organized, the boards of inspectors shall be given all the opportunity to be able
to perform their duties in accordance with law freely, honestly and in an orderly
manner, individually and as a whole. In other words, it is the duty of the Commission
to see that the boards of inspectors, in all their sessions, are placed in an atmosphere
whereby they can fulfill their duties without any pressure, influence and interference
from any private person or public official. All these preparatory steps are
administrative in nature and all questions arising therefrom are within the exclusive
powers of the Commission to resolve. All irregularities, anomalies and misconduct
committed by any official in these preparatory steps are within the exclusive power of
the Commission to correct. Any erring official must respond to the Commission for
investigation. Of these preparatory acts, the preparation of the permanent list of
voters is the matter involved in this case, which to our mind is completely an
administrative matter. (Decision of the Commission on Elections, October 28, 1951, In
Re Petition of Angel Genuino vs. Prudente, et al., Case No. 196)1
Considering that the paramount administrative duty of the Commission is to set in
motion all the multifarious preparatory processes ranging from the purchase of
election supplies, printing of election forms and ballots, appoinments of members of
the board of inspectors, appointment of precincts and designation of polling
preparation of registry lists of voters, so as to as to put in readiness on election day
the election machinery, it may also be reasonably said that the requisitioning and
preparation of the necessary ballot boxes to be used in the elections is by the same
token an imperative ministerial duty which the Commission is bound to perform if the
elections are to be held. Such is the incident which gave rise to the contempt case
before us. It stems from the ministerial act of the Commission in requisitioning for the
necessary ballot boxes in connection with the last elections and in so proceeding it
provoked a dispute between several dealers who offered to do the job.
Although the negotiation conducted by the Commission has resulted in controversy
between several dealers, that however merely refers to a ministerial duty which the
Commission has performed in its administrative capacity in relation to the conduct of
elections ordained by our Constitution. In proceeding on this matter, it only discharged
a ministerial duty; it did not exercise any judicial function. Such being the case, it
could not exercise the power to punish for contempt as postulated in the law, for such
power is inherently judicial in nature. As this Court has aptly said: "The power to
punish for contempt is inherent in all courts; its existence is essential to the
preservation of order in judicial proceedings, and to the enforcement of judgments,
orders and mandates of courts, and, consequently, in the administration of justice"
(Slade Perkins vs. Director of Prisons, 58 Phil., 271; U. S. vs. Loo Hoe, 36 Phil., 867;
In Re Sotto, 46 Off. Gaz. 2570; In Re Kelly, 35 Phil., 944). The exercise of this power
has always been regarded as a necessary incident and attribute of courts (Slade
Perkins vs. Director of Prisons, Ibid.). Its exercise by administrative bodies has been
invariably limited to making effective the power to elicit testimony (People vs. Swena,
296 P., 271). And the exercise of that power by an administrative body in furtherance
of its administrative function has been held invalid (Langenberg vs. Decker, 31 N.E.
190; In Re Sims 37 P., 135; Roberts vs. Hacney, 58 S.W., 810). We are therefore
persuaded to conclude that the Commission on Elections has no power nor authority
to submit petitioner to contempt proceedings if its purpose is to discipline him
because of the publication of the article mentioned in the charge under consideration.
Wherefore, petition is granted. Respondent Commission is hereby enjoined from
proceeding with the case set forth in its resolution of June 20, 1957, with
pronouncement as to costs.
The preliminary injunction issued by this Court is made permanent.
Paras, C. J., Padilla, Montemayor, Reyes, A., Reyes, J. B. L., Endencia and Felix,
JJ., concur.
G.R. No. L-13827 September 28, 1962
BENJAMIN MASANGCAY, petitioner,
vs.
THE COMMISSION ON ELECTIONS, respondent.
Godofredo A. Ramos and Ruby Salazar-Alberto for petitioner.
Office of the Solicitor General and Dominador D. Dayot for respondent.
BAUTISTA ANGELO, J.:
Benjamin Masangcay, with several others, was on October 14, 1957 charged before
the Commission on Election with contempt for having opened three boxes bearing
serial numbers l-8071, l-8072 and l-8073 containing official and sample ballots for the
municipalities of the province of Aklan, in violation of the instructions of said
Commission embodied in its resolution promulgated September 2, 1957, and its
unnumbered resolution date March 5, 1957, inasmuch as he opened said boxes not
the presence of the division superintendent of schools of Aklan, the provincial auditor,
and the authorized representatives of the Nacionalista Party, the Liberal Party and the
Citizens' Party, as required in the aforesaid resolutions, which are punishable under
Section 5 of the Revised Election Code and Rule 64 of the Rules of Court.
Masangcay was then the provincial treasurer of Aklan designated by the Commission
in its resolution in Case CE-No. 270, part II 2 (b) thereof, to take charge of the receipt
57
and custody of the official ballots, election forms and supplies, as well as of their
distribution, among the different municipalities of the province.
In compliance with the summons issued to Masangcay and his co-respondents to
appear and show cause why they should not be punished for contempt on the basis
of the aforementioned charge, they all appeared before the Commission on October
21, 1957 and entered a plea of not guilty. Thereupon, evidence was presented by
both the prosecution and the defense, and on December 16, 1957 the Commission
rendered its decision finding Masangcay and his co-respondent Molo guilty as
charged and sentencing each of them to suffer three months imprisonment and pay a
fine of P500, with subsidiary imprisonment of two months in case of insolvency, to be
served in the provincial jail of Aklan. The other respondents were exonerated for lack
of evidence.
Masangcay brought the present petition for review raising as main issue the
constitutionality of Section 5 of the Revised Election Code which grants the
Commission on Elections as well as its members the power to punish acts of
contempt against said body under the same procedure and with the same penalties
provided for in Rule 64 of the Rules of Court in that the portion of said section which
grants to the Commission and members the power to punish for contempt is
unconstitutional for it infringes the principle underlying the separation of powers that
exists among the three departments of our constitutional form of government. In other
words, it is contended that, even if petitioner can be held guilty of the act of contempt
charged, the decision is null and void for lack of valid power on the part of the
Commission to impose such disciplinary penalty under the principle of separation of
powers. There is merit in the contention that the Commission on Elections lacks
power to impose the disciplinary penalty meted out to petitioner in the decision
subject of review. We had occasion to stress in the case of Guevara v. The
Commission on Elections 1 that under the law and the constitution, the Commission on
Elections has only the duty to enforce and administer all laws to the conduct of
elections, but also the power to try, hear and decide any controversy that may be
submitted to it in connection with the elections. In this sense, said, the Commission,
although it cannot be classified a court of justice within the meaning of the
Constitution (Section 30, Article VIII), for it is merely an administrative body, may
however exercise quasi-judicial functions insofar as controversies that by express
provision law come under its jurisdiction. The difficulty lies in drawing the demarcation
line between the duty which inherently is administrative in character and a function
which calls for the exercise of the quasi-judicial function of the Commission. In the
same case, we also expressed the view that when the Commission exercises a
ministerial function it cannot exercise the power to punish contempt because such
power is inherently judicial in nature, as can be clearly gleaned from the following
doctrine we laid down therein:
. . . In proceeding on this matter, it only discharged a ministerial duty; it did not
exercise any judicial function. Such being the case, it could not exercise the power to
punish for contempt as postulated in the law, for such power is inherently judicial in
nature. As this Court has aptly said: 'The power to punish for contempt is inherent in
all courts; its existence is essential to the preservation of order in judicial proceedings,
and to the enforcement of judgments, orders and mandates courts, and,
consequently, in the administration of justice (Slade Perkins v. Director of Prisons, 58
Phil., 271; U.S. v. Lee Hoc, 36 Phil., 867; In Re Sotto, 46 O.G., 2570; In Re Kelly,
Phil., 944). The exercise of this power has always been regarded as a necessary
incident and attribute of courts (Slade Perkins v. Director of Prisons, Ibid.). Its
exercise by administrative bodies has been invariably limited to making effective the
power to elicit testimony (People v. Swena, 296 P., 271). And the exercise of that
power by an administrative body in furtherance of its administrative function has been
held invalid (Langenberg v. Lecker, 31 N.E., 190; In Re Sims, 37 P., 135; Roberts v.
Hacney, 58 SW., 810).1awphl.nt
In the instant case, the resolutions which the Commission tried to enforce and for
whose violation the charge for contempt was filed against petitioner Masangcay
merely call for the exercise of an administrative or ministerial function for they merely
concern the procedure to be followed in the distribution of ballots and other election
paraphernalia among the different municipalities. In fact, Masangcay, who as
provincial treasurer of Aklan was the one designated to take charge of the receipt,
custody and distribution of election supplies in that province, was charged with having
opened three boxes containing official ballots for distribution among several
municipalities in violation of the instructions of the Commission which enjoin that the
same cannot be opened except in the presence of the division superintendent of
schools, the provincial auditor, and the authorized representatives of the Nacionalista
Party, the Liberal Party, and the Citizens' Party, for he ordered their opening and
distribution not in accordance with the manner and procedure laid down in said
resolutions. And because of such violation he was dealt as for contempt of the
Commission and was sentenced accordingly. In this sense, the Commission has
exceeded its jurisdiction in punishing him for contempt, and so its decision is null and
void.
Having reached the foregoing conclusion, we deem it unnecessary to pass on the
question of constitutionality raised by petitioner with regard to the portion of Section 5
of the Revised Election Code which confers upon the Commission on Elections the
power to punish for contempt for acts provided for in Rule 64 of our rules of court.
WHEREFORE, the decision appealed from insofar as petitioner Benjamin Masangcay
is concerned, as well as the resolution denying petitioner's motion for reconsideration,
insofar as it concerns him, are hereby reversed, without pronouncement as to costs.
Bengzon, C. J., Padilla, Labrador, Concepcion, Barrera, Paredez, Dizon, Regala and
Makalintal, JJ., concur.
Reyes, J. B. L., J., took no part.
G.R. No. 96681 December 2, 1991
HON. ISIDRO CARIO, in his capacity as Secretary of the Department of
Education, Culture & Sports, DR. ERLINDA LOLARGA, in her capacity as
Superintendent of City Schools of Manila, petitioners,
vs.
THE COMMISSION ON HUMAN RIGHTS, GRACIANO BUDOY, JULIETA
58
BABARAN, ELSA IBABAO, HELEN LUPO, AMPARO GONZALES, LUZ DEL
CASTILLO, ELSA REYES and APOLINARIO ESBER, respondents.
NARVASA, J.:p
The issue raised in the special civil action of certiorari and prohibition at bar, instituted
by the Solicitor General, may be formulated as follows: where the relief sought from
the Commission on Human Rights by a party in a case consists of the review and
reversal or modification of a decision or order issued by a court of justice or
government agency or official exercising quasi-judicial functions, may the
Commission take cognizance of the case and grant that relief? Stated otherwise,
where a particular subject-matter is placed by law within the jurisdiction of a court or
other government agency or official for purposes of trial and adjudgment, may the
Commission on Human Rights take cognizance of the same subject-matter for the
same purposes of hearing and adjudication?
The facts narrated in the petition are not denied by the respondents and are hence
taken as substantially correct for purposes of ruling on the legal questions posed in
the present action. These facts, 1 together with others involved in related cases
recently resolved by this Court 2 or otherwise undisputed on the record, are
hereunder set forth.
1. On September 17, 1990, a Monday and a class day, some 800 public school
teachers, among them members of the Manila Public School Teachers Association
(MPSTA) and Alliance of Concerned Teachers (ACT) undertook what they described
as "mass concerted actions" to "dramatize and highlight" their plight resulting from the
alleged failure of the public authorities to act upon grievances that had time and again
been brought to the latter's attention. According to them they had decided to
undertake said "mass concerted actions" after the protest rally staged at the DECS
premises on September 14, 1990 without disrupting classes as a last call for the
government to negotiate the granting of demands had elicited no response from the
Secretary of Education. The "mass actions" consisted in staying away from their
classes, converging at the Liwasang Bonifacio, gathering in peaceable assemblies,
etc. Through their representatives, the teachers participating in the mass actions were
served with an order of the Secretary of Education to return to work in 24 hours or
face dismissal, and a memorandum directing the DECS officials concerned to initiate
dismissal proceedings against those who did not comply and to hire their
replacements. Those directives notwithstanding, the mass actions continued into the
week, with more teachers joining in the days that followed. 3
Among those who took part in the "concerted mass actions" were the eight (8) private
respondents herein, teachers at the Ramon Magsaysay High School, Manila, who
had agreed to support the non-political demands of the MPSTA. 4
2. For failure to heed the return-to-work order, the CHR complainants (private
respondents) were administratively charged on the basis of the principal's report and
given five (5) days to answer the charges. They were also preventively suspended for
ninety (90) days "pursuant to Section 41 of P.D. 807" and temporarily replaced
(unmarked CHR Exhibits, Annexes F, G, H). An investigation committee was
consequently formed to hear the charges in accordance with P.D. 807. 5
3. In the administrative case docketed as Case No. DECS 90-082 in which CHR
complainants Graciano Budoy, Jr., Julieta Babaran, Luz del Castillo, Apolinario Esber
were, among others, named respondents, 6 the latter filed separate answers, opted
for a formal investigation, and also moved "for suspension of the administrative
proceedings pending resolution by . . (the Supreme) Court of their application for
issuance of an injunctive writ/temporary restraining order." But when their motion for
suspension was denied by Order dated November 8, 1990 of the Investigating
Committee, which later also denied their motion for reconsideration orally made at the
hearing of November 14, 1990, "the respondents led by their counsel staged a
walkout signifying their intent to boycott the entire proceedings." 7 The case
eventually resulted in a Decision of Secretary Cario dated December 17, 1990,
rendered after evaluation of the evidence as well as the answers, affidavits and
documents submitted by the respondents, decreeing dismissal from the service of
Apolinario Esber and the suspension for nine (9) months of Babaran, Budoy and del
Castillo. 8
4. In the meantime, the "MPSTA filed a petition for certiorari before the Regional Trial
Court of Manila against petitioner (Cario), which was dismissed (unmarked CHR
Exhibit, Annex I). Later, the MPSTA went to the Supreme Court (on certiorari, in an
attempt to nullify said dismissal, grounded on the) alleged violation of the striking
teachers" right to due process and peaceable assembly docketed as G.R. No.
95445, supra. The ACT also filed a similar petition before the Supreme Court . . .
docketed as G.R. No. 95590." 9 Both petitions in this Court were filed in behalf of the
teacher associations, a few named individuals, and "other teacher-members so
numerous similarly situated" or "other similarly situated public school teachers too
numerous to be impleaded."
5. In the meantime, too, the respondent teachers submitted sworn statements dated
September 27, 1990 to the Commission on Human Rights to complain that while they
were participating in peaceful mass actions, they suddenly learned of their
replacements as teachers, allegedly without notice and consequently for reasons
completely unknown to them. 10
6. Their complaints and those of other teachers also "ordered suspended by
the . . . (DECS)," all numbering forty-two (42) were docketed as "Striking Teachers
CHR Case No. 90775." In connection therewith the Commission scheduled a
59
"dialogue" on October 11, 1990, and sent a subpoena to Secretary Cario requiring
his attendance therein. 11
On the day of the "dialogue," although it said that it was "not certain whether he (Sec.
Cario) received the subpoena which was served at his office, . . . (the) Commission,
with the Chairman presiding, and Commissioners Hesiquio R. Mallilin and Narciso C.
Monteiro, proceeded to hear the case;" it heard the complainants' counsel (a) explain
that his clients had been "denied due process and suspended without formal notice,
and unjustly, since they did not join the mass leave," and (b) expatiate on the
grievances which were "the cause of the mass leave of MPSTA teachers, (and) with
which causes they (CHR complainants) sympathize." 12 The Commission thereafter
issued an Order 13 reciting these facts and making the following disposition:
To be properly apprised of the real facts of the case and be accordingly
guided in its investigation and resolution of the matter, considering that these
forty two teachers are now suspended and deprived of their wages, which
they need very badly, Secretary Isidro Cario, of the Department of
Education, Culture and Sports, Dr. Erlinda Lolarga, school superintendent of
Manila and the Principal of Ramon Magsaysay High School, Manila, are
hereby enjoined to appear and enlighten the Commission en banc on
October 19, 1990 at 11:00 A.M. and to bring with them any and all
documents relevant to the allegations aforestated herein to assist the
Commission in this matter. Otherwise, the Commission will resolve the
complaint on the basis of complainants' evidence.
xxx xxx xxx
7. Through the Office of the Solicitor General, Secretary Cario sought and was
granted leave to file a motion to dismiss the case. His motion to dismiss was
submitted on November 14, 1990 alleging as grounds therefor, "that the complaint
states no cause of action and that the CHR has no jurisdiction over the case." 14
8. Pending determination by the Commission of the motion to dismiss, judgments
affecting the "striking teachers" were promulgated in two (2) cases, as
aforestated, viz.:
a) The Decision dated December l7, 1990 of Education Secretary Cario in
Case No. DECS 90-082, decreeing dismissal from the service of Apolinario
Esber and the suspension for nine (9) months of Babaran, Budoy and del
Castillo; 15 and
b) The joint Resolution of this Court dated August 6, 1991 in G.R. Nos.
95445 and 95590 dismissing the petitions "without prejudice to any appeals,
if still timely, that the individual petitioners may take to the Civil Service
Commission on the matters complained of," 16 and inter alia "ruling that it
was prima facie lawful for petitioner Cario to issue return-to-work orders,
file administrative charges against recalcitrants, preventively suspend them,
and issue decision on those charges." 17
9. In an Order dated December 28, 1990, respondent Commission denied Sec.
Cario's motion to dismiss and required him and Superintendent Lolarga "to submit
their counter-affidavits within ten (10) days . . . (after which) the Commission shall
proceed to hear and resolve the case on the merits with or without respondents
counter affidavit." 18 It held that the "striking teachers" "were denied due process of
law; . . . they should not have been replaced without a chance to reply to the
administrative charges;" there had been a violation of their civil and political rights
which the Commission was empowered to investigate; and while expressing its
"utmost respect to the Supreme Court . . . the facts before . . . (it) are different from
those in the case decided by the Supreme Court" (the reference being unmistakably
to this Court's joint Resolution of August 6, 1991 in G.R. Nos. 95445 and
95590, supra).
It is to invalidate and set aside this Order of December 28, 1990 that the Solicitor
General, in behalf of petitioner Cario, has commenced the present action
of certiorari and prohibition.
The Commission on Human Rights has made clear its position that it does not feel
bound by this Court's joint Resolution in G.R. Nos. 95445 and 95590, supra. It has
also made plain its intention "to hear and resolve the case (i.e., Striking Teachers
HRC Case No. 90-775) on the merits." It intends, in other words, to try and decide or
hear and determine, i.e., exercise jurisdiction over the following general issues:
1) whether or not the striking teachers were denied due process, and just cause
exists for the imposition of administrative disciplinary sanctions on them by their
superiors; and
2) whether or not the grievances which were "the cause of the mass leave of MPSTA
teachers, (and) with which causes they (CHR complainants) sympathize," justify their
mass action or strike.
The Commission evidently intends to itself adjudicate, that is to say, determine with
character of finality and definiteness, the same issues which have been passed upon
and decided by the Secretary of Education, Culture & Sports, subject to appeal to the
Civil Service Commission, this Court having in fact, as aforementioned, declared that
the teachers affected may take appeals to the Civil Service Commission on said
matters, if still timely.
60
The threshold question is whether or not the Commission on Human Rights has the
power under the Constitution to do so; whether or not, like a court of justice, 19 or
even a quasi-judicial agency, 20 it has jurisdiction or adjudicatory powers over, or the
power to try and decide, or hear and determine, certain specific type of cases, like
alleged human rights violations involving civil or political rights.
The Court declares the Commission on Human Rights to have no such power; and
that it was not meant by the fundamental law to be another court or quasi-judicial
agency in this country, or duplicate much less take over the functions of the latter.
The most that may be conceded to the Commission in the way of adjudicative power
is that it may investigate, i.e., receive evidence and make findings of fact as regards
claimed human rights violations involving civil and political rights. But fact finding is
not adjudication, and cannot be likened to the judicial function of a court of justice, or
even a quasi-judicial agency or official. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial function, properly
speaking. To be considered such, the faculty of receiving evidence and making
factual conclusions in a controversy must be accompanied by the authority
of applying the law to those factual conclusions to the end that the controversy may
be decided or determined authoritatively, finally and definitively, subject to such
appeals or modes of review as may be provided by law. 21 This function, to repeat,
the Commission does not have. 22
The proposition is made clear by the constitutional provisions specifying the powers
of the Commission on Human Rights.
The Commission was created by the 1987 Constitution as an independent
office. 23 Upon its constitution, it succeeded and superseded the Presidential
Committee on Human Rights existing at the time of the effectivity of the
Constitution. 24 Its powers and functions are the following 25
(1) Investigate, on its own or on complaint by any party, all forms of human
rights violations involving civil and political rights;
(2) Adopt its operational guidelines and rules of procedure, and cite for
contempt for violations thereof in accordance with the Rules of Court;
(3) Provide appropriate legal measures for the protection of human rights of
all persons within the Philippines, as well as Filipinos residing abroad, and
provide for preventive measures and legal aid services to the
underprivileged whose human rights have been violated or need protection;
(4) Exercise visitorial powers over jails, prisons, or detention facilities;
(5) Establish a continuing program of research, education, and information to
enhance respect for the primacy of human rights;
(6) Recommend to the Congress effective measures to promote human
rights and to provide for compensation to victims of violations of human
rights, or their families;
(7) Monitor the Philippine Government's compliance with international treaty
obligations on human rights;
(8) Grant immunity from prosecution to any person whose testimony or
whose possession of documents or other evidence is necessary or
convenient to determine the truth in any investigation conducted by it or
under its authority;
(9) Request the assistance of any department, bureau, office, or agency in
the performance of its functions;
(10) Appoint its officers and employees in accordance with law; and
(11) Perform such other duties and functions as may be provided by law.
As should at once be observed, only the first of the enumerated powers and functions
bears any resemblance to adjudication or adjudgment. The Constitution clearly and
categorically grants to the Commission the power to investigate all forms of human
rights violations involving civil and political rights. It can exercise that power on its
own initiative or on complaint of any person. It may exercise that power pursuant to
such rules of procedure as it may adopt and, in cases of violations of said rules, cite
for contempt in accordance with the Rules of Court. In the course of any investigation
conducted by it or under its authority, it may grant immunity from prosecution to any
person whose testimony or whose possession of documents or other evidence is
necessary or convenient to determine the truth. It may also request the assistance of
any department, bureau, office, or agency in the performance of its functions, in the
conduct of its investigation or in extending such remedy as may be required by its
findings. 26
But it cannot try and decide cases (or hear and determine causes) as courts of
justice, or even quasi-judicial bodies do. To investigate is not to adjudicate or adjudge.
Whether in the popular or the technical sense, these terms have well understood and
quite distinct meanings.
61
"Investigate," commonly understood, means to examine, explore, inquire or delve or
probe into, research on, study. The dictionary definition of "investigate" is "to observe
or study closely: inquire into systematically. "to search or inquire into: . . . to subject to
an official probe . . .: to conduct an official inquiry." 27 The purpose of investigation, of
course, is to discover, to find out, to learn, obtain information. Nowhere included or
intimated is the notion of settling, deciding or resolving a controversy involved in the
facts inquired into by application of the law to the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step
by patient inquiry or observation. To trace or track; to search into; to examine and
inquire into with care and accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry;" 28 "to inquire; to make an investigation,"
"investigation" being in turn describe as "(a)n administrative function, the exercise of
which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; . . . an inquiry,
judicial or otherwise, for the discovery and collection of facts concerning a certain
matter or matters." 29
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge,
decide, determine, resolve, rule on, settle. The dictionary defines the term as "to
settle finally (the rights and duties of the parties to a court case) on the merits of
issues raised: . . . to pass judgment on: settle judicially: . . . act as judge." 30 And
"adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial
powers: . . . to award or grant judicially in a case of controversy . . . ." 31
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority.
To determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge"
means: "To pass on judicially, to decide, settle or decree, or to sentence or
condemn. . . . Implies a judicial determination of a fact, and the entry of a
judgment." 32
Hence it is that the Commission on Human Rights, having merely the power "to
investigate," cannot and should not "try and resolve on the merits" (adjudicate) the
matters involved in Striking Teachers HRC Case No. 90-775, as it has announced it
means to do; and it cannot do so even if there be a claim that in the administrative
disciplinary proceedings against the teachers in question, initiated and conducted by
the DECS, their human rights, or civil or political rights had been transgressed. More
particularly, the Commission has no power to "resolve on the merits" the question of
(a) whether or not the mass concerted actions engaged in by the teachers constitute
and are prohibited or otherwise restricted by law; (b) whether or not the act of carrying
on and taking part in those actions, and the failure of the teachers to discontinue
those actions, and return to their classes despite the order to this effect by the
Secretary of Education, constitute infractions of relevant rules and regulations
warranting administrative disciplinary sanctions, or are justified by the grievances
complained of by them; and (c) what where the particular acts done by each
individual teacher and what sanctions, if any, may properly be imposed for said acts
or omissions.
These are matters undoubtedly and clearly within the original jurisdiction of the
Secretary of Education, being within the scope of the disciplinary powers granted to
him under the Civil Service Law, and also, within the appellate jurisdiction of the Civil
Service Commission.
Indeed, the Secretary of Education has, as above narrated, already taken cognizance
of the issues and resolved them, 33 and it appears that appeals have been
seasonably taken by the aggrieved parties to the Civil Service Commission; and even
this Court itself has had occasion to pass upon said issues. 34
Now, it is quite obvious that whether or not the conclusions reached by the Secretary
of Education in disciplinary cases are correct and are adequately based on
substantial evidence; whether or not the proceedings themselves are void or
defective in not having accorded the respondents due process; and whether or not
the Secretary of Education had in truth committed "human rights violations involving
civil and political rights," are matters which may be passed upon and determined
through a motion for reconsideration addressed to the Secretary Education himself,
and in the event of an adverse verdict, may be reviewed by the Civil Service
Commission and eventually the Supreme Court.
The Commission on Human Rights simply has no place in this scheme of things. It
has no business intruding into the jurisdiction and functions of the Education
Secretary or the Civil Service Commission. It has no business going over the same
ground traversed by the latter and making its own judgment on the questions
involved. This would accord success to what may well have been the complaining
teachers' strategy to abort, frustrate or negate the judgment of the Education
Secretary in the administrative cases against them which they anticipated would be
adverse to them.
This cannot be done. It will not be permitted to be done.
In any event, the investigation by the Commission on Human Rights would serve no
useful purpose. If its investigation should result in conclusions contrary to those
reached by Secretary Cario, it would have no power anyway to reverse the
Secretary's conclusions. Reversal thereof can only by done by the Civil Service
Commission and lastly by this Court. The only thing the Commission can do, if it
concludes that Secretary Cario was in error, is to refer the matter to the appropriate
Government agency or tribunal for assistance; that would be the Civil Service
62
Commission. 35 It cannot arrogate unto itself the appellate jurisdiction of the Civil
Service Commission.
WHEREFORE, the petition is granted; the Order of December 29, 1990 is
ANNULLED and SET ASIDE, and the respondent Commission on Human Rights and
the Chairman and Members thereof are prohibited "to hear and resolve the case (i.e.,
Striking Teachers HRC Case No. 90-775) on the merits."
SO ORDERED.
Melencio-Herrera, Cruz, Feliciano, Bidin, Grio-Aquino, Medialdea, Regalado,
Davide, Jr. and Romero, JJ, concur.
FIRST DIVISION
G.R. No. L-30485 May 31, 1984
BENJAMIN H. AQUINO, as Provincial Fiscal of Rizal, petitioner,
vs.
HON. HERMINIO C. MARIANO, Judge of the Court of First Instance of Rizal
(Branch X), and LUCIO ADRIANO, JR., respondents.
The Solicitor General for respondents.
RELOVA, J.:
On October 9, 1968, then Rizal Provincial Fiscal Benjamin H. Aquino filed an
information in the then Court of First Instance at Pasig, Rizal, docketed as Criminal
Case No. 18425 and entitled: The People of the Philippines vs. Rodolfo Ceidoza,
Jose R. Baricua, Cesario B. Ong, Lucio Adriano, Jr. and Adriano Castillo, for estafa
thru falsification of official and/or public documents. Said criminal case, which arose
from the huge expansion in the area after a resurvey and subdivision of a certain
parcel of registered land in Muntinlupa, Rizal, and the approval by certain officials of
the Land Registration Commission of the corresponding plans and technical
descriptions prepared by the surveyor who resurveyed and subdivided the property,
was assigned to the branch of the then Court of First Instance of Rizal presided by
Hon. Pedro Revilla.
On October 27, 1968, Lucio Adriano, Jr., one of the defendants in said Criminal Case
No. 18425, instituted a petition for mandamus in the then Court of First Instance of
Rizal praying for an order directing Fiscal Aquino to include as defendants in the
information filed by him in Criminal Case No. 18425 (not 18245) all persons of
whom he found a prima facie case as stated by him in Annex "B " of his Petition,
particularly, Commissioner Antonio Noblejas of the Land Registration Commission,
who, in the meantime, resigned from the office. The mandamus case, docketed as
Civil Case No. 11307, was assigned to Branch X, presided by herein respondent
Judge Herminio C. Mariano, who, thereafter, rendered a decision, dated March 28,
1969, granting the petition for mandamus, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, decision is hereby rendered in favor of
the petitioner and against the respondent, granting petitioner's prayer for the
issuance of a Writ of Mandamus, directing the respondent Benjamin H.
Aquino, Provincial Fiscal of Rizal, to include as accused in the information
filed by him in Criminal Case No. 18425 (not 18245) of this Court, all
persons, including Commissioner Antonio Noblejas, against whom he found
a prima facie case as stated by him in his second indorsement dated June
20, 1968 address to the Secretary of Justice, a copy of which is attached to
the present petition as Annex "B" thereof.
Let the corresponding Writ of mandamus issue.
Hence, this petition for review by certiorari praying that the decision of respondent
Court of First Instance be set aside and declaring that herein petitioner cannot be
compelled to include former Commissioner Antonio Noblejas as one of the accused in
Criminal Case No. 18425.
There is merit in the petition.
As stated in the decision sought to be reviewed, herein petitioner conducted the
corresponding preliminary investigation in the case assigned to him and, in a second
indorsement to the then Secretary of Justice, dated June 20, 1968, he had expressed
the view that a strong prima facie case exists against Commissioner Noblejas and,
therefore, recommended strongly that he be allowed to file the corresponding
information against said commissioner and all other persons whom he found in his
investigation to be criminally liable for the offense complained of. However, Fiscal
Aquino, after a period of more than two months from the tune he made his second
indorsement, addressed a memorandum, dated September 2, 1968, to the then
Secretary of Justice stating, among others, that in view of the offer of Commissioner
Noblejas to resign from office and in the fight of the Commissioner's explanation, he
(herein petitioner) found the responsibility of said commissioner, if any, to be only
administrative in nature. Thus, the information was filed without including
Commissioner Noblejas as one of the accused.
63
In the light of the foregoing facts, is the proper remedy of private respondent Adriano, all, a motion is defined as 'every application for an order not included in a
Jr., an action for mandamus, or a simple motion in Criminal Case No. 18425 with judgment' (Sec. 1, Rule 15, of the Revised Rules of Court).
prayer for an order directing Fiscal Aquino to include in the information Commissioner
Antonio Noblejas as one of the defendants therein? xxx xxx xxx

The Revised Rules of Court (Section 3, Rule 65) on Petition for mandamus provides The conclusion is therefore inevitable that the filing of a mere motion in the
that "[w]hen any tribunal, corporation, board, or person unlawfully neglects the criminal case to achieve the same purpose as prayed for in the petition for
performance of an act which the law specifically enjoins as a duty resulting from an mandamus is not only an adequate remedy but even a plainer, speedier, and
office, trust, or station, or unlawfully excludes another from the use and enjoyment of more adequate remedy in the ordinary course of law than mandamus.
a right or office to which such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person aggrieved thereby may file Another substantial argument in favor of filing only a motion in the criminal
a verified petition in the proper court alleging the facts with certainty and praying that case instead of the petition for mandamus is that it will avoid multiplicity of
judgment be rendered commanding the defendant, immediately or at some other suits which modern procedure abhors (3 Moran's Comments on the Rules of
specified time, to do the act required to be done to protect the rights of the petitioner, Court, 1963 ed., p. 134)
and to pay the damages sustained by the petitioner, by reason of the wrongful acts of
the defendant." Stated differently, mandamus is an extraordinary remedy that can be
Otherwise stated, before filing the present action for mandamus in the court below,
resorted to only in cases of extreme necessity where the ordinary forms of procedure
private respondent Adriano, Jr. should have availed of this administrative remedy and
are powerless to afford relief where there is no other clear, adequate and speedy
his failure to do so is fatal. To place his case beyond the pale of this rule, it must be
remedy. Before a writ of mandamus may be issued, it is obligatory upon the petitioner
shown that his case falls which it did not within the cases where, in accordance
to exhaust all remedies in the ordinary course of law. He must show that the duty
with this Court's decisions, the aggrieved party need not exhaust administrative
sought to be performed must be one which the law specifically enjoins as a duty
remedies within his reach in the ordinary course of the law (Tapales vs. the President
resulting from an office. (Quintero vs. Martinez, 84 Phil. 496; Perez vs. City Mayor of
and the Board of Regents of the U.P., G.R. No. L-17523, March 30, 1963; Mangubat
Cabanatuan, 3 SCRA 431; Alzate vs. Aldana, 8 SCRA 219; and, Caltex Filipino
vs. Osmena, G.R. No. L-12837, April 30, 1959; Baguio vs. Honorable Jose
Managers and Supervisors Association vs. Court of Industrial Relations, 23 SCRA
Rodriguez, G.R. No. L-11078, May 27, 1959; Pascual vs. Provincial Board, G.R. No.
492).
L-11959, October 31, 1959; Marinduque Iron Mines, etc. vs. Secretary of Public
Works, G.R. No. L-15982, May 31, 1963; Alzate vs. Aldaba, G.R. L-14407, February
Thus, if appeal or some other equally adequate remedy is still available in the 29, 1960 and Demaisip vs. Court of Appeals, G.R. No. L-13000, September 25,
ordinary course of law, the action for mandamus would be improper. In the case at 1959).
bar, private respondent Adriano, Jr. did not request Fiscal Aquino to include in the
information Commissioner Noblejas as one of the accused. Had he done so and the
Neither is there merit in the argument that if a motion is presented before the trial
same was met with a denial Adriano, Jr. could have appealed to the Secretary of
judge he would be prejudging the case if he should grant the same because such a
Justice who may reverse petitioner and designate another to act for the purpose. That
resolution win be presented only on a prima facie evidence, while a judgment of
way, the filing of a simple motion with the Fiscal to include or to amend the
conviction must be based on evidence beyond reasonable doubt.
information is much more speedy and adequate than a petition for mandamus. As
aptly stated by the Solicitor General in his brief for the petitioner:
WHEREFORE, the petition is GRANTED and the decision dated March 28, 1969, of
respondent judge is SET ASIDE.
... By just presenting the motion, there will be no need of paying any docket
fee and the numbering of another case; there will be no issuance and
service of a summons or of an order equivalent thereto; there win be no SO ORDERED.
more raffles to determine the sala of the court to which the case will be
assigned; and there will be no pre-trial all of which necessarily consume Melencio-Herrera, Plana, Gutierrez, Jr. and De la Fuente, JJ., concur.
time. At least, there is no prohibition in the rules against this procedure. After
Teehankee, J., (Chairman), took no part.

64
 SECOND DIVISION
June 30, 1987
G.R. No. L-65718
NATIONAL DEVELOPMENT COMPANY AND DOLE PHILIPPINES,
INC., petitioners,
vs.
WILFREDO HERVILLA, respondent.
PADILLA, J.:
Assailed in this petition for review on certiorari is the decision 1 dated 10 November
1983 of the Intermediate Appellate Court (now Court of Appeals) in AC-G.R. No. CV-
66215 entitled, "Wilfredo Hervilla, Plaintiff-Appellant, versus Dole Philippines, Inc.,
Candido de Pedro, and National Development Co., Defendants-Appelleea, "which
reversed the decision of the Court of First Instance of South Cotabato, General
Santos City, as well as its resolution dated 9 August 1985 denying the motion for
reconsideration of said decision.
The facts of the case, as gathered from the decision under review, are as follows:
An action for Recovery of Possession and Damages filed on December 20,
1973 by Wilfredo Hervilla against Dole Philippines, a duly registered
corporation doing business in Polomolok, South Cotabato, involving Lots
Nos. 3284, and 3283, GSS-269-D, each containing four (4) hectares, more
or less, situated at Sitio Bahsong, Palkan, Polomolok, South Cotabato, now
in the possession of defendant corporation as Administrator of the properties
of National Development Corporation (NDC) impleaded as party defendant
(Records, p. 48).
On December 28, 1958, claimant Rolando Gabales, for a consideration of
P450.00, sold to Hernane Hervilla all his rights and interest over a four-
hectare land located in Palkan, Polomolok, South Cotabato but Identified
only by its boundaries:
... On the North, by the property of Teopisto Espafiola; on the south,
by Mr. Macarandan; on the east by Francisco Macarandan and on
the west by Regina Fabrea ...(Exh."K").
It was apparently on the strength of the Tax Declaration No. 1376 that
Hernane Hervilla was induced to acquire it (Exh. "L").
On August 1, 1959, its adjoining occupant-claimant, Fernando Jabagat, for a
consideration of P270.00, also sold his interest and rights to Hernane
Hervilla over another four (4) hectares of land, situated at Balisong, Bo.
Kablon, Tupi [later plotted in Palkan, Polomolok] South Cotabato, Identified
by its boundaries:
...On the North by the property of Candido de Pedro; on the south
by the property of Santiago Macarandan; on the East by creek and
on the West by the property of HernaneHervilla ...(Exh."H").
Undoubtedly, while adjoining each other, one of these is situated on
Polomolok, South Cotabato, while the other is in Tupi, South Cotabato [the
two lots were later plotted to be in Palkan, Polomolok). For, at the time of
these transfers, the boundary between these places had not definitely been
settled. Hence, the discrepancy.
On June 1, 1961, Wilfredo Hervilla, claiming to be the successor-in-interest
of his brother, Hernane Hervilla who vacated these properties, [in favor of
the former], filed with the District Land Office of the Bureau of Lands in
General Santos City Free Patent Application Nos. 2054 and 2054-A,
respectively, over the lots, after the same were surveyed and designated as
Lot Nos. 3264, GSS-269-D and 3l66 (Exhs. "A", "A-7", "B", "B-4", tsn, p.
249).
On April 1, 1963, as claimant and occupant of Lots 3283 and 3284, GSS-
269-D, situated at Balisong, Kablon, Tupi, South Cotabato since 1945,
Candido de Pedro filed with the Bureau of Lands, Manila, his Free Patent
Application, having planted it to abaca, coffee, banana, corn and other
seasonal crops, erecting therein a farm house (Exhs, "E", "2", "2-A", "2-B").
Land taxes from 1945 until 1963 were paid per Official Receipts Nos. B-
9134501 and B-913492 (Record, pp. 126, 131). Then, exactly four months
after filing his application, Candido de Pedro ceded all his rights to the
National Development Corporation, represented by Pedro Changco, Jr.
(Exhs. "J", "J-1").
On April 27, 1968, Wilfredo Hervilla who was then in Palawan, thru his wife,
Enuna V. Hervilla, filed an ejectment suit against Dole before the Municipal
Court of Tupi, South Cotabato (then Cotabato) alleging that "sometime in the
early part of March 1968 defendant by means of threats, of force,
intimidation, strategy and stealth and against the wig of the plaintiffs, entered
and occupied the entire parcels (lots Nos. 3264 and 3265, GSS-269-D)...
constructing ..." (Exh. "F", Record, p. 109). This was dismissed, however, on
September 30, 1970 for failure to state a cause of action and without the
benefit of trying it upon the merits (Exh. "H", Record, p. 195).
On July 28, 1972, as Lots 3264 and 3265 applied by plaintiff on June 1,
1961, had obviously been designated as Lots 3283 and 3284 initially applied
on August 1, 1963 by Candido de Pedro, predecessorin-interest of Dole,
counsel for plaintiff's Wilfredo Hervilla wrote the District Land Officer of the
Bureau of Lands, stationed in Koronadal, South Cotabato, requesting for an
Investigation of these Lots (Exh. "G").
On January 30, 1975, Jesus Ma. Baltazar, supplied with verbal information by
Wilfredo Hervilla in his occular inspection about the facts surrounding the claim of
65
plaintiff, [in an investigation duly conducted with the aid of the map of the Bureau and
in the presence of Candido de Pedro] submitted his report to the District Land Officer,
recommending:
... that PPa, Nos. (VIII-4)-40 54 and (VII-4) 2054-A be amended accordingly
such that it shall cover Lot No. 3284 and 3283, respectively both of GSS-
269-D, Palkan, Polomolok, South Cotabato, instead of Lot Nos. 3264 and
3265, respectively, both of GSS-269-D, and Kablon, Tupi, South Cotabato
(Exh. "H", "H l").
On June 15, 1973, Hernando Jereos, Provincial Officer of Koronadal, South
Cotabato, pursuant to the report of the Land Investigator, Jesus Ma. Baltazar, issued
an order:
"That the Free Patent Application No. (VIII-4) 2054 and Free Patent
Application No. (VIII-4) 2054-A of Wilfredo D. Hervilla for Lots Nos. 3264 and
3265, GSS-269-D, respectively, be, as hereby they are, modified in the
sense that the disposition therein contained shall in the order named refer to
Lots Nos. 3284 and 3283, GSS-269-D and, as thus modified, further action
on the herein mentioned application held in abeyance pending the final
determination of the adverse claim of Dolefil thereto"(Exh."D").
So, on September 20, 1973, armed with that recommendation, counsel for plaintiff
wrote Dolefil demanding the immediate return of Lots 3284 and 3283 to Wilfredo
Hervilla as well as payment of actual and moral damages since the former's
occupation and fencing of the land in March 1968, with a warning of a court suit if it
failed (Exh. "I", Record, p. 125). Falling on deaf ears, plaintiff instituted the
presentsuit, engaged the services of a counsel in the sum of P2,000.00 (tsn, p. 115). 2
On the basis of the foregoing facts, the court a quo rendered a decision in favor of the
National Development Company (NDC, for short) and Dole Philippines, Inc.,
(Dolephil, for short), petitioners herein, by dismissing the herein private respondent's
complaint against them. On 30 March 1979, private respondent iplaintiff in the trial
court) appealed to the Intermediate Appellate Court which, on 10 November 1983,
rendered the herein assailed decision, thus:
WHEREFORE, in view of an the foregoing considerations, the decision
appealed from is hereby REVERSED and set aside and another one entered
herein;
1. Declaring that plaintiff-appellant, Wilfredo Hervilla, the rightful possessor
of the subject lots or lots designated as Lots Nos. 3283 and 3284, GSS-269-
D, situated at Palkan, Polomololok, South Cotabato;
2. Ordering the NDC and DOLE to vacate the said lots and deliver
possession thereof to the said plaintiff-appellant;
3. Ordering the defendants-appellees: Dole (Philippines, Inc.); Candido de
Pedro and National Development Co. (NDC), jointly and severally to pay
Wilfredo Hervilla P700.00 per annum, representing the value of the yearly
harvest of the land at the time it was taken, with legal interest from the tune
of judicial demand until funy paid; and
4. Ordering the said defendants-appeuees jointly and severally to pay
P5,000.00 in the concept of attorney's fees and to pay the costs. 3
A motion for reconsideration was timely filed by herein petitioners and on 9 January
1984, a Supplement to the Motion for Reconsideration with Motion for New Trial was
filed praying that the case be reopened and a new trial conducted for the purpose of
submitting original certificate of Title Nos. 26651 and 26653. Petitioners alleged
therein that, on 5 December 1980, or while the case was pending with respondent
Court, the Bureau of Lands issued the free patents in favor of Petitioners'
predecessor-in-interest.
On 9 August 1985, respondent Court issued a resolution denying the Motion for
Reconsideration and Supplement to the Motion for Reconsideration with Motion for
New Trial, stating thus:
Finding that all the grounds and arguments raised in the Motion for
Reconsideration are practically the same or at least included, considered
and passed upon adversely against movant by this Court in its decision now
sought to be reconsidered, the Court RESOLVED to DENY the Motion for
Reconsideration.
Regarding the Supplement to the Motion for Reconsideration with Motion for
New Trial, in which defendants-appellees now claim that the "issue of
possession and ownership have been conclusively determined in favor of
defendant-appellee National Development Co. " per patents OCTs Nos. p-
26651 and p-26653 both recently dated December 5, 1980, as Annexes "1"
& "2", We do not think the Bureau of Lands could validly make a
pronouncement on the issue of possession over the subject land upon which
rested the issuance of the patents in favor of defendants-appellee, as
against the prior finding of this Court that the plaintiff-appellant had the prior,
superior and physical possession thereof, since said issue is the very
sameDecision of the Intermediate Appellate Court, issue litigated in this case
submitted by the parties to the court of justice. In other words, when the
Bureau of Lands issued the patents and OCT's in question, the case was
already pending in court; hence, subjudice. The issuance of the patents and
Original Certificates of Title over the subject land, therefore, is nun and void,
the same having been issued, while the case is still pending in court.
In view thereof, this Court likewise hereby RESOLVES to DENY the
Supplement to the Motion for Reconsideration with Motion for New Trial, for
being unmeritorious. 4
Hence, the present petition interposed by the National Development Company (NDC).
There is no question that the authority given to the Lands Department over the
disposition of public lands 5 does not exclude the courts from their jurisdiction over
possessory actions, the public character of the land notwithstanding 6 and that the
exercise by the courts of such jurisdiction is not an interference with the alienation,
66
disposition and control of public lands.7 The question that is raised by petitioner NDC
before this Court is: "May the Court in deciding a case involving recovery of
possession declare null and void title issued by an administrative body or office during
the pendency of such case? Specifically, is the Bureau of Lands precluded, on the
ground that the matter is subjudice, from issuing a free patent during the pendency of
a case in court for recovery of possession?
The questions are answered in the negative. It is now well settled that the
administration and disposition of public lands are committed by law to the Director of
Lands primarily, and, ultimately, to the Secretary of Agriculture and Natural
Resources. 8 The jurisdiction of the Bureau of Lands is confined to the determination
of the respective rights of rival claimantsx to public lands 9 or to cases which involve
disposition and alienation of public lands. 10The jurisdiction of courts in possessory
actions involving public lands is limited to the determination of who has the actual,
physical possession or occupation of the land in question (in forcible entry cases,
before municipal courts) or, the better right of possession (in accion publiciana, in
cases before Courts of First Instance, now Regional Trial Courts). 11
In forcible entry cases, moreover, title is not in issue; as a matter of fact, evidence
thereof is expressly barred, except to prove the nature of the possession. 12
In any event, petitioners' possession of the lands in question has been confirmed by
the issuance of Free Patents in favor of their predecessor-in-interest. By this act,
nothing more is left for the courts to pursue. Thus, the private respondent's cause of
action has been rendered moot and academic by the decision of the Director of
Lands. In Rallon vs. Ruiz,13 this Court said:
The reason then for possessory actions in court, namely, to "facilitate
adjudication" by the Lands Department of a dispute over public land no
longer exists. For, defendants' applications are no longer pending
investigation. Defendants' possession of the lands disputed, for purposes of
the free patents, has been confirmed in the administrative case. The
administrative branch of the government has thus already spoken. Its action
has lapsed into finality. Accordingly, plaintiffs' claim of possession is lost.
Since plaintiffs' protests, in reference to possession, has already been
resolved adversely against them by the Lands Department, nothing more is
left for the courts to pursue.
In Realize vs. Duarte, 14 this Court stated:
The land on which Duarte settled may be initially presumed as pubhe land,
his homestead application over it having been approved by the Director of
Lands. It is our considered opinion that the approval of his homestead
application legalized his possession, and such approval constitutes a
justifiable defense against the action for revival of judgment as it necessarily
affects the appellee's right of possession of the land from which Duarte was
ordered ejected.
The principle was reiterated in De los Santos vs. Rodriguez thus:[[15
At the time of the rendition of the decision in CA-G.R. No. 18912-R, the
question of whether or not said portion was to be part of her homestead had
not as yet been definitely settled. Accordingly, it became necessary to
determine in that case who rhafl meanwhile be in possession. The
aforementioned question was finany decided in favor of Rodriguez, in the
order of the Director of Fisheries, dated February 27, 1959. Thereafter he is,
therefore, the party entitled to said possession. In other words, the decision
in CA-G.R. 18912-R may no longer be executed, not because the decision in
CA-G.R. 32970-R has annulled it, but because of events subsequent to the
first decision, which events have changed materially the situation between
the parties. Thus, in Hernandez vs. Clapis, this Court, speaking through then
Chief Justice Paras, said:
In our opinion the present appeal is meritorious. While the decision in the
forcible entry and detainer case is final, it can no longer be executed at least
in so far as the possession of the land in question is concerned, because,
under section 4 of Commonwealth Act No. 141, the Director of Lands has
direct executive control of the survey, classification, lease, sale or any other
form of concession of disposition and management of the lands of the public
domain, and his decisions as to questions of fact are conclusive when
approved by the Secretary of Agriculture; and because the latter had already
cancelled the right of plaintiff Maria L. Hernandez to administer the land in
question and rejected both her sales application and that of her husband,
plaintiff Antonio Hernandez, at the same time giving the defendants the
preferential right to apply for said land in virtue of the provisions of Republic
Act No. 65. The correctness of the final decision of the Secretary of
Agriculture is not herein involved, but it is valid and binding until reversed in
a proper proceeding by the No. L-23170, January 31, 1968, 22 SCRA 451,
457court. The situation is not that the judgment in the forcible entry and
detainer case has lost its virtuality, but that the plaintiffs had subsequently
ceased to be entitled to the relief awarded by said judgment. (Emphasis
supplied.)
Moreover, records do not show that private respondent Wilfredo Hervilla ever filed a
motion for reconsideration of the decision of the Director of Lands issuing free patent
over the lands in dispute in favor of petitioners' predecessor-in-interest. Neither did he
appeal said decision to the Secretary of Agriculture and Natural Resources, nor did
he appeal to the office of the President of the Philippines. In short, Hervilla failed to
exhaust administrative remedies, a flaw which, to our mind, is fatal to a court review.
The decision of the Director of Lands has now become final. The Courts may no
longer interfere with such decision. 16
WHEREFORE, the decision dated 10 November 1983 and the resolution dated 9
August 1985 of the respondent Appellate Court are hereby reversed and set
aside. The decision of the court a quo dated 28 February 1979 is hereby ordered
reinstated. No costs.
67
SO ORDERED. The facts are not disputed.

Fenan, Gutierrez, Jr., Paras, Bidin and Cortes, JJ., concur. On March 21, 1990, a check (Check No. 11669677) dated March 31, 1990 in the amount
of One Million Pesos (P1,000,000.00) was drawn against Account No. 0111-01854-8 with
private respondent Allied Bank payable to the order of one Jose Ch. Alvarez. The payee
deposited the check with petitioner Union Bank who credited the P1,000,000.00 to the account
FIRST DIVISION of Mr. Alvarez. On May 21, 1990, petitioner sent the check for clearing through the Philippine
Clearing House Corporation (PCHC). When the check was presented for payment, a clearing
[G.R. No. 134699. December 23, 1999] discrepancy was committed by Union Banks clearing staff when the amount of One Million
Pesos (P1,000,000.00) was erroneously under-encoded to One Thousand Pesos (P1,000.00)
only.
UNION BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and
ALLIED BANK CORPORATION, respondents.
Petitioner only discovered the under-encoding almost a year later. Thus, on May 7,
1991, Union Bank Notified Allied Bank of the discrepancy by way of a charge slip for Nine
DECISION
Hundred Ninety-Nine Thousand Pesos (P999,000.00) for automatic debiting against the
account of Allied Bank. The latter, however, refused to accept the charge slip since [the]
KAPUNAN, J.:
transaction was completed per your [Union Banks] original instruction and clients account is
now insufficiently funded.
Section 2 of the Law on Secrecy of Bank Deposits, [1] as amended, declares bank deposits
to be absolutely confidential except:
Subsequently, Union Bank filed a complaint against Allied Bank before the PCHC
Arbitration Committee (Arbicom), praying that:
(1) In an examination made in the course of a special or general examination of a bank
that is specifically authorized by the Monetary Board after being satisfied that there is
judgment be rendered in favor of plaintiff against defendant sentencing it to pay plaintiff:
reasonable ground to believe that a bank fraud or serious irregularity has been or is being
committed and that it is necessary to look into the deposit to establish such fraud or
1. The sum of NINE HUNDRED NINETY-NINE THOUSAND PESOS (P999,000.00);
irregularity,

2. The sum of THREE HUNDRED SIXTY-ONE AND FOUR HUNDRED EIGHTY AND
(2) In an examination made by an independent auditor hired by the bank to conduct its
20/XX P361,480.20 as of October 9, 1991 representing reimbursements for opportunity losses
regular audit provided that the examination is for audit purposes only and the results thereof
and interest at the rate of 24% per annum arising from actual losses sustained by plaintiff as of
shall be for the exclusive use of the bank,
May 21, 1990;

(3) Upon written permission of the depositor,

3. The amount for attorneys fees at the rate of 25% of any and all sums due;

(4) In cases of impeachment,

4. Penalty Charges at the rate of 1/8 of 1% of P999,000.00 from May 22, 1990 until payment
thereof.
(5) Upon order of a competent court in cases of bribery or dereliction of duty of public
officials, or
5. Exemplary and punitive damages against the defendant in such amounts as may be awarded
by this Tribunal in order to serve a lesson to all member-Banks under the PCHC umbrella to
(6) In cases where the money deposited or invested in the subject matter of the litigation.
striclty comply with the provisions thereof;

Whether or not the case at bar falls under the last exception is the issue in the instant
6. The costs of suit which includes filing fee in addition to litigation expenses which shall be
petition.
proven in the course of arbitration.

68
7. Such other damages thay may be awarded by this Tribunal. [2]
Thereafter, Union Bank filed in the Regional Trial court (RTC) of Makati a petition for
the examination of Account No. 111-01854-8. Judgment on the arbitration case was held in
abeyance pending the resolution of said petition.
Upon motion of private respondent, the RTC dismissed Union Banks petition. The RTC
held that:
The case of the herein petitioner does not fall under any of the foregoing exceptions to warrant
a disclosure of or inquiry into the ledgers/books of account of Allied Checking Account No.
111-01854-8. Needless to say, the complaint filed by herein petitioner against Allied Banking
Corporation before the Philippine Clearing House Corporation (PCHC) Arbitration Committee
and docketed therein as Arb[i]com Case No. 91-068 (Annex A, petition) is not one for bribery
or dereliction of duty of public officials much less is there any showing that the subject matter
thereof is the money deposited in the account in question. Petitioners complaint primarily
hing[e]s on the alleged deliberate violation by Allied Bank Corporation of the provisions of
the PCHC Rule Book, Sec. 25[.]3, and as principal reliefs, it seeks for [sic] the recovery of
amounts of money as a consequence of an alleged under-coding of check amount to
P1,000,000.00 and damage[s] by way of loss of interest income. [3]
The Court of Appeals affirmed the dismissal of the petition, ruling that the case was not
one where the money deposited is the subject matter of the litigation.
Petitioner collecting bank itself in its complaint filed before the PCHC, Arbicom Case No. 91-
068, clearly stated that its cause of action against defendant arose from defendants deliberate
violation of the provisions of the PCHC Rule Book, Sec. 25.3, specifically on Under-Encoding
of check amouting to P1,000,000.00 drawn upon defendants Tondo Branch which was
deposited with plaintiff herein on May 20, 1990, xxx which was erroneously encoded at
P1,000.00 which defendant as the receiving bank thereof, never called nor notified the
plaintiff of the error committed thus causing actual losses to plaintiff in the principal amount
of P999,000.00 exclusive of opportunity losses and interest.
Furthermore, a reading of petitioner collecting banks complaint in the Arbicom case shows
that its thrust is directed against respondent drawee banks alleged failure to inform the former
of the under-encoding when Sec. 25.3 of the PCHC Rule Book is clear that it is receiving
banks (respondent drawee bank herein) duty and obligation to notify the erring bank
(petitioner collecting bank herein) of any such under-encoding of any check amount submitted
for clearing within the member banks of the PCHC not later than 10:00 a.m. of the following
clearing day and prays that respondent drawee bank be held liable to petitioner collecting bank
for penalties in view of the latters violation of the notification requirement.
Prescinding from the above, we see no cogent reason to depart from the time-honored general
banking rule that all deposits of whatever nature with banks are considered of absolutely
confidential nature and may not be examined, inquired or looked into by any person,
government official, bureau or office and corollarily, that it is unlawful for any official or
employee of a bank to disclose to any person any information concerning deposits.
Nowhere in petitioner collecting banks complaint filed before the PCHC does it mention of the
amount it seeks to recover from Account No. 0111-018548 itself, but speaks of P999,000.00
only as an incident of its alleged opportunity losses and interest as a result of its own
employees admitted error in encoding the check.
The money depositied in Account No. 0111-018548 is not the subject matter of the litigation in
the Arbicom case for as clearly stated by petitioner itself, it is the alleged violation by
respondent of the rules and regulations of the PCHC.[4]
Union Bank is now before this Court insisting that the money deposited in Account No.
0111-01854-8 is the subject matter of the litigation Petitioner cites the case of Mathay vs.
Consolidated Bank and Trust Company,[5] where we defined subject matter of the action, thus:
xxx By the phrase subject matter of the action is meant the physical facts, the things real or
personal, the money, lands, chattels, and the like, in relation to which the suit is prosecuted,
and not the delict or wrong committed by the defendant.
Petitioner contends that the Court of Appeals confuses the cause of action with the subject of
the action. In Yusingco vs. Ong Hing Lian,[6] petitioner points out, this Court distinguished the
two concepts.
xxx The cause of action is the legal wrong threatened or committed, while the object of the
action is to prevent or redress the wrong by obtaining some legal relief; but the subject of the
action is neither of these since it is not the wrong or the relief demanded, the subject of the
action is the matter or thing with respect to which the controversy has arisen, concerning
which the wrong has been done, and this ordinarily is the property, or the contract and its
subject matter, or the thing in dispute.
The argument is well taken. We note with approval the difference between the subject of
the action from the cause of action. We also find petitioners definition of the phrase subject
matter of the action is consistent with the term subject matter of the litigation, as the latter is
used in the Bank Deposits Secrecy Act.
In Mellon Bank, N.A. vs. Magsino,[7] where the petitioner bank inadvertently caused the
transfer of the amount of US$1,000,000.00 instead of only US$1,000.00, the Court sanctioned
69
the examination of the bank accounts where part of the money was subsequently caused to be
deposited:
Section 2 of [Republic Act No. 1405] allows the disclosure of bank deposits in cases where the
money deposited is the subject matter of the litigation. Inasmuch as Civil Case No. 26899 is
aimed at recovering the amount converted by the Javiers for their own benefit, necessarily, an
inquiry into the wherabouts of the illegally acquired amount extends to whatever is concealed
by being held or recorded in the name of persons other than the one responsible for the illegal
acquisition.
Clearly, Mellon Bank involved a case where the money deposited was the subject matter
of the litigation since the money so deposited was the very thing in dispute. This, however, is
not the case here.
Petitioners theory is that private respondent Allied Bank should have informed petitioner
of the under-encoding pursuant to the provisions of Section 25.3.1 of the PCHC Handbook,
which states:
25.3.1. The Receiving Bank should inform the erring Bank about the under-encoding of
amount not later than 10:00 A.M. of the following clearing day.
Failing in that duty, petitioner holds private respondent directly liable for the P999,000.00 and
other damages. It does not appear that petitioner is seeking reimbursement from the account of
the drawer. This much is evident in petitioners complaint before the Arbicom.
xxx plaintiffs cause of action against defendant arose from defendants deliberate violation of
the provisions of the PCHC Rule Book, Sec. 25.3, specifically on Under-Encoding of check
amounting to P1,000,000.00 drawn upon defendants Tondo Branch which was deposited with
plaintiff herein sometime on May 20, 1990. From the check amount of P1,000,000.00, it was
instead erroneously encoded at P1,000.00 which defendant as the receiving bank thereof,
never called nor notified the plaintiff of the error committed thus causing actual losses to
plaintiff in the principal amount of P999,000.00 exclusive of opportunity losses and interest
thereon whatsoever. xxx[8]
Petitioner even requested private respondents Branch Manager for reimbursement from
private respondents account through the automatic debiting system.
2.7. On May 6, 1991, plaintiffs Senior Vice-President, Ms. ERLINDA V. VALENTON wrote
defendants Tondo Branch Manager, Mr. RODOLFO JOSE on the incident and requested
assistance in facilitating correction of the erroneous coding with request for reimbursement
thru the industrys automatic debiting of defendants account.[9]
Further, petitioner rejected private respondents proposal that the drawer issue postdated checks
in favor of petitioner since the identity and credit standing of the depositor were unknown to
petitioner.
2.9. On May 23, 1991, defendants Branch Manager, the same Mr. Rodolfo Jose wrote
plaintiffs Ms. Erlinda Valenton again insisting on the execution of the Quitclaim and Release
in favor of defendant as the Branch has endeavored to negotiate with its client for the
collection of such amount. Upon a reading of the terms of the Quitclaim and Release being
proposed by defendant, the unmistakable fact lies that again defendant attempts for the second
time to take advantage of plaintiffs plight by indicating that the terms of the payment of the
principal amount of P999,000.00 is by way of several personal postdated checks up to March
21, 1992 from a person whose identity is not even disclosed to plaintiff.
To an ordinary person aggrieved already by having been taken advantage of for 620 days more
or less, the proposal of defendant could not be acceptable for the reason that aside from the
interest lost already for the use of its money by another party, no assurance is made as to the
actual collection thereof from a party whose credit standing, the recipient is not at all aware of.
[10]
Petitioner also believed that it had no privity with the depositor:
2.12. Plaintiff then replied to defendants letter by requesting that in lieu of the post-dated
checks from defendants client with whom plaintiff has no privity whatsoever, if the defendant
could tender the full payment of the amount of P999,000.00 in defendants own Managers
check and that plaintiff is willing to forego its further claims for interest and losses for a
period of 620 days, more or less.[11]
The following argument adduced by petitioner in the Arbicom case leaves no doubt that
petitioner is holding private respondent itself liable for the discrepancy:
Defendant by its acceptance thru the clearing exchange of the check deposit from its
client cannot be said to be free from any liability for the unpaid portion of the check amount
considering that defendant as the drawee bank, is remiss in its duty of verifying possible
technicalities on the face of the check.
Since the provisions of the PCHC Rule Book has so imposed upon the defendant being the
Receiving Bank of a discrepant check item to give that timely notification and defendant
failing to comply with such requirement, then it can be said that defendant is guilty of
negligence. He who is guilty of negligence in the performance of its [sic] duty is liable for
damages. (Art. 1170, New Civil Code.)
Art. 1172 of the Civil Code provides that:
70
Responsibility arising from negligence in the performance of every kind of obligation is also In other words, only a disclosure of the pertinent details and information relating to the
demandable, but such liability may be regulated by the courts, according to the circumstances. transactions involving subject account will enable petitioner to prove its allegations in the
[][12] pending Arbicom case. xxx[14]

Petitioner points to its prayer in its complaint to show that it sought reimbursement from
the drawers account. The prayer, however, does not specifically state that it was seeking
recovery of the amount from the depositors account. Petitioner merely asked that judgment be
rendered in favor of plaintiff against defendant sentencing it to pay plaintiff: 1. The sum of
NINE HUNDRED NINETY-NINE THOUSAND PESOS (P999,000.00).[13]
On the other hand, the petition before this court reveals that the true purpose for the
examination is to aid petitioner in proving the extent of Allied Banks liability:
Hence, the amount actually debited from the subject account becomes very material and
germane to petitioners claim for reimbursement as it is only upon examination of subject
account can it be proved that indeed a discrepancy in the amount credited to petitioner was
committed, thereby, rendering respondent Allied Bank liable to petitioner for the
deficiency. The money deposited in aforesaid account is undeniably the subject matter of the
litigation since the issue in the Arbicom case is whether respondent Bank should be held liable
to petitioner for reimbursement of the amount of money constituting the difference between
the amount of the check and the amount credited to petitioner, that is, P999,000.00, which has
remained deposited in aforesaid account.
In short, petitioner is fishing for information so it can determine the culpability of
private respondent and the amount of damages it can recover from the latter. It does not seek
recovery of the very money contained in the deposit.The subject matter of the dispute may be
the amount of P999,000.00 that petitioner seeks from private respondent as a result of the
latters alleged failure to inform the former of the discrepancy; but it is not the P999,000.00
deposited in the drawers account. By the terms of R.A. No. 1405, the money deposited itself
should be the subject matter of the litigation.
That petitioner feels a need for such information in order to establish its case against
private respondent does not, by itself, warrant the examination of the bank deposits. The
necessity of the inquiry, or the lack thereof, is immaterial since the case does not come under
any of the exceptions allowed by the Bank Deposits Secrecy Act.
WHEREFORE, the petition is DENIED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

On top of the allegations in the complaint, which can be verified only by examining the
subject bank account, the defense of respondent Allied Bank that the reimbursement cannot be
made since clients account is not sufficiently funded at the time petitioner sent its Charge Slip,
bolsters petitioners contention that the money in subject account is the very subject matter of
the pending Arbicom case.

Indeed, to prove the allegations in its Complaint before the PCHC Arbitration Committee, and
to rebut private respondents defense on the matter, petitioner needs to determine:

1. how long respondent Allied Bank had willfully or negligently allowed the difference of
FIRST DIVISION
P999,000.00 to be maintained in the subject account without remitting the same to petitioner;

G.R. No. 190566 December 11, 2013

2. whether indeed the subject account was no longer sufficiently funded when petitioner sent
its charge slip for reimbursement to respondent bank on May 7, 1991; and
MARK JEROME S. MAGLALANG, Petitioner,
vs.
3. whether or not respondent Allied Banks actuations in refusing to immediately reimburse the
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), as
discrepancy was attended by good or bad faith.
represented by its incumbent Chairman EFRAIM GENUINO, Respondent.

DECISION
71
VILLARAMA, JR., J.:
Before this Court is a petition1 for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, seeking the reversal of the Resolution2 dated
September 30, 2009 issued by the Court of Appeals (CA) in CA"".G.R. SP No.
110048, which outrightly dismissed the petition for certiorari filed by herein petitioner
Mark Jerome S. Maglalang (petitioner). Also assailed is the appellate court's
Resolution3 dated November 26, 2009 which denied petitioner's motion for
reconsideration.
The facts follow.
Petitioner was a teller at the Casino Filipino, Angeles City Branch, Angeles City, which
was operated by respondent Philippine Amusement and Gaming Corporation
(PAGCOR), a government-owned or controlled corporation existing by virtue of
Presidential Decree (P.D.) No. 1869.4
Petitioner alleged that in the afternoon of December 13, 2008, while he was
performing his functions as teller, a lady customer identified later as one Cecilia
Nakasato5 (Cecilia) approached him in his booth and handed to him an undetermined
amount of cash consisting of mixed P1,000.00 and P500.00 bills. There were
45 P1,000.00 and ten P500.00 bills for the total amount of P50,000.00. Following
casino procedure, petitioner laid the bills on the spreading board. However, he
erroneously spread the bills into only four clusters instead of five clusters
worth P10,000.00 per cluster. He then placed markers for P10,000.00 each cluster of
cash and declared the total amount of P40,000.00 to Cecilia. Perplexed, Cecilia
asked petitioner why the latter only dished out P40,000.00. She then pointed to the
first cluster of bills and requested petitioner to check the first cluster which she
observed to be thicker than the others. Petitioner performed a recount and found that
the said cluster contained 20 pieces of P1,000.00 bills. Petitioner apologized to
Cecilia and rectified the error by declaring the full and correct amount handed to him
by the latter. Petitioner, however, averred that Cecilia accused him of trying to
shortchange her and that petitioner tried to deliberately fool her of her money.
Petitioner tried to explain, but Cecilia allegedly continued to berate and curse him. To
ease the tension, petitioner was asked to take a break. After ten minutes, petitioner
returned to his booth. However, Cecilia allegedly showed up and continued to berate
petitioner. As a result, the two of them were invited to the casinos Internal Security
Office in order to air their respective sides. Thereafter, petitioner was required to file
an Incident Report which he submitted on the same day of the incident.6
7
On January 8, 2009, petitioner received a Memorandum issued by the casinos
Branch Manager, Alexander Ozaeta, informing him that he was being charged with
Discourtesy towards a casino customer and directing him to explain within 72 hours
upon receipt of the memorandum why he should not be sanctioned or dismissed. In
compliance therewith, petitioner submitted a letter-explanation8 dated January 10,
2009.
On March 31, 2009, petitioner received another Memorandum9 dated March 19,
2009, stating that the Board of Directors of PAGCOR found him guilty of Discourtesy
towards a casino customer and imposed on him a 30-day suspension for this first
offense. Aggrieved, on April 2, 2009, petitioner filed a Motion for
Reconsideration10seeking a reversal of the boards decision and further prayed in the
alternative that if he is indeed found guilty as charged, the penalty be only a
reprimand as it is the appropriate penalty. During the pendency of said motion,
petitioner also filed a Motion for Production11 dated April 20, 2009, praying that he be
furnished with copies of documents relative to the case including the recommendation
of the investigating committee and the Decision/Resolution of the Board supposedly
containing the latters factual findings. In a letter-reply12 dated June 2, 2009, one Atty.
Carlos R. Bautista, Jr. who did not indicate his authority therein to represent
PAGCOR, denied the said motion. Petitioner received said letter-reply on June 17,
2009.
Subsequently, on June 18, 2009, PAGCOR issued a Memorandum13 dated June 18,
2009 practically reiterating the contents of its March 19, 2009 Memorandum. Attached
therewith is another Memorandum14 dated June 8, 2009 issued by PAGCORs
Assistant Vice President for Human Resource and Development, Atty. Lizette F.
Mortel, informing petitioner that the Board of Directors in its meeting on May 13, 2009
resolved to deny his appeal for reconsideration for lack of merit. Petitioner received
said memoranda on the same date of June 18, 2009.
On August 17, 2009, petitioner filed a petition15 for certiorari under Rule 65 of the
1997 Rules of Civil Procedure, as amended, before the CA, averring that there is no
evidence, much less factual and legal basis to support the finding of guilt against him.
Moreover, petitioner ascribed grave abuse of discretion amounting to lack or excess
of jurisdiction to the acts of PAGCOR in adjudging him guilty of the charge, in failing
to observe the proper procedure in the rendition of its decision and in imposing the
harsh penalty of a 30-day suspension. Justifying his recourse to the CA, petitioner
explained that he did not appeal to the Civil Service Commission (CSC) because the
penalty imposed on him was only a 30-day suspension which is not within the CSCs
appellate jurisdiction. He also claimed that discourtesy in the performance of official
duties is classified as a light offense which is punishable only by reprimand.
In its assailed Resolution16 dated September 30, 2009, the CA outrightly dismissed
the petition for certiorari for being premature as petitioner failed to exhaust
administrative remedies before seeking recourse from the CA. Invoking Section 2(1),
Article IX-B of the 1987 Constitution,17 the CA held that the CSC has jurisdiction over
72
issues involving the employer-employee relationship in all branches, subdivisions,
instrumentalities and agencies of the Government, including government-owned or
controlled corporations with original charters such as PAGCOR. Petitioner filed his
Motion for Reconsideration18 which the CA denied in the assailed Resolution19 dated
November 26, 2009. In denying the said motion, the CA relied on this Courts ruling in
Duty Free Philippines v. Mojica20 citing Philippine Amusement and Gaming Corp. v.
CA,21 where this Court held as follows:
It is now settled that, conformably to Article IX-B, Section 2(1), [of the 1987
Constitution] government-owned or controlled corporations shall be considered part of
the Civil Service only if they have original charters, as distinguished from those
created under general law.
PAGCOR belongs to the Civil Service because it was created directly by PD 1869 on
July 11, 1983. Consequently, controversies concerning the relations of the employee
with the management of PAGCOR should come under the jurisdiction of the Merit
System Protection Board and the Civil Service Commission, conformably to the
Administrative Code of 1987.
Section 16(2) of the said Code vest[s] in the Merit System Protection Board the power
inter alia to:
a) Hear and decide on appeal administrative cases involving officials and employees
of the Civil Service. Its decision shall be final except those involving dismissal or
separation from the service which may be appealed to the Commission.
Hence, this petition where petitioner argues that the CA committed grave and
substantial error of judgment
1. IN OUTRIGHTLY DISMISSING THE PETITION FOR CERTIORARI FILED BY
PETITIONER AND IN DENYING THE LATTERS MOTION FOR
RECONSIDERATION[;]
2. IN RULING THAT THE CIVIL SERVICE COMMISSION HAS APPELLATE
JURISDICTION OVER THE SUSPENSION OF THE PETITIONER DESPITE THE
FACT THAT THE PENALTY INVOLVED IS NOT MORE THAN THIRTY (30) DAYS[;]
3. IN RESOLVING THE PETITION FOR CERTIORARI FILED BY PETITIONER IN A
MANNER WHICH IS UTTERLY CONTRARY TO LAW AND JURISPRUDENCE[;]
4. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION AS TO THE
PROPRIETY OR VALIDITY OF THE SUSPENSION OF THE PETITIONER BY THE
RESPONDENT[;]
5. IN UNDULY REFUSING TO RENDER A DECISION DECLARING THAT THE
ASSAILED DECISIONS/RESOLUTIONS OF THE RESPONDENT ARE NOT
SUPPORTED BY THE EVIDENCE ON RECORD[; AND]
6. IN UNJUSTIFIABLY REFUSING TO RENDER A DECISION DECLARING THAT
THE ASSAILED DECISIONS/RESOLUTIONS OF RESPONDENT WERE ISSUED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION.22
Petitioner claims that the CA clearly overlooked the applicable laws and jurisprudence
that provide that when the penalty involved in an administrative case is suspension
for not more than 30 days, the CSC has no appellate jurisdiction over the said
administrative case. As authority, petitioner invokes our ruling in Geronga v. Hon.
Varela23which cited Section 47,24 Chapter 1, Subtitle A, Title I, Book V of Executive
Order (E.O.) No. 292 otherwise known as The Administrative Code of 1987. Said
Section 47 provides that the CSC may entertain appeals only, among others, from a
penalty of suspension of more than 30 days. Petitioner asserts that his case, involving
a 30-day suspension penalty, is not appealable to the CSC. Thus, he submits that his
case was properly brought before the CA via a petition for certiorari.25
On the other hand, PAGCOR alleges that petitioner intentionally omitted relevant
matters in his statement of facts. PAGCOR essentially claims that petitioner refused
to apologize to Cecilia; that he treated Cecilias complaint with arrogance; and that
before taking the aforementioned 10-minute break, petitioner slammed the cash to
the counter window in giving it back to the customer. PAGCOR argues that the instant
petition raises questions of fact which are not reviewable in a petition for review on
certiorari. PAGCOR maintains that the CAs ruling was in accordance with law and
jurisprudence. Moreover, PAGCOR counters that petitioners remedy of appeal is
limited as Section 37 of the Revised Uniform Rules on Administrative Cases in the
Civil Service provides that a decision rendered by heads of agencies whereby a
penalty of suspension for not more than 30 days is imposed shall be final and
executory. PAGCOR opines that such intent of limiting appeals over such minor
offenses is elucidated in the Concurring Opinion of former Chief Justice Reynato S.
Puno in CSC v. Dacoycoy26and based on the basic premise that appeal is merely a
statutory privilege. Lastly, PAGCOR submits that the 30-day suspension meted on
petitioner is justified under its own Code of Discipline.27 Prescinding from the
foregoing, the sole question for resolution is: Was the CA correct in outrightly
dismissing the petition for certiorari filed before it on the ground of non-exhaustion of
administrative remedies?
73
We resolve the question in the negative.
Our ruling in Public Hearing Committee of the Laguna Lake Development Authority v.
SM Prime Holdings, Inc.28 on the doctrine of exhaustion of administrative remedies is
instructive, to wit:
Under the doctrine of exhaustion of administrative remedies, before a party is allowed
to seek the intervention of the court, he or she should have availed himself or herself
of all the means of administrative processes afforded him or her. Hence, if resort to a
remedy within the administrative machinery can still be made by giving the
administrative officer concerned every opportunity to decide on a matter that comes
within his or her jurisdiction, then such remedy should be exhausted first before the
court's judicial power can be sought. The premature invocation of the intervention of
the court is fatal to ones cause of action. The doctrine of exhaustion of administrative
remedies is based on practical and legal reasons. The availment of administrative
remedy entails lesser expenses and provides for a speedier disposition of
controversies. Furthermore, the courts of justice, for reasons of comity and
convenience, will shy away from a dispute until the system of administrative redress
has been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case.
However, the doctrine of exhaustion of administrative remedies is not absolute as it
admits of the following exceptions:
(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.29
The case before us falls squarely under exception number 12 since the law per se
provides no administrative review for administrative cases whereby an employee like
petitioner is covered by Civil Service law, rules and regulations and penalized with a
suspension for not more than 30 days.
Section 37 (a) and (b) of P.D. No. 807, otherwise known as the Civil Service Decree
of the Philippines, provides for the unavailability of any appeal:
Section 37. Disciplinary Jurisdiction.
(a) The Commission shall decide upon appeal all administrative disciplinary cases
involving the imposition of a penalty of suspension for more than thirty days, or fine in
an amount exceeding thirty days salary, demotion in rank or salary or transfer,
removal or dismissal from Office. A complaint may be filed directly with the
Commission by a private citizen against a government official or employee in which
case it may hear and decide the case or it may deputize any department or agency or
official or group of officials to conduct the investigation. The results of the
investigation shall be submitted to the Commission with recommendation as to the
penalty to be imposed or other action to be taken.
(b) The heads of departments, agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction. Their
decisions shall be final in case the penalty imposed is suspension for not more than
thirty days or fine in an amount not exceeding thirty days salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same may
be initially appealed to the department and finally to the Commission and pending
appeal, the same shall be executory except when the penalty is removal, in which
case the same shall be executory only after confirmation by the department head.
(Emphasis supplied.)
Similar provisions are reiterated in the aforequoted Section 4730 of E.O. No. 292
essentially providing that cases of this sort are not appealable to the CSC.
Correlatively, we are not unaware of the Concurring Opinion of then Chief Justice
Puno in CSC v. Dacoycoy,31 where he opined, to wit:
In truth, the doctrine barring appeal is not categorically sanctioned by the Civil
Service Law. For what the law declares as "final" are decisions of heads of agencies
involving suspension for not more than thirty (30) days or fine in an amount not
exceeding thirty (30) days salary. But there is a clear policy reason for declaring these
decisions final. These decisions involve minor offenses. They are numerous for they
are the usual offenses committed by government officials and employees. To allow
their multiple level appeal will doubtless overburden the quasijudicial machinery of our
administrative system and defeat the expectation of fast and efficient action from
these administrative agencies. Nepotism, however, is not a petty offense. Its
deleterious effect on government cannot be over-emphasized. And it is a stubborn
evil. The objective should be to eliminate nepotic acts, hence, erroneous decisions
allowing nepotism cannot be given immunity from review, especially judicial review. It
74
is thus non sequitur to contend that since some decisions exonerating public officials
from minor offenses can not be appealed, ergo, even a decision acquitting a
government official from a major offense like nepotism cannot also be appealed.
Nevertheless, decisions of administrative agencies which are declared final and
unappealable by law are still subject to judicial review. In Republic of the Phils. v.
Francisco,32 we held:
Since the decision of the Ombudsman suspending respondents for one (1) month
is final and unappealable, it follows that the CA had no appellate jurisdiction to
review, rectify or reverse the same. The Ombudsman was not estopped from
asserting in this Court that the CA had no appellate jurisdiction to review and reverse
the decision of the Ombudsman via petition for review under Rule 43 of the Rules of
Court. This is not to say that decisions of the Ombudsman cannot be
questioned. Decisions of administrative or quasi-administrative agencies which
are declared by law final and unappealable are 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. Thus, the decision of the Ombudsman may
be reviewed, modified or reversed via petition for certiorari under Rule 65 of the
Rules of Court, on a finding that it had no jurisdiction over the complaint, or of
grave abuse of discretion amounting to excess or lack of jurisdiction.It bears
stressing that the judicial recourse petitioner availed of in this case before the CA is a
special civil action for certiorari ascribing grave abuse of discretion, amounting to lack
or excess of jurisdiction on the part of PAGCOR, not an appeal. Suffice it to state that
an appeal and a special civil action such as certiorari under Rule 65 are entirely
distinct and separate from each other. One cannot file petition for certiorari under
Rule 65 of the Rules where appeal is available, even if the ground availed of is grave
abuse of discretion. A special civil action for certiorari under Rule 65 lies only when
there is no appeal, or plain, speedy and adequate remedy in the ordinary course of
law. Certiorari cannot be allowed when a party to a case fails to appeal a judgment
despite the availability of that remedy, as the same should not be a substitute for the
lost remedy of appeal. The remedies of appeal and certiorari are mutually exclusive
and not alternative or successive.33
In sum, there being no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law in view of petitioner's allegation that P AGCOR has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, the CA's outright dismissal of the petition for certiorari on the
basis of non-exhaustion of administrative remedies is bereft of any legal standing and
should therefore be set aside.
Finally, as a rule, a petition for certiorari under Rule 65 is valid only when the question
involved is an error of jurisdiction, or when there is grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the court or tribunals
exercising quasi-judicial functions. Hence, courts exercising certiorari jurisdiction
should refrain from reviewing factual assessments of the respondent court or agency.
Occasionally, however, they are constrained to wade into factual matters when the
evidence on record does not support those factual findings; or when too much is
concluded, inferred or deduced from the bare or incomplete facts appearing on
record.34Considering the circumstances and since this Court is not a trier of
facts, 35 remand of this case to the CA for its judicious resolution is in order.
WHEREFORE, the petition is PARTLY GRANTED. The Resolutions dated September
30, 2009 and November 26, 2009 of the Court of Appeals in CA-G.R. SP No. 110048
are hereby REVERSED and SET ASIDE. The instant case is REMANDED to the
Court of Appeals for further proceedings.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 131442. July 10, 2003]
BANGUS FRY FISHERFOLK DIWATA MAGBUHOS, ANGELITA BINAY, ELMA
GARCIA, VIRGILIO PANGUIO, ARSENIO CASTILLO, ARIEL PANGUIO,
ANTONIO PANGUIO, ANTONIO BUNQUIN, GENEROSO BUNQUIN,
CHARLIE DIMAYACYAC, RENATO PANGUIO, ATILANO BUNQUIN,
CARLOS CHAVEZ, JUAN DIMAYACYAC, FILEMON BUNQUIN, MARIO
MAGBUHOS, MAURO MAGBUHOS, NORA MAGBUHOS, JEOVILYN,
GENALYN and JORVAN QUIMUEL, minors, represented by their
parents FELICIANA and SABINO QUIMUEL, MARICAR MAGBUHOS,
minor, represented by her parents CARMELITA and ANTONIO
MAGBUHOS, MARLO BINAY, minor, represented by his parents
EFRENITA and CHARLITO BINAY, and the BANGUS, BANGUS FRY and
other MARINE LIFE OF MINOLO COVE, petitioners, vs. THE
HONORABLE ENRICO LANZANAS as Judge of the Regional Trial Court
of Manila, Branch VII, THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES Region IV, represented by its Regional
Executive Director and its Regional Director for Environment, THE
NATIONAL POWER CORPORATION, ORIENTAL MINDORO ELECTRIC
COOPERATIVE, PROVINCIAL GOVERNMENT OF ORIENTAL MINDORO,
herein represented by GOVERNOR RODOLFO VALENCIA, PUERTO
GALERA MAYOR GREGORIO DELGADO, VICE MAYOR ARISTEO
ATIENZA, and MEMBERS OF THE SANGGUNIANG BAYAN OF PUERTO
75
 GALERA, JUAN ASCAN, JR., RAFAEL ROMEY, CENON SALCEDO,
JERRY DALISAY, SIMON BALITAAN, RENATO CATAQUIS, MARCELINO
BANAAG, DANIEL ENRIQUEZ, AMELYN MARCO, GABRIEL ILAGAN,
MUNICIPAL ENGINEER RODEL RUBIO, and MUNICIPAL PLANNING and
DEVELOPMENT COORDINATOR WILHELMINA LINESES, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the Order[2] dated 7 November 1997 of the
Regional Trial Court of Manila, Branch 7 (Manila RTC), dismissing petitioners
complaint for lack of cause of action and lack of jurisdiction.
The Facts
On 30 June 1997, Regional Executive Director Antonio G. Principe (RED
Principe) of Region IV, Department of Environment and Natural Resources (DENR),
issued an Environmental Clearance Certificate (ECC) in favor of respondent National
Power Corporation (NAPOCOR). The ECC authorized NAPOCOR to construct a
temporary mooring facility in Minolo Cove, Sitio Minolo, Barangay San Isidro, Puerto
Galera, Oriental Mindoro. The Sangguniang Bayan of Puerto Galera has declared
Minolo Cove, a mangrove area and breeding ground for bangus fry, an eco-tourist
zone.[3]
The mooring facility would serve as the temporary docking site of NAPOCORs
power barge, which, due to turbulent waters at its former mooring site in Calapan,
Oriental Mindoro, required relocation to a safer site like Minolo Cove. The 14.4
megawatts power barge would provide the main source of power for the entire
province of Oriental Mindoro pending the construction of a land-based power plant in
Calapan, Oriental Mindoro. The ECC for the mooring facility was valid for two years
counted from its date of issuance or until 30 June 1999.[4]
Petitioners, claiming to be fisherfolks from Minolo, San Isidro, Puerto Galera,
[5]
sought reconsideration of the ECC issuance. RED Principe, however, denied
petitioners plea on 15 July 1997. On 21 July 1997, petitioners filed a complaint with
the Regional Trial Court of Manila, Branch 7, for the cancellation of the ECC and for
the issuance of a writ of injunction to stop the construction of the mooring facility.
Impleaded as defendants were the following: (1) NAPOCOR, (2) RED Principe, (3)
DENR Region IV Technical Director for Environment Oscar Dominguez, (4) Oriental
Mindoro Electric Cooperative (ORMECO), which is engaged in the distribution of
electricity in Oriental Mindoro, and (5) certain officials of Puerto Galera. [6] Petitioners
subsequently amended their complaint to include as additional defendants the
elective officials of Oriental Mindoro represented by then Governor Rodolfo G.
Valencia. Petitioners further prayed for the demolition of mooring structures that
respondents had already built.
On 28 July 1997, prior to the filing of the amended complaint, the trial court
issued a 20-day temporary restraining order enjoining the construction of the mooring
facility. However, the trial court lifted the same on 6 August 1997 on NAPOCORs
manifestation that the provincial government of Oriental Mindoro was the one
undertaking the construction of the mooring facility.[7]
On 28 August 1997, before filing their answers, respondents ORMECO and the
provincial officials of Oriental Mindoro moved to dismiss the complaint. These
respondents claimed that petitioners failed to exhaust administrative remedies,
rendering the complaint without cause of action. They also asserted that the Manila
RTC has no jurisdiction to enjoin the construction of the mooring facility in Oriental
Mindoro, which lies outside the Manila RTCs territorial jurisdiction.
Petitioners opposed the motion on the ground that there was no need to exhaust
administrative remedies. They argued that the issuance of the ECC was in patent
violation of Presidential Decree No. 1605, [8] Sections 26 and 27 of Republic Act No.
7160,[9] and the provisions of DENR Department Administrative Order No. 96-37
(DAO 96-37) on the documentation of ECC applications. Petitioners also claimed that
the implementation of the ECC was in patent violation of its terms.
In its order of 7 November 1997, the trial court granted the motion and
dismissed petitioners complaint.
Hence, this petition.
The Ruling of the Trial Court
The trial courts order dismissing the complaint reads in part:
After careful evaluation and analysis, this Court finds the Motion to Dismiss tenable and
meritorious.
Petitioners have clearly failed to exhaust all administrative remedies before taking this legal
action in Court x x x.
76
It is x x x worth mentioning that the decision of the Regional Director may still be x x x
elevated to the Office of the Secretary of the DENR to fully comply with the process of
exhaustion of administrative remedies. And well settled is the rule in our jurisdiction that
before bringing an action in or resorting to the Courts of Justice, all remedies of administrative
character affecting or determinative of the controversy at that level should first be exhausted
by the aggrieved party (Pestanas vs. Dyogi, L-25786, February 27, 1978). And petitioners
failure to exhaust administrative remedies renders his [sic] petition dismissible (Chia vs.
Acting Collector of Customs, 177 SCRA 755). And a dismissal on the ground of failure to
exhaust administrative remedies is tantamount to a dismissal based on lack of cause of action
(Baguiro vs. Basa, Jr., 214 SCRA 437; Pineda vs. CFI of Davao, 111 Phil. 643; Sarabia vs.
Secretary ofAgriculture & Natural Resources, L-16002, May 23, 1961; Gone, et al. vs. District
Engineer, et. al., L-22782, August 29, 1975; Abe-Abe, et al. vs. Manta, et. al., L-4827, May
31, 1979) although it does not affect the jurisdiction of the court over the subject matter (Mun.
of La Trinidad, et al. vs. CFI of Baguio-Benguet, et al., L-33889, June 28, 1983).
Moreover, this Court finds the Opposition of the Petitioners highly untenable and bereft of
merits that the controverted act in question is patently illegal and there was an immediate need
for judicial intervention.
The ECC in question was issued by the Regional Office of the DENR which has jurisdiction
and authority over the same x x x. And corollary to this, the issue as to whether or not the
Minolo Cove is within the enclosed coves and waters embraced by Puerto Galera bay and
protected by Medio island is a clear question of fact which the DENR may appropriately
resolve before resorting to [the] Court[s].
This Court is likewise aware and cognizant of its territorial jurisdiction in the enforcement of
Writ of Injunction. That truly, [a] writ of injunction can only be enforced within [the]
territorial jurisdiction of this Court but not for acts which are being or about to be committed
outside its territorial jurisdiction. Thus, in Philippine National Bank vs. Pineda, 197 SCRA 1,
the Honorable Supreme Court ruled: Regional Trial Courts can only enforce their writs of
injunction within their respective designated territories. Furthermore, we find the issuance of
the preliminary injunction directed against the Provincial Sheriff of Negros Occidental a
jurisdictional paux [sic] pas (from Black Dictionary means jurisdictional falsity) as the Courts
of First Instance now Regional Trial Court[s], can only enforce their writs of injunction within
their respective designated territories.
And finally, this Court is not unmindful of the relevant and square application in the case at
bar of Presidential Decree No. 1818, Executive Order No. 380 dated November 27, 1989, and
Circular No. 2-91 of the Supreme Court that the National Power Corporation (NPC) is a public
utility, created under special legislation, engaged in the generation and distribution of electric
power and energy. The mooring site of NPC in Puerto Galera, Oriental Mindoro is one of its
infrastructure projects falling within the mantle of Executive Order No. 380, November 27,
1989 x x x.
And as held by the Supreme Court in the case of National Power Corporation vs. Honorable
Abraham P. Vera, et al., 170 SCRA 721, courts are without jurisdiction to issue injunctive
writs against [the] National Power Corporation. The latter enjoys the protective mantle of P.D.
1818, (Circular No. 2-91).
xxx
Injunction in this case is not a mere ancillary [sic] writ but the main action itself together with
the Annulment of the Environmental Clearance Certificate (ECC). Even assuming arguendo
that the court [can] annul the ECC how can the latter enforce the same against the Provincial
Government of Oriental Mindoro which was impleaded by the petitioners as a necessary party
together with the Oriental Mindoro Electric Cooperative and the government officials of
Puerto Galera, Oriental Mindoro, whose acts and functions are being performed outside the
territorial jurisdiction of this court? x x x Indisputably, the injunction and annulment of ECC
as prayed for in the petition are inseparable x x x.
The conclusion, therefore, is inescapable that petitioners have failed to exhaust all the
available administrative remedies and this Court has no jurisdiction to issue the injunctive writ
prayed for in the Amended [Complaint].[10]
The Issue
The issue is whether the trial court erred in dismissing petitioners complaint for
lack of cause of action and lack of jurisdiction.
The Ruling of the Court
The petition has no merit.
Jurisdiction of the Manila RTC over the Case
Jurisdiction over the subject matter of a case is conferred by law. Such
jurisdiction is determined by the allegations in the complaint, irrespective of whether
the plaintiff is entitled to all or some of the reliefs sought.[11]
A perusal of the allegations in the complaint shows that petitioners principal
cause of action is the alleged illegality of the issuance of the ECC. The violation of
laws on environmental protection and on local government participation in the
implementation of environmentally critical projects is an issue that involves the validity
of NAPOCORs ECC. If the ECC is void, then as a necessary consequence,
NAPOCOR or the provincial government of Oriental Mindoro could not construct the
mooring facility. The subsidiary issue of non-compliance with pertinent local
77
ordinances in the construction of the mooring facility becomes immaterial for
purposes of granting petitioners main prayer, which is the annulment of the
ECC. Thus, if the court has jurisdiction to determine the validity of the issuance of the
ECC, then it has jurisdiction to hear and decide petitioners complaint.
Petitioners complaint is one that is not capable of pecuniary estimation. It falls
within the exclusive and original jurisdiction of the Regional Trial Courts under Section
19(1) of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691. The
question of whether petitioners should file their complaint in the Regional Trial Court
of Manila or Oriental Mindoro then becomes a matter of venue, to be determined by
the residence of the parties.[12]
Petitioners main prayer is the annulment of the ECC. The principal respondent,
DENR Region IV, has its main office at the L & S Building, Roxas Boulevard,
Manila.Regional Executive Director Principe of the DENR Region IV, who issued the
ECC, holds office there. Plainly, the principal respondent resides in Manila, which is
within the territorial jurisdiction of the Manila RTC. Thus, petitioners filed their
complaint in the proper venue.
On the other hand, the jurisdiction of Regional Trial Courts to issue injunctive
writs is limited to acts committed or about to be committed within their judicial region.
[13]
Moreover, Presidential Decree No. 1818 (PD No. 1818) prohibited[14] courts from
issuing injunctive writs against government infrastructure projects like the mooring
facility in the present case. Republic Act No. 8975 (RA No. 8975), which took effect on
26 November 2000, superseded PD No. 1818 and delineates more clearly the
coverage of the prohibition, reserves the power to issue such writs exclusively with
this Court, and provides penalties for its violation. [15] Obviously, neither the Manila
RTC nor the Oriental Mindoro RTC can issue an injunctive writ to stop the
construction of the mooring facility. Only this Court can do so under PD No. 1818 and
later under RA No. 8975. Thus, the question of whether the Manila RTC has
jurisdiction over the complaint considering that its injunctive writ is not enforceable in
Oriental Mindoro is academic.
Clearly, the Manila RTC has jurisdiction to determine the validity of the issuance
of the ECC, although it could not issue an injunctive writ against the DENR or
NAPOCOR. However, since the construction of the mooring facility could not proceed
without a valid ECC, the validity of the ECC remains the determinative issue in
resolving petitioners complaint.
Exhaustion of Administrative Remedies
The settled rule is before a party may seek the intervention of the courts, he
should first avail of all the means afforded by administrative processes. Hence, if a
remedy within the administrative machinery is still available, with a procedure
prescribed pursuant to law for an administrative officer to decide the controversy, a
party should first exhaust such remedy before resorting to the courts. The premature
invocation of a courts intervention renders the complaint without cause of action and
dismissible on such ground.[16]
RED Principe of the DENR Region IV Office issued the ECC based on (1)
Presidential Decree No. 1586 (PD No. 1586) and its implementing rules establishing
the Environmental Impact Statement System, (2) DAO 96-37[17] and (3) the
Procedural Manual of DAO 96-37. Section 4[18] of PD No. 1586 requires a proponent
of an environmentally critical project, or a project located within an environmentally
critical area as declared by the President, to secure an ECC prior to the projects
operation.[19] NAPOCOR thus secured the ECC because the mooring facility in Minolo
Cove, while not an environmentally critical project, is located within an
environmentally critical area under Presidential Proclamation No. 2146, issued on 14
December 1981.[20]
The rules on administrative appeals from rulings of the DENR Regional
Directors on the implementation of PD No. 1586 are found in Article VI of DAO 96-37,
which provides:
SECTION 1.0. Appeal to the Office of the Secretary. Any party aggrieved by the final decision
of the RED may, within 15 days from receipt of such decision, file an appeal with the Office
of the Secretary. The decision of the Secretary shall be immediately executory.
SECTION 2.0. Grounds for Appeal. The grounds for appeal shall be limited to grave abuse of
discretion and serious errors in the findings of fact which would cause grave or irreparable
injury to the aggrieved party. Frivolous appeals shall not be countenanced.
SECTION 3.0. Who May Appeal. The proponent or any stakeholder, including but not limited
to, the LGUs concerned and affected communities, may file an appeal.
The DENR Procedural Manual for DAO 96-37 explains these provisions thus:
Final decisions of the RED may be appealed. These decisions include those relating to the
issuance or non-issuance of an ECC, and the imposition of fines and penalties. By inference,
the decision of the Secretary on the issuance or non-issuance of the ECC may also be appealed
based on this provision. Resort to courts prior to availing of this remedy would make the
appellants action dismissible on the ground of non-exhaustion of administrative remedies.
78
The right to appeal must be exercised within 15 days from receipt by the aggrieved party of
such decision. Failure to file such appeal within the requisite period will result in the finality
of the REDs or Secretarys decision(s), which can no longer be disturbed.
An appeal shall not stay the effectivity of the REDs decision, unless the Secretary directs
otherwise.
The right to appeal does not prevent the aggrieved party from first resorting to the filing of a
motion for reconsideration with the RED, to give the RED an opportunity to re-evaluate his
decision. (Emphasis added)
Instead of following the foregoing procedure, petitioners bypassed the DENR
Secretary and immediately filed their complaint with the Manila RTC, depriving the
DENR Secretary the opportunity to review the decision of his subordinate, RED
Principe. Under the Procedural Manual for DAO 96-37 and applicable jurisprudence,
petitioners omission renders their complaint dismissible for lack of cause of action.
[21]
Consequently, the Manila RTC did not err in dismissing petitioners complaint for
lack of cause of action.
On the Alleged Patent Illegality of the ECC
Petitioners nevertheless contend that they are exempt from filing an appeal with
the DENR Secretary because the issuance of the ECC was in patent violation of
existing laws and regulations. These are (1) Section 1 of Presidential Decree No.
1605, as amended, (2) Sections 26 and 27 of Republic Act No. 7160 (Local
Government Code of 1991), and (3) the provisions of DAO 96-37 on the documentary
requirements for the zoning permit and social acceptability of the mooring facility.
Petitioners contention is without merit. While the patent illegality of an act
exempts a party from complying with the rule on exhaustion of administrative
remedies,[22]this does not apply in the present case.
Presidential Decree No. 1605
Presidential Decree No. 1605 (PD No. 1605), [23] as amended by Presidential
Decrees Nos. 1605-A and 1805, declares as ecologically threatened zone the coves
and waters embraced by Puerto Galera Bay as protected by Medio Island. This
decree provides in part:
Section 1. Any provision of law to the contrary notwithstanding, the construction of marinas,
hotels, restaurants, other commercial structures; commercial or semi-commercial wharfs [sic];
commercial docking within the enclosed coves of Puerto Galera; the destruction of its
mangrove stands; the devastation of its corals and coastline by large barges, motorboats,
tugboat propellers, and any form of destruction by other human activities are hereby
prohibited.
Section 2. x x x
No permit for the construction of any wharf, marina, hotel, restaurants and other commercial
structures in Puerto Galera shall be issued without prior approval of the Office of the President
upon the recommendation of the Philippine Tourism Authority. (Emphasis supplied)
NAPOCOR claims that since Minolo Cove lies outside of Puerto Galera Bay as
protected by Medio Island,[24] PD No. 1605 does not apply to this case. However,
petitioners assert that Minolo Cove is one of the enclosed coves of Puerto
Galera[25] and thus protected under PD No. 1605. This is a question of fact that the
DENR Secretary should have first resolved. In any event, there is no dispute that
NAPOCOR will use the mooring facility for its power barge that will supply 14.4
megawatts of electricity to the entire province of Oriental Mindoro, including Puerto
Galera. The mooring facility is obviously a government-owned public infrastructure
intended to serve a basic need of the people of Oriental Mindoro. The mooring facility
is not a commercial structure; commercial or semi-commercial wharf or commercial
docking as contemplated in Section 1 of PD No. 1605. Therefore, the issuance of the
ECC does not violate PD No. 1605 which applies only to commercial structures like
wharves, marinas, hotels and restaurants.
Sections 26 and 27 of RA No. 7160
Congress introduced Sections 26 and 27 in the Local Government Code to
emphasize the legislative concern for the maintenance of a sound ecology and clean
environment.[26] These provisions require every national government agency or
government-owned and controlled corporation to hold prior consultations with the
local government unit concerned and to secure the prior approval of
its sanggunian before implementing any project or program that may cause pollution,
climatic change, depletion of non-renewable resources, loss of cropland, rangeland,
or forest cover and extinction of animal or plant species. Sections 26 and 27
respectively provide:
Section 26. Duty of National Government Agencies in the Maintenance of Ecological Balance.
- It shall be the duty of every national agency or government-owned or controlled corporation
79
authorized or involved in the planning and implementation of any project or program that may
cause pollution, climatic change, depletion of non-renewable resources, loss of crop land,
rangeland, or forest cover and extinction of animal or plant species, to consult with the local
government units, non-governmental organizations, and other sectors concerned and explain
the goals and objectives of the project or program, its impact upon the people and the
community in terms of environmental or ecological balance, and the measures that will be
undertaken to prevent or minimize the adverse effects thereof.
Section 27. Prior Consultations Required. - No project or program shall be implemented by
government authorities unless the consultations mentioned in Section x x x 26 hereof are
complied with, and prior approval of the sanggunian concerned is obtained: Provided, That
occupants in areas where such projects are to be implemented shall not be evicted unless
appropriate relocation sites have been provided, in accordance with the provisions of the
Constitution.
In Lina, Jr. v. Pao,[27] the Court interpreted these provisions in this manner:
Section 27 of the Code should be read in conjunction with Section 26 thereof x x x.
Thus, the projects and programs mentioned in Section 27 should be interpreted to mean
projects and programs whose effects are among those enumerated in Sections 26 and 27, to
wit, those that: (1) may cause pollution; (2) may bring about climatic change; (3) may cause
the depletion of non-renewable resources; (4) may result in loss of crop land, rangeland, or
forest cover; (5) may eradicate certain animal or plant species; and (6) other projects or
programs that may call for the eviction of a particular group of people residing in the locality
where these will be implemented.
Again, Sections 26 and 27 do not apply to this case because as petitioners
admit,[28] the mooring facility itself is not environmentally critical and hence does not
belong to any of the six types of projects mentioned in the law. There is no statutory
requirement for the concerned sanggunian to approve the construction of the mooring
facility. It is another matter if the operation of the power barge is at issue. As an
environmentally critical project that causes pollution, the operation of the power barge
needs the prior approval of the concerned sanggunian. However, what is before this
Court is only the construction of the mooring facility, not the operation of the power
barge. Thus, the issuance of the ECC does not violate Sections 26 and 27 of RA No.
7160.
Documentary Requirements for
ECC Applications
Under DAO 96-37, an ECC applicant for a project located within an
environmentally critical area is required to submit an Initial Environment Examination,
which must contain a brief description of the environmental setting and a
documentation of the consultative process undertaken, when appropriate.[29] As part
of the description of the environmental setting, the ECC applicant must submit a
certificate of locational clearance or zoning certificate.
Petitioners further contend that NAPOCOR, in applying for the ECC, did not
submit to the DENR Region IV Office the documents proving the holding of
consultations and the issuance of a locational clearance or zoning certificate.
Petitioners assert that this omission renders the issuance of the ECC patently illegal.
The contention is also without merit. While such documents are part of the
submissions required from a project proponent, their mere absence does not render
the issuance of the ECC patently illegal. To justify non-exhaustion of administrative
remedies due to the patent illegality of the ECC, the public officer must have issued
the ECC [without any] semblance of compliance, or even an attempt to comply, with
the pertinent laws; when manifestly, the officer has acted without jurisdiction or has
exceeded his jurisdiction, or has committed a grave abuse of discretion; or when his
act is clearly and obviously devoid of any color of authority.[30]
RED Principe, as chief of DENR Region IV, is the officer duly authorized under
DAO 96-37[31] to issue ECCs for projects located within environmentally critical
areas.RED Principe issued the ECC on the recommendation of Amelia Supetran, the
Director of the Environmental Management Bureau. Thus, RED Principe acted with
full authority pursuant to DENR regulations. Moreover, the legal presumption is that
he acted with the requisite authority.[32] This clothes RED Principes acts with
presumptive validity and negates any claim that his actions are patently illegal or that
he gravely abused his discretion. While petitioners may present proof to the contrary,
they must do so before the proper administrative forum before resorting to judicial
remedies.
On the Alleged Non-Compliance with the Terms of the ECC
Lastly, petitioners claim that they are justified in immediately seeking judicial
recourse because NAPOCOR is guilty of violating the conditions of the ECC, which
requires it to secure a separate ECC for the operation of the power barge. The ECC
also mandates NAPOCOR to secure the usual local government permits, like zoning
and building permits, from the municipal government of Puerto Galera.
80
 The contention is similarly without merit. The fact that NAPOCORs ECC is
subject to cancellation for non-compliance with its conditions does not justify
petitioners conduct in ignoring the procedure prescribed in DAO 96-37 on appeals
from the decision of the DENR Executive Director. Petitioners vigorously insist that
NAPOCOR should comply with the requirements of consultation and locational
clearance prescribed in DAO 96-37. Ironically, petitioners themselves refuse to abide
with the procedure for filing complaints and appealing decisions laid down in DAO 96-
37.
DAO 96-37 provides for a separate administrative proceeding to address
complaints for the cancellation of an ECC. Under Article IX of DAO 96-37, complaints
to nullify an ECC must undergo an administrative investigation, after which the
hearing officer will submit his report to the EMB Director or the Regional Executive
Director, who will then render his decision. The aggrieved party may file an appeal to
the DENR Secretary, who has authority to issue cease and desist orders. Article IX
also classifies the types of violations covered under DAO 96-37, including projects
operating without an ECC or violating the conditions of the ECC. This is the
applicable procedure to address petitioners complaint on NAPOCORs alleged
violations and not the filing of the instant case in court.
A Final Word
The Court commends petitioners for their courageous efforts to safeguard and
maintain the ecological balance of Minolo Cove. This Court recognizes the utmost
importance of protecting the environment.[33] Indeed, we have called for the vigorous
prosecution of violators of environmental laws.[34] Legal actions to achieve this end,
however, must be done in accordance with established rules of procedure that were
intended, in the first place, to achieve orderly and efficient administration of justice.
WHEREFORE, we DENY the petition for lack of merit.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Ynares-Santiago, and Azcuna, JJ., concur.
[G.R. No. 137266. December 5, 2001]
ANTONIO M. BERNARDO, ERNESTO A. DOMINGO, JR. and JESUS C.
CRUZ, petitioners, vs. BENJAMIN S. ABALOS, SR., BENJAMIN "BENHUR"
D. ABALOS, JR., DR. EDEN C. DIAZ, ROMEO F. ZAPANTA, ARCADIO S.
DE VERA and THE COMMISSION ON ELECTIONS, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
This is a petition for certiorari[1] seeking the nullification of Resolution No. 98-3208 of
the Commission on Elections (COMELEC) En Banc promulgated on December 1, 1998
dismissing the complaint for vote buying filed by petitioners against respondents.
On April 21, 1998, petitioners Antonio M. Bernardo, Ernesto A. Domingo, Jr. and Jesus
C. Cruz filed with the COMELEC a criminal complaint against respondents Benjamin S.
Abalos, Sr., Benjamin C. Abalos, Jr., Dr. Eden C. Diaz, Romeo Zapanta and Arcadio de Vera
for vote buying in violation of Section 261, paragraphs (a), (b) and (j) of the Omnibus Election
Code (OEC), in relation to Section 28 of Republic Act 6646 and Section 68 of the OEC. The
complaint, docketed as E.O. Case No. 98-110,[2] alleged that:
1. On April 14, 1998 (Tuesday), respondent Mandaluyong City Mayor Benjamin S. Abalos,
Sr., and his son respondent Benjamin "Benhur" C. Abalos, Jr., candidate for City Mayor of the
same city in the May 11, 1998 elections, conspiring with respondents Dr. Eden C. Diaz,
Schools Division Superintendent, Romeo F. Zapanta, Assistant Schools Division
Superintendent, and Arcadio de Vera, President, Mandaluyong Federation of Public School
Teachers, sponsored, arranged and conducted an all-expense-free transportation, food and
drinks affair for the Mandaluyong City public school teachers, registered voters of said city, at
the Tayabas Bay Beach Resort, Sariaya, Quezon Province.
2. Among the identified public school teachers present, brought in around twelve (12) buses,
were Corazon Mayoya, Principal of Highway Hills Elementary School, her Assistant Principal
and Mr. Dante del Remigio; Mrs. Diaz, Principal of Mandaluyong City High School and Mr.
Alvia; Mrs. Parillo, Andres Bonifacio Elementary School; Mrs. Gregoria Ignacio, Principal of
Doa Pilar Gonzaga Elementary School and Mrs. Bolantes; Mrs. Diaz, Principal, Nueve de
Febrero Elementary School; Ms. Magsalin, Principal of Mandaluyong Science High School
and Mrs. Rita Bondayril; Mrs. De Vera, Fabella Elementary School; Ms. Anselmo, Principal of
Isaac Lopez Elementary School and Mrs. Fayton; Mrs. Sylvia Liwanag, District Supervisor,
District II, Mrs. Nalaonan, Principal of Amado T. Reyes Elementary School; Mrs. Teresita
Vicencio, Mandaluyong City Elementary School; Officers of the Mandaluyong Federation of
Public School Teachers namely: Mrs. Erlinda Ilagan, Treasurer; Ms. Nancy de Leon, Auditor;
Ms. Fortunata Gondran, PRO; Mr. Nenito Pumariga, Business Manager; Mr. Jose Guerrero,
Sgt.-at-arms; and Board Members Ms. Virginia Carillo, Ms. Wilma Fernandez, Mr. Arturo
Morales and Mr. Teddy Angeles.
81
3. During the whole-day affair, the background music loudly and repeatedly played over the
sound system was the political jingle advertisement of Mandaluyong City candidate for
Mayor, Benjamin Benhur Abalos, Jr., sang to the tune of the song SHA LALA LALA.
4. Some of the participants wore T-shirts with the name of candidate Benhur" Abalos, Jr.,"
printed in over-sized colored letters.
5. Mayor Benjamin Abalos, Sr. delivered a speech wherein he offered and promised the
Mandaluyong City public school teachers and employees a hazard pay of P1,000.00, and
increasing their allowances from P1,500.00 to P2,000.00 for food, or with a total of P3,000.00
which they will get by the end of the month.
6. The offers and promises to said public school teachers, who are members of the Board of
Election Inspectors of Mandaluyong City and registered voters thereat, were made a few
weeks before the election to induce or unduly influence the said teachers and the public in
general (the other guests) to vote for the candidacy of Benjamin "Benhur" Abalos, Jr..
7. The offers and promises of Mayor Abalos, Sr., and the enthusiastic acceptance of said
monetary increase of allowances by the public school teachers and employees of
Mandaluyong City, is a violation of Section 261 pars. (a), (b) and (j) of the Omnibus Election
Code against vote-buying and vote-selling.[3]
The Director[4] of the Law Department of the COMELEC conducted a preliminary
investigation. All the private respondents filed separate counter-affidavits [5] with prayer to
dismiss the complaint.
On November 26, 1998, the Director of the Law Department submitted his findings to
the COMELEC En Banc recommending that the complaint be dismissed for insufficiency of
evidence.
On December 1, 1998, the COMELEC En Banc issued the assailed Resolution No. 98-
3208[6] dismissing the complaint "for insufficiency of evidence to establish a prima
facie case,"
Considering that this complaint, being criminal in nature, must have all its allegations
supported by direct, strong, convincing and indubitable evidence; and that the submitted
evidence of the complainant are mere self-serving statements and uncorroborated audio and
visual recordings and a photograph; and considering further that the evidence of the
respondents have more probative value and believable than the evidence of said complainants;
and that the burden of proof lies with the complainants and not with the respondents. [7]
On February 09, 1999, petitioners, without first submitting a motion for reconsideration,
filed the instant petition with this Court.
They alleged therein that the COMELEC En Banc, in issuing Resolution No. 98-3208
dated December 1, 1998, acted "with apparent grave abuse of discretion."[8]
The petition must fail.
Petitioners did not exhaust all the remedies available to them at the COMELEC
level. Specifically, they did not seek a reconsideration of the assailed COMELEC En
Banc Resolution as required by Section 1, Rule 13 of the 1993 COMELEC Rules of
Procedure, thus:
Section 1. What Pleadings are not Allowed. The following pleadings are not allowed:
xxx
d) motion for reconsideration of an en banc ruling, resolution, order or
decision except in election offense cases;
x x x. (Emphasis ours)
It is not disputed that petitioners complaint before the COMELEC involves an election
offense. But in this petition, they conveniently kept silent why they directly elevated to this
Court the questioned Resolution without first filing a motion for reconsideration with the
COMELEC En Banc. It was only after the respondents had filed their comment on the petition
and called this Courts attention to petitioners' failure to comply with Section 1 of Rule 13 that
they, in their Consolidated Reply, advanced the excuse that they "deemed it best not seek any
further dilatory motion for reconsideration', even if allowed by Sec. 1 (d) of COMELEC Rule
13."[9]
Petitioners' failure to file the required motion for reconsideration utterly disregarded
the COMELEC Rules intended "to achieve
an orderly, just, expeditious and inexpensivedetermination and disposition of every action
and proceeding brought before the Commission."[10]
Contrary to petitioners' statement that a resort to a motion for reconsideration is
"dilatory," it bears stressing that the purpose of the said motion is to give the COMELEC an
opportunity to correct the error imputed to it.[11] If the error is immediately corrected by way of
a motion for reconsideration, then it is the most expeditious and inexpensive recourse. But if
the COMELEC refuses to correct a patently erroneous act, then it commits a grave abuse of
discretion justifying a recourse by the aggrieved party to a petition for certiorari.
82
 A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as [G.R. No. 127139. February 19, 1999]
amended, can only be resorted to if "there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law."[12] Having failed to file the required JAIME C. LOPEZ, petitioner, vs. CITY OF MANILA and HON. BENJAMIN A.G.
motion for reconsideration of the challenged Resolution, petitioners' instant petition is VEGA, Presiding Judge, RTC, Manila, Branch 39, respondents.
certainly premature.[13]Significantly, they have not raised any plausible reason for their direct
recourse to this Court. DECISION

In its assailed Resolution, the COMELEC cited a valid reason for dismissing petitioners' QUISUMBING, J.:
complaint against private respondents for vote buying. The COMELEC found that the
evidence of the respondents have "more probative value and believable than the evidence of
This petition for review on certiorari, assails the Order[1] of the Regional Trial Court of
the complainants;" and that the evidence submitted by petitioners are "mere self-serving
Manila, Branch 39, promulgated on October 24, 1996, dismissing Civil Case No. 96-77510
statements and uncorroborated audio and visual recording and a photograph."
which sought the declaration of nullity of City of Manila Ordinance No. 7894, filed by
petitioner Jaime C. Lopez.
Moreover, Section 28 of Republic Act 6646 provides:

The facts as found by the trial court are as follows:

SEC. 28. Prosecution of Vote-buying and Vote-selling. The representation of a complaint for
violations of paragraph (a) or (b) of Section 261 of Batas Pambansa Blg. 881 supported by
Section 219 of Republic Act 7160 (R.A. 7160) or the Local Government Code of 1991
affidavits of complaining witnesses attesting to the offer or promise by or of the voters
requires the conduct of the general revision of real property as follows:
acceptance of money or other consideration from the relatives, leaders or sympathizers
of candidate, shall be sufficient basis for an investigation to be immediately conducted by the
Commission, directly or through its duly authorized legal officers, under Section 68 or Section General Revision of Assessments[2] and Property Classification -- The provincial, city or
265 of said Batas Pambansa Blg. 881. municipal assessor shall undertake a general revision of real property assessments within two
(2) years after the effectivity of this Code and every three (3) years thereafter.
x x x. (Emphasis ours)
Although R.A. 7160 took effect on January 1, 1992, the revision of real property
assessments prescribed therein was not yet enforced in the City of Manila. However, the
Petitioners' complaint expressly states that no supporting affidavits were submitted by
process of real property valuation had already been started and done by the former city
the complaining witnesses[14] to sustain their charge of vote buying. Suffice it to state that the
assessor.
absence of such supporting affidavits shows the frailty of petitioners' complaint. Indeed, it is
vulnerable to dismissal.
In 1992, the schedule of real property values in the city was prepared and submitted to
the City Council of Manila, but for unknown reason, was not acted upon. Nevertheless, despite
WHEREFORE, the instant petition is DISMISSED.
the inaction of the City Council, there was a continuous update of the fair market values of the
real properties within the city.
SO ORDERED.

Until the year 1995, the basis for collection of real estate taxes in the City of Manila was
Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, the old, year-1979, real estate market values.
Quisumbing, Pardo, Ynares-Santiago, De Leon, Jr., and Carpio, JJ., concur.

Mrs. Lourdes Laderas, the newly appointed City Assessor of Manila, received
Buena, J., on official leave. Memorandum Circular No. 04-95 dated March 20, 1995, from the Bureau of Local
Government Finance, Department of Finance. This memorandum relates to the failure of most
of the cities and municipalities of Metropolitan Manila, including the City of Manila, to
conduct the general revision of real property. For this purpose, Mrs. Laderas embarked in a
SECOND DIVISION

83
working dialogue with the Office of the City Mayor and the City Council for the completion
of the task.
After obtaining the necessary funds from the City Council, the City Assessor began the
process of general revision based on the updated fair market values of the real properties.
In the year 1995, the increase in valuation of real properties compared to the year-1979
market values ranges from 600% to 3,330%, but the City Assessors office initially fixed the
general average of increase to 1,700%. Mrs. Laderas felt that the increase may have adverse
reactions from the public, hence, she ended up reducing the increase in the valuation of real
properties to 1,020%.
In September 1995, the City Assessors Office submitted the proposed schedule of fair
market values to the City Council for its appropriate action. The Council acting on the
proposed schedule, conducted public hearings as required by law. The proposed ordinance was
subjected to the regular process in the enactment of ordinances pursuant to the City Charter of
Manila.The first reading was held on September 12, 1995, the second on October 28, 1995,
and the third on December 12, 1995. In between these dates, public hearings on the general
revision, which included the schedule of values of real properties, were had, viz.; on
September 28, 1995, October 5, 12 and 19, 1995 and November 27 and 29, 1995.
The proposed ordinance with the schedule of fair market values of real properties was
published in the Manila Standard on October 28, 1995, and the Balita on November 1,
1995. On December 12, 1995, the City Council enacted Manila Ordinance No. 7894,
entitled: An Ordinance Prescribed as the Revised Schedule of Fair Market Values of Real
Properties of the City of Manila. The ordinance was approved by the City Mayor on December
27, 1995, and made effective on Jan. 01, 1996. Thereafter, notices of the revised assessments
were distributed to the real property owners of Manila pursuant to Sec. 223 of R.A. 7160. [3]
With the implementation of Manila Ordinance No. 7894, the tax on the land owned by
the petitioner was increased by five hundred eighty percent (580%). With respect to the
improvement on petitioners property, the tax increased by two hundred fifty percent (250%).
As a consequence of these increases, petitioner Jaime C. Lopez, filed on March 18,
1996, a special proceeding for the declaration of nullity of the City of Manila Ordinance No.
7894 with preliminary injunction and prayer for temporary restraining order (TRO). The
petition alleged that Manila Ordinance No. 7894 appears to be unjust, excessive, oppressive or
confiscatory. The case was originally raffled to the Regional Trial Court of Manila, Branch 5,
which issued the TRO on April 10, 1996.
On the same date, Manila Ordinance No. 7905 [4] took effect, reducing by fifty percent
(50%) the assessment levels[5] (depending on the use of property, e.g., residential, commercial)
for the computation of tax due. The new ordinance amended the assessment levels provided by
Section 74,[6] paragraph (A) of Manila Ordinance No. 7794.
Moreover, Section 2 of Manila Ordinance No. 7905[7] provides that the amendment
embodied therein shall take effect retroactively to January 1, 1996. The same provision
indicates the maximum realty tax increases, as follows:
Sec. 2 - x x x Provided, however, that the tax increase on residential lands and improvements
shall in no case exceed by two hundred percent (200%) of the tax levied thereon in calendar
year 1995 and the tax increase on commercial and industrial land, buildings and other
structures shall not exceed by three hundred percent (300%) of the tax imposed thereon in
calendar year 1995; Provided further, that the tax on all lands and improvements shall in no
case be lower than the tax imposed thereon in calendar year 1995.
As a result, Manila Ordinance No. 7905 reduced the tax increase of petitioners
residential land to one hundred fifty-five percent (155%), while the tax increase for residential
improvement was eighty-two percent (82%).
The maximum tax increase on classified commercial estates is three hundred percent
(300%) but the tax increase on commercial land was only, two hundred eighty-eight percent
(288%), and seventy-two percent (72%) on commercial portion of the improvement.
On April 12, 1996, respondent filed a motion for inhibition of the presiding judge of
RTC, Branch 5, alleging that Judge Amelia Andrade had shown markedly indulgent attitude
towards the petitioner. Hence, Judge Andrade inhibited herself and directed the forwarding of
the case record to the Clerk of Court for its re-raffle to another branch of the court.
Despite the amendment brought about by Manila Ordinance No. 7905, the controversy
proceeded and the case was re-raffled to Branch 39 of the court which acted on the motions
submitted by the parties for resolution, viz.: 1) application for preliminary injunction by the
petitioner, and 2) motion to dismiss by the respondent. The reason relied upon by the City of
Manila for the dismissal of the petition was for failure of the petitioner to exhaust
administrative remedies.
On May 9, 1996, the court directed the issuance of a writ of injunction and denied, in the
meanwhile, the motion to dismiss by the respondent. The reason for the denial of the
respondents motion to dismiss was not detailed to avoid a repetition of the unfortunate
situation in RTC-Manila, Branch 5, wherein the counsel for the respondent assumed bias on
the part of Judge Andrade.
On May 22, 1996, the respondent filed the instant motion for reconsideration on the
denial of its motion to dismiss. The movant-respondent aside from reiterating the basic ground
84
alleged in its motion to dismiss underscored the additional premise, which is the happening of
a supervening event, i.e., the enactment and approval of the City Mayor of Manila Ordinance
No. 7905.
On October 24, 1996, the trial court granted the motion to dismiss filed by the
respondent. The dismissal order was justified by petitioners failure to exhaust the
administrative remedies and that the petition had become moot and academic when Manila
Ordinance No. 7894 was repealed by Manila Ordinance No. 7905. Notwithstanding, the trial
court likewise resolved all other interlocking issues.
The dispositive portion of the trial courts order is as follows:
WHEREFORE, finding the motion dated May 19, 1996 filed by the herein respondent on May
22, 1996 sufficiently well-taken, the order dated May 9, 1996 is hereby set aside. Let the
petition filed by the herein petitioner on March 8, 1996 be, as it is, hereby DISMISSED. The
order of preliminary injunction dated May 9, 1996, is also set aside and the writ of injunction
likewise issued pursuant thereto, dissolved.
SO ORDERED.[8]
The petitioner filed a motion for reconsideration, but it was denied for lack of merit.
Hence, the petitioner now comes before this Court raising in his petition the following
issues:
I. DID THE RESPONDENT TRIAL COURT IN CIVIL CASE NO. 96-77510
ERR IN HOLDING THAT THE PETITIONER FAILED TO EXHAUST ALL
ADMINISTRATIVE REMEDIES, AND THEREFORE, THE PETITION
OUGHT TO BE DISMISSED? AND;
II. DID THE RESPONDENT COURT ERR IN FAILING TO CORRECTLY
APPLY SECTIONS 212 AND 221 OF THE LOCAL GOVERNMENT CODE
OF 1991?
Petitioner contends that when the trial court ruled that it has jurisdiction over the case,
the question of whether he needs to resort to the exhaustion of administrative remedies
becomes moot and academic. He claims that resort to administrative remedies on
constitutionality of law is merely permissive as provided by Sec. 187 of R.A. 7160, viz.:
x x x Provided, further, That any question on the constitutionality or legality of tax ordinances
or revenue measures may be raised on appeal within thirty (30) days from the effectivity
thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the
date of receipt of the appeal. x x x (emphasis supplied)
Petitioner further asserts that the question of the constitutionality of the city ordinance
may be raised on appeal, either to the Secretary of Justice or the Regional Trial Court, both
having concurrent jurisdiction over the case, in accordance with Batas Pambansa Blg. 129. He
states that at the time he instituted this complaint, it was premature to resort to the remedies
provided by R.A. 7160 because he has not received the formal notice of assessment yet, hence,
he could not be expected to pay under protest and elevate the exorbitant assessment to the
Board of Assessment Appeals.
On the other hand, respondent argues that the adjustment of the fair market values of real
properties in the City of Manila was long overdue, being updated only after fifteen (15)
years.According to the respondent, petitioner filed the case, merely to take advantage of the
situation to gain political mileage and help advance his mayoralty bid.
As a general rule, where the law provides for the remedies against the action of an
administrative board, body, or officer, relief to courts can be sought only after exhausting all
remedies provided. The reason rests upon the presumption that the administrative body, if
given the chance to correct its mistake or error, may amend its decision on a given matter and
decide it properly. Therefore, where a remedy is available within the administrative machinery,
this should be resorted to before resort can be made to the courts, not only to give the
administrative agency the opportunity to decide the matter by itself correctly, but also to
prevent unnecessary and premature resort to courts. [9] This rule, however, admits certain
exceptions.[10]
With regard to questions on the legality of a tax ordinance, the remedies available to the
taxpayer are provided under Sections 187, 226, and 252 of R.A. 7160.
Section 187 of R.A. 7160 provides, that the taxpayer may question the constitutionality
or legality of tax ordinance on appeal within thirty (30) days from effectivity thereof, to the
Secretary of Justice. The petitioner after finding that his assessment is unjust, confiscatory, or
excessive, must have brought the case before the Secretary of Justice for questions of legality
or constitutionality of the city ordinance.
Under Section 226 of R.A. 7160, an owner of real property who is not satisfied with the
assessment of his property may, within sixty (60) days from notice of assessment, appeal to
the Board of Assessment Appeals.[11]
Should the taxpayer question the excessiveness of the amount of tax, he must first pay
the amount due, in accordance with Section 252 of R.A. 7160. Then, he must request the
annotation of the phrase paid under protest and accordingly appeal to the Board of Assessment
85
Appeals by filing a petition under oath together with copies of the tax declarations and
affidavits or documents to support his appeal.[12]
The rule is well-settled that courts will not interfere in matters which are addressed to
the sound discretion of government agencies entrusted with the regulations of activities
coming under the special technical knowledge and training of such agencies. [13] Furthermore,
the crux of petitioners cause of action is the determination of whether or not the tax is
excessive, oppressive or confiscatory. This issue is essentially a question of fact and thereby,
precludes this Court from reviewing the same.[14]
We have carefully scrutinized the record of this case and we found no cogent reason to
depart from the findings made by the trial court on this point. As correctly found by the trial
court, the petition does not fall under any of the exceptions to excuse compliance with the rule
on exhaustion of administrative remedies, to wit:
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
within the competence of other department. x x x
There are however a number of instances when the doctrine may be dispensed with and
judicial action validly resorted to immediately. Among these exceptional cases 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 controversy is private land; and (10) in quo-warranto
proceeding (citation omitted).
In the courts opinion, however, the instant petition does not fall within any of the exceptions
above-mentioned. x x x
x x x Instant petition involves not only questions of law but more importantly the questions of
facts which therefore needed the reception of evidence contrary to the position of the
respondent before the hearing of its motion for reconsideration
Now, on the second exception on the rule of exhaustion of administrative remedies, supra,
there is no showing that administrative bodies, viz., The Secretary of Justice, the City
Treasurer, Board of Assessment Appeals, and the Central Board of Assessment Appeals are in
estoppel. On the third exception, it does not appear that Ordinance No. 7894 or the
amendatory Ordinance No. 7905 are patently illegal. Re the fourth exception, in the light of
circumstances as pointed elsewhere herein, the matter does not need a compelling judicial
intervention. On the fifth exception, the claim of the petitioner is not small. Re the sixth
exception, the court does not see any irreparable damage that the petitioner will suffer if he
had paid or will pay under protest as per the ordinance. He could always ask for a refund of
the excess amount he paid under protest or be credited thereof if the administrative bodies
mentioned in the law (R.A. 7180[15]) will find that his position is meritorious. Re the seventh
exception, the court is of the opinion that administrative relief provided for in the law are
plain, speedy and adequate. On the eight exception, while the controversy involves public
interest, judicial intervention as the petitioner would like this court to do should be avoided as
demonstrated herein below in the discussion of the third issue. The ninth and tenth exception
obviously are not applicable in the instant case. [16]
Proceeding to the second issue, petitioner contends that the respondent court failed to
apply correctly Sections 212 and 221 of R.A. 7160. The pertinent provisions are set forth
below:
Sec. 212 Preparation of Schedule of Fair Market Values -- Before any general revision of
property assessment is made pursuant to the provisions of this Title, there shall be prepared a
schedule of fair market values by the provincial, city and the municipal assessors of the
municipalities within the Metropolitan Manila Area for the different classes of real property
situated in their respective local government units [LGU] for enactment by ordinance of the
sanggunian concerned. The schedule of fair market values shall be published in a newspaper
of general circulation in the province, city or municipality concerned, or in the absence
thereof, shall be posted in the provincial capitol, city or municipal hall and in two other
conspicuous public places therein.
Sec. 221. Date of Effectivity of Assessment or Reassessment -- All assessments or
reassessments made after the first (1st) day of January of any year shall take effect on the first
(1st) day of January of the succeeding year: Provided, however, That the reassessment of real
property due to its partial or total destruction, or to a major change in its actual use, or to any
great and sudden inflation or deflation of real property values, or to the gross illegality of the
assessment when made or to any other abnormal cause, shall be made within ninety (90) days
from the date any such cause or causes occurred, and shall take effect at the beginning of the
quarter next following assessment.
The petitioner claims that the effectivity date of Manila Ordinance No. 7894 and the
schedule of the fair market values is January 1, 1996. He contends that Sec. 212 of the R.A.
7160 prohibits the general revision of real property assessment before the approval of the
schedule of the fair market values. Thus, the alleged revision of real property assessment in
1995 is illegal.
Based on the evidence presented by the parties, the steps to be followed for the
mandatory conduct of General Revision of Real Property assessments, pursuant to the
provision of Sec. 219 of R.A. No. 7160 are as follows:
1. The preparation of Schedule of Fair Market Values.
86
2. The enactment of Ordinances: Coming down to specifics, we find it desirable to lay down the procedure in computing
the real property tax. With the introduction of assessment levels, tax rates could be maintained,
a) levying an annual ad valorem tax on real property and an additional tax although tax payments can be made either higher or lower depending on their percentage
accruing to the SEF. (assessment level) applied to the fair market value of property to derive its assessed
value which is subject to tax. Moreover, classes and values of real properties can be given
b) fixing the assessment levels to be applied to the market values of real proper consideration, like assigning lower assessment levels to residential properties and
properties; higher levels to properties used in business. [19] The procedural steps in computing the real
property tax are as follows:

c) providing necessary appropriation to defray expenses incident to general

revision of real property assessments; and 1) Ascertain the assessment level of the property

d) adopting the Schedule of Fair Market Values prepared by the assessors. [17] 2) Multiply the market value by the applicable assessment level of the property

The preparation of fair market values as a preliminary step in the conduct of general 3) Find the tax rate which corresponds to the class (use) of the property and multiply
revision was set forth in Section 212 of R.A. 7160, to wit: (1) The city or municipal assessor the assessed value by the applicable tax rates. [20]
shall prepare a schedule of fair market values for the different classes of real property situated
in their respective Local Government Units for the enactment of an ordinance by the For easy reference, the computation of real property tax is cited below:
sanggunian concerned. (2) The schedule of fair market values shall be published in a
newspaper of general circulation in the province, city or municipality concerned or the posting Market Value P x x x
in the provincial capitol or other places as required by law.
Multiplied by Assessment Level ( x %)
It was clear from the records that Mrs. Lourdes Laderas, the incumbent City Assessor,
prepared the fair market values of real properties and in preparation thereof, she considered Assessed Value P x x x
the fair market values prepared in the calendar year 1992. Upon that basis, the City Assessors
Office updated the schedule for the year 1995. In fact, the initial schedule of fair market values Multiplied by Rate of Tax ( x %)
of real properties showed an increase in real estate costs, which ranges from 600% - 3,330%
over the values determined in the year 1979. However, after a careful study on the movement
Real Property Tax P x x
of prices, Mrs. Laderas eventually lowered the average increase to 1,020%. Thereafter, the
proposed ordinance with the schedule of the fair market values of real properties was
published in the Manila Standard on October 28, 1995 and the Balita on November 1, 1995. =====
[18]
Under the circumstances of this case, there was compliance with the requirement provided
under Sec. 212 of R.A. 7160. On April 10, 1996, Manila Ordinance No. 7905 was enacted and approved to take effect,
retroactively to January 1, 1996. As a result of this new ordinance, the assessment levels
Thereafter, on January 1, 1996, the Sanggunian approved Manila Ordinance No. applicable to the market values of real properties were lowered into half. A comparative
7894. The schedule of values of real properties in the City of Manila, which formed an integral evaluation between the old and the new assessment levels is as follows:
part of the ordinance, was likewise approved on the same date.
Assessment Levels
When Manila Ordinance No. 7894 took effect on January 1, 1996, the existing
assessment levels to be multiplied by the market value of the property in computing the Ordinance 7794 Ordinance 7905
assessed value (taxable value) subject to tax were those enumerated in Section 74 paragraph
(A) of Manila Ordinance Number 7794. Old New

87
 (1) On Lands: 300,000.00 500,000.00 35% 17.5%

Class 500,000.00 750,000.00 40% 20%

Residential 20% 10% 750,000.00 1,000,000.00 50% 25%

Commercial 50% 25% 1,000,000.00 2,000,000.00 60% 30%

Industrial 50% 25% 2,000,000.00 5,000,000.00 70% 35%

(2) On Buildings and other structures: 5,000,000.00 10,000,000.00 75% 37.5%

(a) Residential Fair Market Value 10,000,000.00 80% 40%

Over Not Over (3) On Machineries:

P 175,000.00 0% 0% Class

175,000.00 P 300,000.00 10% 5% Residential 50% 25%

300,000.00 500,000.00 20% 10% Commercial 80% 40%

500,000.00 750,000.00 25% 12.5% Industrial 66% 40%

750,000.00 1,000,000.00 30% 15% (4) On special classes - The assessment levels for all lands, buildings, machineries and other
improvements shall be as follows:
1,000,000.00 2,000,000.00 35% 17.5%
Actual Use
2,000,000.00 5,000,000.00 40% 20%
Cultural 15% 7.5%
5,000,000.00 10,000,000.00 50% 25%
Scientific 15% 7.5%
10,000,000.00 60% 30%
Hospital 15% 7.5%
(b) Commercial/Industrial Fair Market Value
Local Water Districts 15% 7.5%
Over Not Over
GOCC engaged in the supply and
300,000.00 30% 15%
and distribution of water and/or

88
 degeneration and transmission of Bellosillo, (Chairman), Puno, Mendoza, and Buena, JJ., concur.

electric power 10% 5%

Despite the favorable outcome of Manila Ordinance No. 7905, the petitioner insists that
since it was approved on April 10, 1996, it cannot be implemented in the year 1996. Using
Section 221 of R.A. 7160 as basis for his argument, petitioner claims that the assessments or
reassessments made after the first (1st) day of January of any year shall take effect on the first
(1st) day of January of the succeeding year.

Contrarily, the trial court viewed that Manila Ordinance No. 7905 affects the resulting
tax imposed on the market values of real properties as specified in Manila Ordinance No.
7894.Therefore, this supervening circumstance has rendered the petition, moot and academic,
for failure of the petitioner to amend his cause of action. The trial court said:
THIRD DIVISION

A mere cursory reading of his petition that he questioned fair market values and the UNIVERSAL ROBINA CORP. (CORN G.R. No. 191427
assessment levels and the resulting tax based thereon as imposed by Ordinance No. 7894. The DIVISION),
petitioner, however, failed to amend his petition. Thus, it is clear that the petition has become Petitioner, Present:
moot and academic. As correctly stated by the respondent, the facts, viz., the tax rates on level
prescribed by Ordinance 7894 upon which the petition was anchored no longer exist because CARPIO MORALES, J., Chairperson
- versus - BRION,
the tax rates in Ordinance No. 7894 have been amended, otherwise, impliedly repealed by
BERSAMIN,
Ordinance No. 7905. If only for this, the petition could be dismissed but this court followed LAGUNA LAKE DEVELOPMENT AUTHORITY, VILLARAMA, JR., and
the advice of the Supreme Court in the case of National Housing Authority vs. Court of Respondent. SERENO, JJ.
Appeals, et. al. (121 SCRA 777) that the case may be decided in its totality resolving all
interlocking issues in order to render justice to all concerned and end litigation once and for
all.[21] Promulgated:
May 30, 2011
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
Although, we are in full accord with the ruling of the trial court, it is likewise necessary
to stress that Manila Ordinance No. 7905 is favorable to the taxpayers when it specifically DECISION
states that the reduced assessment levels shall be applied retroactively to January 1, 1996. The
reduced assessment levels multiplied by the schedule of fair market values of real properties, CARPIO MORALES, J.:
provided by Manila Ordinance No. 7894, resulted to decrease in taxes. To that extent, the The present petition for review on certiorari assails the Court of Appeals Decision [1] dated
October 27, 2009 and Resolution dated February 23, 2010 in CA-G. R. SP No. 107449.
ordinance is likewise, a social legislation intended to soften the impact of the tremendous
increase in the value of the real properties subject to tax. The lower taxes will ease, in part, the Universal Robina Corp. (petitioner) is engaged in, among other things, the manufacture of
economic predicament of the low and middle-income groups of taxpayers. In enacting this animal feeds at its plant in Bagong Ilog, Pasig City.
ordinance, the due process of law was considered by the City of Manila so that the increase in
realty tax will not amount to the confiscation of the property. Laguna Lake Development Authority (LLDA), respondent, through its Pollution
Control Division Monitoring and Enforcement Section, after conducting on March 14, 2000 a
laboratory analysis of petitioners corn oil refinery plants wastewater, found that it failed to
WHEREFORE, the instant petition is hereby DENIED, and the assailed Order of comply with government standards provided under Department of Environment and Natural
Regional Trial Court of Manila, Branch 39 in Civil Case No. 96-77510 is hereby Resources (DENR) Administrative Orders (DAOs) Nos. 34 and 35, series of 1990.
AFFIRMED.COSTS against the petitioner.
LLDA later issued on May 30, 2000 an Ex-Parte Order requiring petitioner to
SO ORDERED. explain why no order should be issued for the cessation of its operations due to its discharge of
89
pollutive effluents into the Pasig River and why it was operating without a clearance/permit
from the LLDA.
Still later, the LLDA, after receiving a phone-in complaint conducted on August 31, 2000,
another analysis of petitioners wastewater, which showed its continued failure to conform to
its effluent standard in terms of Total Suspended Solids (TSS), Biochemical Oxygen Demand
(BOD), Color and Oil/Grease.
Hearings on petitioners pollution case were thereafter commenced on March 1,
2001.
Despite subsequent compliance monitoring and inspections conducted by the LLDA,
petitioners wastewater failed to conform to the parameters set by the aforementioned DAOs.
In early 2003, petitioner notified LLDA of its plan to upgrade the wastewater treatment facility
(WTF) of its corn oil refinery plant in an effort to comply with environmental laws, an
upgrade that was completed only in 2007.
On May 9, 2007 on its request, [2] a re-sampling of petitioners wastewater was
conducted which showed that petitioners plant finally complied with government standards.
Petitioner soon requested for a reduction of penalties, by Manifestation and Motion [3] filed on
August 24, 2007 to which it attached copies of its Daily Operation Reports and
Certifications[4] to show that accrued daily penalties should only cover a period of 560 days.
After conducting hearings, the LLDA issued its Order to Pay [5] (OP) dated January
21, 2008, the pertinent portion of which reads:
After careful evaluation of the case, respondent is found to be
discharging pollutive wastewater computed in two periods reckoned from
March 14, 2000 the date of initial sampling until November 3, 2003 the
date it requested for a re-sampling covering 932 days in consideration of
the interval of time when subsequent monitoring was conducted after an
interval of more than 2 years and from March 15, 2006 the date when re-
sampling was done until April 17, 2007 covering 448 days[6] for a total of
1,247 days.
WHEREFORE, premises considered, respondent is hereby
ordered to pay within fifteen (15) days from receipt hereof the
accumulated daily penalties amounting to a total of Pesos: One Million
Two Hundred Forty-Seven (Thousand) Pesos Only (PHP 1,247,000.00)
prior to dismissal of the case and without prejudice of filing another case
for its subsequent violations. (emphasis and underscoring supplied)
Petitioner moved to reconsider, praying that it be ordered to pay only accumulated
daily penalties in the sum of Five Hundred Sixty Thousand (P560,000) Pesos[7] on grounds
that the LLDA erred in first, adopting a straight computation of the periods of violation based
on the flawed assumption that petitioner was operating on a daily basis without excluding,
among others, the period during which the LLDA Laboratory underwent rehabilitation work
from December 1, 2000 to June 30, 2001 (covering 212 days); and second, in disregarding the
Daily Operation Reports and Certifications which petitioner submitted to attest to the actual
number of its operating days, i.e., 560 days.
By Order[8] of July 11, 2008, the LLDA denied petitioners motion for
reconsideration and reiterated its order to pay the aforestated penalties, disposing of the issues
thusly:
On the first issue, while it is true that the Authority failed to state
in its OP dated 21 January 2008 the basis for actual computation of the
accumulated daily penalties, the Authority would like to explain that its
computation was based on the following, to wit:
The computation of accumulated daily penalties was reckoned
period [sic] from 14 March 2000 the date of initial sampling to 03
November 2003 the date when its letter request for re-sampling was
received which covers 932 days computed at 6 days per week operation as
reflected in the Reports of Inspection. Since subsequent inspection
conducted after two (2) years and four (4) months, such period was
deducted from the computation. Likewise, the period when the LLDA
Laboratory was rehabilitated from December 1, 2000 to June 30, 2001 was
also deducted with a total of Two Hundred Twelve (212) days.
On the second claim, the same cannot be granted for lack of
legal basis since the documents submitted are self-serving. The period
from 15 March 2006 to 17 April 2007 was computed from the date of re-
sampling when it failed to conform to the standards set by law up to the
date of receipt of its letter request for re-sampling prior to its compliance
on May 9, 2007. The period covers 342 days.
Hence, respondent is found to be discharging pollutive
wastewater not conforming with the standards set by law computed from
March 14, 2000 November 3, 2003 covering 932 days and from March 15,
2006 April 17, 2007 covering 342 days for a total of 1,274 days.
Petitioner challenged by certiorari the twin orders before the Court of Appeals,
attributing to LLDA grave abuse of discretion in disregarding its documentary evidence, and
maintaining that the lack of any plain, speedy or adequate remedy from the enforcement of
LLDAs order justified such recourse as an exception to the rule requiring exhaustion of
administrative remedies prior to judicial action.
By Decision of October 27, 2009 the appellate court affirmed both LLDA orders,
which it found to be amply supported by substantial evidence, the computation of the
accumulated daily penalties being in accord with prevailing DENR guidelines. The appellate
court held that while petitioner may have offered documentary evidence to support its
assertion that the days when it did not operate must be excluded from the computation, the
LLDA has the prerogative to disregard the same for being unverified, hence, unreliable.
90
 The appellate court went on to chide petitioners petition for certiorari as premature
since the law provides for an appeal from decisions or orders of the LLDA to the DENR
Secretary or the Office of the President, a remedy which should have first been exhausted
before invoking judicial intervention.[9]
Petitioners motion for reconsideration having been denied by Resolution of February
23, 2010, it filed the present petition.
Petitioner cites deprivation of due process and lack of any plain, speedy or adequate
remedy as grounds which exempted it from complying with the rule on exhaustion of
administrative remedies.
The petition fails.
The doctrine of exhaustion of administrative remedies is a cornerstone of our
judicial system. 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.[10] 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.[11]
Executive Order No. 192[12] (EO 192) was issued on June 10, 1987 for the salutary
purpose of reorganizing the DENR, charging it with the task of promulgating rules and
regulations for the control of water, air and land pollution as well as of promulgating ambient
and effluent standards for water and air quality including the allowable levels of other
pollutants and radiations. EO 192 also created the Pollution Adjudication Board under the
Office of the DENR Secretary which took over the powers and functions of the National
Pollution Control Commission with respect to the adjudication of pollution cases, including
the latters role as arbitrator for determining reparation, or restitution of the damages and losses
resulting from pollution.[13]
Petitioner had thus available administrative remedy of appeal to the DENR
Secretary. Its contrary arguments to show that an appeal to the DENR Secretary would be an
exercise in futility as the latter merely adopts the LLDAs findings is at best, speculative and
presumptuous.
As for petitioners invocation of due process, it fails too. The appellate court thus
aptly brushed aside this claim, in this wise:
Due process, as a constitutional precept, does not always and in
all situations require a trial-type proceeding. Due process is satisfied when
a person is notified of the charge against him and given an opportunity to
explain or defend himself. In administrative proceedings, the filing of
charges and giving reasonable opportunity for the person so charged to
answer the accusations against him constitute the minimum requirements
of due process. The essence of due process is simply to be heard, or as
applied to administrative proceedings, an opportunity to explain ones
side, or an opportunity to seek a reconsideration of the action or
ruling complained of.
. . . Administrative due process cannot be fully equated with
due process in its strict judicial sense for it is enough that the party is
given the chance to be heard before the case against him is decided.
Here, petitioner URC was given ample opportunities to be heard it was
given show cause orders and allowed to participate in hearing to rebut the
allegation against it of discharging pollutive wastewater to the Pasig River,
it was given the chance to present evidences in support of its claims, it was
notified of the assailed Order to Pay, and it was allowed to file a motion
for reconsideration. Given these, we are of the view that the minimum
requirements of administrative due process have been complied with
in this case.[14] (emphasis in the original)
In fine, the assailed LLDA orders of January 21, 2008 and July 11, 2008 correctly
reckoned the two periods within which petitioner was found to have continued discharging
pollutive wastewater and applied the penalty as provided for under Article VI, Section 32 of
LLDA Resolution No. 33, Series of 1996. [15]LLDAs explanation that behind its inclusion of
certain days in its computation of the imposable penalties that it had already deducted not just
the period during which the LLDA Laboratory underwent rehabilitation work from December
1, 2000 to June 30, 2001 (covering 212 days) but had also excluded from the computation the
period during which no inspections or compliance monitorings were conducted (a period
covering two years and four months) is well-taken.
It is noted that during the hearing on June 19, 2007, the LLDA gave petitioner the
opportunity to submit within fifteen (15) days.any valid documents to show proof of its non-
operating dates that would be necessary for the possible reduction of the accumulated daily
penalties,[16] but petitioner failed to comply therewith.
As earlier noted, petitioner filed a Manifestation and Motion to which it
attached Daily Operation Reports and Certifications, which voluminous documents were,
however, unverified in derogation of Rule X, Section 2 [17] of the 2004 Revised Rules,
Regulations and Procedures Implementing Republic Act No. 4850. Absent such verification,
the LLDA may not be faulted for treating such evidence to be purely self-serving.
Respecting LLDAs decision not to attach any evidentiary weight to the Daily
Operation Reports or Certifications, recall that the LLDA conducted an analysis of petitioners
wastewater discharge on August 31, 2000, upon receiving a phone-in complaint. And it
conducted too an analysis on May 3, 2002 in the course of periodic compliance
monitoring. The Daily Operation Reports for both August 31, 2000 [18] and May 3,
2002[19] submitted by petitioner clearly manifest that the plant did not operate on those
dates. On the other hand, LLDAs Investigation Report and Report of Inspection [20] dated
August 31, 2000 and May 3, 2002, respectively, disclose otherwise. Petitioner never disputed
the factual findings reflected in these reports. Thus spawns doubts on the veracity and
accuracy of the Daily Operation Reports.
Petitioner asserts that LLDA had not credited it for undertaking remedial measures
to rehabilitate its wastewater treatment facility, despite the prohibitive costs and at a time
when its income from the agro-industrial business was already severely affected by a poor
91
business climate; and that the enforcement of the assailed LLDA orders amounted to a gross
disincentive to its business.
Without belaboring petitioners assertions, it must be underscored that the protection
of the environment, including bodies of water, is no less urgent or vital than the pressing
concerns of private enterprises, big or small. Everyone must do their share to conserve the
national patrimonys meager resources for the benefit of not only this generation, but of those
to follow. The length of time alone it took petitioner to upgrade its WTF (from 2003 to 2007),
a move arrived at only under threat of continuing sanctions, militates against any genuine
concern for the well-being of the countrys waterways.
20, 2000[1] of the Court of Appeals (CA) in CA-G.R. CV No. 59681 affirming
an earlier decision of the Regional Trial Court (RTC) of Makati City, Branch
141, in its Civil Case No. 94-005, an action for a sum of money with
damages thereat commenced by the respondent against the herein
petitioner, its Administrator and its Assistant Administrator for Systems and
Operations and Equipment Management.
Succinctly summarized by the Court of Appeals in the assailed
decision are the following undisputed facts:

WHEREFORE, the petition is DENIED. The October 27, 2009 Decision and the Records show that in 1984, defendant-appellant [petitioner]
February 23, 2010 Resolution, of the Court of Appeals in CA-G. R. SP No. National Irrigation Administration (NIA) commenced the widening of
107449, are AFFIRMED. the Binahaan River in Brgy. Cansamada, Dagami, Leyte. This project was
divided into small sections costing not more than P50,000.00 each so as
SO ORDERED.
not to require public bidding. However, pre-bidding was nevertheless
NATIONAL IRRIGATION ADMINISTRATION, conducted by NIA and participated in by different contractors to determine
Petitioner, the possible lowest bid which shall serve as the cost of the project. With
this arrangement, contractors are assigned to work on specific sections
without formal contracts. When the works for the assigned sections are
- versus - completed to NIAs satisfaction, NIA will then prepare the requisite
contract and other pertinent documents so that the contractor can collect
payment.
LEONCIO C. ENCISO,
Respondent. Plaintiff-appellant [respondent] Enciso, doing business as a
G.R. No. 142571 contractor under the name LCE Construction, worked on a portion of the
river from station 16 + 400 to station 16 + 900. His first billing
of P227,165.90 was paid by NIA. However, his second and final billing
Present:
PUNO, J., Chairperson* of P259,154.01 was denied on the ground that the work done on the right
SANDOVAL-GUTIERREZ,** side of the river was not accomplished. [Words in bracket supplied.]
CORONA,
AZCUNA, and
GARCIA, JJ.

Respondent finally instituted a complaint for collection of a sum of

money with damages and attorneys fees with the RTC of Makati City,
Promulgated: thereat docketed as Civil Case No. 94-005 and eventually raffled to Branch
141 thereof. Petitioner and co-defendants filed a motion to dismiss
May 5, 2006 ongrounds of non-exhaustion of administrative remedies and lack of cause
of action. The RTC denied the motion and proceeded to trial.
x---------------------------------------------------------------------------------x

DECISION In a decision dated February 27, 1998, the RTC rendered judgment
for respondent, as plaintiff, holding petitioner, as defendant, liable, thus:
GARCIA, J.:
The instant petition for review on certiorari under Rule 45 of the
Rules of Court seeks to nullify and set aside the Decision dated March
92
 WHEREFORE, judgment is hereby rendered ordering defendant
National Irrigation Administration to pay plaintiff the sum of P259,154.01
with legal rate of interest of 12% per annum effective on 1 August 1985
until fully paid; P50,000.00, as and for attorneys fees; and the costs of suit.
SO ORDERED.
Both parties went up to the Court of Appeals (CA). For its part,
petitioner contended that the trial court erred in denying its motion to
dismiss and thereafter holding it liable to respondent. On the other hand,
respondent interposed that the trial court erred in failing to hold petitioners
co-defendants personally liable for damages and in adjudging petitioner
NIA solely liable based on the face value of the work accomplished in
1985. The CA, however, found no reversible error in the appealed decision
and affirmed it as follows:
WHEREFORE, finding no reversible error in the appealed
decision which is in accord with the evidence and jurisprudential principle
on the matter, the same is hereby AFFIRMED.
SO ORDERED.
Only petitioner NIA came to this Court via this petition for review
raising the following issues for resolution:
THE COURT OF APPEALS ERRED IN AFFIRMING THE RULING OF
THE REGIONAL TRIAL COURT DENYING PETITIONERS MOTION
TO DISMISS (ANNEX C HEREOF) WHICH AVERRED, AMONG
OTHER THINGS, THAT RESPONDENT FAILED TO EXHAUST
ADMINISTRATIVE REMEDIES AVAILABLE TO HIM UNDER THE
LAW.
THE COURT OF APPEALS ERRED IN DECLARING THAT
PETITIONER IS LIABLE TO RESPONDENT FOR THE ALLEGED
WORK AT PETITIONERS PROJECT THOUGH THE ALLEGED
ASSIGNMENT WAS DONE IN VIOLATION OF EXISTING RULES
AND REGULATIONS.
The Court finds the petition meritorious.
Petitioner raised the issue of non-exhaustion of administrative
remedies in its appeal before the CA, on account of respondents failure to
file his claim before the Commission on Audit (COA) prior to instituting a
complaint for collection of sum of money with the RTC. Instead of
addressing the question, however, the CA discussed NIAs separate and
distinct corporate personality from the government or the State, which is a
non-issue.What the CA failed to rule upon is, given the fact that NIA is a
government entity vested with a separate corporate personality from the
State, whether NIA, being a government entity disbursing public funds or
tax-payers money is subject to the jurisdiction of COA such that any claim
for collection of sum of money against it, specially in this instance where it
is not covered by any written contract, must be initially lodged before the
COA.
The issue should have been resolved in the affirmative.
Among the powers vested upon COA as provided for in Section 26,
Presidential Decree No. 1445, are the following:
SECTION 26. General jurisdiction. The authority and powers of
the Commission shall extend to and comprehend all matters relating to
auditing procedures, systems and controls, the keeping of the general
accounts of the Government, the preservation of vouchers pertaining
thereto for a period of ten years, the examination and inspection of the
books, records, and papers relating to those accounts; and the audit and
settlement of the accounts of all persons respecting funds or property
received or held by them in an accountable capacity, as well as the
examination, audit, and settlement of all claims of any sort due from or
owing to the Government or any of its subdivisions, agencies and
instrumentalities. The said jurisdiction extends to all government-owned
or controlled corporations, including their subsidiaries, and other self-
governing boards, commissions, agencies of the Government, and as
herein prescribed, including non-governmental entities subsidized by the
government, those funded by donations through the government, those
required to pay levies or government share, and those for which the
government has put up a counterpart fund or those partly funded by the
government. [Emphasis supplied.]
COA, as one of the three (3) independent constitutional
commissions, is specifically vested with the power, authority and duty to
examine, audit and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property owned or held
in trust by the government, or any of its subdivisions, agencies or
93
instrumentalities. To ensure the effective discharge of its functions, COA
has been empowered, subject to the limitations imposed by Article IX(D) of
the 1987 Constitution, to define the scope of its audit and examination and
establish the techniques and methods required therefor, and promulgate
accounting and auditing rules and regulations, including those for the
prevention and disallowance of irregular, unnecessary, excessive,
extravagant or unconscionable expenditures or uses of government funds
and properties.[2]
In the instant case, when determining the regularity of
disbursement of public funds by the petitioner NIA for the alleged services
rendered by respondent in the widening project involving a portion of
Binahaan River in Barangay Cansamada, Dagami, Leyte more specifically,
from station 16 + 400 to station 16 + 900 thereof, the accounting and
auditing principles, rules and regulations set by COA must be taken into
consideration.In this light, it is highly doubtful whether respondent may
compel petitioner NIAs officers to release payment of his claims without
any previously approved contract for the supposed river-widening project
in violation of existing COA rules and regulations, without subjecting said
official to administrative and/or personal liabilities and/or accountabilities.
Be that as it may, for the supposed refusal or failure by the
concerned public officials to act over respondents money claim or even the
mere inaction for an unreasonable period, the proper and immediate
remedy of the respondent was to file his claim with the COA, such inaction
or refusal to pay being tantamount to disallowance of the claim. Only after
COA has ruled on the claim, may the injured party invoke judicial
intervention by bringing the matter to this Court on petition for certiorari.
Exhaustion of administrative remedies is a doctrine of long
standing and courts have clear guidelines on the matter. Paat vs. Court of
Appeals[3] wrote:
This Court in a long line of cases has consistently held that
before a party is allowed to seek the intervention of the court, it is a pre-
condition that he should have availed of all the means of administrative
processes afforded him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer
concerned every opportunity to decide on a matter that comes within his
jurisdiction then such remedy should be exhausted first before courts
judicial power can be sought. The premature invocation of courts
intervention is fatal to ones cause of action. Accordingly, absent any
finding of waiver or estoppel the case is susceptible of dismissal for lack
of cause of action. This doctrine of exhaustion of administrative remedies
was not without its practical and legal reasons, for one thing, availment of
administrative remedy entails lesser expenses and provides for a speedier
disposition of controversies. It is no less true to state that the courts of
justice for reasons of comity and convenience will shy away from a
dispute until the system of administrative redress has been completed and
complied with so as to give the administrative agency concerned every
opportunity to correct its error and to dispose of the case. However, we are
not amiss to reiterate that the principle of exhaustion of
administrative remedies as tested by a battery of cases is not an ironclad
rule. This doctrine is a relative one and its flexibility is called upon by the
peculiarity and uniqueness of the factual and circumstantial settings of a
case. Hence, it is disregarded (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.
Petitioner had timely raised this ground to dismiss the action
before the RTC, and since there is no showing that respondents case falls
under any one of the accepted exceptions, petitioners motion to dismiss
should have been granted, forthwith dismissing the case for lack of cause
of action.
Anent the second issue, the legality or regularity of petitioners
payment of respondents claim may be best addressed in a proper case
before the COA, considering that there might be factual matters involved
therein, which is definitely not within the province of the present petition
for review on certiorari.
WHEREFORE, the petition is hereby GRANTED. The appealed
decision is hereby REVERSED and SET ASIDE, and respondents
Complaint before the RTC is DISMISSED for lack of cause of action, with
costs against respondent.
94
 the respondents Transcript of Records (ToR). The case was raffled to Branch 5 of the RTC of
Dinalupihan, Bataan, and docketed as Civil Case No. DH-788-02.
SO ORDERED.
In his Complaint, respondent alleged that he graduated from UST on April 2, 2002 with a Bachelors
Degree of Science in Nursing. He was included in the list of candidates for graduation and attended
graduation ceremonies. On April 18, 2002, respondent sought to secure a copy of his ToR with the UST
Registrars Office, paid the required fees, but was only given a Certificate of Graduation by the
Registrar. Despite repeated attempts by the respondent to secure a copy of his ToR, and submission of his
class cards as proof of his enrolment, UST refused to release his records, making it impossible for him to
take the nursing board examinations, and depriving him of the opportunity to make a living. The
respondent prayed that the RTC order UST to release his ToR and hold UST liable for actual, moral, and
exemplary damages, attorneys fees, and the costs of suit.

FIRST DIVISION Instead of filing an Answer, petitioners filed a Motion to Dismiss [4] where they claimed that they refused
to release respondents ToR because he was not a registered student, since he had not been enrolled in the
UNIVERSITY OF SANTO G.R. No. 165569 university for the last three semesters. They claimed that the respondents graduation, attendance in
TOMAS, GLENDA A. VARGAS, classes, and taking/passing of examinations were immaterial because he ceased to be a student when he
MA. SOCORRO S. GUANHING, failed to enroll during the second semester of school year 2000-2001. They also sought the dismissal of
in their capacities as Dean and the case on the ground that the complaint failed to state a cause of action, as paragraph 10 of the complaint
Assistant Dean, respectively, of Present: admitted that:
the College of Nursing of the
University of Santo Tomas, and CORONA, C. J., Chairperson, 10. On several occasions, [respondent] went to see the [petitioners] to
RODOLFO N. CLAVIO, in his VELASCO, JR., get his ToR, but all of these were futile for he was not even entertained at the Office
capacity as Registrar of the LEONARDO-DE CASTRO, of the Dean. Worst, he was treated like a criminal forcing him to admit the fact that
University of Santo Tomas, DEL CASTILLO, and he did not enroll for the last three (3) semesters of his schooling. [Petitioner] Dean
Petitioners, PEREZ, JJ. tried to persuade the [respondent] to give the original copies of the Class Cards
which he has in his possession. These are the only [bits of] evidence on hand to
- versus - prove that he was in fact officially enrolled. [Respondent] did not give the said class
cards and instead gave photo copies to the [Petitioner] Dean. The Office of the
DANES B. SANCHEZ, Promulgated: Dean of Nursing of [petitioner] UST became very strict in receiving documents
Respondent. ________________July 29, 2010 from the [respondent]. [They have] to be scrutinized first before the same are
x-------------------------------------------------------------------x received. Receiving, as [respondent] believes, is merely a ministerial function [of]
DECISION the [petitioners] and the documents presented for receiving need not be scrutinized
DEL CASTILLO, especially so when x x x they are not illegal. Copies of the class cards are hereto
attached as F hereof.[5]
Where a valid cause of action exists, parties may not simply bypass litigation by the simple expediency of
a Motion to Dismiss. Instead of abbreviating the proceedings, it has had the opposite effect: unnecessary
litigation for almost seven years. Here, in particular, where any resolution of the case will depend on the After the parties filed their responsive pleadings, [6] petitioners filed a Supplement to their Motion to
appreciation of evidence, a full-blown trial is necessary to unearth all relevant facts and circumstances. Dismiss,[7] alleging that respondent sought administrative recourse before the Commission on Higher
Education (CHED) through a letter-complaint dated January 21, 2003. Thus, petitioners claimed that the
This petition for review on certiorari assails the Decision[1] dated July 20, 2004 of the Court of Appeals CHED had primary jurisdiction to resolve matters pertaining to school controversies, and the filing of the
(CA) in CA-G.R. SP No. 79404 which affirmed the denial of petitioners motion to dismiss and directed instant case was premature.
the Regional Trial Court (RTC) of Dinalupihan, Bataan, Branch 5, to proceed with trial. Also assailed is
the Resolution[2] dated September 22, 2004 denying the motion for reconsideration. Ruling of the Regional Trial Court

Factual Antecedents
This case began with a Complaint[3] for Damages filed by respondent Danes B. Sanchez (respondent)
against the University of Santo Tomas (UST) and its Board of Directors, the Dean and the Assistant Dean
of the UST College of Nursing, and the University Registrar for their alleged unjustified refusal to release
After another exchange of pleadings,[8] the RTC issued an Order[9] dated April 1, 2003 denying
the Motion to Dismiss on the ground that the issues involved required an examination of the evidence,
which should be threshed out during trial. Petitioners Motion for Reconsideration[10] was denied in an
Order[11] dated August 1, 2003, so petitioners sought recourse before the CA.
95
Ruling of the Court of Appeals
The CA affirmed the denial of petitioners Motion to Dismiss, and directed the RTC to proceed with trial.
Issues
Petitioners seek recourse before us raising the following issues:
1) The CHED exercises quasi-judicial power over controversies involving school matters and has
primary jurisdiction over respondents demand for the release of his ToR.Thus, respondent failed to
exhaust administrative remedies;
2) Since respondent sought recourse with both the CHED and the RTC, respondent violated the
rule against forum-shopping; and
3) The Complaint failed to state a cause of action, since respondent admitted that he was not
enrolled in UST in the last three semesters prior to graduation.
Our Ruling
The petition is denied for lack of merit.
The doctrine of exhaustion of
administrative remedies does not
apply in this case.
The doctrine of exhaustion of administrative remedies requires that where a
remedy before an administrative agency is provided, the administrative agency concerned must be given
the opportunity to decide a matter within its jurisdiction before an action is brought before the courts.
[12]
Failure to exhaust administrative remedies is a ground for dismissal of the action.[13]
In this case, the doctrine does not apply because petitioners failed to demonstrate that recourse to the
CHED is mandatory or even possible in an action such as that brought by the respondent, which is
essentially one for mandamus and damages. The doctrine of exhaustion of administrative remedies
admits of numerous exceptions,[14] one of which is where the issues are purely legal and well within the
jurisdiction of the trial court, as in the present case.[15] Petitioners liability if any for damages will have to
be decided by the courts, since any judgment inevitably calls for the application and the interpretation of
the Civil Code.[16] As such, exhaustion of administrative remedies may be dispensed with. As we held
in Regino v. Pangasinan Colleges of Science and Technology:[17]
x x x 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; x x x neither [are they] part of the
judicial system, [or] 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. (Emphasis ours)
In addition, the rule on primary jurisdiction applies only where the administrative agency exercises quasi-
judicial or adjudicatory functions.[18] Thus, an essential requisite for this doctrine to apply is the actual
existence of quasi-judicial power.[19] However, petitioners have not shown that the CHED possesses any
such power to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw
conclusions.[20] Indeed, Section 8 of Republic Act No. 7722[21] otherwise known as the Higher Education
Act of 1994, certainly does not contain any express grant to the CHED of judicial or quasi-judicial power.
Petitioners also claim that even without any express grant of quasi-judicial power by the legislature, the
CHED is authorized to adjudicate the case filed by respondent on the strength of the following provisions
of the Manual of Regulations of Private Schools:[22]
(1) Section 33, which authorizes the CHED to cancel or revoke the graduation of any student
whose records are found to be fraudulent:
Section 33. Authority to Graduate Without Department Approval. One of the
benefits which may be made available for accredited schools of the appropriate
level is the authority to graduate students from accredited courses or programs of
study without prior approval of the Department, the conditions of which are as
follows:
a) The school head must furnish the Regional Office of the region
where the school is situated a copy of its certificate of accreditation.
b) Within two weeks after the graduation exercise, the school shall
submit to the Regional Office concerned an alphabetical list of graduates by course,
accompanied by a certification under oath signed by the school registrar certifying
that the students listed (1) have complied with all the requirements of the
Department, (2) were conferred their respective certificates or degrees on a specific
date, (3) have complete scholastic records on file in the school, and (4) have their
Form 137 for high school and Form IX for college, as the case may be, in the
custody of the school. This list shall be sufficient basis for issuing special orders, if
still necessary.
The school will be held fully liable for the veracity of the records without prejudice
to any legal action, including revocation of government recognition, as may be
called for under the circumstances.
The Department reserves the right to cancel or revoke the graduation of any student
whose records are found to be fraudulent.
(2) Section 72, which permits the school to withhold students credentials under
certain specified circumstances, and authorizes the CHED to
issue a students credentials in case these are unlawfully withheld by the school:
Section 72. Withholding of Credentials. The release of the transfer credentials of
any pupil or student may be withheld for reasons of suspension, expulsion, or non-
payment of financial obligations or property responsibility of the pupil or student to
the school. The credentials shall be released as soon as his obligation shall have
been settled or the penalty of suspension or expulsion lifted.
However, if, after due inquiry, a school is found to have unjustifiably refused to
issue transfer credentials or student records, the Department may issue the same
96
 without prejudice to the imposition of appropriate administrative sanctions against
the school concerned.
The most cursory perusal of these provisions shows that they are inapplicable. Section 33 concerns the
conditions and authority of accredited schools to authorize the graduation of students without the prior
authority of the CHED. Corollarily, the CHED may cancel or revoke the graduation if it is found to be
fraudulent. We are not aware that the CHED has taken any action to revoke the respondents graduation,
though it is free to do so.
As regards Section 72, it refers to a schools right to withhold the release of credentials due to suspension,
expulsion, or non-payment of financial obligations or property responsibility. None of these
circumstances is present, and there has been no intimation that respondents ToR has been withheld on any
of these grounds.
In any event, even if we were to assume that these provisions were applicable, the CHED remains without
authority to adjudicate an action for damages.
Respondent is not guilty of forum shopping
Forum shopping exists when, as a result of an adverse opinion in one
forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another, or when he
institutes two or more actions or proceedings grounded on the same cause, on the gamble that one or the
other court would make a favorable disposition.[23] Here, there can be no forum shopping precisely
because the CHED is without quasi-judicial power, and cannot make any disposition of the case whether
favorable or otherwise. As we held in Cabarrus, Jr. v. Bernas:[24]
The courts, tribunal and agencies referred to under Circular No. 28-91,
revised Circular No. 28-91 and Administrative Circular No. 04-94 are
those vested with judicial powers or quasi-judicial powers and those who
not only hear and determine controversies between adverse parties, but to
make binding orders or judgments. As succinctly put by R.A. 157, the NBI
is not performing judicial or quasi-judicial functions. The NBI cannot
therefore be among those forums contemplated by the Circular that can
entertain an action or proceeding, or even grant any relief, declaratory or
otherwise.
The Complaint states a cause of action
Under Rule 16, Section 1(g) of the Rules of Court, a motion to dismiss may be made on the
ground that the pleading asserting the claim states no cause of action. [25]To clarify the essential test
required to sustain dismissal on this ground, we have explained that [t]he test of the sufficiency of the facts
found in a petition, to constitute a cause of action, is whether admitting the facts alleged, the court could
render a valid judgment upon the same in accordance with the prayer of the petition.[26] Stated otherwise, a
complaint is said to assert a sufficient cause of action if, admitting what appears solely on its face to be
correct, the plaintiff would be entitled to the relief prayed for.[27]
The Complaint makes the following essential allegations: that petitioners unjustifiably refused
to release respondents ToR despite his having obtained a degree from UST; that petitioners claim that
respondent was not officially enrolled is untrue; that as a result of petitioners unlawful actions, respondent
has not been able to take the nursing board exams since 2002; that petitioners actions violated Articles 19-
21 of the Civil Code; and that petitioners should be ordered to release respondents ToR and held liable
for P400,000.00 as moral damages, P50,000.00 as exemplary damages, P50,000.00 as attorneys fees and
costs of suit, and P15,000.00 as actual damages. Clearly, assuming that the facts alleged in the Complaint
are true, the RTC would be able to render a valid judgment in accordance with the prayer in the
Complaint.
Petitioners argue that paragraph 10 of the Complaint contains an admission that respondent was not
officially enrolled at UST. Said paragraph reads:
10. On several occasions, [respondent] went to see the [petitioners] to
get his ToR, but all of these were futile for he was not even entertained at the Office
of the Dean. Worst, he was treated like a criminal forcing him to admit the fact that
he did not enroll for the last three (3) semesters of his schooling. [Petitioner] Dean
tried to persuade the [respondent] to give the original copies of the Class Cards
which he has in his possession. These are the only [bits of] evidence on hand to
prove that he was in fact officially enrolled. [Respondent] did not give the said class
cards and instead gave photo copies to the [Petitioner] Dean. The Office of the
Dean of Nursing of [petitioner] UST became very strict in receiving documents
from the [respondent]. [They have] to be scrutinized first before the same are
received. Receiving, as [respondent] believes, is merely a ministerial function [of]
the [petitioners] and the documents presented for receiving need not be scrutinized
especially so when x x x they are not illegal. Copies of the class cards are hereto
attached as F hereof.[28]
This statement certainly does not support petitioners claim that respondent admitted that he
was not enrolled. On the contrary, any allegation concerning the use of force or intimidation by
petitioners, if substantiated, can only serve to strengthen respondents complaint for damages.
We fully agree with the RTCs finding that a resolution of the case requires the presentation of
evidence during trial. Based on the parties allegations, the issues in this case are far from settled. Was
respondent enrolled or not? Was his degree obtained fraudulently? If so, why was he permitted by the
petitioners to graduate? Was there fault or negligence on the part of any of the parties? Clearly, these are
factual matters which can be best ventilated in a full-blown proceeding before the trial court.
WHEREFORE, the petition is DENIED. The Decision dated July 20, 2004 and the Resolution dated
September 22, 2004 of the Court of Appeals in CA-G.R. SP No. 79404 are AFFIRMED. The Regional
Trial Court of Dinalupihan, Bataan, Branch 5, is DIRECTED to continue the proceedings in Civil Case
No. DH-788-02 with all deliberate speed.
Costs against petitioners.
SO ORDERED.
SECOND DIVISION
G.R. No. 88550 April 18, 1990
INDUSTRIAL ENTERPRISES, INC., petitioner,
vs.
THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL
97
CORPORATION, THE HON. GERONIMO VELASCO in his capacity as Minister of
Energy and PHILIPPINE NATIONAL BANK, respondents.
Manuel M. Antonio and Dante Cortez for petitioner.
Pelaez, Adriano & Gregorio for respondent MMIC.
The Chief Legal Counsel for respondent PNB.
MELENCIO-HERRERA, J.:
This petition seeks the review and reversal of the Decision of respondent Court of
Appeals in CA-G.R. CV No. 12660, 1 which ruled adversely against petitioner herein.
Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the
Government through the Bureau of Energy Development (BED) for the exploration of
two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then
Ministry of Energy for another coal operating contract for the exploration of three
additional coal blocks which, together with the original two blocks, comprised the so-
called "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's
over-all coal supply-demand balance . . . the logical coal operator in the area should
be the Marinduque Mining and Industrial Corporation (MMIC), which was already
developing the coal deposit in another area (Bagacay Area) and that the Bagacay and
Giporlos Areas should be awarded to MMIC (Rollo, p. 37). Thus, IEI and MMIC
executed a Memorandum of Agreement whereby IEI assigned and transferred to
MMIC all its rights and interests in the two coal blocks which are the subject of IEI's
coal operating contract.
Subsequently, however, IEI filed an action for rescission of the Memorandum of
Agreement with damages against MMIC and the then Minister of Energy Geronimo
Velasco before the Regional Trial Court of Makati, Branch 150, 2alleging that MMIC
took possession of the subject coal blocks even before the Memorandum of
Agreement was finalized and approved by the BED; that MMIC discontinued work
thereon; that MMIC failed to apply for a coal operating contract for the adjacent coal
blocks; and that MMIC failed and refused to pay the reimbursements agreed upon
and to assume IEI's loan obligation as provided in the Memorandum of Agreement
(Rollo, p. 38). IEI also prayed that the Energy Minister be ordered to approve the
return of the coal operating contract from MMIC to petitioner, with a written
confirmation that said contract is valid and effective, and, in due course, to convert
said contract from an exploration agreement to a development/production or
exploitation contract in IEI's favor.
Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in
an Amended Complaint when the latter with the Development Bank of the Philippines
effected extra-judicial foreclosures on certain mortgages, particularly the Mortgage
Trust Agreement, dated 13 July 1981, constituted in its favor by MMIC after the latter
defaulted in its obligation totalling around P22 million as of 15 July 1984. The Court of
Appeals eventually dismissed the case against the PNB (Resolution, 21 September
1989).
Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.
In a summary judgment, the Trial Court ordered the rescission of the Memorandum of
Agreement, declared the continued efficacy of the coal operating contract in favor of
IEI; ordered the reversion of the two coal blocks covered by the coal operating
contract; ordered BED to issue its written affirmation of the coal operating contract
and to expeditiously cause the conversion thereof from exploration to development in
favor of IEI; directed BED to give due course to IEI's application for a coal operating
contract; directed BED to give due course to IEI's application for three more coal
blocks; and ordered the payment of damages and rehabilitation expenses (Rollo, pp.
9-10).
In reversing the Trial Court, the Court of Appeals held that the rendition of the
summary judgment was not proper since there were genuine issues in controversy
between the parties, and more importantly, that the Trial Court had no jurisdiction over
the action considering that, under Presidential Decree No. 1206, it is the BED that
has the power to decide controversies relative to the exploration, exploitation and
development of coal blocks (Rollo, pp. 43-44).
Hence, this petition, to which we resolved to give due course and to decide.
Incidentally, the records disclose that during the pendency of the appeal before the
Appellate Court, the suit against the then Minister of Energy was dismissed and that,
in the meantime, IEI had applied with the BED for the development of certain coal
blocks.
The decisive issue in this case is whether or not the civil court has jurisdiction to hear
and decide the suit for rescission of the Memorandum of Agreement concerning a
coal operating contract over coal blocks. A corollary question is whether or not
respondent Court of Appeals erred in holding that it is the Bureau of Energy
Development (BED) which has jurisdiction over said action and not the civil court.
While the action filed by IEI sought the rescission of what appears to be an ordinary
civil contract cognizable by a civil court, the fact is that the Memorandum of
Agreement sought to be rescinded is derived from a coal-operating contract and is
inextricably tied up with the right to develop coal-bearing lands and the determination
of whether or not the reversion of the coal operating contract over the subject coal
blocks to IEI would be in line with the integrated national program for coal-
development and with the objective of rationalizing the country's over-all coal-supply-
demand balance, IEI's cause of action was not merely the rescission of a contract but
the reversion or return to it of the operation of the coal blocks. Thus it was that in its
Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared
the continued efficacy of the coal-operating contract in IEI's favor and directed the
BED to give due course to IEI's application for three (3) IEI more coal blocks. These
are matters properly falling within the domain of the BED.
For the BED, as the successor to the Energy Development Board (abolished by Sec.
11, P.D. No. 1206, dated 6 October 1977) is tasked with the function of establishing a
98
comprehensive and integrated national program for the exploration, exploitation, and
development and extraction of fossil fuels, such as the country's coal resources;
adopting a coal development program; regulating all activities relative thereto; and
undertaking by itself or through service contracts such exploitation and development,
all in the interest of an effective and coordinated development of extracted resources.
Thus, the pertinent sections of P.D. No. 1206 provide:
Sec. 6. Bureau of Energy Development. There is created in the Department
a Bureau of Energy Development, hereinafter referred to in this Section as
the Bureau, which shall have the following powers and functions, among
others:
a. Administer a national program for the encouragement, guidance, and
whenever necessary, regulation of such business activity relative to
the exploration, exploitation, development, and extraction of fossil fuels such
as petroleum, coal, . . .
The decisions, orders, resolutions or actions of the Bureau may be appealed
to the Secretary whose decisions are final and executory unless appealed to
the President. (Emphasis supplied.)
That law further provides that the powers and functions of the defunct Energy
Development Board relative to the implementation of P.D. No. 972 on coal exploration
and development have been transferred to the BED, provided that coal operating
contracts including the transfer or assignment of interest in said contracts, shall
require the approval of the Secretary (Minister) of Energy (Sec. 12, P.D. No. 1206).
Sec. 12. . . . the powers and functions transferred to the Bureau of Energy
Development are:
xxx xxx xxx
ii. The following powers and functions of the Energy Development Board
under PD No. 910 . . .
(1) Undertake by itself or through other arrangements, such as service
contracts, the active exploration, exploitation, development, and extraction
of energy resources . . .
(2) Regulate all activities relative to the exploration, exploitation,
development, and extraction of fossil and nuclear fuels . . .
(P.D. No. 1206) (Emphasis supplied.)
P.D. No. 972 also provides:
Sec. 8. Each coal operating contract herein authorized shall . . . be executed
by the Energy Development Board.
Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first
instance, to pass upon any question involving the Memorandum of Agreement
between IEI and MMIC, revolving as its does around a coal operating contract, should
be sustained.
In recent years, it has been the jurisprudential trend to apply the doctrine of primary
jurisdiction in many cases involving matters that demand the special competence of
administrative agencies. It may occur that the Court has jurisdiction to take
cognizance of a particular case, which means that the matter involved is also judicial
in character. However, 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. This is the
doctrine of primary jurisdiction. It applies "where a 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, have 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" (United States v. Western Pacific Railroad Co., 352 U.S. 59, Emphasis
supplied).
Clearly, the doctrine of primary jurisdiction finds application in this case since the
question of what coal areas should be exploited and developed and which entity
should be granted coal operating contracts over said areas involves a technical
determination by the BED as the administrative agency in possession of the
specialized expertise to act on the matter. The Trial Court does not have the
competence to decide matters concerning activities relative to the exploration,
exploitation, development and extraction of mineral resources like coal. These issues
preclude an initial judicial determination. It behooves the courts to stand aside even
when apparently they have statutory power to proceed in recognition of the primary
jurisdiction of an administrative agency.
One thrust of the multiplication of administrative agencies is that the
interpretation of contracts and the determination of private rights thereunder
is no longer a uniquely judicial function, exercisable only by our regular
courts (Antipolo Realty Corp. vs. National Housing Authority, 153 SCRA 399,
at 407).
The application of the doctrine of primary jurisdiction, however, does not call for the
dismissal of the case below. It need only be suspended until after the matters within
the competence of the BED are threshed out and determined. Thereby, the principal
purpose behind the doctrine of primary jurisdiction is salutarily served.
Uniformity and consistency in the regulation of business entrusted to an
administrative agency are secured, and the limited function of review by the
judiciary are more rationally exercised, by preliminary resort, for ascertaining
and interpreting the circumstances underlying legal issues, to agencies that
are better equipped than courts by specialization, by insight gained through
experience, and by more flexible procedure (Far East Conference v. United
States, 342 U.S. 570).
With the foregoing conclusion arrived at, the question as to the propriety of the
summary judgment rendered by the Trial Court becomes unnecessary to resolve.
WHEREFORE, the Court Resolved to DENY the petition. No costs.
SO ORDERED.
99
Paras, Padilla, Sarmiento and Regalado, JJ., concur
THIRD DIVISION
G.R. No. 157171 March 14, 2006
ARSENIA B. GARCIA, Petitioner,
vs.
HON. COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, Respondents
DECISION
QUISUMBING, J.:
This petition seeks the review of the judgment of the Court of Appeals in CA-G.R. CR
No. 245471that affirmed the conviction of petitioner by the Regional Trial Court2of
Alaminos City, Pangasinan, Branch 54, for violation of Section 27(b) of Republic Act
No. 6646.3
Based on the complaint-affidavit of Aquilino Q. Pimentel, Jr., who ran in the 1995
senatorial elections, an information dated March 30, 1998, was filed in the Regional
Trial Court of Alaminos, charging Herminio R. Romero, Renato R. Viray, Rachel
Palisoc and Francisca de Vera, and petitioner, with violation of Section 27(b). The
information reads:
That on or about May 11, 1995, which was within the canvassing period during the
May 8, 1995 elections, in the Municipality of Alaminos, Province of Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, Election Officer Arsenia B. Garcia, Municipal Treasurer Herminio R.
Romero, Public School District Supervisor Renato R. Viray, Chairman, Vice-
Chairman, and Member-Secretary, respectively, of the Municipal Board of Canvassers
of Alaminos, Pangasinan, tabulators Rachel Palisoc and Francisca de Vera,
conspiring with, confederating together and mutually helping each other, did, then and
there, willfully, and unlawfully decrease[d] the votes received by senatorial candidate
Aquilino Q. Pimentel, Jr. from six thousand nine hundred ninety-eight (6,998) votes,
as clearly disclosed in the total number of votes in the one hundred fifty-nine (159)
precincts of the Statement of Votes by Precincts of said municipality, with Serial Nos.
008417, 008418, 008419, 008420, 008421, 008422 and 008423 to one thousand nine
hundred twenty-one (1,921) votes as reflected in the Statement of Votes by Precincts
with Serial No. 008423 and Certificate of Canvass with Serial No. 436156 with a
difference of five thousand seventy-seven (5,077) votes.
CONTRARY TO LAW.4
In a Decision dated September 11, 2000, the RTC acquitted all the accused for
insufficiency of evidence, except petitioner who was convicted as follows:
xxx
5. And finally, on the person of Arsenia B. Garcia, the Court pronounces her GUILTY
beyond reasonable doubt, of the crime defined under Republic Act 6646, Section 27
(b) for decreasing the votes of Senator Pimentel in the total of 5,034 and in relation to
BP Blg. 881, considering that this finding is a violation of Election Offense, she is thus
sentenced to suffer an imprisonment of SIX (6) YEARS as maximum, but applying the
INDETERMINATE SENTENCE LAW, the minimum penalty is the next degree lower
which is SIX (6) MONTHS; however, accused Arsenia B. Garcia is not entitled to
probation; further, she is sentenced to suffer disqualification to hold public office and
she is also deprived of her right of suffrage.
The bailbond posted by her is hereby ordered cancelled, and the Provincial Warden is
ordered to commit her person to the Bureau of Correctional Institution for Women, at
Metro Manila, until further orders from the court.
No pronouncement as to costs.
IT IS SO ORDERED.5
Petitioner appealed before the Court of Appeals which affirmed with modification the
RTC Decision, thus,
WHEREFORE, foregoing considered, the appealed decision is hereby affirmed with
modification, increasing the minimum penalty imposed by the trial court from six (6)
months to one (1) year.
SO ORDERED.6
The Court of Appeals likewise denied the motion for reconsideration. Hence, this
appeal assigning the following as errors of the appellate court:
I
ON THE FIRST AND SECOND GROUNDS RELIED UPON BY THE RESPONDENT
COURT, NAMELY, THAT IT COULD NOT HAVE BEEN SECRETARY VIRAY WHO
DECREASED THE VOTES OF COMPLAINANT PIMENTEL SINCE HE MERELY
100
RELIED ON WHAT THE PETITIONER DICTATED, AND THAT IT COULD NOT HAVE
ALSO BEEN THE TABULATORS BECAUSE PETITIONER WAS THE ONE WHO
READ THE ADDING [MACHINE] TAPE.
II
ON THE THIRD GROUND, NAMELY, THAT PETITIONER DID NOT PRODUCE THE
TAPES DURING THE TRIAL BECAUSE IF PRODUCED, IT IS GOING TO BE
ADVERSE TO HER.
III
ON THE FOURTH GROUND, NAMELY, THAT THE PETITIONER WAS THE ONE
WHO ENTERED THE REDUCED FIGURE OF 1,921 IN THE CERTIFICATE OF
CANVASS (COC), Exh. "7", WHEN THE DUTY WAS THAT OF THE SECRETARY OF
THE BOARD.
IV
THE REDUCTION OF THE VOTES OF CANDIDATE PIMENTEL WAS CLEARLY
NOT WILLFUL OR INTENTIONAL.7
Petitioner contends that (1) the Court of Appeals judgment is erroneous, based on
speculations, surmises and conjectures, instead of substantial evidence; and (2) there
was no motive on her part to reduce the votes of private complainant.
Respondent on the other hand contends that good faith is not a defense in the
violation of an election law, which falls under the class of mala prohibita.
The main issue is, Is a violation of Section 27(b) of Rep. Act No. 6646, classified
under mala in se or mala prohibita? Could good faith and lack of criminal intent be
valid defenses?
Generally, mala in se felonies are defined and penalized in the Revised Penal Code.
When the acts complained of are inherently immoral, they are deemed mala in se,
even if they are punished by a special law.8Accordingly, criminal intent must be clearly
established with the other elements of the crime; otherwise, no crime is committed.
On the other hand, in crimes that are mala prohibita, the criminal acts are not
inherently immoral but become punishable only because the law says they are
forbidden. With these crimes, the sole issue is whether the law has been
violated.9Criminal intent is not necessary where the acts are prohibited for reasons of
public policy.10
Section 27(b) of Republic Act No. 664611provides:
SEC. 27. Election Offenses.- In addition to the prohibited acts and election offenses
enumerated in Sections 261 and 262 of Batas Pambansa Blg. 881, as amended, the
following shall be guilty of an election offense:
xxx
(b) Any member of the board of election inspectors or board of canvassers who
tampers, increases, or decreases the votes received by a candidate in any election or
any member of the board who refuses, after proper verification and hearing, to credit
the correct votes or deduct such tampered votes.
xxx
Clearly, the acts prohibited in Section 27(b) are mala in se.12For otherwise, even
errors and mistakes committed due to overwork and fatigue would be punishable.
Given the volume of votes to be counted and canvassed within a limited amount of
time, errors and miscalculations are bound to happen. And it could not be the intent of
the law to punish unintentional election canvass errors. However, intentionally
increasing or decreasing the number of votes received by a candidate is inherently
immoral, since it is done with malice and intent to injure another.
Criminal intent is presumed to exist on the part of the person who executes an act
which the law punishes, unless the contrary shall appear.13Thus, whoever invokes
good faith as a defense has the burden of proving its existence.
Records show that the canvassing of votes on May 11, 1995 before the Board of
Canvassers of the Municipality of Alaminos, Pangasinan was conducted as follows:
1. After the votes in the 159 precincts of the municipality of Alaminos were
tallied, the results thereof were sealed and forwarded to the Municipal Board
of Canvassers for canvassing;
2. The number of votes received by each candidate in each precinct was
then recorded in the Statement of Votes with appellant, in her capacity as
Chairman, reading the figures appearing in the results from the precincts
and accused Viray, in his capacity as secretary of the Board, entering the
number in the Statements of Votes as read by the appellant. Six Statements
of Votes were filled up to reflect the votes received by each candidate in the
159 precincts of the Municipality of Alaminos, Pangasinan.
101
 3. After the number of votes received by each candidate for each precincts
were entered by accused Viray in the Statements of Votes, these votes were
added by the accused Palisoc and de Vera with the use of electrical adding
machines.
4. After the tabulation by accused Palisoc and de Vera, the corresponding
machine tapes were handed to appellant who reads the subtotal of votes
received by each candidate in the precincts listed in each Statement of
Votes. Accused Viray [then] records the subtotal in the proper column in the
Statement of Votes.
5. After the subtotals had been entered by accused Viray, tabulators accused
Palisoc and de Vera added all the subtotals appearing in all Statement of
Votes.
6. After the computation, the corresponding machine tape on which the
grand total was reflected was handed to appellant who reads the same and
accused Viray enters the figure read by appellant in the column for grand
total in the Statement of Votes.14
Neither the correctness of the number of votes entered in the Statement of Votes
(SOV) for each precinct, nor of the number of votes entered as subtotals of votes
received in the precincts listed in SOV Nos. 008417 to 008422 was raised as an
issue.
At first glance, however, there is a noticeable discrepancy in the addition of the
subtotals to arrive at the grand total of votes received by each candidate for all 159
precincts in SOV No. 008423.15The grand total of the votes for private complainant,
Senator Aquilino Pimentel, was only 1,921 instead of 6,921, or 5,000 votes less than
the number of votes private complainant actually received. This error is also evident
in the Certificate of Canvass (COC) No. 436156 signed by petitioner, Viray and
Romero.16
During trial of this case, petitioner admitted that she was indeed the one who
announced the figure of 1,921, which was subsequently entered by then accused
Viray in his capacity as secretary of the board.17Petitioner likewise admitted that she
was the one who prepared the COC (Exhibit A-7), though it was not her duty. To our
mind, preparing the COC even if it was not her task, manifests an intention to
perpetuate the erroneous entry in the COC.18
Neither can this Court accept petitioners explanation that the Board of Canvassers
had no idea how the SOV (Exhibit "6") and the COC reflected that private
complainant had only 1,921 votes instead of 6,921 votes. As chairman of the
Municipal Board of Canvassers, petitioners concern was to assure accurate, correct
and authentic entry of the votes. Her failure to exercise maximum efficiency and
fidelity to her trust deserves not only censure but also the concomitant sanctions as a
matter of criminal responsibility pursuant to the dictates of the law.19
The fact that the number of votes deducted from the actual votes received by private
complainant, Sen. Aquilino Pimentel, Jr. was not added to any senatorial candidate
does not relieve petitioner of liability under Section 27(b) of Rep. Act No. 6646. The
mere decreasing of the votes received by a candidate in an election is already
punishable under the said provision.20
At this point, we see no valid reason to disturb the factual conclusions of the appellate
court. The Court has consistently held that factual findings of the trial court, as well as
of the Court of Appeals are final and conclusive and may not be reviewed on appeal,
particularly where the findings of both the trial court and the appellate court on the
matter coincide.21
Public policy dictates that extraordinary diligence should be exercised by the
members of the board of canvassers in canvassing the results of the elections. Any
error on their part would result in the disenfranchisement of the voters. The Certificate
of Canvass for senatorial candidates and its supporting statements of votes prepared
by the municipal board of canvassers are sensitive election documents whose entries
must be thoroughly scrutinized.22
In our review, the votes in the SOV should total 6,998.23
As between the grand total of votes alleged to have been received by private
complainant of 6,921 votes and statement of his actual votes received of 6,998 is a
difference of 77 votes. The discrepancy may be validly attributed to mistake or error
due to fatigue. However, a decrease of 5,000 votes as reflected in the Statement of
Votes and Certificate of Canvass is substantial, it cannot be allowed to remain on
record unchallenged, especially when the error results from the mere transfer of totals
from one document to another.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of
Appeals sustaining petitioners conviction but increasing the minimum penalty in her
sentence to one year instead of six months is AFFIRMED.
SO ORDERED.
FIRST DIVISION
102
G.R. No. L-37453 May 25, 1979
RIZALINA GABRIEL GONZALES, petitioner,
vs.
HONORABLE COURT OF APPEALS and LUTGARDA SANTIAGO, respondents.
Francisco D. Rilloraza, Jr. for petitioners.
Angel A. Sison for private respondent.
GUERRERO, J.:
This is a petition for review of the decision of the Court of Appeals, First
Division, 1 promulgated on May 4, 1973 in CA G.R. No. 36523-R which reversed the
decision of the Court of First Instance of Rizal dated December 15, 1964 and allowed
the probate of the last will and testament of the deceased Isabel Gabriel. *
It appears that on June 24, 1961, herein private respondent Lutgarda Santiago filed a
petition with the Court of First Instance of Rizal docketed as Special Proceedings No.
3617, for the probate of a will alleged to have been executed by the deceased Isabel
Gabriel and designating therein petitioner as the principal beneficiary and executrix.
There is no dispute in the records that the late Isabel Andres Gabriel died as a widow
and without issue in the municipality of Navotas, province of Rizal her place of
residence, on June 7, 1961 at the age of eighty-five (85), having been born in 1876. It
is likewise not controverted that herein private respondent Lutgarda Santiago and
petitioner Rizalina Gabriel Gonzales are nieces of the deceased, and that private
respondent, with her husband and children, lived with the deceased at the latters
residence prior an- d up to the time of her death.
The will submitted for probate, Exhibit "F", which is typewritten and in Tagalog,
appears to have been executed in Manila on the 15th day of April, 1961, or barely two
(2) months prior to the death of Isabel Gabriel. It consists of five (5) pages, including
the pages whereon the attestation clause and the acknowledgment of the notary
public were written. The signatures of the deceased Isabel Gabriel appear at the end
of the will on page four and at the left margin of all the pages. The attestation clause,
which is found on page four, reads as follows:
PATUNAY NG MGA SAKSI
Kaming mga nakalagdang mga saksi o testigo na ang aming mga tinitirahan
ay nakasulat sa gawing kanan at kahilira ng aming mga pangalan sa ibaba
nito, ay pagpapatutuo na ipinakilala ipinaalam at ipinahayag sa amin ni
Isabel Gabriel na ang kasulatang ito na binubuo ng Limang Dahon (Five
Pages) pati na ang dahong ito, na siya niyang TESTAMENTO AT HULING
HABILIN, ngayong ika 15 ng Abril, 1961, ay nilagdaan ng nasabing
testadora na si Isabel Gabriel ang nasabing testamento sa ibaba o ilalim ng
kasulatan na nasa ika apat na dahon (page four) at nasa itaas ng patunay
naming ito, at sa kaliwang panig ng lahat at bawat dahon (and on the left
hand margin of each and every page), sa harap ng lahat at bawat isa sa
amin, at kami namang mga saksi ay lumagda sa harap ng nasabing
testadora, at sa harap ng lahat at bawat isa sa amin, sa ilalim ng patunay ng
mga saksi at sa kaliwang panig ng lahat at bawa't dahon ng testamentong
ito.
At the bottom thereof, under the heading "Pangalan", are written the signatures of
Matilde D. Orobia, Celso D. Gimpaya and Maria R. Gimpaya, and opposite the same,
under the heading "Tirahan", are their respective places of residence, 961 Highway
54, Philamlife, for Miss Orobia, and 12 Dagala St., Navotas, Rizal, for the two
Gimpayas. Their signatures also appear on the left margin of all the other pages. The
WW is paged by typewritten words as follows: "Unang Dahon" and underneath
"(Page One)", "Ikalawang Dahon" and underneath "(Page Two)", etc., appearing at
the top of each page.
The will itself provides that the testatrix desired to be buried in the Catholic Cemetery
of Navotas, Rizal in accordance with the rites of the Roman Catholic Church, all
expenses to be paid from her estate; that all her obligations, if any, be paid; that
legacies in specified amounts be given to her sister, Praxides Gabriel Vda. de
Santiago, her brother Santiago Gabriel, and her nephews and nieces, Benjamin,
Salud, Rizalina (herein petitioner), Victoria, Ester, Andres, all surnamed Gabriel, and
Evangeline, Rudyardo Rosa, Andrea, Marcial, Numancia, Verena an surnamed
Santiago. To herein private respondent Lutgarda Santiago, who was described in the
will by the testatrix as "aking mahal na pamangkin na aking pinalaki, inalagaan at
minahal na katulad ng isang tunay na anak" and named as universal heir and
executor, were bequeathed all properties and estate, real or personal already
acquired, or to be acquired, in her testatrix name, after satisfying the expenses, debts
and legacies as aforementioned.
The petition was opposed by Rizalina Gabriel Gonzales, herein petitioner, assailing
the document purporting to be the will of the deceased on the following grounds:
1. that the same is not genuine; and in the alternative
103
 2. that the same was not executed and attested as required by law;
3. that, at the time of the alleged execution of the purported wilt the decedent
lacked testamentary capacity due to old age and sickness; and in the
second alternative
4. That the purported WW was procured through undue and improper
pressure and influence on the part of the principal beneficiary, and/or of
some other person for her benefit.
Lutgarda Santiago filed her Answer to the Opposition on February 1, 1962. After trial,
the court a quo rendered judgment, the summary and dispositive portions of which
read:
Passing in summary upon the grounds advanced by the oppositor, this Court
finds:
1. That there is no iota of evidence to support the contentio that the
purported will of the deceased was procured through undue and improper
pressure and influence on the part of the petitioner, or of some other person
for her benefit;
2. That there is insufficient evidence to sustain the contention that at the time
of the alleged execution of the purported will, the deceased lacked
testamentary capacity due to old age and sickness;
3. That sufficient and abundant evidence warrants conclusively the fact that
the purported will of the deceased was not executed and attested as
required by law;
4. That the evidence is likewise conclusive that the document presented for
probate, Exhibit 'F' is not the purported win allegedly dictated by the
deceased, executed and signed by her, and attested by her three attesting
witnesses on April 15, 1961.
WHEREFORE, Exhibit "F", the document presented for probate as the last
wig and testament of the deceased Isabel Gabriel is here by DISALLOWED.
From this judgment of disallowance, Lutgarda Santiago appealed to respondent
Court, hence, the only issue decided on appeal was whether or not the will in
question was executed and attested as required by law. The Court of Appeals, upon
consideration of the evidence adduced by both parties, rendered the decision now
under review, holding that the will in question was signed and executed by the
deceased Isabel Gabriel on April 15, 1961 in the presence of the three attesting
witnesses, Matilde Orobia, Celso Gimpaya and Maria Gimpaya, signing and
witnessing the document in the presence of the deceased and of each other as
required by law, hence allow ed probate.
Oppositor Rizalina Gabriel Gonzales moved for reconsideration 3 of the aforesaid
decision and such motion was opposed 4 by petitioner-appellant Lutgarda Santiago.
Thereafter. parties submitted their respective Memoranda, 5 and on August 28, 1973,
respondent Court, Former Special First Division, by Resolution 6 denied the motion for
reconsideration stating that:
The oppositor-appellee contends that the preponderance of evidence shows
that the supposed last wig and testament of Isabel Gabriel was not executed
in accordance with law because the same was signed on several occasions,
that the testatrix did not sign the will in the presence of all the instrumental
witnesses did not sign the will in the presence of each other.
The resolution of the factual issue raised in the motion for reconsideration
hinges on the appreciation of the evidence. We have carefully re-examined
the oral and documentary evidence of record, There is no reason to alter the
findings of fact in the decision of this Court sought to be set aside. 7
In her petition before this Court, oppositor Rizalina Gabriel Gonzales contends that
respondent Court abused its discretion and/or acted without or in excess of its
jurisdiction in reverssing the findings of fact and conclusions of the trial court. The
Court, after deliberating on the petition but without giving due course resolved, in the
Resolution dated Oct. 11, 1973 to require the respondents to comment thereon, which
comment was filed on Nov. 14, 1973. Upon consideration of the allegations, the
issues raised and the arguments adduced in the petition, as well as the Comment 8 of
private respondent thereon, We denied the petition by Resolution on November 26,
1973, 9the question raised being factual and for insufficient showing that the findings
of fact by respondent Court were unsupported by substantial evidence.
Subsequently, or on December 17, 1973, petitioner Rim Gabriel Goes fried a Motion
for Reconsideration 10 which private respondent answered by way of her Comment or
Opposition 11 filed on January 15, 1974. A Reply and Rejoinder to Reply followed.
Finally, on March 27, 1974, We resolved to give due course to the petition.
The petitioner in her brief makes the following assignment of errors:
104
I. The respondent Court of Appeals erred in holding that the document, Exhibit "F"
was executed and attested as required by law when there was absolutely no proof
that the three instrumental witnesses were credible witness
II. The Court of Appeals erred in reversing the finding of the lower court that the
preparation and execution of the win Exhibit "F", was unexpected and coincidental.
III. The Court of Appeals erred in finding that Atty, Paraiso was not previously
furnished with the names and residence certificates of the witnesses as to enable him
to type such data into the document Exhibit "F".
IV. The Court of Appeals erred in holding that the fact that the three typewritten lines
under the typewritten words "Pangalan" and "Tinitirahan" were left blank shows
beyond cavil that the three attesting witnesses were all present in the same occasion.
V. The Court of Appeals erred in reversing the trial court's finding that it was incredible
that Isabel Gabriel could have dictated the wilt Exhibit "F , without any note or
document, to Atty. Paraiso.
VI. The Court of Appeals erred in reversing the finding of the trial court that Matilde
Orobia was not physically present when the Will Exhibit "F" was allegedly signed on
April 15, 1961 by the deceased Isabel Gabriel and the other witnesses Celso
Gimpaya and Maria Gimpaya.
VII. The Court of Appeals erred in holding that the trial court gave undue importance
to the picture takings as proof that the win was improperly executed.
VIII. The Court of Appeals erred in holding that the grave contradictions, evasions,
and misrepresentations of witnesses (subscribing and notary) presented by the
petitioner had been explained away, and that the trial court erred in rejecting said
testimonies.
IX. The Court of Appeals acted in excess of its appellate jurisdiction or has so far
departed from the accepted and usual course of judicial proceedings, as to call for an
exercise of the power of supervision.
X. The Court of Appeals erred in reversing the decision of the trial court and admitting
to probate Exhibit "F", the alleged last will and testament of the deceased Isabel
Gabriel.
It will be noted from the above assignments of errors that the same are substantially
factual in character and content. Hence, at the very outset, We must again state the
oft-repeated and well-established rule that in this jurisdiction, the factual findings of
the Court of Appeals are not reviewable, the same being binding and conclusive on
this Court. This rule has been stated and reiterated in a long line of cases
enumerated in Chan vs. CA (L-27488, June 30, 1970, 33 SCRA 737,
743) 12 and Tapas vs. CA (L-22202, February 27; 1976, 69 SCRA 393), 13 and in the
more recent cases of Baptisia vs. Carillo and CA (L32192, July 30, 1976, 72 SCRA
214, 217) and Vda. de Catindig vs. Heirs of Catalina Roque (L-25777, November 26,
1976, 74 SCRA 83, 88). In the case of Chan vs. CA, this Court said:
... from Guico v. Mayuga, a 1936 decision, the opinion being penned by the then
Justice Recto, it has been well-settled that the jurisdiction of tills Court in cases
brought to us from the Court of Appeals is limited to reviewing and revising the errors
of law imputed to it, its findings of fact being conclusive. More specifically, in a
decision exactly a month later, this Court, speaking through the then Justice Laurel, it
was held that the same principle is applicable, even if the Court of Appeals was in
disagreement with the lower court as to the weight of the evidence with a consequent
reversal of its findings of fact ...
Stated otherwise, findings of facts by the Court of Appeals, when supported by
substantive evidence are not reviewable on appeal by certiorari. Said findings of the
appellate court are final and cannot be disturbed by Us particularly because its
premises are borne out by the record or based upon substantial evidence and what is
more, when such findings are correct. Assignments of errors involving factual issues
cannot be ventilated in a review of the decision of the Court of Appeals because only
legal questions may be raised. The Supreme Court is not at liberty to alter or modify
the facts as set forth in the decision of the Court of Appeals sought to be reversed.
Where the findings of the Court of Appeals are contrary to those of the trial court, a
minute scrutiny by the Supreme Court is in order, and resort to duly-proven evidence
becomes necessary. The general rule We have thus stated above is not without some
recognized exceptions.
Having laid down the above legal precepts as Our foundation, We now proceed to
consider petitioner's assignments of errors.
Petitioner, in her first assignment, contends that the respondent Court of Appeals
erred in holding that the document, Exhibit "F", was executed and attested as
required by law when there was absolutely no proof that the three instrumental
witnesses were credible witnesses. She argues that the require. ment in Article 806,
Civil Code, that the witnesses must be credible is an absolute requirement which
must be complied with before an alleged last will and testament may be admitted to
probate and that to be a credible witness, there must be evidence on record that the
witness has a good standing in his community, or that he is honest and upright, or
reputed to be trustworthy and reliable. According to petitioner, unless the
105
qualifications of the witness are first established, his testimony may not be favorably
considered. Petitioner contends that the term "credible" is not synonymous with
"competent" for a witness may be competent under Article 820 and 821 of the Civil
Code and still not be credible as required by Article 805 of the same Code. It is further
urged that the term "credible" as used in the Civil Code should receive the same
settled and well- known meaning it has under the Naturalization Law, the latter being
a kindred legislation with the Civil Code provisions on wigs with respect to the
qualifications of witnesses.
We find no merit to petitioner's first assignment of error. Article 820 of the Civil Code
provides the qualifications of a witness to the execution of wills while Article 821 sets
forth the disqualification from being a witness to a win. These Articles state:
Art. 820. Any person of sound mind and of the age of eighteen years or
more, and not blind, deaf or dumb, and able to read and write, may be a
witness to the execution of a will mentioned in article 806 of this Code. "Art.
821. The following are disqualified from being witnesses to a will:
(1) Any person not domiciled in the Philippines,
(2) Those who have been convicted of falsification of a document, perjury or
false testimony.
Under the law, there is no mandatory requirement that the witness testify initially or at
any time during the trial as to his good standing in the community, his reputation for
trustworthythiness and reliableness, his honesty and uprightness in order that his
testimony may be believed and accepted by the trial court. It is enough that the
qualifications enumerated in Article 820 of the Civil Code are complied with, such that
the soundness of his mind can be shown by or deduced from his answers to the
questions propounded to him, that his age (18 years or more) is shown from his
appearance, testimony , or competently proved otherwise, as well as the fact that he
is not blind, deaf or dumb and that he is able to read and write to the satisfaction of
the Court, and that he has none of the disqualifications under Article 821 of the Civil
Code. We reject petitioner's contention that it must first be established in the record
the good standing of the witness in the community, his reputation for trustworthiness
and reliableness, his honesty and uprightness, because such attributes are presumed
of the witness unless the contrary is proved otherwise by the opposing party.
We also reject as without merit petitioner's contention that the term "credible" as used
in the Civil Code should be given the same meaning it has under the Naturalization
Law where the law is mandatory that the petition for naturalization must be supported
by two character witnesses who must prove their good standing in the community,
reputation for trustworthiness and reliableness, their honesty and uprightness. The
two witnesses in a petition for naturalization are character witnesses in that being
citizens of the Philippines, they personally know the petitioner to be a resident of the
Philippines for the period of time required by the Act and a person of good repute and
morally irreproachable and that said petitioner has in their opinion all the qualifications
necessary to become a citizen of the Philippines and is not in any way disqualified
under the provisions of the Naturalization Law (Section 7, Commonwealth Act No.
473 as amended).
In probate proceedings, the instrumental witnesses are not character witnesses for
they merely attest the execution of a will or testament and affirm the formalities
attendant to said execution. And We agree with the respondent that the rulings laid
down in the cases cited by petitioner concerning character witnesses in naturalization
proceedings are not applicable to instrumental witnesses to wills executed under the
Civil Code of the Philippines.
In the case at bar, the finding that each and everyone of the three instrumental
witnesses, namely, Matilde Orobia, Celso Gimpaya and Maria Gimpaya, are
competent and credible is satisfactorily supported by the evidence as found by the
respondent Court of Appeals, which findings of fact this Tribunal is bound to accept
and rely upon. Moreover, petitioner has not pointed to any disqualification of any of
the said witnesses, much less has it been shown that anyone of them is below 18
years of age, of unsound mind, deaf or dumb, or cannot read or write.
It is true that under Article 805 of the New Civil Code, every will, other than a
holographic will, must be subscribed at the end thereof by the testator himself or by
the testator's name written by some other person in his presence, and by his express
direction, and attested and subscribed by three or more credible witnesses in the
presence of the testator and of one another, While the petitioner submits that Article
820 and 821 of the New Civil Code speak of the competency of a witness due to his
qualifications under the first Article and none of the disqualifications under the second
Article, whereas Article 805 requires the attestation of three or more credible
witnesses, petitioner concludes that the term credible requires something more than
just being competent and, therefore, a witness in addition to being competent under
Articles 820 and 821 must also be a credible witness under Article 805.
Petitioner cites American authorities that competency and credibility of a witness are
not synonymous terms and one may be a competent witness and yet not a credible
one. She exacerbates that there is no evidence on record to show that the
instrumental witnesses are credible in themselves, that is, that they are of good
standing in the community since one was a family driver by profession and the
second the wife of the driver, a housekeeper. It is true that Celso Gimpaya was the
driver of the testatrix and his wife Maria Gimpaya, merely a housekeeper, and that
Matilde Orobia was a piano teacher to a grandchild of the testatrix But the relation of
106
employer and employee much less the humble or financial position of a person do not
disqualify him to be a competent testamentary witness. (Molo Pekson and Perez
Nable vs. Tanchuco, et al., 100 Phil. 344; Testate Estate of Raymundo, Off. Gaz.,
March 18,1941, p. 788).
Private respondent maintains that the qualifications of the three or more credible
witnesses mentioned in Article 805 of the Civil Code are those mentioned in Article
820 of the same Code, this being obvious from that portion of Article 820 which says
"may be Q witness to the execution of a will mentioned in Article 805 of this Code,"
and cites authorities that the word "credible" insofar as witnesses to a will are
concerned simply means " competent." Thus, in the case of Suntay vs. Suntay, 95
Phil. 500, the Supreme Court held that "Granting that a will was duly executed and
that it was in existence at the time of, and not revoked before, the death of the
testator, still the provisions of the lost wig must be clearly and distinctly proved by at
least two credible witnesses. 'Credible witnesses' mean competent witnesses and not
those who testify to facts from or upon hearsay. " emphasissupplied).
In Molo Pekson and Perez Nable vs. Tanchuco, et al., 100 Phil. 344, the Supreme
Court held that "Section 620 of the same Code of Civil Procedure provides that any
person of sound mind, and of the age of eighteen years or more, and not blind, deaf,
or dumb and able to read and write, may be a witness to the execution of a will. This
same provision is reproduced in our New Civil Code of 1950, under Art. 820. The
relation of employer and employee, or being a relative to the beneficiary in a win,
does not disqualify one to be a witness to a will. The main qualification of a witness in
the attestation of wills, if other qualifications as to age, mental capacity and literacy
are present, is that said witness must be credible, that is to say, his testimony may be
entitled to credence. There is a long line of authorities on this point, a few of which we
may cite:
A 'credible witness is one who is not is not to testify by mental incapacity,
crime, or other cause. Historical Soc of Dauphin County vs. Kelker 74 A.
619, 226 Pix 16, 134 Am. St. Rep. 1010. (Words and Phrases, Vol. 10, p.
340).
As construed by the common law, a 'credible witness' to a will means a
'competent witness.' Appeal of Clark, 95 A. 517, 114 Me. 105, Ann. Cas.
1917A, 837. (lbid, p. 341).
Expression 'credible witness' in relation to attestation of wins means
'competent witness that is, one competent under the law to testify to fact of
execution of will. Vernon's Ann. Civ St. art. 8283. Moos vs. First State Bank
of Uvalde, Tex . Civ. App. 60 S.W. 2nd 888, 889. (Ibid, p. 342)
The term 'credible', used in the statute of wills requiring that a will shall be
attested by two credible witnesses means competent; witnesses who, at the
time of attesting the will, are legally competent to testify, in a court of justice,
to the facts attested by subscribing the will, the competency being
determined as of the date of the execution of the will and not of the timr it is
offered for probate, Smith vs. Goodell 101 N.E. 255, 256, 258 111. 145.
(Ibid.)
Credible witnesses as used in the statute relating to wills, means competent
witnesses that is, such persons as are not legally disqualified from
testifying in courts of justice, by reason of mental incapacity, interest, or the
commission of crimes, or other cause excluding them from testifying
generally, or rendering them incompetent in respect of the particular subject
matter or in the particular suit. Hill vs. Chicago Title & Trust co 152 N.E. 545,
546, 322 111. 42. (Ibid. p, 343)
In the strict sense, the competency of a person to be an instrumental witness to a will
is determined by the statute, that is Art. 820 and 821, Civil Code, whereas his
credibility depends On the appreciation of his testimony and arises from the belief and
conclusion of the Court that said witness is telling the truth. Thus, in the case of Vda.
de Aroyo v. El Beaterio del Santissimo Rosario de Molo, No. L-22005, May 3, 1968,
the Supreme Court held and ruled that: "Competency as a witness is one thing, and it
is another to be a credible witness, so credible that the Court must accept what he
says. Trial courts may allow a person to testify as a witness upon a given matter
because he is competent, but may thereafter decide whether to believe or not to
believe his testimony." In fine, We state the rule that the instrumental witnesses in
Order to be competent must be shown to have the qualifications under Article 820 of
the Civil Code and none of the disqualifications under Article 821 and for their
testimony to be credible, that is worthy of belief and entitled to credence, it is not
mandatory that evidence be first established on record that the witnesses have a
good standing in the community or that they are honest and upright or reputed to be
trustworthy and reliable, for a person is presumed to be such unless the contrary is
established otherwise. In other words, the instrumental witnesses must be competent
and their testimonies must be credible before the court allows the probate of the will
they have attested. We, therefore, reject petitioner's position that it was fatal for
respondent not to have introduced prior and independent proof of the fact that the
witnesses were "credible witnesses that is, that they have a good standing in the
community and reputed to be trustworthy and reliable.
Under the second, third, fourth, fifth, sixth, seventh and eighth assignments of errors,
petitioner disputes the findings of fact of the respondent court in finding that the
preparation and execution of the will was expected and not coincidental, in finding
that Atty. Paraiso was not previously furnished with the names and residence
107
certificates of the witnesses as to enable him to type such data into the document
Exhibit "F", in holding that the fact that the three typewritten lines under the
typewritten words "pangalan" and "tinitirahan" were left blank shows beyond cavil that
the three attesting witnesses were all present in the same occasion, in holding
credible that Isabel Gabriel could have dictated the will without note or document to
Atty. Paraiso, in holding that Matilde Orobia was physically present when the will was
signed on April 15, 1961 by the deceased Isabel Gabriel and the other witnesses
Celso Gimpaya and Maria Gimpaya, in holding that the trial court gave undue
importance to the picture takings as proof that the will was improperly executed, and
in holding that the grave contradictions, evasions and misrepresentations of the
witnesses (subscribing and notary) presented by the petitioner had been explained
away.
Since the above errors are factual We must repeat what We have previously laid
down that the findings of fact of the appellate court are binding and controlling which
We cannot review, subject to certain exceptions which We win consider and discuss
hereinafter. We are convinced that the appellate court's findings are sufficiently
justified and supported by the evidence on record. Thus, the alleged unnaturalness
characterizing the trip of the testatrix to the office of Atty. Paraiso and bringing all the
witnesses without previous appointment for the preparation and execution of the win
and that it was coincidental that Atty. Paraiso was available at the moment impugns
the finding of the Court of Appeals that although Atty. Paraiso admitted the visit of
Isabel Gabriel and of her companions to his office on April 15, 1961 was unexpected
as there was no prior appointment with him, but he explained that he was available
for any business transaction on that day and that Isabel Gabriel had earlier requested
him to help her prepare her will. The finding of the appellate court is amply based on
the testimony of Celso Gimpaya that he was not only informed on the morning of the
day that he witnessed the will but that it was the third time when Isabel Gabriel told
him that he was going to witness the making of her will, as well as the testimony of
Maria Gimpaya that she was called by her husband Celso Gimpaya to proceed to
Isabel Gabriel's house which was nearby and from said house, they left in a car to the
lawyer's office, which testimonies are recited in the respondent Court's decision.
The respondent Court further found the following facts: that Celso Gimpaya and his
wife Maria Gimpaya obtained residence certificates a few days before Exhibit "F" was
executed. Celso Gimpaya's residence certificate No. A-5114942 was issued at
Navotas, Rizal on April 13, 1961 while Maria Gimpaya's residence certificate No. A-
5114974 was issued also at Navotas, Rizal on April 14, 1961. The respondent Court
correctly observed that there was nothing surprising in these facts and that the
securing of these residence certificates two days and one day, respectively, before
the execution of the will on April 15, 1961, far from showing an amazing coincidence,
reveals that the spouses were earlier notified that they would be witnesses to the
execution of Isabel Gabriel's will.
We also agree with the respondent Court's conclusion that the excursion to the office
of Atty. Paraiso was planned by the deceased, which conclusion was correctly drawn
from the testimony of the Gimpaya spouses that they started from the Navotas
residence of the deceased with a photographer and Isabel Gabriel herself, then they
proceeded by car to Matilde Orobia's house in Philamlife, Quezon City to fetch her
and from there, all the three witnesses (the Gimpayas and Orobia) passed by a place
where Isabel Gabriel stayed for about ten to fifteen minutes at the clinic of Dr.
Chikiamco before they proceeded to Atty. Cipriano Paraiso's office.
It is also evident from the records, as testified to by Atty. Paraiso, that previous to the
day that. the will was executed on April 15, 1961, Isabel Gabriel had requested him to
help her in the execution of her will and that he told her that if she really wanted to
execute her will, she should bring with her at least the Mayor of Navotas, Rizal and a
Councilor to be her witnesses and that he (Atty. Paraiso) wanted a medical certificate
from a physician notwithstanding the fact that he believed her to be of sound and
disposition mind. From this evidence, the appellate court rightly concluded, thus: "It is,
therefore, clear that the presence of Isabel Gabriel and her witnesses Matilde Orobia,
Celso Gimpaya and Maria Gimpaya including the photographer in the law office of
Atty. Paraiso was not coincidental as their gathering was pre-arranged by Isabel
Gabriel herself."
As to the appellate court's finding that Atty. Paraiso was not previously furnished with
the names and residence certificates of the witnesses as to enable him to type such
data into the document Exhibit ' L which the petitioner assails as contradictory and
irreconcilable with the statement of the Court that Atty. Paraiso was handed a list
(containing the names of the witnesses and their respective residence certificates)
immediately upon their arrival in the law office by Isabel Gabriel and this was
corroborated by Atty. Paraiso himself who testified that it was only on said occasion
that he received such list from Isabel Gabriel, We cannot agree with petitioner's
contention. We find no contradiction for the, respondent Court held that on the
occasion of the will making on April 15, 1961, the list was given immediately to Atty.
Paraiso and that no such list was given the lawyer in any previous occasion or date
prior to April 15, 1961.
But whether Atty. Paraiso was previously furnished with the names and residence
certificates of the witnesses on a prior occasion or on the very occasion and date in
April 15, 1961 when the will was executed, is of no moment for such data appear in
the notarial acknowledgment of Notary Public Cipriano Paraiso, subscribed and
sworn to by the witnesses on April 15, 1961 following the attestation clause duly
executed and signed on the same occasion, April 15, 1961. And since Exhibit "F" is a
notarial will duly acknowledged by the testatrix and the witnesses before a notary
public, the same is a public document executed and attested through the intervention
of the notary public and as such public document is evidence of the facts in clear,
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unequivocal manner therein expressed. It has in its favor the presumption of
regularity. To contradict all these, there must be evidence that is clear, convincing and
more than merely preponderant. (Yturalde vs. Azurin, 28 SCRA 407). We find no such
evidence pointed by petitioner in the case at bar.
Likewise, the conclusion of the Court of Appeals in holding that the fact that the three
typewritten lines under the typewritten words "pangalan ' and "tinitirahan" were left
blank shows beyond cavil that the three attesting witnesses were all present in the
same occasion merits Our approval because tills conclusion is supported and borne
out by the evidence found by the appellate court, thus: "On page 5 of Exhibit "F",
beneath the typewritten words "names", "Res. Tax Cert. date issued" and place
issued the only name of Isabel Gabriel with Residence Tax certificate No. A-5113274
issued on February 24, 1961 at Navotas Rizal appears to be in typewritten form while
the names, residence tax certificate numbers, dates and places of issuance of said
certificates pertaining to the three (3) witnesses were personally handwritten by Atty.
Paraiso. Again, this coincides with Atty. Paraiso's even the sale must be made to
close relatives; and the seventh was the appointment of the appellant Santiago as
executrix of the will without bond. The technical description of the properties in
paragraph 5 of Exhibit F was not given and the numbers of the certificates of title
were only supplied by Atty. Paraiso. "
It is true that in one disposition, the numbers of the Torrens titles of the properties
disposed and the docket number of a special proceeding are indicated which Atty.
Paraiso candidly admitted were supplied by him, whereupon petitioner contends that
it was incredible that Isabel Gabriel could have dictated the will Exhibit "F" without any
note or document to Atty. Paraiso, considering that Isabel Gabriel was an old and
sickly woman more than eighty-one years old and had been suffering from a brain
injury caused by two severe blows at her head and died of terminal cancer a few
weeks after the execution of Exhibit "F". While we can rule that this is a finding of fact
which is within the competency of the respondent appellate court in determining the
testamentary capacity of the testatrix and is, therefore, beyond Our power to revise
and review, We nevertheless hold that the conclusion reached by the Court of
Appeals that the testatrix dictated her will without any note or memorandum appears
to be fully supported by the following facts or evidence appearing on record. Thus,
Isabel Gabriel, despite her age, was particularly active in her business affairs as she
actively managed the affairs of the movie business ISABELITA Theater, paying the
aparatistas herself until June 4, 1961, 3 days before her death. She was the widow of
the late Eligio Naval, former Governor of Rizal Province and acted as coadministratrix
in the Intestate Estate of her deceased husband Eligio Naval. The text of the win was
in Tagalog, a dialect known and understood by her and in the light of all the
circumstances, We agree with the respondent Court that the testatrix dictated her will
without any note or memorandum, a fact unanimously testified to by the three
attesting witnesses and the notary public himself.
Petitioner's sixth assignment of error is also bereft of merit. The evidence, both
testimonial and documentary is, according to the respondent court, overwhelming that
Matilde Orobia was physically present when the will was signed on April 15, 1961 by
the testatrix and the other two witnesses, Celso Gimpaya and Maria Gimpaya. Such
factual finding of the appellate court is very clear, thus: "On the contrary, the record is
replete with proof that Matilde Orobia was physically present when the will was signed
by Isabel Gabriel on April '15, 1961 along with her co-witnesses Celso Gimpaya and
Maria Gimpaya. The trial court's conclusion that Orobia's admission that she gave
piano lessons to the child of the appellant on Wednesdays and Saturdays and that
April 15, 1961 happened to be a Saturday for which reason Orobia could not have
been present to witness the will on that day is purely conjectural. Witness Orobia
did not admit having given piano lessons to the appellant's child every Wednesday
and Saturday without fail. It is highly probable that even if April 15, 1961 were a
Saturday, she gave no piano lessons on that day for which reason she could have
witnessed the execution of the will. Orobia spoke of occasions when she missed
giving piano lessons and had to make up for the same. Anyway, her presence at the
law office of Atty. Paraiso was in the morning of April 15, 1961 and there was nothing
to preclude her from giving piano lessons on the afternoon of the same day in
Navotas, Rizal."
In addition to the testimony of Matilde Orobia, Celso Gimpaya and Maria Gimpaya
that Matilde was present on April 15, 1961 and that she signed the attestation clause
to the will and on the left-hand margin of each of the pages of the will, the
documentary evidence which is the will itself, the attestation clause and the notarial
acknowledgment overwhelmingly and convincingly prove such fact that Matilde
Orobia was present on that day of April 15, 1961 and that she witnessed the will by
signing her name thereon and acknowledged the same before the notary public, Atty.
Cipriano P. Paraiso. The attestation clause which Matilde Orobia signed is the best
evidence as to the date of signing because it preserves in permanent form a recital of
all the material facts attending the execution of the will. This is the very purpose of the
attestation clause which is made for the purpose of preserving in permanent form a
record of the facts attending the execution of the will, so that in case of failure in the
memory of the subscribing witnesses, or other casualty they may still be proved.
(Thompson on Wills, 2nd ed., Sec. 132; Leynez vs. Leynez, 68 Phil. 745).
As to the seventh error assigned by petitioner faulting the Court of Appeals in holding
that the trial court gave undue importance to the picture-takings as proof that the win
was improperly executed, We agree with the reasoning of the respondent court that:
"Matilde Orobia's Identification of the photographer as "Cesar Mendoza", contrary to
what the other two witnesses (Celso and Maria Gimpaya) and Atty. Paraiso said that
the photographer was Benjamin Cifra, Jr., is at worst a minor mistake attributable to
lapse of time. The law does not require a photographer for the execution and
attestation of the will. The fact that Miss Orobia mistakenly Identified the
photographer as Cesar Mendoza scarcely detracts from her testimony that she was
109
present when the will was signed because what matters here is not the photographer
but the photograph taken which clearly portrays Matilde Orobia herself, her co-
witnesses Celso Gimpaya. " Further, the respondent Court correctly held: "The trial
court gave undue importance to the picture takings, jumping therefrom to the
conclusion that the will was improperly executed. The evidence however, heavily
points to only one occasion of the execution of the will on April 15, 1961 which was
witnessed by Matilde Orobia, Celso Gimpaya and Maria Gimpaya. These witnesses
were quite emphatic and positive when they spoke of this occasion. Hence, their
Identification of some photographs wherein they all appeared along with Isabel
Gabriel and Atty. Paraiso was superfluous."
Continuing, the respondent Court declared: "It is true that the second picture-taking
was disclosed at the cross examination of Celso Gimpaya. But this was explained by
Atty. Paraiso as a reenactment of the first incident upon the insistence of Isabel
Gabriel. Such reenactment where Matilde Orobia was admittedly no longer present
was wholly unnecessary if not pointless. What was important was that the will was
duly executed and witnessed on the first occasion on April 15, 1961 , " and We agree
with the Court's rationalization in conformity with logic, law and jurisprudence which
do not require picture-taking as one of the legal requisites for the execution or probate
of a will.
Petitioner points to alleged grave contradictions, evasions and misrepresentations of
witnesses in their respective testimonies before the trial court. On the other hand, the
respondent Court of Appeals held that said contradictions, evasions and
misrepresentations had been explained away. Such discrepancies as in the
description of the typewriter used by Atty. Paraiso which he described as "elite" which
to him meant big letters which are of the type in which the will was typewritten but
which was Identified by witness Jolly Bugarin of the N.B.I. as pica the mistake in
mentioning the name of the photographer by Matilde Orobia to be Cesar Mendoza
when actually it was Benjamin Cifra, Jr. these are indeed unimportant details which
could have been affected by the lapse of time and the treachery of human memory
such that by themselves would not alter the probative value of their testimonies on the
true execution of the will, (Pascual vs. dela Cruz, 28 SCRA 421, 424) for it cannot be
expected that the testimony of every person win be Identical and coinciding with each
other with regard to details of an incident and that witnesses are not expected to
remember all details. Human experience teach us "that contradictions of witnesses
generally occur in the details of certain incidents, after a long series of questionings,
and far from being an evidence of falsehood constitute a demonstration of good faith.
In as much as not all those who witness an incident are impressed in like manner, it is
but natural that in relating their impressions, they should not agree in the minor
details; hence the contradictions in their testimony." (Lopez vs. Liboro, 81 Phil. 429).
It is urged of Us by the petitioner that the findings of the trial court should not have
been disturbed by the respondent appellate court because the trial court was in a
better position to weigh and evaluate the evidence presented in the course of the trial.
As a general rule, petitioner is correct but it is subject to well-established exceptions.
The right of the Court of Appeals to review, alter and reverse the findings of the trial
court where the appellate court, in reviewing the evidence has found that facts and
circumstances of weight and influence have been ignored and overlooked and the
significance of which have been misinterpreted by the trial court, cannot be disputed.
Findings of facts made by trial courts particularly when they are based on conflicting
evidence whose evaluation hinges on questions of credibility of contending witnesses
hes peculiarly within the province of trial courts and generally, the appellate court
should not interfere with the same. In the instant case, however, the Court of Appeals
found that the trial court had overlooked and misinterpreted the facts and
circumstances established in the record. Whereas the appellate court said that
"Nothing in the record supports the trial court's unbelief that Isabel Gabriel dictated
her will without any note or document to Atty. Paraiso;" that the trial court's conclusion
that Matilde Orobia could not have witnessed anybody signing the alleged will or that
she could not have witnessed Celso Gimpaya and Maria Gimpaya sign the same or
that she witnessed only the deceased signing it, is a conclusion based not on facts
but on inferences; that the trial court gave undue importance to the picture-takings,
jumping therefrom to the conclusion that the will was improperly executed and that
there is nothing in the entire record to support the conclusion of the court a quo that
the will signing occasion was a mere coincidence and that Isabel Gabriel made an
appointment only with Matilde Orobia to witness the signing of her will, then it
becomes the duty of the appellate court to reverse findings of fact of the trial court in
the exercise of its appellate jurisdiction over the lower courts.
Still the petitioner insists that the case at bar is an exception to the rule that the
judgment of the Court of Appeals is conclusive as to the facts and cannot be reviewed
by the Supreme Court. Again We agree with the petitioner that among the exceptions
are: (1) when the conclusion is a finding grounded entirely on speculations, surmises
or conjectures; (2) when the inference is manifestly mistaken, absurd or impossible;
(3) when there is a grave abuse of discretion; (4) when the presence of each other as
required by law. " Specifically, We affirm that on April 15, 1961 the testatrix Isabel
Gabriel, together with Matilde Orobia, Celso Gimpaya and his wife Maria Gimpaya,
and a photographer proceeded in a car to the office of Atty. Cipriano Paraiso at the
Bank of P.I. Building, Manila in the morning of that day; that on the way, Isabel Gabriel
obtained a medical certificate from one Dr. Chikiamko which she gave to Atty. Paraiso
upon arriving at the latter's office and told the lawyer that she wanted her will to be
made; that Atty. Paraiso asked Isabel Gabriel to dictate what she wanted to be written
in the will and the attorney wrote down the dictation of Isabel Gabriel in Tagalog, a
language known to and spoken by her; that Atty. Paraiso read back to her what he
wrote as dictated and she affirmed their correctness; the lawyer then typed the will
and after finishing the document, he read it to her and she told him that it was alright;
110
that thereafter, Isabel Gabriel signed her name at the end of the will in the presence
of the three witnesses Matilde Orobia, Celso Gimpaya and Maria Gimpaya and also
at the left-hand margin of each and every page of the document in the presence also
of the said three witnesses; that thereafter Matilde Orobia attested the will by signing
her name at the end of the attestation clause and at the left-hand margin of pages 1,
2, 3 and 5 of the document in the presence of Isabel Gabriel and the other two
witnesses, Celso Gimpaya and Maria Gimpaya; then, Celso Gimpaya signed also the
will at the bottom of the attestation clause and at the left-hand margin of the other
pages of the document in the presence of Isabel Gabriel, Matilde Orobia and Maria
Gimpaya; that Maria Gimpaya followed suit, signing her name at the foot of the
attestation clause and at the left-hand margin of every page in the presence of Isabel
Gabriel, Matilde Orobia and Celso Gimpaya; that thereafter, Atty. Paraiso notarized
the will as Page No. 94, Book No. IV, Series of 1961, in his Notarial Register. On the
occasion of the execution and attestation of the will, a photographer took pictures,
one Exhibit "G", depicting Matilde Orobia, the testatrix Isabel Gabriel, Celso Gimpaya,
Maria Gimpaya and Atty. Paraiso, taken on said occasion of the signing of the will,
and another, Exhibit "H", showing Matilde Orobia signing testimony that he had earlier
advised Isabel Gabriel to bring with her at least the Mayor and a Councilor of
Navotas, Rizal to be her witnesses for he did not know beforehand the Identities of
the three attesting witnesses until the latter showed up at his law office with Isabel
Gabriel on April 15, 1961. Atty. Paraiso's claim which was not controverted that he
wrote down in his own hand the date appearing on page 5 of Exhibit "F" dissipates
any lingering doubt that he prepared and ratified the will on the date in question."
It is also a factual finding of the Court of Appeals in holding that it was credible that
Isabel Gabriel could have dictated the will, Exhibit "F", without any note or document
to Atty. Paraiso as against the contention of petitioner that it was incredible. This
ruling of the respondent court is fully supported by the evidence on record as stated in
the decision under review, thus: "Nothing in the record supports the trial court's
unbelief that Isabel Gabriel dictated her will without any note or document to Atty.
Paraiso. On the contrary, all the three attesting witnesses uniformly testified that
Isabel Gabriel dictated her will to Atty. Paraiso and that other than the piece of paper
that she handed to said lawyer she had no note or document. This fact jibes with the
evidence which the trial court itself believed was unshaken that Isabel Gabriel
was of sound disposing memory when she executed her will.
Exhibit "F" reveals only seven (7) dispositions which are not complicated but quite
simple. The first was Isabel Gabriel's wish to be interred according to Catholic rites
the second was a general directive to pay her debts if any; the third provided for
P1,000.00 for her sister Praxides Gabriel Vda. de Santiago and P2,000.00 for her
brother Santiago Gabriel; the fourth was a listing of her 13 nephews and nieces
including oppositor-appellee Rizalina Gabriel and the amount for each legatee the
fifth was the institution of the petitioner-appellant, Lutgarda Santiago as the principal
heir mentioning in general terms seven (7) types of properties; the sixth disposed of
the remainder of her estate which she willed in favor of appellant Lutgarda Santiago
but prohibiting the sale of such properties to anyone except in extreme situations in
which judgment is based on a misapprehension of facts; (5) when the findings of fact
are conflicting, (6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both appellant and
appellee. (Roque vs. Buan, et al., G.R. No. L-22459, Oct. 31, 1967; Ramos vs. Pepsi
Cola Bottling Co., G.R. No. L-22533, Feb. 9, 1967; Hilarion Jr. vs. City of Manila, G.R.
No. L-19570; Sept. 14, 1967).
Petitioner's insistence is without merit. We hold that the case at bar does not fall
within any of the exceptions enumerated above. We likewise hold that the findings of
fact of the respondent appellate court are fully supported by the evidence on record.
The conclusions are fully sustained by substantial evidence. We find no abuse of
discretion and We discern no misapprehension of facts. The respondent Court's
findings of fact are not conflicting. Hence, the well-established rule that the decision of
the Court of Appeals and its findings of fact are binding and conclusive and should not
be disturbed by this Tribunal and it must be applied in the case at bar in its full force
and effect, without qualification or reservation. The above holding simply synthesize
the resolutions we have heretofore made in respect ' to petitioner's previous
assignments of error and to which We have disagreed and, therefore, rejected.
The last assignments of error of petitioner must necessarily be rejected by Us as We
find the respondent Court acted properly and correctly and has not departed from the
accepted and usual course of judicial proceedings as to call for the exercise of the
power of supervision by the Supreme Court, and as We find that the Court of Appeals
did not err in reversing the decision of the trial court and admitting to probate Exhibit
"F", the last will and testament of the deceased Isabel Gabriel.
We rule that the respondent Court's factual findings upon its summation and
evaluation of the evidence on record is unassailable that: "From the welter of
evidence presented, we are convinced that the will in question was executed on April
15, 1961 in the presence of Matilde Orobia, Celso Gimpaya and Maria Gimpaya
signing and witnessing the same in the the will on a table with Isabel Gabriel, Celso
Gimpaya and Maria Gimpaya sitting around the table. Atty. Paraiso, after finishing the
notarial act, then delivered the original to Isabel Gabriel and retained the other copies
for his file and notarial register. A few days following the signing of the will, Isabel
Gabriel, Celso Gimpaya and another photographer arrived at the office of Atty.
Paraiso and told the lawyer that she wanted another picture taken because the first
picture did not turn out good. The lawyer told her that this cannot be done because
the will was already signed but Isabel Gabriel insisted that a picture be taken, so a
simulated signing was performed during which incident Matilde Orobia was not
present.
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Petitioner's exacerbation centers on the supposed incredibility of the testimonies of
the witnesses for the proponent of the will, their alleged evasions, inconsistencies and
contradictions. But in the case at bar, the three instrumental witnesses who constitute
the best evidence of the will making have testified in favor of the probate of the will.
So has the lawyer who prepared it, one learned in the law and long in the practice
thereof, who thereafter notarized it. All of them are disinterested witnesses who stand
to receive no benefit from the testament. The signatures of the witnesses and the
testatrix have been identified on the will and there is no claim whatsoever and by
anyone, much less the petitioner, that they were not genuine. In the last and final
analysis, the herein conflict is factual and we go back to the rule that the Supreme
Court cannot review and revise the findings of facts of the respondent Court of
Appeals.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is
hereby AFFIRMED, with costs against the petitioner.
SO ORDERED.
Teehankee, Makasiar, De Castro and Herrera, JJ., concur.
FIRST DIVISION
[G.R. No. 125339. June 22, 1998]
CRESENCIA CRISTOBAL, ROBERTO MAKIMKIM, DAMASO MAKIMKIM,
SPOUSES SALVADOR HERMALINO and PONCIANA MAKIMKIM,
MILAGROS MAKIMKIM, REMEDIOS MAKIMKIM, SPOUSES FRANCISCO
ESTANISLAO and FLORDELIZA MAKIMKIM, ERLINDA MAKIMKIM,
JOSE MAKIMKIM and GINA MAKIMKIM, Petitioners, vs. COURT OF
APPEALS, CESAR LEDESMA, INC., SPOUSES JESUS C. PACIONE and
LERMA B. PACIONE, Respondents.
DECISION
BELLOSILLO, J.:
This petition for review seeks the reversal of the decision of respondent Court of
Appeals of 16 January 1996 in CA-G.R. CV Case No. 37273, "Cresencia Cristobal, et
al. v. Cesar Ledesma, Inc., et al.,"[1] which affirmed in toto the decision of the RTC-Br.
81, Quezon City,[2] dismissing herein petitioners complaint for easement of right of
way, and the Resolution of 14 June 1996 denying their motion for reconsideration.
Petitioners own a house and lot situated at No. 10 Visayas Avenue Extension,
Quezon City, where they have been residing from 1961 to the present. Respondent
Cesar Ledesma, Inc., on the other hand, is the owner of a subdivision at Barrio Culiat
along Visayas Avenue which once included the disputed residential lots, Lot 1 and Lot
2, with areas of 164 square meters and 52 square meters, respectively, located
adjacent to petitioners property. Lots 1 and 2 were originally part of a private road
known as Road Lot 2 owned exclusively by Cesar Ledesma, Inc. Petitioners were
using Road Lot 2 in going to and from the nearest public road. When Visayas Avenue
became operational as a national road in 1979, Cesar Ledesma, Inc., filed a petition
before the RTC of Quezon City to be allowed to convert Road Lot 2 into residential
lots.[3] The petition was granted, hence, Road Lot 2 was converted into residential lots
designated as Lot 1 and Lot 2. Subsequently, Cesar Ledesma, Inc., sold both lots to
112
Macario Pacione in whose favor Transfer Certificates of Title were correspondingly
issued. In turn, Macario Pacione conveyed the lots to his son and daughter-in-law,
respondent spouses Jesus and Lerma Pacione.
When the Pacione spouses, who intended to build a house on Lot 1, visited the
property in 1987, they found out that the lot was occupied by a squatter named
Juanita Geronimo and a portion was being used as a passageway by petitioners to
and from Visayas Avenue. Accordingly, the spouses complained about the intrusion
into their property to the Barangay Office. At the barangay conciliation proceeding,
petitioners offered to pay for the use of a portion of Lot 1 as passageway but the
Pacione spouses rejected the offer. When the parties failed to arrive at an amicable
settlement, the spouses started enclosing Lot 1 with a concrete fence.
Petitioners protested the enclosure alleging that their property was bounded on
all sides by residential houses belonging to different owners and had no adequate
outlet and inlet to Visayas Avenue except through the property of the Paciones. As
their protests went unheeded, petitioners instituted an action for easement of right of
way with prayer for the issuance of a temporary restraining order (TRO).
On 3 June 1987 the trial court issued a TRO directing the Pacione spouses to
cease and desist from fencing the disputed property. The Paciones objected arguing
that petitioners were not entitled to a TRO since they showed no valid basis for its
issuance, and that petitioners had no cause of action against respondents because
there were actually two (2) accessible outlets and inlets - a pathway right in front of
their gate leading towards an asphalted 5-meter road to the left, and across an open
space to the right adjacent to respondents lot likewise leading to Visayas Avenue.
At the instance of the parties, the trial court ordered an ocular inspection of the
property. A Board of Commissioners was constituted for that purpose composed of
representatives chosen by the parties, with Deputy Sheriff Florencio D. Dela Cruz, Jr.,
as representative of the court.
On 3 January 1990 Deputy Sheriff Dela Cruz, Jr., submitted his Report [4] relative
to the ocular inspection on the litigated lots -
x x x there is another way from the Visayas Ave. to the plaintiffs lot existing at the time
of the ocular inspection. Plaintiffs can use the street originating from Visayas Avenue,
identified as Ma. Elena St., which is about 2.5 m. in width and about 150 m. in length
up to an intersection, meeting a private road, which is about 100 meters in length, that
ends at the lower portion of the right side of the adjacent vacant lot previously
identified, and at the back of a lot with concrete fence located at the back of the
plaintiffs property. From that point the plaintiff must enter the adjacent vacant lot
(entry to the said lot is still possible during the ocular inspection because the barbed
wires were not properly placed) to reach a gate at the side of the plaintiffs lot, about
16 m. from the end of the private road, allegedly used by the plaintiffs before the
adjacent lot was enclosed by barbed wires. According to Atty. Mendoza, counsel for
the defendants, that gate no longer exist(ed) at the time of the ocular inspection.
As may be observed from the above report, only one outlet was indicated by
Sheriff Dela Cruz, Jr. The other outlet across an open space to the right referred to by
the Pacione spouses was not reflected thereon. However, on the basis of the report
as well as the testimonial and documentary evidence of the parties, the trial court
dismissed the complaint holding that one essential requisite of a legal easement of
right of way was not proved, i.e., the absence of an alternative adequate way or outlet
to a public highway, in this case, Visayas Avenue.[5]
Petitioners appealed to the Court of Appeals arguing that the trial court erred in
finding that they failed to sufficiently establish the essential fact that from their
property no adequate outlet or access to a public highway existed; and, that the
conversion of the Road Lot into two (2) residential lots by Cesar Ledesma, Inc., was
violative of PD No. 957, hence illegal, and the titles issued as a consequence of the
conversion were null and void.
On 16 January 1996 the Court of Appeals rendered its assailed decision
affirming the findings of the trial court -
The burden of proving the existence of the requisites of easement of right of way lies
on the owner of the dominant estate. In the case at bar, plaintiff-appellants failed to
prove that there is no adequate outlet from their property to a public
highway. Convenience of the dominant estate is not a gauge for the grant of
compulsory right of way.The true standard for the grant of the legal right is adequacy.
Hence, when there is already an existing adequate outlet from the dominant estate to
a public highway, as in this case, even if the outlet, for one reason or another, be
inconvenient, the need to open up another servitude is entirely unjustified. To justify
the imposition of an easement of right of way, there must be real, not fictitious or
artificial necessity for it. A right of way is legally demandable, but the owner of the
dominant estate is not at liberty to impose one based on arbitrary choice. Art. 650 of
the Civil Code provides for the criteria in the establishment of such easement but it
has been settled that the criterion of least prejudicial prevails over shortest
distance. Each case must be weighed according to its individual merits and judged
according to the sound discretion of the court (Costabella Corporation v. Court of
Appeals, G.R. No. 80511, 193 SCRA 333 [1991]).
The second assigned error has no legal leg to stand on since plaintiff-appellants
cannot just introduce a new issue to an already settled one, especially for the first
time on appeal.
113
 Their motion for reconsideration having been denied, petitioners now come to us
with the following assignment of errors: First, the Court of Appeals erred in applying
the doctrine in Costabella, considering that in the instant case the four (4) requisites
that must be complied with by an owner of the dominant estate in order to validly
claim a compulsory right of way have been clearly established by petitioners, contrary
to the Decision appealed from, and that the facts in Costabella are not the same as in
the present case. Second, the Court of Appeals seriously erred in holding that the
question of legality or illegality of the conversion of Road Lot 2 into two (2) residential
lots by the Cesar Ledesma, Inc., is a new issue raised for the first time on appeal,
because such issue appeared in the complaint filed before the trial court.
Quite noticeably, petitioners first assigned error is essentially factual in nature,
i.e., it merely assails the factual findings of both the Court of Appeals and the trial
court.Basic is the rule in this jurisdiction that only questions of law may be raised in a
petition for review under Rule 45 of the 1997 Rules of Civil Procedure. The jurisdiction
of the Supreme Court in cases brought to it from the Court of Appeals is limited to
reviewing errors of law, the findings of fact of the appellate court being conclusive.
[6]
We have emphatically declared that it is not the function of this Court to analyze or
weigh such evidence all over again, its jurisdiction being limited to reviewing errors of
law that may have been committed by the lower court.[7]
Petitioners insist that their petition raises a question of law, that is, the
correctness of the appellate courts ruling that one who has an existing passageway,
however inconvenient that passageway may be, is no longer entitled to an easement
of right of way.
We do not agree. Questions of law are those that do not call for any examination
of the probative value of the evidence presented by the parties. [8] In the instant case,
petitioners' assignment of errors would have this Court go over the facts because it
necessarily entails an examination of the evidence and its subsequent re-evaluation
to determine whether petitioners indeed have no sufficient outlet to the highway.
Petitioners next claim that the findings of the appellate court are based on
misapprehension of facts, which circumstance warrants a review of the appellate
courts decision. Yet, they failed to sufficiently demonstrate this allegation in their
pleadings. Absent a clear showing that the findings complained of are totally devoid of
support in the record, or that they are so glaringly erroneous as to constitute serious
abuse of discretion, such findings must stand.
At any rate, even assuming that the first assignment of error may be properly
raised before this Court, we find no reversible error in the assailed decision. To be
entitled to a compulsory easement of right of way, the preconditions provided under
Arts. 649 and 650 of the Civil Code must be established. These are: (1) that the
dominant estate is surrounded by other immovables and has no adequate outlet to a
public highway; (2) that proper indemnity has been paid; (3) that the isolation was not
due to acts of the proprietor of the dominant estate; (4) that the right of way claimed is
at a point least prejudicial to the servient estate and, in so far as consistent with this
rule, where the distance from the dominant estate to a public highway may be the
shortest.[9] The burden of proving the existence of these prerequisites lies on the
owner of the dominant estate.[10]
In the present case, the first element is clearly absent. As found by the trial court
and the Court of Appeals, an outlet already exists, which is a
path walk located at theleft side of petitioners property and which is connected to a
private road about five hundred (500) meters long. The private road, in turn, leads to
Ma. Elena Street which is about 2.5 meters wide and, finally, to Visayas Avenue. This
outlet was determined by the court a quo to be sufficient for the needs of the
dominant estate, hence petitioners have no cause to complain that they have no
adequate outlet to Visayas Avenue.
Further, no evidence was adduced by petitioners to prove that the easement
they seek to impose on private respondents property is to be established at a point
least prejudicial to the servient estate. For emphasis, Lot 1 is only 164 square meters
and an improvident imposition of the easement on the lot may unjustly deprive private
respondents of the optimum use and enjoyment of their property, considering that its
already small area will be reduced further by the easement. Worse, it may even
render the property useless for the purpose for which private respondents purchased
the same.
It must also be stressed that, by its very nature, and when considered with
reference to the obligations imposed on the servient estate, an easement involves an
abnormal restriction on the property rights of the servient owner and is regarded as a
charge or encumbrance on the servient estate. Thus, it is incumbent upon the owner
of the dominant estate to establish by clear and convincing evidence the presence of
all the preconditions before his claim for easement of right of way may be granted.
Petitioners miserably failed in this regard.
On the question of adequacy of the existing outlet, petitioners allege that the
path walk is much longer, circuitous and inconvenient, as from Visayas Avenue one
has to pass by Ma. Elena St., turn right to a private road, then enter a vacant lot, and
turn right again to exit from the vacant lot until one reaches petitioners property.
We find petitioners concept of what is "adequate outlet" a complete disregard of
the well-entrenched doctrine that in order to justify the imposition of an easement of
right of way there must be a real, not fictitious or artificial, necessity for it. Mere
convenience for the dominant estate is not what is required by law as the basis for
114
setting up a compulsory easement. Even in the face of necessity, if it can be satisfied Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ. concur.
without imposing the easement, the same should not be imposed.[11]

Thus, in Ramos v. Gatchalian,[12] this Court disallowed the easement prayed for -
even if petitioner therein "had to pass through lots belonging to other owners, as
temporary ingress and egress, which lots were grassy, cogonal and greatly
inconvenient due to flood and mud" - because it would run counter to the prevailing
jurisprudence that mere convenience for the dominant estate does not suffice to
serve as basis for the easement.

Also, in Floro v. Llenado,[13] we refused to impose an easement

of right of way over petitioners property, although private respondents alternative
route was admittedly inconvenient because he had to traverse several rice lands and
rice paddies belonging to different persons, not to mention that said passage, as
found by the trial court, was impassable during rainy season.

Admittedly, the proposed right of way over private respondents property is the
most convenient, being the shorter and the more direct route to Visayas
Avenue.However, it is not enough that the easement be where the way is shortest. It
is more important that it be where it will cause the least prejudice to the servient FIRST DIVISION
estate.[14] As discussed elsewhere, petitioners failed to sufficiently demonstrate that
the proposed right of way shall be at a point least prejudicial to the servient estate. G.R. No. L-38962 September 15, 1986

The second assignment of error was likewise properly rejected by the appellate IN RE: MOTION TO CORRECT ORIGINAL CERTIFICATE OF TITLE NO. P-672
court. Primarily, the issue of legality or illegality of the conversion of the road lot in COVERING LOT NO. 4569 CAUAYAN CAD. FRANCISCA SOTO petitioner-
question has long been laid to rest in LRC Case No. Q-1614[15] which declared with appellant,
finality the legality of the segregation subdivision survey plan of the disputed road lot. vs.
Consequently, it is now too late for petitioners to question the validity of the MARINA S. JARENO, JOSEFINA S. MEDEL and LILIA S. ALILAIN, oppositors-
conversion of the road lot. appellees.

Finally, questions relating to non-compliance with the requisites for conversion Orlando N. Cuachon for petitioner-appellant.
of subdivision lots are properly cognizable by the National Housing Authority (NHA),
now the Housing and Land Use Regulatory Board (HLURB), pursuant to Sec.
Serafin Diego for oppositors-appellees.
22 of PD 957[16] and not by the regular courts. Under the doctrine of primary
administrative jurisdiction,[17] where jurisdiction is vested upon an administrative body,
no resort to the courts may be made before such administrative body shall have acted
upon the matter.
CRUZ, J.:
WHEREFORE, Petition is DENIED. The 16 January 1996 Decision and the 14
June 1996 Resolution of the Court of Appeals denying reconsideration thereof are Originally elevated to the Court of Appeals, this case has been referred to us because
AFFIRMED. Costs against petitioners. it raises the following (and only) question of law:

SO ORDERED.
115
Does the trial court have jurisdiction to order an amendment of a certificate of title
without previous exhaustion of administrative remedies?
Specifically, the change sought is in the civil status of the registered owner, whom the
petitioner wants to be described in the certificate of title as married to her rather than
as a widower. 1
The said registered owner was Sergio Serfino, who was married in January 1933 to
the petitioner. 2 In 1939, he filed an application for a homestead patent, describing
himself as "married to Francisca Soto," 3 but in 1953, when the original certificate over
the homestead was issued, it was in favor of "Sergio Serfino, widower," 4 Serfino died
in 1965, 5 and soon thereafter the petitioner filed a motion with the Court of First
instance of Negros Occidental praying that his description as a "widower" be changed
to "married to Francisca Soto." 6 Two daughters of the couple opposed the motion. 7
While conceding that their parents were married in 1933, the oppositors nonetheless
pointed out that their mother had abandoned them in 1942 to live with another man.
Later, they said, she had adulterous relations with still a second man by whom she
begot eleven children. According to these oppositors, it was their father himself who
had described himself as a widower in 1953 because he had not heard from the
petitioner since 1942. 8
Their purpose, obviously, was to prevent the land from being considered conjugal and
therefore equally owned by the spouses.
The trial court originally granted the motion and ordered the change prayed for, but
later it reconsidered its decision and held itself without jurisdiction to act on the
matter. Its reason was that there was no observance of the doctrine of exhaustion of
administrative remedies. 9
Failure to observe the doctrine of exhaustion of administrative remedies does not
affect the jurisdiction of the court. We have repeatedly stressed this in a long line of
decisions. The only effect of non-compliance with this rule is that it will deprive the
complainant of a cause of action, which is a ground for a motion to dismiss. If not
invoked at the proper time, this ground is deemed waived and the court can then take
cognizance of the case and try it. 10
Moreover, the doctrine of exhaustion of administrative remedies is not applicable to
private lands, as also settled in a number of decisions rendered by this Court. 11 Once
registered, the homestead granted to Sergio Serfino ceased to have the character of
public land and so was removed from the operation of the said doctrine.
But notwithstanding the above principles, the petition will still have to be dismissed
because the change sought is not authorized under Section 112 of Act 496, as
interpreted by this Court.
According to Tangunan v. Republic, 12 the amendment of a certificate of title is allowed
under this section only "if there is unanimity among the parties, or there is no adverse
claim or serious objection on the part of any party in interest; otherwise, the case
becomes controversial and should be threshed out in an ordinary case or in the case
where the incident properly belongs."
In another case, it was held that "it is not proper to cancel an original certificate of
Torrens title issued exclusively in the name of a deceased person, and to issue a new
certificate in the name of his heirs, under the provisions of Section 112 of Act 496,
when the surviving spouse claims right of ownership over the land covered by such
certificate." 13
It is obvious that in asking for the amendment of the certificate of title issued
exclusively in the name of Sergio Serfino, the petitioner was seeking to reserve the
title to one half of the subject land as her conjugal share. Appellees, for their part,
reject this claim. Clearly, therefore, Section 112 of Act 496 is not applicable in this
case.
The proper procedure is to institute the intestate proceedings of the Sergio Serfino,
where the appellant may file against its administrator the corresponding ordinary
action to claim her alleged rights over the lot in question.
WHEREFORE, this appeal is dismissed, with costs against the appellant. It is so
ordered.
Yap (Chairman), Narvasa, Melencio-Herrera and Feliciano, JJ., concur.
116
FIRST DIVISION
G.R. No. 76633 October 18, 1988
EASTERN SHIPPING LINES, INC., petitioner,
vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER
OF LABOR AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and
KATHLEEN D. SACO, respondents.
Jimenea, Dala & Zaragoza Law Office for petitioner.
The Solicitor General for public respondent.
Dizon Law Office for respondent Kathleen D. Saco.
CRUZ, J.:
The private respondent in this case was awarded the sum of P192,000.00 by the
Philippine Overseas Employment Administration (POEA) for the death of her
husband. The decision is challenged by the petitioner on the principal ground that the
POEA had no jurisdiction over the case as the husband was not an overseas worker.
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an
accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under
Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The
petitioner, as owner of the vessel, argued that the complaint was cognizable not by
the POEA but by the Social Security System and should have been filed against the
State Insurance Fund. The POEA nevertheless assumed jurisdiction and after
considering the position papers of the parties ruled in favor of the complainant. The
award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.
The petitioner immediately came to this Court, prompting the Solicitor General to
move for dismissal on the ground of non-exhaustion of administrative remedies.
Ordinarily, the decisions of the POEA should first be appealed to the National Labor
Relations Commission, on the theory inter alia that the agency should be given an
opportunity to correct the errors, if any, of its subordinates. This case comes under
one of the exceptions, however, as the questions the petitioner is raising are
essentially questions of law. 1 Moreover, the private respondent himself has not
objected to the petitioner's direct resort to this Court, observing that the usual
procedure would delay the disposition of the case to her prejudice.
The Philippine Overseas Employment Administration was created under Executive
Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas
employment of Filipinos and to protect their rights. It replaced the National Seamen
Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a)
of the said executive order, the POEA is vested with "original and exclusive
jurisdiction over all cases, including money claims, involving employee-employer
relations arising out of or by virtue of any law or contract involving Filipino contract
workers, including seamen." These cases, according to the 1985 Rules and
Regulations on Overseas Employment issued by the POEA, include "claims for
death, disability and other benefits" arising out of such employment. 2
The petitioner does not contend that Saco was not its employee or that the claim of
his widow is not compensable. What it does urge is that he was not an overseas
worker but a 'domestic employee and consequently his widow's claim should have
been filed with Social Security System, subject to appeal to the Employees
Compensation Commission.
We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was
an overseas employee of the petitioner at the time he met with the fatal accident in
Japan in 1985.
Under the 1985 Rules and Regulations on Overseas Employment, overseas
employment is defined as "employment of a worker outside the Philippines, including
employment on board vessels plying international waters, covered by a valid
contract. 3 A contract worker is described as "any person working or who has worked
overseas under a valid employment contract and shall include seamen" 4 or "any
person working overseas or who has been employed by another which may be a local
employer, foreign employer, principal or partner under a valid employment contract
and shall include seamen." 5 These definitions clearly apply to Vitaliano Saco for it is
not disputed that he died while under a contract of employment with the petitioner and
alongside the petitioner's vessel, the M/V Eastern Polaris, while berthed in a foreign
country. 6
It is worth observing that the petitioner performed at least two acts which constitute
implied or tacit recognition of the nature of Saco's employment at the time of his
death in 1985. The first is its submission of its shipping articles to the POEA for
processing, formalization and approval in the exercise of its regulatory power over
overseas employment under Executive Order NO. 797. 7 The second is its
payment 8 of the contributions mandated by law and regulations to the Welfare Fund
117
for Overseas Workers, which was created by P.D. No. 1694 "for the purpose of
providing social and welfare services to Filipino overseas workers."
Significantly, the office administering this fund, in the receipt it prepared for the private
respondent's signature, described the subject of the burial benefits as "overseas
contract worker Vitaliano Saco." 9 While this receipt is certainly not controlling, it does
indicate, in the light of the petitioner's own previous acts, that the petitioner and the
Fund to which it had made contributions considered Saco to be an overseas
employee.
The petitioner argues that the deceased employee should be likened to the
employees of the Philippine Air Lines who, although working abroad in its
international flights, are not considered overseas workers. If this be so, the petitioner
should not have found it necessary to submit its shipping articles to the POEA for
processing, formalization and approval or to contribute to the Welfare Fund which is
available only to overseas workers. Moreover, the analogy is hardly appropriate as
the employees of the PAL cannot under the definitions given be considered seamen
nor are their appointments coursed through the POEA.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was
made by the POEA pursuant to its Memorandum Circular No. 2, which became
effective on February 1, 1984. This circular prescribed a standard contract to be
adopted by both foreign and domestic shipping companies in the hiring of Filipino
seamen for overseas employment. A similar contract had earlier been required by the
National Seamen Board and had been sustained in a number of cases by this
Court. 10 The petitioner claims that it had never entered into such a contract with the
deceased Saco, but that is hardly a serious argument. In the first place, it should have
done so as required by the circular, which specifically declared that "all parties to the
employment of any Filipino seamen on board any ocean-going vessel are advised to
adopt and use this employment contract effective 01 February 1984 and to desist
from using any other format of employment contract effective that date." In the second
place, even if it had not done so, the provisions of the said circular are nevertheless
deemed written into the contract with Saco as a postulate of the police power of the
State. 11
But the petitioner questions the validity of Memorandum Circular No. 2 itself as
violative of the principle of non-delegation of legislative power. It contends that no
authority had been given the POEA to promulgate the said regulation; and even with
such authorization, the regulation represents an exercise of legislative discretion
which, under the principle, is not subject to delegation.
The authority to issue the said regulation is clearly provided in Section 4(a) of
Executive Order No. 797, reading as follows:
... The governing Board of the Administration (POEA), as hereunder
provided shall promulgate the necessary rules and regulations to govern the
exercise of the adjudicatory functions of the Administration (POEA).
Similar authorization had been granted the National Seamen Board, which, as earlier
observed, had itself prescribed a standard shipping contract substantially the same as
the format adopted by the POEA.
The second challenge is more serious as it is true that legislative discretion as to the
substantive contents of the law cannot be delegated. What can be delegated is the
discretion to determine how the law may be enforced, not what the law shall be. The
ascertainment of the latter subject is a prerogative of the legislature. This prerogative
cannot be abdicated or surrendered by the legislature to the delegate. Thus, in Ynot v.
Intermediate Apellate Court 12 which annulled Executive Order No. 626, this Court
held:
We also mark, on top of all this, the questionable manner of the disposition
of the confiscated property as prescribed in the questioned executive order.
It is there authorized that the seized property shall be distributed to
charitable institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may see fit, in the case of carabaos.'
(Italics supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities
for partiality and abuse, and even corruption. One searches in vain for the
usual standard and the reasonable guidelines, or better still, the limitations
that the officers must observe when they make their distribution. There is
none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen?
Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion.
Definitely, there is here a 'roving commission a wide and sweeping authority
that is not canalized within banks that keep it from overflowing,' in short a
clearly profligate and therefore invalid delegation of legislative powers.
There are two accepted tests to determine whether or not there is a valid delegation
of legislative power, viz, the completeness test and the sufficient standard test. Under
the first 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 enforce it. 13 Under the sufficient standard test, there must be adequate guidelines
or stations in the law to map out the boundaries of the delegate's authority and
prevent the delegation from running riot. 14
118
Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a
power essentially legislative.
The principle of non-delegation of powers is applicable to all the three major powers
of the Government but is especially important in the case of the legislative power
because of the many instances when its delegation is permitted. The occasions are
rare when executive or judicial powers have to be delegated by the authorities to
which they legally certain. In the case of the legislative power, however, such
occasions have become more and more frequent, if not necessary. This had led to
the observation that the delegation of legislative power has become the rule and its
non-delegation the exception.
The reason is the increasing complexity of the task of government and the growing
inability of the legislature to cope directly with the myriad problems demanding its
attention. The growth of society has ramified its activities and created peculiar and
sophisticated problems that the legislature cannot be expected reasonably to
comprehend. Specialization even in legislation has become necessary. To many of
the problems attendant upon present-day undertakings, the legislature may not have
the competence to provide the required direct and efficacious, not to say, specific
solutions. These solutions may, however, be expected from its delegates, who are
supposed to be experts in the particular fields assigned to them.
The reasons given above for the delegation of legislative powers in general are
particularly applicable to administrative bodies. With the proliferation of specialized
activities and their attendant peculiar problems, the national legislature has found it
more and more necessary to entrust to administrative agencies the authority to issue
rules to carry out the general provisions of the statute. This is called the "power of
subordinate legislation."
With this power, administrative bodies may implement the broad policies laid down in
a statute by "filling in' the details which the Congress may not have the opportunity or
competence to provide. This is effected by their promulgation of what are known as
supplementary regulations, such as the implementing rules issued by the Department
of Labor on the new Labor Code. These regulations have the force and effect of law.
Memorandum Circular No. 2 is one such administrative regulation. The model
contract prescribed thereby has been applied in a significant number of the cases
without challenge by the employer. The power of the POEA (and before it the National
Seamen Board) in requiring the model contract is not unlimited as there is a sufficient
standard guiding the delegate in the exercise of the said authority. That standard is
discoverable in the executive order itself which, in creating the Philippine Overseas
Employment Administration, mandated it to protect the rights of overseas Filipino
workers to "fair and equitable employment practices."
Parenthetically, it is recalled that this Court has accepted as sufficient standards
"Public interest" in People v. Rosenthal 15 "justice and equity" in Antamok Gold Fields
v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and "simplicity,
economy and efficiency" in Cervantes v. Auditor General, 18 to mention only a few
cases. In the United States, the "sense and experience of men" was accepted
in Mutual Film Corp. v. Industrial Commission, 19and "national security" in Hirabayashi
v. United States. 20
It is not denied that the private respondent has been receiving a monthly death
benefit pension of P514.42 since March 1985 and that she was also paid a P1,000.00
funeral benefit by the Social Security System. In addition, as already observed, she
also received a P5,000.00 burial gratuity from the Welfare Fund for Overseas
Workers. These payments will not preclude allowance of the private respondent's
claim against the petitioner because it is specifically reserved in the standard contract
of employment for Filipino seamen under Memorandum Circular No. 2, Series of
1984, that
Section C. Compensation and Benefits.
1. In case of death of the seamen during the term of his Contract, the
employer shall pay his beneficiaries the amount of:
a. P220,000.00 for master and chief engineers
b. P180,000.00 for other officers, including radio operators and
master electrician
c. P 130,000.00 for ratings.
2. It is understood and agreed that the benefits mentioned above shall be
separate and distinct from, and will be in addition to whatever benefits which
the seaman is entitled to under Philippine laws. ...
3. ...
c. If the remains of the seaman is buried in the Philippines, the
owners shall pay the beneficiaries of the seaman an amount not
exceeding P18,000.00 for burial expenses.
119
The underscored portion is merely a reiteration of Memorandum Circular No. 22, subordinate but as a peer of management, with which he can negotiate on even
issued by the National Seamen Board on July 12,1976, providing an follows: plane. Labor is not a mere employee of capital but its active and equal partner.

Income Benefits under this Rule Shall be Considered Additional WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The
Benefits. temporary restraining order dated December 10, 1986 is hereby LIFTED. It is so
ordered.
All compensation benefits under Title II, Book Four of the Labor
Code of the Philippines (Employees Compensation and State Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Insurance Fund) shall be granted, in addition to whatever benefits,
gratuities or allowances that the seaman or his beneficiaries may
be entitled to under the employment contract approved by the NSB.
If applicable, all benefits under the Social Security Law and the
Philippine Medicare Law shall be enjoyed by the seaman or his
beneficiaries in accordance with such laws.

The above provisions are manifestations of the concern of the State for the working
G.R. No. 85439 January 13, 1992
class, consistently with the social justice policy and the specific provisions in the
Constitution for the protection of the working class and the promotion of its interest.
KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG
PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM), TERESITA A.
One last challenge of the petitioner must be dealt with to close t case. Its argument
FAJARDO, NADYESDA B. PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES,
that it has been denied due process because the same POEA that issued
MARIO S. FRANCISCO, AMADO V. MANUEL and ROLANDO G. GARCIA,
Memorandum Circular No. 2 has also sustained and applied it is an uninformed
incumbent members of the Board, AMADO G. PEREZ and MA. FE V. BOMBASE,
criticism of administrative law itself. Administrative agencies are vested with two basic
incumbent General Manager and Secretary-Treasurer, respectively, petitioners,
powers, the quasi-legislative and the quasi-judicial. The first enables them to
vs.
promulgate implementing rules and regulations, and the second enables them to
HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional Director of
interpret and apply such regulations. Examples abound: the Bureau of Internal
Region IV of the Department of Agriculture ROGELIO P. MADRIAGA, RECTO
Revenue adjudicates on its own revenue regulations, the Central Bank on its own
CORONADO and Municipal Mayor IGNACIO R. BUNYE, both in his capacity as
circulars, the Securities and Exchange Commission on its own rules, as so too do the
Municipal Mayor of Muntinlupa, Metro Manila and as Presiding Officer of
Philippine Patent Office and the Videogram Regulatory Board and the Civil
Sangguniang Bayan ng Muntinglupa, and JOHN DOES, respondents.
Aeronautics Administration and the Department of Natural Resources and so on ad
infinitum on their respective administrative regulations. Such an arrangement has
been accepted as a fact of life of modern governments and cannot be considered
violative of due process as long as the cardinal rights laid down by Justice Laurel in
the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed. G.R. No. 91927 January 13, 1992

Whatever doubts may still remain regarding the rights of the parties in this case are
resolved in favor of the private respondent, in line with the express mandate of the
Labor Code and the principle that those with less in life should have more in law.
When the conflicting interests of labor and capital are weighed on the scales of social
justice, the heavier influence of the latter must be counter-balanced by the sympathy
and compassion the law must accord the underprivileged worker. This is only fair if he
is to be given the opportunity and the right to assert and defend his cause not as a
IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E.
AGUINALDO, ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E.
BULAY, LUCIO B. CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO,
ROGER SMITH, RUFINO B. JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and
NESTOR SANTOS, petitioners,
vs.
THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special
Prosecutor III, respondents.

120
Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R. No. 85439.
Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.
DAVIDE, JR., J.:
These cases have been consolidated because they are closely linked with each other
as to factual antecedents and issues.
The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case),
questions the validity of the order of 28 October 1988 of then Secretary of Agriculture
Hon. Carlos G. Dominguez which ordered: (1) the take-over by the Department of
Agriculture of the management of the petitioner Kilusang Bayan sa Paglilingkod Ng
Mga Magtitinda ng Bagong Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM) pursuant
to the Department's regulatory and supervisory powers under Section 8 of P.D. No.
175, as amended, and Section 4 of Executive Order No. 13, (2) the creation of a
Management Committee which shall assume the management of KBMBPM upon
receipt of the order, (3) the disbandment of the Board of Directors, and (4) the turn
over of all assets, properties and records of the KBMBPM the Management
Committee.
The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks
the nullification of the Resolution of 4 January 1990 of the Sandiganbayan admitting
the Amended Information against petitioners in Criminal Case No. 13966 and denying
their motion to order or direct preliminary investigation, and its Resolution of 1
February 1990 denying the motion to reconsider the former.
The procedural and factual antecedents are not disputed.
On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter,
Municipality), Metro Manila, thru its then Mayor Santiago Carlos, Jr., entered into a
contract with the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA
BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM) represented by
its General Manager, Amado Perez, for the latter's management and operation of the
new Muntinlupa public market. The contract provides for a twenty-five (25) year term
commencing on 2 September 1985, renewable for a like period, unless sooner
terminated and/or rescinded by mutual agreement of the parties, at a monthly
consideration of Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM
within the first five (5) days of each month which shall, however, be increased by ten
percent (10%) each year during the first five (5) years only. 1
The KBMBPM is a service cooperative organized by and composed of vendors
occupying the New Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila
pursuant to Presidential Decree No. 175 and Letter of Implementation No. 23; its
articles of incorporation and by-laws were registered with the then Office of the
Bureau of Cooperatives Development (thereafter the Bureau of Agricultural
Cooperatives Development or BACOD and now the Cooperative Development
Authority). 2
Following his assumption into office as the new mayor succeeding Santiago Carlos,
Jr., petitioner Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-
year term of the agreement, contrary to the provision of Section 143, paragraph 3 of
Batas Pambansa Blg. 337," and the "patently inequitable rental," directed a review of
the aforesaid contract. 3 He sought opinions from both the Commission on Audit and
the Metro Manila Commission (MMC) on the validity of the instrument. In separate
letters, these agencies urged that appropriate legal steps be taken towards its
rescission. The letter of Hon. Elfren Cruz of the MMC even granted the Municipality
authority "to take the necessary legal steps for the cancellation/recission of the above
cited contract and make representations with KBMBPM for the immediate
transfer/takeover of the possession, management and operation of the New
Muntinlupa Market to the Municipal Government of Muntinlupa." 4
Consequently, upon representations made by Bunye with the Municipal Council, the
latter approved on 1 August 1988 Resolution No. 45 abrogating the contract. To
implement this resolution, Bunye, together with his co-petitioners and elements of the
Capital Command of the Philippine Constabulary, proceeded, on 19 August 1986, to
the public market and announced to the general public and the stallholders thereat
that the Municipality was taking over the management and operation of the facility,
and that the stallholders should henceforth pay their market fees to the Municipality,
thru the Market Commission, and no longer to the KBMBPM. 5
On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of
Makati a complaint for breach of contract, specific performance and damages with
prayer for a writ of preliminary injunction against the Municipality and its officers,
which was docketed as Civil Case No. 88-1702. 6 The complaint was premised on the
alleged illegal take-over of the public market effected "in excess of his (Bunye's)
alleged authority" and thus "constitutes breach of contract and duty as a public
official."
The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts
of Bunye and company to complete the take-over; they continued holding office in the
KBS building, under their respective official capacities. The matter having been
elevated to this Court by way of certiorari, 8 We remanded the same to the Court of
Appeals which docketed it as C.A.-G.R. No. L-16930. 9
121
On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-
complaint charging Bunye and his co-petitioners with oppression, harassment, abuse
of authority and violation of the Anti-Graft and Corrupt Practices Act 10 for taking over
the management and operation of the public market from KBMBPM. 11
In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of
the Special Prosecutor directed Bunye and his co-petitioners to submit within ten (10)
days from receipt thereof counter-affidavits, affidavits of their witnesses and other
supporting documents. 12 The subpoena and letter-complaint were received on 12
October 1988.
On 20 October 1988, two (2) days before the expiration of the period granted to file
said documents, Bunye, et al. filed by mail an urgent motion for extension of "at least
fifteen (15) days from October 22, 1988" within which to comply 13 with the subpoena.
Thereafter, the following transpired which subsequently gave rise to these petitions:
G.R. No. 85439
In the early morning of 29 October 1988, a Saturday, respondent Madriaga and
Coronado, allegedly accompanied by Mayor Bunye and the latters' heavily armed
men, both in uniform and in civilian clothes, together with other civilians, namely:
Romulo Bunye II, Alfredo Bunye, Tomas Osias, Reynaldo Camilon, Benjamin
Taguibao, Benjamin Bulos and other unidentified persons, allegedly through force,
violence and intimidation, forcibly broke open the doors of the offices of petitioners
located at the second floor of the KBS Building, new Muntinlupa Public Market,
purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture
dated 28 October 1988, and to implement the same, by taking over and assuming the
management of KBMBPM, disbanding the then incumbent Board of Directors for that
purpose and excluding and prohibiting the General Manager and the other officers
from exercising their lawful functions as such. 14 The Order of the Secretary reads as
follows: 15
ORDER
WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA
MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC.,
(KBMBPM), Alabang, Muntinlupa, Metro Manila is a Cooperative registered
under the provisions of Presidential Decree No. 175, as amended;
WHEREAS, the Department of Agriculture is empowered to regulate and
supervise cooperatives registered under the provisions of Presidential
Decree No. 175, as amended;
WHEREAS, the general membership of the KBMBPM has petitioned the
Department of Agriculture for assistance in the removal of the members of
the Board of Directors who were not elected by the general membership of
said cooperative;
WHEREAS, the on-going financial and management audit of the Department
of Agriculture auditors show (sic) that the management of the KBMBPM is
not operating that cooperative in accordance with PD. 175, LOI No. 23, the
Circulars issued by DA/BACOD and the provisions of the by-laws of
KBMBPM;
WHEREAS, the interest of the public so demanding it is evident and urgently
necessary that the KBMBPM MUST BE PLACED UNDER MANAGEMENT
TAKE-OVER of the Department of Agriculture in order to preserve the
financial interest of the members of the cooperative and to enhance the
cooperative development program of the government;
WHEREAS, it is ordered that the Department of Agriculture in the exercise of
its regulatory and supervisory powers under Section 8 of PD 175, as
amended, and Section 4 of Executive Order No. 113, take over the
management of KBMBPM under the following directives:
1. THAT a Management Committee is hereby created composed of
the following:
a) Reg. Dir. or OIC RD DA Region IV
b) Atty. Rogelio P. Madriaga BACOD
c) Mr. Recto Coronado KBMBPM
d) Mrs. Nadjasda Ponsones KBMBPM
e) One (1) from the Municipal Government of Muntinlupa to be
designated by the Sangguniang Pambayan ng Muntinlupa;
2. THAT the Management Committee shall, upon receipt of this
Order, assume the management of KBMBPM;
3. THAT the present Board of Directors is hereby
disbanded and the officers and Manager of the KBMBPM
are hereby directed to turnover all assets, properties and
122
 records of the KBMBPM to the Management Committee
herein created;
4. THAT the Management Committee is hereby
empowered to promulgate rules of procedure to govern its
workings as a body;
5. THAT the Management Committee shall submit to the
undersigned thru the Director of BACOD monthly reports
on the operations of KBMBPM;
6. THAT the Management Committee shall call a General
Assembly of all registered members of the KBMBPM
within Ninety (90) days from date of this Order to decide
such matters affecting the KBMBPM, including the election
of a new set of Board of Director (sic).
This Order takes effect immediately and shall continue to be in force until the
members of the Board of Directors shall have been duly elected and
qualified.
Done this 28th day of October, 1988 at Quezon City.
As claimed by petitioners, the Order served on them was not written on the stationary
of the Department, does not bear its seal and is a mere xerox copy.
The so-called petition upon which the Order is based appears to be an unverified
petition dated 10 October 1988 signed, according to Mayor Bunye, 16 by 371
members of the KBMBPM.
On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that:
(a) Respondent Secretary acted without or in excess of jurisdiction in issuing the
Order for he arrogated unto himself a judicial function by determining the alleged guilt
of petitioners on the strength of a mere unverified petition; the disbandment of the
Board of Directors was done without authority of law since under Letter of
Implementation No. 23, removal of officers, directors or committee members could be
done only by the majority of the members entitled to vote at an annual or special
general assembly and only after an opportunity to be heard at said assembly.
(b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic
manner, so patent and gross that it amounted to a grave abuse of discretion.
(c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise illegal
and unlawful for it allows or tolerates the violation of the penal provisions under
paragraph (c), Section 9 of P.D. No. 175.
(d) The Order is a clear violation of the constitutional right of the
individual petitioners to be heard. 17
They pray that upon the filing of the petition, respondents, their agents,
representatives or persons acting on their behalf be ordered to refrain, cease and
desist from enforcing and implementing the questioned Order or from excluding the
individual petitioners from the exercise of their rights as such officers and, in the event
that said acts sought to be restrained were already partially or wholly done, to
immediately restore the management and operation of the public market to
petitioners, order respondents to vacate the premises and, thereafter, preserve
the status quo; and that, finally, the challenged Order be declared null and void.
In the Resolution of 9 October 1988, 18 We required the respondents to Comment on
the petition. Before any Comment could be filed, petitioners filed on 2 January 1989
an Urgent Ex-Parte Motion praying that respondent Atty. Rogelio Madriaga, who had
assumed the position of Chairman of the Management Committee, be ordered to stop
and/or cancel the scheduled elections of the officers of the KBMBPM on 6 January
1989 and, henceforth, desist from scheduling any election of officers or Members of
the Board of Directors thereof until further orders on the Court. 19 The elections were,
nevertheless, held and a new board of directors was elected. So, on 19 January
1989, petitioners filed a supplemental motion 20 praying that respondent Madriaga and
the "newly elected Board of Directors be ordered to cease and desist from assuming,
performing or exercising powers as such, and/or from removing or replacing the
counsels of petitioners as counsels for KBMBPM and for Atty. Fernando Aquino, Jr.,
to cease and desist from unduly interfering with the affairs and business of the
cooperative."
Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies
the factual allegations in the petition and claims that petitioners failed to exhaust
administrative remedies. A reply thereto was filed by petitioners on 7 February
1989. 22
Respondent Recto Coronado filed two (2) Comments. The first was filed on 6
February 1989 23 by his counsel, Atty. Fernando Aquino, Jr., and the second, which is
for both him and Atty. Madriaga, was filed by the latter on 10 February 1989. 24
On 20 February 1989, petitioners filed a Reply to the first Comment of
Coronado 25 and an Ex-Parte Motion for the immediate issuance of a cease and
desist order 26 praying that the so-called new directors and officers of KBMBPM,
123
namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino Moldez, Fortunato M. Medina,
Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to
immediately cease and desist from filing notices of withdrawals or motions to dismiss
cases filed by the Cooperative now pending before the courts, administrative offices
and the Ombudsman and Tanodbayan, and that if such motions or notices were
already filed, to immediately withdraw and desist from further pursuing the same until
further orders of this Court. The latter was precipitated by the Resolution No. 19 of the
"new" board of directors withdrawing all cases filed by its predecessors against
Bunye, et al., and more particularly the following cases: (a) G.R. No. 85439 (the
instant petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110 before the
Ombudsman, (d) IBP Case No. 88-0119 before the Tanodbayan, and Civil Case No.
88-118 for Mandamus. 27
On 1 March 1989, We required the Solicitor General to file his Comment to the
petition and the urgent motion for the immediate issuance of a cease and desist
order. 28
A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April
1989, We resolved to dismiss the case and consider it closed and
terminated. 30 Thereupon, after some petitioners filed a motion for clarification and
reconsideration, We set aside the dismissal order and required the new directors to
comment on the Opposition to Motion to Dismiss filed by the former. 31
The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and
Opposition dated 9 June 1989, earlier submitted it response to petitioners' motion for
reconsideration of the order dismissing the instant petition, be treated as its
Comment. 32 Both parties then continued their legal fencing, serving several pleadings
on each other.
In Our Resolution of 9 August 1989, 33 We gave the petition due course and required
the parties to submit their respective Memoranda.
On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate
issuance of a cease and desist order 34 in view of the new board's plan to enter into a
new management contract; the motion was noted by this Court on 23 August 1989. A
second ex-parte motion, noted on 18 October 1989, was filed on 19 September 1989
asking this court to consider the "Invitation to pre-qualify and bid" for a new contract
published by respondent Bunye. 35
36
In a belated Comment for the respondent Secretary of Agriculture filed on 22
September 1989, the Office of the Solicitor General asserts that individual petitioners,
who were not allegedly elected by the members or duly designated by the BACOD
Director, have no right or authority to file this case; the assailed Order of the
Secretary was issued pursuant to P.D. No. 175, more particularly Section 8 thereof
which authorizes him "(d) to suspend the operation or cancel the registration of any
cooperative after hearing and when in its judgment and based on findings, such
cooperative is operating in violation of this Decree, rules and regulations, existing
laws as well as the by-laws of the cooperative itself;" the Order is reasonably
necessary to correct serious flaws in the cooperative and provide interim measures
until election of regular members to the board and officers thereof; the elections
conducted on 6 January 1989 are valid; and that the motion to dismiss filed by the
new board of directors binds the cooperative. It prays for the dismissal of the petition.
Respondent Secretary of Agriculture manifested on 22 September 1989 that he is
adopting the Comment submitted by the Office of the Solicitor General as his
memorandum; 37 petitioners and respondents Coronado and Madriaga filed their
separate Memoranda on 6 November 1989; 38 while the new board of directors
submitted its Memorandum on 11 December 1989. 39
The new KBMBPM board submitted additional pleadings on 16 February 1990 which
it deemed relevant to the issues involved herein. Reacting, petitioners filed a motion
to strike out improper and inadmissible pleadings and annexes and sought to have
the pleaders cited for contempt. Although We required respondents to comment, the
latter did not comply.
Nevertheless, a manifestation was filed by the same board on 25 February
1991 40 informing this Court of the holding, on 9 January 1991, of its annual general
assembly and election of its board of directors for 1991. It then reiterates the prayer
that the instant petition be considered withdrawn and dismissed. Petitioners filed a
counter manifestation alleging that the instant petition was already given due course
on 9 August 1989. 41 In its traverse to the counter manifestation, the new board insists
that it "did not derive authority from the October 28, 1988 Order, the acts of the
Management Committee, nor (sic) from the elections held in (sic) January 6, 1989,"
but rather from the members of the cooperative who elected them into office during
the elections.
Petitioners filed a rejoinder asserting that the election of new directors is not a
supervening event independent of the main issue in the present petition and that to
subscribe to the argument that the issues in the instant petition became moot with
their assumption into office is to reward a wrong done.
G. R. NO. 91927
Petitioners claim that without ruling on their 20 October 1988 motion for an extension
of at last 15 days from 22 October 1988 within which to file their counter-affidavits,
which was received by the Office of the Special Prosecutor on 3 November 1988,
124
Special Prosecutor Onos promulgated on 11 November 1988 a Resolution finding the
evidence on hand sufficient to establish a prima facie case against respondents
(herein petitioners) and recommending the filing of the corresponding information
against them before the Sandiganbayan. 42 Petitioners also claim that they submitted
their counter-affidavits on 9 November 1988. 43
In their motion dated 2 December 1988, petitioners move for a reconsideration of the
above Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The
information against the petitioners was attached to this order.
Upon submission of the records for his approval, the Ombudsman issued a first
indorsement on 4 April 1989 referring to "Judge Gualberto J. de la Llana, Acting
Director , IEO/RSSO, this Office, the within records of OSP Case No. 88-
02110 . . . for further preliminary investigation . . ." 46
Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la
Llana requiring them to appear before the latter on 25 April 1989, 47 submit a report
and file comment. After being granted an extension, Bunye and company submitted
their comment on 18 May 1989. 48
On 22 August 1989, de la Llana recommended the filing of an information for violation
of section 3 (e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred
to special prosecuting officer Jose Parentela, Jr. who, in his Memorandum 50 to the
Ombudsman through the Acting Special Prosecutor, likewise urged that an
information be filed against herein petitioners. On 3 October 1989, the Ombudsman
signed his conformity to the Memorandum and approved the 18 January information
prepared by Onos, which was then filed with the Sandiganbayan.
Consequently, Bunye, et al. were served arrest warrants issued by the
Sandiganbayan. Detained at the NBI on 9 October 1989, they claim to have
discovered only then the existence of documents recommending and approving the
filing of the complaint and a memorandum by special prosecutor Bernardita G. Erum
proposing the dismissal of the same. 51
Arraignment was set for 18 October 1989. 52
However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus
Motion to Remand to the Office of the Ombudsman; to Defer Arraignment and to
Suspend Proceedings." 53
Subsequently, through new counsel, petitioners filed on 17 October 1989 a
Consolidated Manifestation and Supplemental Motion 54 praying, inter alia, for the
quashal of the information on the ground that they were deprived of their right to a
preliminary investigation and that the information did not charge an offense.
The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and
directing the parties to submit their respective memoranda, 55 which petitioners
complied with on 2 November 1989. 56 On 16 November 1989, special Prosecutor
Berbano filed a motion to admit amended
information. 57
On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for
lack of merit the Omnibus Motion to Remand the Case To The Office of the
Ombudsman, to Defer Arraignment and to Suspend Proceedings. Petitioners then
filed a motion to order a preliminary investigation 59 on the basis of the introduction by
the amended information of new, material and substantive allegations, which the
special prosecutor opposed, 60 thereby precipitating a rejoinder filed by petitioners. 61
On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the
Amended Information and denying the motion to direct preliminary investigation. Their
motion to reconsider this Resolution having been denied in the Resolution of 1
February 1990, 63 petitioners filed the instant petition on 12 February 1990.
Petitioners claim that respondent Sandiganbayan acted without or in excess of
jurisdiction or with manifest grave abuse of discretion amounting to lack of jurisdiction
in denying petitioners their right to preliminary investigation and in admitting the
Amended Information.
They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the
Sandiganbayan, admitting the amended information and denying the motion for
reconsideration, respectively, be annulled; (b) a writ be issued enjoining the
Sandiganbayan from proceeding further in Criminal Case No. 13966; and (c)
respondents be enjoined from pursuing further actions in the graft case.
We required the respondents to Comment on the petition.
On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta
and Rey E. Dulay as petitioners, 64 and in the Comment they filed on 30 March 1990,
in compliance with Our Resolution of 1 March 1990, they state that they do not
interpose any objection to the motion.
On 20 March 1990, the Office of the Solicitor General moved that it be excused from
filing comment for the respondents as it cannot subscribe to the position taken by the
latter with respect to the questions of law involved. 65 We granted this motion in the
resolution of 8 May 1990.
125
Respondent Berbano filed his comment on 10 September 1991 and petitioners
replied on 20 December 1990; Berbano subsequently filed a Rejoinder thereto on 11
January 1991. 66 The Sandiganbayan then filed a manifestation proposing that it be
excused from filing comment as its position
on the matters in issue is adequately stated in the resolutions sought to be
annulled. 67 On 7 March 1991, We resolved to note the manifestation and order the
instant petition consolidated with G.R. No. 85439.
The present dispute revolves around the validity of the antecedent proceedings which
led to the filing of the original information on 18 January 1989 and the amended
information afterwards.
THE ISSUES AND THEIR RESOLUTION
1. G. R. No. 85439.
As adverted to in the introductory portion of this Decision, the principal issue in G.R.
No. 85439 is the validity of the 28 October 1988 Order of respondent Secretary of
Agriculture. The exordium of said Order unerringly indicates that its basis is the
alleged petition of the general membership of the KBMBPM requesting the
Department for assistance "in the removal of the members of the Board of Directors
who were not elected by the general membership" of the cooperative and that the
"ongoing financial and management audit of the Department of Agriculture auditors
show (sic) that the management of the KBMBPM is not operating that cooperative in
accordance with P.D. 175, LOI 23, the Circulars issued by DA/BACOD and the
provisions and by-laws of KBMBPM." It is also professed therein that the Order was
issued by the Department "in the exercise of its regulatory and supervisory powers
under Section 8 of P.D. 175, as amended, and Section 4 of Executive Order No. 113."
Respondents challenge the personality of the petitioners to bring this action, set up
the defense of non-exhaustion of administrative remedies, and assert that the Order
was lawfully and validly issued under the above decree and Executive Order.
We find merit in the petition and the defenses interposed do not persuade Us.
Petitioners have the personality to file the instant petition and ask, in effect, for their
reinstatement as Section 3, Rule 65 of the Rules of Court, defining an action
for mandamus, permits a person who has been excluded from the use and enjoyment
of a right or office to which he is entitled, to file suit. 68 Petitioners, as ousted directors
of the KBMBPM, are questioning precisely the act of respondent Secretary in
disbanding the board of directors; they then pray that this Court restore them to their
prior stations.
As to failure to exhaust administrative remedies, the rule is well-settled that this
requirement does not apply where the respondent is a department secretary whose
acts, as an alter ego of the President, bear the implied approval of the latter, unless
actually disapproved by him. 69 This doctrine of qualified political agency ensures
speedy access to the courts when most needed. There was no need then to appeal
the decision to the office of the President; recourse to the courts could be had
immediately. Moreover, the doctrine of exhaustion of administrative remedies also
yields to other exceptions, such as when the question involved is purely legal, as in
the instant case, 70 or where the questioned act is patently illegal, arbitrary or
oppressive. 71 Such is the claim of petitioners which, as hereinafter shown, is correct.
And now on the validity of the assailed Order.
Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175)
provides the procedure for the removal of directors or officers of cooperatives, thus:
An elected officer, director or committee member may be removed by a vote
of majority of the members entitled to vote at an annual or special general
assembly. The person involved shall have an opportunity to be heard.
A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-
laws, reads:
Sec. 17. Removal of Directors and Committee Members. Any elected
director or committee member may be removed from office for cause by a
majority vote of the members in good standing present at the annual or
special general assembly called for the purpose after having been given the
opportunity to be heard at the assembly.
Under the same article are found the requirements for the holding of both the annual
general assembly and a special general assembly.
Indubitably then, there is an established procedure for the removal of directors and
officers of cooperatives. It is likewise manifest that the right to due process is
respected by the express provision on the opportunity to be heard. But even without
said provision, petitioners cannot be deprived of that right.
The procedure was not followed in this case. Respondent Secretary of Agriculture
arrogated unto himself the power of the members of the KBMBPM who are
authorized to vote to remove the petitioning directors and officers. He cannot take
refuge under Section 8 of P.D. No. 175 which grants him authority to supervise and
regulate all cooperatives. This section does not give him that right.
126
An administrative officer has only such powers as are expressly granted to him and
those necessarily implied in the exercise thereof. 72 These powers should not be
extended by implication beyond what may to necessary for their just and reasonable
execution. 73
Supervision and control include only the authority to: (a) act directly whenever a
specific function is entrusted by law or regulation to a subordinate; (b) direct the
performance of duty; restrain the commission of acts; (c) review, approve, reverse or
modify acts and decisions of subordinate officials or
units; (d) determine priorities in the execution of plans and programs; and (e)
prescribe standards, guidelines, plans and programs. Specifically, administrative
supervision is limited to the authority of the department or its equivalent to: (1)
generally oversee the operations of such agencies and insure that they are managed
effectively, efficiently and economically but without interference with day-to-day
activities; (2) require the submission of reports and cause the conduct of
management audit, performance evaluation and inspection to determine compliance
with policies, standards and guidelines of the department; (3) take such action as may
be necessary for the proper performance of official functions, including rectification of
violations, abuses and other forms of mal-administration; (4) review and pass upon
budget proposals of such agencies but may not increase or add to them. 74
The power to summarily disband the board of directors may not be inferred from any
of the foregoing as both P.D. No. 175 and the by-laws of the KBMBPM explicitly
mandate the manner by which directors and officers are to be removed. The
Secretary should have known better than to disregard these procedures and rely on a
mere petition by the general membership of the KBMBPM and an on-going audit by
Department of Agriculture auditors in exercising a power which he does not have,
expressly or impliedly. We cannot concede to the proposition of the Office of the
Solicitor General that the Secretary's power under paragraph (d), Section 8 of P.D.
No. 175 above quoted to suspend the operation or cancel the registration of any
cooperative includes the "milder authority of suspending officers and calling for the
election of new officers." Firstly, neither suspension nor cancellation includes the
take-over and ouster of incumbent directors and officers, otherwise the law itself
would have expressly so stated. Secondly, even granting that the law intended such
as postulated, there is the requirement of a hearing. None was conducted.
Likewise, even if We grant, for the sake of argument, that said power includes the
power to disband the board of directors and remove the officers of the KBMBPM, and
that a hearing was not expressly required in the law, still the Order can be validly
issued only after giving due process to the affected parties, herein petitioners.
Due process is guaranteed by the Constitution 75 and extends to administrative
proceedings. In the landmark case of Ang Tibay vs. Court of Industrial
Relations, 76 this Court, through Justice Laurel, laid down the cardinal primary
requirements of due process in administrative proceedings, foremost of which is the
right to a hearing, which includes the right to present one's case and submit evidence
in support thereof. The need for notice and the opportunity to be heard is the heart of
procedural due process, be it in either judicial or administrative
proceedings. 77 Nevertheless, a plea of a denial of procedural due process does not
lie where a defect consisting in an absence of notice of hearing was thereafter cured
by the aggrieved party himself as when he had the opportunity to be heard on a
subsequent motion for reconsideration. This is consistent with the principle that what
the law prohibits is not the absence of previous notice but the absolute absence
thereof and lack of an opportunity to be heard. 78
In the instant case, there was no notice of a hearing on the alleged petition of the
general membership of the KBMBPM; there was, as well, not even a semblance of a
hearing. The Order was based solely on an alleged petition by the general
membership of the KBMBPM. There was then a clear denial of due process. It is most
unfortunate that it was done after democracy was restored through the peaceful
people revolt at EDSA and the overwhelming ratification of a new Constitution
thereafter, which preserves for the generations to come the gains of that historic
struggle which earned for this Republic universal admiration.
If there were genuine grievances against petitioners, the affected members should
have timely raise these issues in the annual general assembly or in a special general
assembly. Or, if such a remedy would be futile for some reason or another, judicial
recourse was available.
Be that as it may, petitioners cannot, however, be restored to their positions. Their
terms expired in 1989, thereby rendering their prayer for reinstatement moot and
academic. Pursuant to Section 13 of the by-laws, during the election at the first
annual general assembly after registration, one-half plus one (4) of the directors
obtaining the highest number of votes shall serve for two years, and the remaining
directors (3) for one year; thereafter, all shall be elected for a term of two years.
Hence, in 1988, when the board was disbanded, there was a number of directors
whose terms would have expired the next year (1989) and a number whose terms
would have expired two years after (1990). Reversion to the status quo preceding 29
October 1988 would not be feasible in view of this turn of events. Besides, elections
were held in 1990 and 1991. 79 The affairs of the cooperative are presently being
managed by a new board of directors duly elected in accordance with the
cooperative's by-laws.
2. G. R. No. 91927.
127
The right of an accused to a preliminary investigation is not among
the rights guaranteed him in the Bill of Rights. As stated in Marcos, et
al. vs. Cruz, 80 "the preliminary investigation in criminal cases is not a creation of the
Constitution; its origin is statutory and it exists and the right thereto can be invoked
when so established and granted by law. It is so specifically granted by procedural
law. 81 If not waived, absence thereof may amount to a denial of due
process. 82 However, lack of preliminary investigation is not a ground to quash or
dismiss a complaint or information. Much less does it affect the court's jurisdiction.
In People vs. Casiano, 83 this Court ruled:
Independently of the foregoing, the absence of such investigation [preliminary] did not
impair the validity of the information or otherwise render it defective. Much less did it
affect the jurisdiction of the court of first instance over the present case. Hence, had
the defendant-appellee been entitled to another preliminary investigation, and had his
plea of not guilty upon arraignment not implied a waiver of said right, the court of first
instance should have, either conducted such preliminary investigation, or ordered the
Provincial Fiscal to make it, in pursuance of section 1687 of the Revised
Administrative Code (as amended by Republic Act No. 732), or remanded the record
for said investigation to the justice of the peace court, instead of dismissing the case
as it did in the order appealed from.
This doctrine was thereafter reiterated or affirmed in several case. 84
In the instant case, even if it is to be conceded for argument's sake that there was in
fact no preliminary investigation, the Sandiganbayan, per Doromal
vs. Sandiganbayan, 85 "should merely suspend or hold in abeyance proceedings
upon the questioned Amended Information and remand the case to the Office of the
Ombudsman for him to conduct a preliminary investigation."
It is Our view, however, that petitioners were not denied the right to preliminary
investigation. They, nevertheless, insist that the preliminary investigation conducted
by the Office of the Special Prosecutor existed more in form than in substance. This is
anchored on the failure by prosecutor Onos to consider the counter-affidavits filed by
petitioners. The same sin of omission is ascribed to Acting Director de la Llana who
purportedly failed to consider the comments submitted by the petitioners pursuant to
a subpoena dated 13 April 1989. The failure of special prosecutor Berbano to conduct
a preliminary investigation before amending the information is also challenged.
It is finally urged that the Sandiganbayan completely disregarded the "glaring
anomaly that on its face the Information filed by the Office of the Special Prosecutor"
was prepared and subscribed on 18 January 1989, while the records indicate that the
preliminary investigation was concluded on 3 October 1989.
In his Comment, respondent Berbano dispassionately traces the genesis of the
criminal information filed before the Sandiganbayan. His assessment that a
preliminary investigation sufficient in substance and manner was conducted prior to
the filing of the information reflects the view of the Sandiganbayan, maintained in both
the 17 November 1989 and 4 January 1990 resolutions, that there was compliance
with the requirements of due process.
Petitioners were provided a reasonable period within which to submit their counter-
affidavits; they did not avail of the original period; they moved for an extension of at
least fifteen (15) days from 22 October 1988. Despite the urgency of its nature, the
motion was sent by mail. The extension prayed for was good up to 6 November 1988.
But, as admitted by them, they filed the Counter-Affidavits only on 9 November 1988.
Yet, they blamed prosecutor Onos for promulgating the 11 November 1989 Resolution
and for, allegedly, not acting on the motion. Petitioners then should not lay the blame
on Onos; they should blame themselves for presuming that the motion would be
granted.
This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13
December 1988 requesting that the reviewing prosecutor consider the belatedly filed
documents; 86 thus, there is the recommendation of prosecutor Bernardita Erum
calling for the dismissal of the charges on 2 March 1989, which, however, was not
sustained upon subsequent review. The Sandiganbayan, in its 17 November 1989
Resolution, succinctly summed up the matter when it asserted that "even granting, for
the sake of argument, that prosecutor Onos . . . failed to consider accused-movants'
counter-affidavits, such defect was cured when a "Motion for Reconsideration" was
filed, and
which . . . de la Llana took into account upon review."
It may not then be successfully asserted that the counter-affidavits were not
considered by the Ombudsman in approving the information. Perusal of the factual
antecedents reveals that a second investigation was conducted upon the "1st
Indorsement" of the Ombudsman of 4 April 1989. As a result, subpoenas were issued
and comments were asked to be submitted, which petitioners did, but only after a
further extension of fifteen (15) days from the expiration of the original deadline. From
this submission the matter underwent further review.
Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample
discussion of the defenses raised by the petitioners in their counter-affidavits, thus
negating the charge that the issues raised by them were not considered at all. 87
It is indisputable that the respondents were not remiss in their duty to afford the
petitioners the opportunity to contest the charges thrown their way. Due process does
not require that the accused actually file his counter-affidavits before the preliminary
128
investigation is deemed completed. All that is required is that he be given the
opportunity to submit such if he is so minded. 88
In any event, petitioners did in fact, although belatedly, submit their counter-affidavits
and as a result thereof, the prosecutors concerned considered them in subsequent
reviews of the information, particularly in the re-investigation ordered by the
Ombudsman.
And now, as to the protestation of lack of preliminary investigation prior to the filing of
the Amended Information. The prosecution may amend the information without leave
of court before arraignment, 89 and such does not prejudice the accused. 90 Reliance
on the pronouncements in Doromal vs. Sandiganbayan 91 is misplaced as what
obtained therein was the preparation of an entirely new information as contrasted with
mere amendments introduced in the amended information, which also charges
petitioners with violating Section 3 (e) of the Anti-Graft Law.
In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the
Tanodbayan to conduct another preliminary investigation of a case under review by it.
On the contrary, under P.D. No. 911, in relation to Rule 12, Administrative Order No.
VII, the Tanodbayan may, upon review, reverse the findings of the investigator and
thereafter "where he finds a prima facie case, to cause the filing of an information in
court against the respondent, based on the same sworn statements or evidence
submitted, without the necessity of conducting another preliminary investigation."
Respondent Sandiganbayan did not then commit any grave abuse of discretion in
respect to its Resolutions of 4 January 1990 and 1 February 1990.
The petition then must fail.
CONCLUSION
WHEREFORE, judgment is hereby rendered:
1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged
Order of 28 October 1988 of the respondent Secretary of Agriculture; but denying, for
having become moot and academic, the prayer of petitioners that they be restored to
their positions in the KBMBPM.
2. DISMISSING, for lack of merit, the petition in G.R. No. 91927.
No pronouncement as to costs.
IT IS SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Cruz, Paras, Feliciano, Padilla, Bidin, Grio-Aquino,
Medialdea, Regalado and Romero, JJ., concur.
Gutierrez, Jr. and Nocon, JJ., took no part.
SECOND DIVISION
[G.R. No. 138842. October 18, 2000]
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR., petitioners, vs.
COURT OF APPEALS, ESTATE OF MAXIMINO A. NAZARENO, SR.,
ROMEO P. NAZARENO and ELIZA NAZARENO, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision [1] of the Court of Appeals
in CA-GR CV No. 39441 dated May 29, 1998 affirming with modifications the decision
of the Regional Trial Court, Branch 107, Quezon City, in an action for annulment of
sale and damages.
The facts are as follows:
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife. Aurea died
on April 15, 1970, while Maximino, Sr. died on December 18, 1980. They had five
children, namely, Natividad, Romeo, Jose, Pacifico, and Maximino, Jr. Natividad and
Maximino, Jr. are the petitioners in this case, while the estate of Maximino, Sr.,
Romeo, and his wife Eliza Nazareno are the respondents.
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete acquired
properties in Quezon City and in the Province of Cavite. It is the ownership of some of
these properties that is in question in this case.
It appears that after the death of Maximino, Sr., Romeo filed an intestate case in
the Court of First Instance of Cavite, Branch XV, where the case was docketed as Sp.
Proc. No. NC-28. Upon the reorganization of the courts in 1983, the case was
129
transferred to the Regional Trial Court of Naic, Cavite. Romeo was appointed
administrator of his fathers estate.
In the course of the intestate proceedings, Romeo discovered that his parents
had executed several deeds of sale conveying a number of real properties in favor of
his sister, Natividad. One of the deeds involved six lots in Quezon City which were
allegedly sold by Maximino, Sr., with the consent of Aurea, to Natividad on January
29, 1970 for the total amount of P47,800.00. The Deed of Absolute Sale reads as
follows:
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
I, MAXIMINO A. NAZARENO, Filipino, married to Aurea Poblete-Nazareno, of legal age
and a resident of the Mun. of Naic, Prov. of Cavite, Philippines,
-WITNESSETH-
That I am the absolute registered owner of six (6) parcels of land with the improvements
thereon situated in Quezon City, Philippines, which parcels of land are herewith described and
bounded as follows, to wit:
TRANS. CERT. OF TITLE NO. 140946
A parcel of land (Lot 3-B of the subdivision plan Psd-47404, being a portion of Lot 3, Block
D-3 described on plan Bsd-10642, G.L.R.O. Record No.) situated in the Quirino District,
Quezon City. Bounded on the N., along line 1-2 by Lot 15, Block D-3 of plan Bsd - 10642;
along line 2-3 by Lot 4, Block D-3 of plan Bsd-10642; along line 3-4 by Aurora Boulevard
(Road Lot-1, Bsd-10642); and along line 4-1 by Lot 3-D of the subdivision plan. Beginning at
a point marked 1 on plan, being S.29 deg. 26E., 1156.22 m. from B.L.L.M. 9, Quezon City,
thence N. 79 deg. 53E., 12.50 m. to point 2;
thence S. 10 deg. 07E., 40.00 m. to point 3;
thence S. 79 deg. 53W., 12.50 m. to point 4;
thence N. 10 deg. 07W., 40.00 m. to the point
of beginning; containing an area of FIVE HUNDRED (500) SQUARE METERS. All points
referred to are indicated on the plan and are marked on the ground as follows: points 1 and 4
by P.L.S. Cyl. Conc. Mons. bearings true; date of the original survey, April 8-July 15, 1920
and that of the subdivision survey, March 25, 1956.
TRANS. CERT. OF TITLE NO. 132019
A parcel of land (Lot 3, Block 93 of the subdivision plan Psd-57970 being a portion of Lot 6,
Pcs-4786, G.L.R.O. Rec. No. 917) situated in Quirino District Quezon City. Bounded on the
NW., along line 1-2, by Lot 1, Block 93; on the NE., along line 2-3, by Road Lot 101; on the
SE., along line 3-4, by Road Lot 100; on the SW., along line 4-1, by Lot 4, Block 93; all of the
subdivision plan. Beginning at point marked 1 on plan, being S. 65 deg. 40 3339.92 m. from
B.L.L.M. No. 1, Marikina, Rizal;
thence N. 23 deg. 28 min. E., 11.70 m. to point 2;
thence S. 66 deg. 32 min. E., 18.00 m. to point 3;
thence S. 23 deg. 28 min. W., 11.70 m. to point 4;
thence N. 66 deg. 32. min. W., 18.00 m. to the point
of beginning; containing an area of TWO HUNDRED TEN SQUARE METERS AND SIXTY
SQUARE DECIMETERS (210.60). All points referred to are indicated on the plan and are
marked on the ground by B.L. Cyl. Conc. Mons. 15 x 60 cm.; bearings true; date of the
original survey, Nov. 10, 1920 and Jan. 31-March 31, 1924 and that of the subdivision survey,
February 1 to September 30, 1954. Date approved - March 9, 1962.
TRANS. CERT. OF TITLE NO. 118885
A parcel of land (Lot No. 10, of the consolidation and subdivision plan Pcs-988, being a
portion of the consolidated Lot No. 26, Block No. 6, Psd-127, and Lots Nos. 27-A and 27-B,
Psd-14901, G.L.R.O. Record No. 917), situated in the District of Cubao, Quezon City, Island
of Luzon. Bounded on the NE., by Lot No. 4 of the consolidation and subdivision plan; on the
SE., by Lot No. 11 of the consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 9 of the consolidation and
subdivision plan. Beginning at a point marked 1 on the plan, being S. 7 deg. 26W., 4269.90 m.
more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00E., 12.00 m. to point 2;
thence S. 64 deg. 59W., 29.99 m. to point 3;
thence N. 25 deg. 00W., 12.00 m to point 4;
130
thence N. 64 deg. 59E., 29.99 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360),
more or less. All points referred to are indicated on the plan and on the ground are marked by
P.L.S. Conc. Mons. 15 x 60 cm.; bearings true; declination 0 deg. 50E., date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and subdivision survey, April 24
to 26, 1941.
TRANS. CERT. OF TITLE NO. 118886
A parcel of land (Lot No. 11, of the consolidation and subdivision plan Pcs-988, being a
portion of the consolidated Lot No. 26, Block No. 6, Psd-127, and Lots Nos. 27-A and 27-B,
Psd-14901, G.L.R.O. Record No. 917), situated in the District of Cubao, Quezon City, Island
of Luzon. Bounded on the NE., by Lot No. 4 of the consolidation and subdivision plan; on the
SE., by Lot No. 12 of the consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; on the NW., by Lot No. 10 of the consolidation and
subdivision plan. Beginning at a point marked 1 on plan, being S. 79 deg. 07W., 4264.00 m.
more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 59W., 29.99 m. to point 2;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence N. 64 deg. 59E., 29.99 m. to point 4;
thence S. 26 deg. 00E., 12.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360),
more or less. All points referred to are indicated on the plan and on the ground, are marked by
P.L.S. Conc. Mons. 15 x 60 cm.; bearings true; declination 0 deg. 50E.; date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and subdivision survey, April 24
to 26, 1941.
A parcel of land (Lot No. 13 of the consolidation and subdivision plan Pcs-988, being a
portion of the consolidated Lot No. 26, Block No. 6, Psd-127, and Lots Nos. 27-A and 27-B,
Psd-14901, G.L.R.O. Record No. 917), situated in the District of Cubao, Quezon City, Island
of Luzon. Bounded on the NE., by Lot No. 4 of the consolidation and subdivision plan; on the
SE., by Lot No. 14, of the consolidation; and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 12, of the consolidation and
subdivision plan. Beginning at the point marked 1 on plan, being S.78 deg. 48W., 4258.20 m.
more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 58W., 30.00 m. to point 2;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence N. 64 deg. 59E., 29.99 m. to point 4;
thence S.25 deg. 00E., 12.00 m. to point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360, more
or less. All points referred to are indicated on the plan and on the ground are marked by P.L.S.
Conc. Mons. 15 x 60 cm.; bearings true; declination 0 deg. 50E., date of the original survey,
April 8 to July 15, 1920, and that of the consolidation and subdivision survey, April 24 to 26,
1941.
A parcel of land (Lot No. 14, of the consolidation and subdivision plan Pcs-988, being a
portion of the consolidated Lot No. 26, Block No. 6, Psd-127, and Lots Nos. 27-A and 27-B,
Psd-14901, G.L.R.O. Record No. 917), situated in the District of Cubao, Quezon City, Island
of Luzon. Bounded on the NE., by Lot No. 4 of the consolidation and subdivision plan; on the
SE., by Lot No. 15, of the consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 13 of the consolidation and
subdivision plan. Beginning at the point marked 1 on plan, being S.78 deg. 48W., 4258.20 m.
more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00E., 12.00 m. to point 2;
thence S. 65 deg. 00W., 30.00 m. to point 3;
thence S. 65 deg. 00W., 12.00 m. to point 4;
thence N.64 deg. 58E., 30.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360),
more or less. All points referred to are indicated on the plan and on the ground are marked by
P.L.S. Conc. Mons. 15 x 60 cm.; bearings true; declination 0 deg. 50E., date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and subdivision survey, April 24
to 26, 1941.
That for and in consideration of the sum of FORTY THREE THOUSAND PESOS
(P43,000.00) PHILIPPINE CURRENCY, to me in hand paid by NATIVIDAD P.
NAZARENO, Filipino, single, of legal age and a resident of the Mun. of Naic, Prov. of Cavite,
Philippines, the receipt whereof is acknowledged to my entire satisfaction, I do hereby CEDE,
SELL, TRANSFER, CONVEY and ASSIGN unto the said Natividad P. Nazareno, her heirs,
131
administrators and assigns, all my title, rights, interests and participations to the
abovedescribed parcels of land with the improvements thereon, with the exception of LOT
NO. 11 COVERED BY T.C.T. NO. 118886, free of any and all liens and encumbrances; and
That for and in consideration of the sum of FOUR THOUSAND EIGHT HUNDRED PESOS
(P4,800.00) PHILIPPINE CURRENCY, to me in hand paid by NATIVIDAD P. NAZARENO,
Filipino, single, of legal age and a resident of the Mun. of Naic, Prov. of Cavite, Philippines,
the receipt whereof is acknowledged to my entire satisfaction, I do hereby CEDE, SELL,
TRANSFER, CONVEY and ASSIGN unto the said Natividad P. Nazareno, her heirs,
administrators and assigns, all my title, rights, interests and participations in and to Lot No. 11
covered by T.C.T. No. 118886 above-described, free of any and all liens and encumbrances,
with the understanding that the title to be issued in relation hereto shall be separate and distinct
from the title to be issued in connection with Lots Nos. 13 and 14, although covered by the
same title.
IN WITNESS WHEREOF, I have hereunto signed this deed of absolute sale in the City of
Manila, Philippines, this 29th day of January, 1970.[2]
By virtue of this deed, transfer certificates of title were issued to Natividad, to
wit: TCT No. 162738 (Lot 3-B),[3] TCT No. 162739 (Lot 3),[4] TCT No. 162735 (Lot 10),
[5]
TCT No. 162736 (Lot 11),[6] and TCT No. 162737 (Lots 13 and 14),[7] all of the
Register of Deeds of Quezon City.
Among the lots covered by the above Deed of Sale is Lot 3-B which is
registered under TCT No. 140946. This lot had been occupied by Romeo, his wife
Eliza, and by Maximino, Jr. since 1969. Unknown to Romeo, Natividad sold Lot 3-B
on July 31, 1982 to Maximino, Jr.,[8] for which reason the latter was issued TCT No.
293701 by the Register of Deeds of Quezon City.[9]
When Romeo found out about the sale to Maximino, Jr., he and his wife
Eliza locked Maximino, Jr. out of the house. On August 4, 1983, Maximino, Jr. brought
an action for recovery of possession and damages with prayer for writs of preliminary
injunction and mandatory injunction with the Regional Trial Court of Quezon City. On
December 12, 1986, the trial court ruled in favor of Maximino, Jr. In CA-G.R. CV No.
12932, the Court of Appeals affirmed the decision of the trial court.[10]
On June 15, 1988, Romeo in turn filed, on behalf of the estate of Maximino, Sr.,
the present case for annulment of sale with damages against Natividad and
Maximino, Jr. The case was filed in the Regional Trial Court of Quezon City, where it
was docketed as Civil Case No. 88-58.[11] Romeo sought the declaration of nullity of
the sale made on January 29, 1970 to Natividad and that made on July 31, 1982 to
Maximino, Jr. on the ground that both sales were void for lack of consideration.
On March 1, 1990, Natividad and Maximino, Jr. filed a third-party complaint
against the spouses Romeo and Eliza.[12] They alleged that Lot 3, which was included
in the Deed of Absolute Sale of January 29, 1970 to Natividad, had been
surreptitiously appropriated by Romeo by securing for himself a new title (TCT No.
277968) in his name.[13] They alleged that Lot 3 is being leased by the spouses
Romeo and Eliza to third persons. They therefore sought the annulment of the
transfer to Romeo and the cancellation of his title, the eviction of Romeo and his wife
Eliza and all persons claiming rights from Lot 3, and the payment of damages.
The issues having been joined, the case was set for trial. Romeo presented
evidence to show that Maximino and Aurea Nazareno never intended to sell the six
lots to Natividad and that Natividad was only to hold the said lots in trust for her
siblings. He presented the Deed of Partition and Distribution dated June 28, 1962
executed by Maximino Sr. and Aurea and duly signed by all of their children, except
Jose, who was then abroad and was represented by their mother, Aurea. By virtue of
this deed, the nine lots subject of this Deed of Partition were assigned by raffle as
follows:
1. Romeo - Lot 25-L (642 m2)
2. Natividad - Lots 23 (312 m2) and 24 (379 m2)
3. Maximino, Jr. - Lots 6 (338 m2) and 7 (338 m2)
4. Pacifico - Lots 13 (360 m2) and 14 (360 m2)
5. Jose - Lots 10 (360 m2) and 11 (360 m2)
Romeo received the title to Lot 25-L under his name,[14] while Maximino, Jr.
received Lots 6 and 7 through a Deed of Sale dated August 16, 1966 for the amount
of P9,500.00.[15] Pacifico and Joses shares were allegedly given to Natividad, who
agreed to give Lots 10 and 11 to Jose, in the event the latter came back from
abroad.Natividads share, on the other hand, was sold to third persons [16] because she
allegedly did not like the location of the two lots. But, Romeo said, the money realized
from the sale was given to Natividad.
Romeo also testified that Lot 3-B was bought for him by his father, while Lot 3
was sold to him for P7,000.00 by his parents on July 4, 1969. [17] However, he admitted
that a document was executed by his parents transferring six properties in Quezon
City, i.e., Lots 3, 3-B, 10, 11, 13, and 14, to Natividad.
132
 Romeo further testified that, although the deeds of sale executed by his parents
in their favor stated that the sale was for a consideration, they never really paid any
amount for the supposed sale. The transfer was made in this manner in order to avoid
the payment of inheritance taxes. [18] Romeo denied stealing Lot 3 from his sister but
instead claimed that the title to said lot was given to him by Natividad in 1981 after
their father died.
Natividad and Maximino, Jr. claimed that the Deed of Partition and Distribution
executed in 1962 was not really carried out. Instead, in December of 1969, their
parents offered to sell to them the six lots in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13
and 14. However, it was only Natividad who bought the six properties because she
was the only one financially able to do so. Natividad said she sold Lots 13 and 14 to
Ros-Alva Marketing Corp.[19] and Lot 3-B to Maximino, Jr. for P175,000.00.
[20]
Natividad admitted that Romeo and the latters wife were occupying Lot 3-B at that
time and that she did not tell the latter about the sale she had made to Maximino, Jr.
Natividad said that she had the title to Lot 3 but it somehow got lost. She could
not get an original copy of the said title because the records of the Registrar of Deeds
had been destroyed by fire. She claimed she was surprised to learn that Romeo was
able to obtain a title to Lot 3 in his name.
Natividad insisted that she paid the amount stated in the Deed of Absolute Sale
dated January 29, 1970. She alleged that their parents had sold these properties to
their children instead of merely giving the same to them in order to impose on them
the value of hardwork.
Natividad accused Romeo of filing this case to harass her after Romeo lost in
the action for recovery of possession (Civil Case No. Q-39018) which had been
brought against him by Maximino, Jr. It appears that before the case filed by Romeo
could be decided, the Court of Appeals rendered a decision in CA-GR CV No.
12932 affirming the trial courts decision in favor of Maximino, Jr.
On August 10, 1992, the trial court rendered a decision, the dispositive portion of
which states:
WHEREFORE, judgment is hereby rendered declaring the nullity of the Deed of Sale dated
January 29, 1970. Except as to Lots 3, 3-B, 13 and 14 which had passed on to third persons,
thedefendant Natividad shall hold the rest in trust for Jose Nazareno to whom the same had
been adjudicated. The Register of Deeds of Quezon City is directed to annotate this judgment
on Transfer Certificate of Titles Nos. 162735 and 162736 as a lien in the titles of Natividad P.
Nazareno.
The defendants counterclaim is dismissed. Likewise, the third-party complaint is dismissed.
The defendants are hereby directed to pay to the plaintiff jointly and severally the sum
of P30,000 as and for attorneys fees. Likewise, the third-party plaintiff is directed to pay the
third-party defendants attorneys fees of P20,000.
All other claims by one party against the other are dismissed.
SO ORDERED.[21]
Natividad and Maximino, Jr. filed a motion for reconsideration. As a result, on
October 14, 1992 the trial court modified its decision as follows:
WHEREFORE, the plaintiffs Partial Motion for Reconsideration is hereby granted. The
judgment dated August 10, 1992 is hereby amended, such that the first paragraph of its
dispositive portion is correspondingly modified to read as follows:
WHEREFORE, judgment is hereby rendered declaring the nullity of the Deeds of Sale dated
January 29, 1970 and July 31, 1982.
Except as to Lots 3, 13 and 14 which had passed on to third person, the defendant Natividad
shall hold the rest OF THE PROPERTIES COVERED BY THE DEED OF SALE DATED
JANUARY 29, 1970 (LOTS 10 and 11) in trust for Jose Nazareno to whom the same had been
adjudicated.
The Register of Deeds of Quezon City is directed to annotate this judgment on Transfer
Certificates of Title No. 162735 and 162736 as a lien on the titles of Natividad P. Nazareno.
LIKEWISE, THE SAID REGISTER OF DEEDS IS DIRECTED TO CANCEL TCT NO.
293701 (formerly 162705) OVER LOT 3-B AND RESTORE TCT NO. 140946 IN THE
NAME OF MAXIMINO NAZARENO SR. AND AUREA POBLETE.[22]
On appeal to the Court of Appeals, the decision of the trial court was modified in
the sense that titles to Lot 3 (in the name of Romeo Nazareno) and Lot 3-B (in the
name of Maximino Nazareno, Jr.), as well as to Lots 10 and 11 were cancelled and
ordered restored to the estate of Maximino Nazareno, Sr. The dispositive portion of
the decision dated May 29, 1998 reads:
WHEREFORE, the appeal is GRANTED. The decision and the order in question are modified
as follows:
1. The Deed of Absolute Sale dated 29 January 1970 and the Deed of Absolute Sale dated 31
July 1982 are hereby declared null and void;
133
2. Except as to Lots 13 and 14 ownership of which has passed on to third persons, it is hereby C) THE ADMISSION MADE BY MAXIMINO A. NAZARENO, SR. IN HIS
declared that Lots 3, 3-B, 10 and 11 shall form part of the estate of the deceased Maximino TESTIMONY IN OPEN COURT ON AUGUST 13, 1980 DURING
Nazareno, Sr.; HIS LIFETIME IN CIVIL CASE NO. NC-712 (EXH. 81, 81B) THAT
HE HAD SOLD CERTAIN PROPERTIES IN FAVOR OF
3. The Register of Deeds of Quezon City is hereby ordered to restore TCT No. 140946 NATIVIDAD P. NAZARENO THUS BELYING THE CLAIM OF
(covering Lot 3-B), TCT No. 132019 (covering Lot 3), TCT No. 118885 (covering Lot 10), ROMEO P. NAZARENO THAT THE DEED OF ABSOLUTE SALE
and TCT No. 118886 (covering Lot 11).[23] DATED JANUARY 29, 1970 IS ONE AMONG THE DOCUMENTS
EXECUTED BY THE DECEASED SPOUSES TO BE WITHOUT
CONSIDERATION.
Petitioners filed a motion for reconsideration but it was denied in a resolution
dated May 27, 1999. Hence this petition.
D) THE ADMISSIONS MADE BY ROMEO P. NAZARENO HIMSELF
CONTAINED IN A FINAL DECISION OF THE RESPONDENT
Petitioners raise the following issues:
COURT IN CA-GR CV NO. 12932 DATED AUGUST 31, 1992 AND
AN ANNEX APPEARING IN HIS ANSWER TO THE COMPLAINT
1. WHETHER OR NOT THE UNCORROBORATED TESTIMONY OF
IN CIVIL CASE NO. Q-39018 (EXH. 11-B) INVOLVING LOT 3B,
PRIVATE RESPONDENT ROMEO P. NAZARENO CAN DESTROY
ONE OF THE PROPERTIES IN QUESTION THAT THE SAID
THE FULL FAITH AND CREDIT ACCORDED TO NOTARIZED
PROPERTY IS OWNED BY PETITIONER NATIVIDAD P.
DOCUMENTS LIKE THE DEED OF ABSOLUTE SALE DATED
NAZARENO.
JANUARY 29, 1970 (EXH. 1) EXECUTED BY THE DECEASED
SPOUSES MAXIMINO A. NAZARENO, SR. AND AUREA POBLETE IN
E) THE PARTIAL PROJECT OF PARTITION DATED MAY 24, 1995
FAVOR OF PETITIONER NATIVIDAD P. NAZARENO.
WHICH WAS APPROVED BY THE INTESTATE COURT IN SP.
PROC. NO. NC-28 AND EXECUTED IN ACCORDANCE WITH
2. WHETHER OR NOT THE RESPONDENT COURT GROSSLY
THE LATTER COURTS FINAL ORDER DATED JULY 9, 1991
MISAPPRECIATED THE FACTS OF THE CASE WITH RESPECT TO
DETERMINING WHICH WERE THE REMAINING PROPERTIES
THE VALIDITY OF THE SAID DEED OF ABSOLUTE SALE DATED
OF THE ESTATE.
JANUARY 29, 1970 (EXH. 1) IN THE LIGHT OF THE FOLLOWING:

3. WHETHER OR NOT THE DEED OF ABSOLUTE SALE DATED

A) THE DOCUMENTARY EVIDENCE, ALL OF WHICH ARE
JANUARY 29, 1970 EXECUTED BY THE DECEASED SPOUSES
NOTARIZED, EXECUTED BY THE DECEASED SPOUSES
MAXIMINO A. NAZARENO, SR. AND AUREA POBLETE DURING
DURING THEIR LIFETIME INVOLVING SOME OF THEIR
THEIR LIFETIME INVOLVING THEIR CONJUGAL PROPERTIES IS
CONJUGAL PROPERTIES.
AN INDIVISIBLE CONTRACT? AND IF SO WHETHER OR NOT
UPON THEIR DEATH, THE ESTATE OF MAXIMINO A. NAZARENO,
B) THE EXECUTION OF AN EXTRA-JUDICIAL PARTITION WITH SR. ALONE CAN SEEK THE ANNULMENT OF SAID SALE?
WAIVER OF RIGHTS AND CONFIRMATION OF SALE DATED
MAY 24, 1975 (EXH. 14A) OF THE ESTATE OF AUREA POBLETE
4. WHETHER OR NOT THE SALE OF LOT 3 UNDER THE DEED OF
BY THE DECEASED MAXIMINO A. NAZARENO, SR. AND THEIR
ABSOLUTE SALE DATED JANUARY 29, 1970 IN FAVOR OF
CHILDREN INVOLVING THE ONLY REMAINING ESTATE OF
PETITIONER NATIVIDAD P. NAZARENO, IS VALID CONSIDERING
AUREA POBLETE THUS IMPLIEDLY ADMITTING THE VALIDITY
THAT AS PER THE ORDER OF THE LOWER COURT DATED
OF PREVIOUS DISPOSITIONS MADE BY SAID DECEASED
NOVEMBER 21, 1990. ROMEO NAZARENO ADMITTED THAT HE
SPOUSES ON THEIR CONJUGAL PROPERTIES, HALF OF
DID NOT PAY THE CONSIDERATION STATED IN THE DEED OF
WHICH WOULD HAVE BECOME A PART OF AUREA POBLETES
ABSOLUTE SALE DATED JULY 4, 1969 EXECUTED BY THE
ESTATE UPON HER DEMISE.
DECEASED SPOUSES IN HIS FAVOR (EXH. M-2).

134
 5. WHETHER OR NOT AS A CONSEQUENCE, THE TITLE ISSUED IN
THE NAME OF ROMEO P. NAZARENO, TCT NO. 277968 (EXH. M)
SHOULD BE CANCELLED AND DECLARED NULL AND VOID AND A
NEW ONE ISSUED IN FAVOR OF NATIVIDAD P. NAZARENO
PURSUANT TO THE DEED OF ABSOLUTE SALE EXECUTED IN
THE LATTERS FAVOR ON JANUARY 29, 1970 BY THE DECEASED
SPOUSES.[24]
We find the petition to be without merit.
First. Petitioners argue that the lone testimony of Romeo is insufficient to
overcome the presumption of validity accorded to a notarized document.
To begin with, the findings of fact of the Court of Appeals are conclusive on the
parties and carry even more weight when these coincide with the factual findings of
the trial court. This Court will not weigh the evidence all over again unless there is a
showing that the findings of the lower court are totally devoid of support or are clearly
erroneous so as to constitute serious abuse of discretion.[25] The lone testimony of a
witness, if credible, is sufficient. In this case, the testimony of Romeo that no
consideration was ever paid for the sale of the six lots to Natividad was found to be
credible both by the trial court and by the Court of Appeals and it has not been
successfully rebutted by petitioners. We, therefore, have no reason to overturn the
findings by the two courts giving credence to his testimony.
The fact that the deed of sale was notarized is not a guarantee of the validity of
its contents. As held in Suntay v. Court of Appeals:[26]
Though the notarization of the deed of sale in question vests in its favor the presumption of
regularity, it is not the intention nor the function of the notary public to validate and make
binding an instrument never, in the first place, intended to have any binding legal effect upon
the parties thereto. The intention of the parties still and always is the primary consideration in
determining the true nature of a contract.
Second. Petitioners make capital of the fact that in C.A.-G.R. CV No. 12932,
which was declared final by this Court in G.R. No. 107684, the Court of Appeals
upheld the right of Maximino, Jr. to recover possession of Lot 3-B. In that case, the
Court of Appeals held:
As shown in the preceding disquisition, Natividad P. Nazareno acquired the property in
dispute by purchase in 1970. She was issued Transfer Certificate of Title No. 162738 of the
Registry of Deeds of Quezon City. When her parents died, her mother Aurea Poblete-
Nazareno in 1970 and her father Maximino A. Nazareno, Sr. in 1980, Natividad P. Nazareno
had long been the exclusive owner of the property in question. There was no way therefore
that the aforesaid property could belong to the estate of the spouses Maximino Nazareno, Sr.
and Aurea Poblete.The mere fact that Romeo P. Nazareno included the same property in an
inventory of the properties of the deceased Maximino A. Nazareno, Sr. will not adversely
affect the ownership of the said realty. Appellant Romeo P. Nazarenos suspicion that his
parents had entrusted all their assets under the care and in the name of Natividad P. Nazareno,
their eldest living sister who was still single, to be divided upon their demise to all the
compulsory heirs, has not progressed beyond mere speculation. His barefaced allegation on
the point not only is without any corroboration but is even belied by documentary
evidence. The deed of absolute sale (Exhibit B), being a public document (Rule 132, Secs. 19
and 23, Revised Rules on Evidence), is entitled to great weight; to contradict the same, there
must be evidence that is clear, convincing and more than merely preponderant (Yturralde vs.
Aganon, 28 SCRA 407; Favor vs. Court of Appeals, 194 SCRA 308). Defendants-appellants
own conduct disproves their claim of co-ownership over the property in question. Being
themselves the owner of a ten-unit apartment building along Stanford St., Cubao Quezon City,
defendants-appellants, in a letter of demand to vacate addressed to their tenants (Exhibits P, P-
1 and P-2) in said apartment, admitted that the house and lot located at No. 979 Aurora Blvd.,
Quezon City where they were residing did not belong to them. Also, when they applied for a
permit to repair the subject property in 1977, they stated that the property belonged to and was
registered in the name of Natividad P. Nazareno. Among the documents submitted to support
their application for a building permit was a copy of TCT No. 162738 of the Registry of Deeds
of Quezon City in the name of Natividad Nazareno (Exhibit O and submarkings; tsn March
15, 1985, pp. 4-5).[27]
To be sure, that case was for recovery of possession based on ownership of Lot
3-B. The parties in that case were Maximino, Jr., as plaintiff, and the spouses Romeo
and Eliza, as defendants. On the other hand, the parties in the present case for
annulment of sale are the estate of Maximino, Sr., as plaintiff, and Natividad and
Maximino, Jr., as defendants. Romeo and Eliza were named third-party defendants
after a third-party complaint was filed by Natividad and Maximino, Jr. As already
stated, however, this third-party complaint concerned Lot 3, and not Lot 3-B.
The estate of a deceased person is a juridical entity that has a personality of its
own.[28] Though Romeo represented at one time the estate of Maximino, Sr., the latter
has a separate and distinct personality from the former. Hence, the judgment in CA-
GR CV No. 12932 regarding the ownership of Maximino, Jr. over Lot 3-B binds
Romeo and Eliza only, and not the estate of Maximino, Sr., which also has a right to
recover properties which were wrongfully disposed.
Furthermore, Natividads title was clearly not an issue in the first case. In other
words, the title to the other five lots subject of the present deed of sale was not in
issue in that case. If the first case resolved anything, it was the ownership of
Maximino, Jr. over Lot 3-B alone.
135
 Third. Petitioners allege that, as shown by several deeds of sale executed by
Maximino, Sr. and Aurea during their lifetime, the intention to dispose of their real
properties is clear. Consequently, they argue that the Deed of Sale of January 29,
1970 should also be deemed valid.
This is a non-sequitur. The fact that other properties had allegedly been sold by
the spouses Maximino, Sr. and Aurea does not necessarily show that the Deed of
Sale made on January 29, 1970 is valid.
Romeo does not dispute that their parents had executed deeds of sale. The
question, however, is whether these sales were made for a consideration. The trial
court and the Court of Appeals found that the Nazareno spouses transferred their
properties to their children by fictitious sales in order to avoid the payment of
inheritance taxes.
Indeed, it was found both by the trial court and by the Court of Appeals that
Natividad had no means to pay for the six lots subject of the Deed of Sale.
All these convince the Court that Natividad had no means to pay for all the lots she
purportedly purchased from her parents. What is more, Romeos admission that he did not pay
for the transfer to him of lots 3 and 25-L despite the considerations stated in the deed of sale is
a declaration against interest and must ring with resounding truth. The question is, why should
Natividad be treated any differently, i.e., with consideration for the sale to her, when she is
admittedly the closest to her parents and the one staying with them and managing their
affairs? It just seems without reason. Anyway, the Court is convinced that the questioned Deed
of Sale dated January 29, 1970 (Exh. A or 1) is simulated for lack of consideration, and
therefore ineffective and void.[29]
In affirming this ruling, the Court of Appeals said:
Facts and circumstances indicate badges of a simulated sale which make the Deed of Absolute
Sale dated 29 January 1970 void and of no effect. In the case of Suntay vs. Court of Appeals
(251 SCRA 430 [1995]), the Supreme Court held that badges of simulation make a deed of
sale null and void since parties thereto enter into a transaction to which they did not intend to
be legally bound.
It appears that it was the practice in the Nazareno family to make simulated transfers of
ownership of real properties to their children in order to avoid the payment of inheritance
taxes. Per the testimony of Romeo, he acquired Lot 25-L from his parents through a fictitious
or simulated sale wherein no consideration was paid by him. He even truthfully admitted that
the sale of Lot 3 to him on 04 July 1969 (Deed of Absolute Sale, Records, Vol. II, p. 453)
likewise had no consideration. This document was signed by the spouses Max, Sr. and Aurea
as vendors while defendant-appellant Natividad signed as witness. [30]
Fourth. Petitioners argue further:
The Deed of Absolute Sale dated January 29, 1970 is an indivisible contract founded on an
indivisible obligation. As such, it being indivisible, it can not be annulled by only one of
them.And since this suit was filed only by the estate of Maximino A. Nazareno, Sr. without
including the estate of Aurea Poblete, the present suit must fail. The estate of Maximino A.
Nazareno, Sr. can not cause its annulment while its validity is sustained by the estate of Aurea
Poblete.[31]
An obligation is indivisible when it cannot be validly performed in parts, whatever
may be the nature of the thing which is the object thereof. The indivisibility refers to
the prestation and not to the object thereof. [32] In the present case, the Deed of Sale of
January 29, 1970 supposedly conveyed the six lots to Natividad. The obligation is
clearly indivisible because the performance of the contract cannot be done in parts,
otherwise the value of what is transferred is diminished. Petitioners are therefore
mistaken in basing the indivisibility of a contract on the number of obligors.
In any case, if petitioners only point is that the estate of Maximino, Sr. alone
cannot contest the validity of the Deed of Sale because the estate of Aurea has not
yet been settled, the argument would nonetheless be without merit. The validity of the
contract can be questioned by anyone affected by it. [33] A void contract is inexistent
from the beginning. Hence, even if the estate of Maximino, Sr. alone contests the
validity of the sale, the outcome of the suit will bind the estate of Aurea as if no sale
took place at all.
Fifth. As to the third-party complaint concerning Lot 3, we find that this has been
passed upon by the trial court and the Court of Appeals. As Romeo admitted, no
consideration was paid by him to his parents for the Deed of Sale. Therefore, the sale
was void for having been simulated. Natividad never acquired ownership over the
property because the Deed of Sale in her favor is also void for being without
consideration and title to Lot 3 cannot be issued in her name.
Nonetheless, it cannot be denied that Maximino, Sr. intended to give the six
Quezon City lots to Natividad. As Romeo testified, their parents executed the Deed of
Sale in favor of Natividad because the latter was the only female and the only
unmarried member of the family.[34] She was thus entrusted with the real properties in
behalf of her siblings. As she herself admitted, she intended to convey Lots 10 and 11
to Jose in the event the latter returned from abroad. There was thus an implied trust
constituted in her favor. Art. 1449 of the Civil Code states:
There is also an implied trust when a donation is made to a person but it appears that although
the legal estate is transmitted to the donee, he nevertheless is either to have no beneficial
interest or only a part thereof.
136
 There being an implied trust, the lots in question are therefore subject to FELICIANO, respondents-appelllees,
collation in accordance with Art. 1061 which states: vs.
THE DIRECTOR OF FORESTRY, APOLONIO RIVERA, THE SECRETARY OF
Every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass AGRICULTURE AND N ATURAL RESOURCES JOSE Y. FELICIANO, respon
of the estate any property or right which he may have received from the decedent, during the dents-appellees,RAVAGO COMMERCIAL CO., JORGE LAO HAPPICK and
lifetime of the latter, by way of donation, or any other gratuitous title, in order that it may be ATANACIO MALLARI, intervenors,
computed in the determination of the legitime of each heir, and in the account of the partition.
Camito V Pelianco Jr. for petitioner-appellant.
As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva Marketing,
Corp. on April 20, 1979[35] will have to be upheld for Ros-Alva Marketing is an innocent Solicitor General for respondent Director.
purchaser for value which relied on the title of Natividad. The rule is settled that every
person dealing with registered land may safely rely on the correctness of the Estelito P. Mendoza for respondent Ravago Comm'l Co.
certificate of title issued therefor and the law will in no way oblige him to go behind the
certificate to determine the condition of the property.[36] Anacleto Badoy for respondent Atanacio Mallari.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED. Mariano de Joya, Jr. for respondent Jorge Lao Happick, Jr.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur. MAKASIAR, J:

Buena, J., no part. This is an appeal from the order dated January 20, 1965 of the then Court of First
Instance of Manila, Branch VII, in Civil Case No. 56813, a petition for certiorari,
prohibition and mandamus with preliminary prohibitory injunction (p. 2. rec.), which
dismissed the petition of petitioner-appellant Wenceslao Vinzons Tan on the ground
that it does not state a sufficient cause of action, and upon the respondents-
appellees' (Secretary of Agriculture and Natural resources and the Director of
Forestry) motion to dismiss (p. 28, rec.).

Sometime in April 1961, the Bureau of Forestry issued Notice No. 2087, advertising
for public bidding a certain tract of public forest land situated in Olongapo, Zambales,
provided tenders were received on or before May 22, 1961 (p. 15, CFI rec.). This
public forest land, consisting of 6,420 hectares, is located within the former U.S.
Naval Reservation comprising 7,252 hectares of timberland, which was turned over
by the United States Government to the Philippine Government (P. 99, CFI rec.).

SECOND DIVISION
On May 5, 1961, petitioner-appellant Wenceslao Vinzons Tan submitted his
application in due form after paying the necessary fees and posting tile required bond
G.R. No. L- 24548 October 27, 1983 therefor. Nine other applicants submitted their offers before the deadline (p. 29, rec.).

WENCESLAO VlNZONS TAN, THE DIRECTOR OF FORESTRY, APOLONIO THE Thereafter, questions arose as to the wisdom of having the area declared as a forest
SECRETARY OF AGRICULTURE AND NATURAL RESOURCES JOSE Y. reserve or allow the same to be awarded to the most qualified bidder. On June 7,

137
1961, then President Carlos P. Garcia issued a directive to the Director of the Bureau
of Forestry, which read as follows:
It is desired that the area formerly covered by the Naval Reservation be
made a forest reserve for watershed purposes. Prepare and submit
immediately a draft of a proclamation establishing the said area as a
watershed forest reserve for Olongapo, Zambales. It is also desired that the
bids received by the Bureau of Forestry for the issuance of the timber
license in the area during the public bidding conducted last May 22, 1961 be
rejected in order that the area may be reserved as above stated. (pp. 98,
CFI rec.).
On August 3, 1961, Secretary Cesar M. Fortich of Agriculture and Natural Resources
sustained the findings and re comendations of the Director of Forestry who concluded
that "it would be beneficial to the public interest if the area is made available for
exploitation under certain conditions," and
We quote:
Respectfully forwarded to the honorable, the Executive Secretary Malacanang.
Manila inviting particular attention to the comment and recommendation of the
Director of Forestry in the proceeding in indorsement in which this Of fice fully
concurs.
The observations of responsible forest officials are most revealing of their
zeal to promote forest conservation and watershed protection especially in
Olongapo, Zambales area. In convincing fashion, they have demonstrated
that to declare the forest area involved as a forest reserve ratify than open it
for timber exploitation under license and regulation would do more harm
than of to the public interest. To convert the area into a forest reserve without
an adequate forest protection force, would make of it a 'Free Zone and
Logging Paradise,' to the ever 'Problem Loggers' of Dinalupihan, Bataan . . .
an open target of timber smugglers, kaingineros and other forms of forest
vandals and despoilers. On the other hand, to award the area, as planned,
to a reputable and responsible licensee who shall conduct logging
operations therein under the selective logging method and who shall be
obliged to employ a sufficient number of forest guards to patrol and protect
the forest consecration and watershed protection.
Worthy of mention is the fact that the Bureau of Forestry had already
conducted a public bidding to determine the most qualified bidder to whom
the area advertised should be awarded. Needless to stress, the decision of
the Director of Forestry to dispose of the area thusly was arrived at after
much thought and deliberation and after having been convinced that to do so
would not adversely affect the watershed in that sector. The result of the
bidding only have to be announced. To be sure, some of the participating
bidders like Mr. Edgardo Pascual, went to much expense in the hope of
winning a virgin forest concession. To suddenly make a turn about of this
decision without strong justifiable grounds, would cause the Bureau of
Forestry and this Office no end of embarrassment.
In view of the foregoing, it is earnestly urged that the Director of Forestry be allowed
to proceed with the announcement of the results of the bidding for the subject forest
area (p. 13, CFI rec.).
The Office of the President in its 4th Indorsement dated February 2, 1962, signed by
Atty. Juan Cancio, Acting Legal Officer, "respectfully returned to the Honorable
Secretary of the Department of Agriculture and Natural Resources for appropriate
action," the papers subject of Forestry Notice No. 2087 which was referred to the
Bureau of Forestry for decision (p. 14, CFI rec.).
Finally, of the ten persons who submitted proposed the area was awarded to herein
petitioner-appellant Wenceslao Vinzons Tan, on April 15, 1963 by the Bureau of
Forestry (p. 17, CFI rec.). Against this award, bidders Ravago Commercial Company
and Jorge Lao Happick filed motions for reconsideration which were denied by the
Director of Forestry on December 6, 1963.
On May 30, 1963, the Secretary of Agriculture and Natural Resources Benjamin M.
Gozon who succeeded Secretary Cesar M. Fortich in office issued General
Memorandum Order No. 46, series of 1963, pertinent portions of which state:
xxx xxx xxx
SUBJECT: ... ... ...
(D)elegation of authority to the Director of Forestry to grant ordinary timber
licenses.
1. ... ... ...
2. The Director of Forestry is hereby authorized to grant (a) new ordinary
timber licenses where the area covered thereby is not more than 3,000
hectares each; and (be the extension of ordinary timber licenses for areas
not exceeding 5,000 hectares each;
138
3. This Order shall take effect immediately (p. 267, CFI rec.).
Thereafter, Jose Y. Feliciano was appointed as Acting secretary of Agriculture and
Natural Resources, replacing secretary Benjamin M. Gozon. Upon assumption of
office he Immediately promulgate on December 19, 19b3 General memorandum
Order No. 60, revoking the authority delegated to the Director of Forestry, under
General Memorandum order No. 46, to grant ordinary timber licenses, which order
took effect on the same day, December 19, 1963. Pertinent portions of the said Order
read as follows:
xxx xxx xxx
SUBJECT: Revocation of General Memorandum Order No 46 dated May 30, 1963
1. In order to acquaint the undersigned with the volume and Nature of the work of the
Department, the authority delegated to the Director of forestry under General
Memorandum Order No. 46, dated May 30, 1963, to grant (a) new ordinary timber
licenses where the area covered thereby is not more than 3,000 hectares each; and
(b) the extension of ordinary timber licenses for areas not exceeding 3,000 hectares
each is hereby revoked. Until further notice, the issuance of' new licenses , including
amendments thereto, shall be signed by the secretary of Agriculture and Natural
Resources.
2. This Order shall take effect immediately and all other previous orders, directives,
circulars, memoranda, rules and regulations inconsistent with this Order are hereby
revoked (p. 268, CFl rec.; Emphasis supplied).
On the same date that the above-quoted memorandum took effect, December 19,
1963, Ordinary Timber License No. 20-'64 (NEW) dated April 22, 1963, in the name of
Wenceslao Vinzons Tan, was signed by then Acting Director of Forestry Estanislao R.
Bernal without the approval of the Secretary of Agriculture and Natural Resources. On
January 6, 1964, the license was released by the Office of the Director of Forestry (p.
30, CFI rec.; p. 77, rec.). It was not signed by the Secretary of Agriculture and Natural
Resources as required by Order No. 60 aforequoted.
On February 12, 1964, Ravago Commercial Company wrote a letter to the Secretary
of Agriculture and Natural Resources shall be considered by tile Natural Resources
praying that, pending resolution of the appeal filed by Ravago Commercial Company
and Jorge Lao Happick from the order of the Director of Forestry denying their motion
for reconsideration, OTI No. 20-'64 in the name of Wenceslao V. Tan be cancelled or
revoked on the ground that the grant thereof was irregular, anomalous and contrary to
existing forestry laws, rules and regulations.
On March 9, 1964, acting on the said representation made by Ravago Commercial
Company, the Secretary of Agriculture and Natural Resources promulgated an order
declaring Ordinary Timber License No. 20-'64 issued in the name of Wenceslao
Vinzons Tan, as having been issued by the Director of Forestry without authority, and
is therefore void ab initio. The dispositive portion of said order reads as follows:
WHEREFORE, premises considered, this Office is of the opinion and so
holds that O.T. License No. 20-'64 in the name of Wenceslao Vinzons Tan
should be, as hereby it is, REVOKED AND DECLARED without force and
effect whatsoever from the issuance thereof.
The Director of Forestry is hereby directed to stop the logging operations of
Wenceslao Vinzons Tan, if there be any, in the area in question and shall
see to it that the appellee shall not introduce any further improvements
thereon pending the disposition of the appeals filed by Ravago Commercial
Company and Jorge lao Happick in this case" (pp. 30-31, CFI rec.).
Petitioner-appellant moved for a reconsideration of the order, but the Secretary of
Agriculture and Natural Resources denied the motion in an Order dated March 25,
1964, wherein this paragraph appears:
In this connection, it has been observed by the Acting Director of Forestry in
his 2nd indorsement of February 12, 1964, that the area in question
composes of water basin overlooking Olongapo, including the proposed
Olongapo watershed Reservation; and that the United States as well as the
Bureau of Forestry has earmarked this entire watershed for a watershed
pilot forest for experiment treatment Concerning erosion and water
conservation and flood control in relation to wise utilization of the forest,
denudation, shifting cultivation, increase or decrease of crop harvest of
agricultural areas influenced by the watershed, etc. .... (pp. 3839, CFI rec.; p.
78, rec.).
On April 11, 1964, the Secretary of Agriculture and Natural Resources, acting on the
separate appeals filed by Jorge Lao Happick and Ravago Commercial Company,
from the order of the Director of Forestry dated April 15, 1963, awarding to
Wenceslao Vinzons Tan the area under Notive No. 2087, and rejecting the proposals
of the other applicants covering the same area, promulgated an order commenting
that in view of the observations of the Director of Forestry just quoted, "to grant the
area in question to any of the parties herein, would undoubtedly adversely affect
public interest which is paramount to private interests," and concluding that, "for this
reason, this Office is of the opinion and so holds, that without the necessity of
discussing the appeals of the herein appellants, the said appeals should be, as
139
hereby they are, dismissed and this case is considered a closed matter insofar as this
Office is concerned" (p. 78, rec.).
On April 18, 1964, on the basis of the denial of his motion for reconsideration by the
Secretary of Agriculture and Natural Resources, petitioner-appellant filed the instant
case before tile court a quo (Court of First Instance, Manila), Special Civil Action No.
56813, a petition for certiorari, prohibition and mandamus with preliminary prohibitory
injunction (pp. 1-12, CFI rec.). Petitioner-appellant claims that the respondents-
appellees "unlawfully, illegally whimsically, capriciously and arbitrarily acted without or
in excess of their jurisdiction, and/or with grave abuse of discretion by revoking a valid
and existing timber license without just cause, by denying petitioner-appellant of the
equal protection of the laws, by depriving him of his constitutional right to property
without due process of law, and in effect, by impairing the obligation of contracts" (P.
6, CFI rec.). Petitioner-appellant prayed for judgment making permanent the writ of
preliminary injunction against the respondents- appellees; declaring the orders of the
Secretary of Agriculture and Natural Resources dated March 9, March 25, and April
11, 1964, as well as all his acts and those of the Director of Forestry implementing
said orders, and all the proceedings in connection therewith, null and void, unlawful
and of no force and effect; ordering the Director of Forestry to renew OTI No. 20-'64
upon expiration, and sentencing the respondents, jointly and severally, to pay the
petitioner-appellant the sum of Two Hundred Thousand Pesos (P200,000.000) by way
of pecuniary damage, One Hundred Thousand Pesos (P100,000.00) by way of moral
and exemplary damages, and Thirty Thousand Pesos (P30,000-00) as attorney's fees
and costs. The respondents-appellees separately filed oppositions to the issuance of
the writ of preliminary injunction, Ravago Commercial Company, Jorge Lao, Happick
and Atanacio Mallari, presented petitions for intervention which were granted, and
they too opposed the writ.
The Director of Forestry in his motion to dismiss dated April 24, 1964, alleges the
following grounds: (1) that the court has no jurisdiction; (2) that the respondents may
not be sued without their consent; (3) that the petitioner has not exhausted all
available administrative remedies; (4) that the petition does not state a cause of
action; and (5) that purely administrative and discretionary functions of administrative
officials may not be interfered with by the courts. The Secretary of Agriculture and
Natural Resources joined the motion to dismiss when in his answer of May 18, 1964,
he avers the following special and affirmative defenses: (1) that the court has no
jurisdiction to entertain the action for certiorari, prohibition and mandamus; (2) that the
petitioner has no cause of action; (3) that venue is improperly laid; (4) that the State is
immune from suit without its consent; (5) that the court has no power to interfere in
purely administrative functions; and (6) that the cancellation of petitioner's license
was dictated by public policy (pp. 172-177, rec.). Intervenors also filed their respective
answers in intervention with special and affirmative defenses (pp. 78-79, rec.). A
hearing was held on the petition for the issuance of writ of preliminary injunction,
wherein evidence was submitted by all the parties including the intervenors, and
extensive discussion was held both orally and in writing.
After the said hearing, on January 20, 1965, the court a quo, from the evidence
received, resolved not only the question on the issuance of a writ of preliminary
injunction but also the motion to dismiss, declared that the petition did not state a
sufficient cause of action, and dismissed the same accordingly. To justify such action,
the trial court, in its order dismissing the petition, stated that "the court feels that the
evidence presented and the extensive discussion on the issuance of the writ of
preliminary mandatory and prohibitory injunction should also be taken into
consideration in resolving not only this question but also the motion to dismiss,
because there is no reason to believe that the parties will change their stand,
arguments and evidence" (p. 478, CFI rec.). His motion for reconsideration having
been denied (p. 488, CFI rec.), petitioner-appellant Wenceslao Vinzons Tan appealed
directly to this Court.
I
Petitioner-appellant now comes before this Court, claiming that the trial court erred in:
(1) holding that the petition does not state a sufficient cause of
action: and
(2) dismissing the petition [p.27,rec. ].
He argues that the sole issue in the present case is, whether or not the facts in the
petition constitute a sufficient cause of action (p. 31, rec.). Petitioner-appellant, in his
brief, presented a lengthy discussion on the definition of the term cause of action
wherein he contended that the three essential elements thereon, namely, the legal
right of the plaintiff, the correlative obligation of the defendants and the act or
omission of the defendant in violation of that right are satisfied in the averments of
this petition (pp. 31-32, rec.). He invoked the rule that when the ground for dismissal
is that the complaint states no cause of action, such fact can be determined only from
the facts alleged in the complaint and from no other, and the court cannot consider
other matters aliunde He further invoked the rule that in a motion to dismiss based on
insufficiency of cause of action, the facts alleged in the complaint are deemed
hypothetically admitted for the purpose of the motion (pp. 32-33, rec.).
A perusal of the records of the case shows that petitioner-appellant's contentions are
untenable. As already observed, this case was presented to the trial court upon a
motion to dismiss for failure of the petition to state a claim upon which relief could be
granted (Rule 16 [g], Revised Rules of Court), on the ground that the timber license
relied upon by the petitioner- appellant in his petition was issued by the Director of
140
Forestry without authority and is therefore void ab initio. This motion supplanted the
general demurrer in an action at law and, as a rule admits, for the purpose of the
motion, ail facts which are well pleaded however while the court must accept as true
all well pleaded facts, the motion does not admit allegations of which the court will
take judicial notice are not true, nor does the rule apply to legally impossible facts, nor
to facts inadmissible in evidence, nor to facts which appear by record or document
included in the pleadings to be unfounded (Vol. 1, Moran's Comments on the Rules of
Court, 1970 ed., p. 505, citing cases).
It must be noted that there was a hearing held in the instant case wherein answers
were interposed and evidence introduced. In the course of the hearing, petitioner-
appellant had the opportunity to introduce evidence in support of tile allegations iii his
petition, which he readily availed of. Consequently, he is estopped from invoking the
rule that to determine the sufficiency of a cause of action on a motion to dismiss, only
the facts alleged in the complaint must be considered. If there were no hearing held,
as in the case of Cohen vs. U.S. CCA Minn 1942,129 F. 2d 733), "where the case was
presented to District Court upon a motion to dismiss because of alleged failure of
complaint to state a claim upon which relief could be granted, and no answer was
interposed and no evidence introduced, the only facts which the court could properly
consider in passing upon the motion were those facts appearing in the complaint,
supplemented be such facts as the court judicially knew.
In Llanto vs. Ali Dimaporo, et al. (16 SCRA 601, March 31, 1966), this Court, thru
Justice Conrado V. Sanchez, held that the trial court can properly dismiss a complaint
on a motion to dismiss due to lack of cause of action even without a hearing, by
taking into consideration the discussion in said motion and the opposition thereto.
Pertinent portion of said decision is hereby quoted:
Respondents moved to dismiss. Ground therefor is lack of cause of action. The Court
below granted the motion, dismissed the petition. The motion to reconsider failed.
Offshoot is this appeal.
1. The threshold questions are these: Was the dismissal order
issued without any hearing on the motion to dismiss? Is it void?
WE go to the record. The motion to dismiss was filed on February 1, 1961 and set for
hearing on February 10 following. On February 8, 1961 petitioner's counsel
telegraphed the court, (r)equest postponement motion dismissal till written opposition
filed.' He did not appear at the scheduled hearing. But on March 4, 1961, he followed
up his wire, with his written opposition to the motion to dismiss. Adverting to the 5-
page motion to dismiss and the 6-page opposition thereto, We find that the
arguments pro and con on the question of the board's power to abolish petitioner's
position to discussed the problem said profusely cited authorities. The May 15, 1961
8-page court order recited at length the said arguments and concluded that petitioner
made no case.
One good reason for the statutory requirement of hearing on a motion as to enable
the suitors to adduce evidence in support of their opposing claims. But here the
motion to dismiss is grounded on lack of cause of action. Existence of a cause of
action or lack of it is determined be a reference to the facts averred in the challenged
pleading. The question raised in the motion is purely one of law. This legal issue was
fully discussed in said motion and the opposition thereto. In this posture, oral
arguments on the motion are reduced to an unnecessary ceremony and should be
overlooked. And, correctly so, because the other intendment of the law in requiring
hearing on a motion, i.e., 'to avoid surprises upon the opposite party and to give to
the latter time to study and meet the arguments of the motion,' has been sufficiently
met. And then, courts do not exalt form over substance (Emphasis supplied).
Furthermore even if the complaint stated a valid cause of action, a motion to dismiss
for- insufficiency of cause of action will be granted if documentary evidence admitted
by stipulation disclosing facts sufficient to defeat the claim enabled the court to go
beyond disclosure in the complaint (LOCALS No. 1470, No. 1469, and No. 1512 of
the International Longshoremen's Association vs. Southern Pacific Co., 6 Fed. Rules
Service, p. 107; U.S. Circuit Court of Appeals, Fifth Circuit, Dec. 7, 1952; 131 F. 2d
605). Thus, although the evidence of the parties were presented on the question of
granting or denying petitioner-appellant's application for a writ of preliminary
injunction, the trial court correctly applied said evidence in the resolution of the motion
to dismiss. Moreover, in applying said evidence in the resolution of the motion to
dismiss, the trial court, in its order dismissing the petition, pointed out that, "there is
no reason to believe that the parties will change their stand, arguments and evidence"
(p. 478, CFI rec.). Petitioner-appellant did not interpose any objection thereto, nor
presented new arguments in his motion for reconsideration (pp. 482-484, CFI rec.).
This omission means conformity to said observation, and a waiver of his right to
object, estopping him from raising this question for the first time on appeal. " I
question not raised in the trial court cannot be raised for the first time on appeal"
(Matienzo vs. Servidad, Sept. 10, 1981, 107 SCRA 276).
Moreover, petitioner-appellant cannot invoke the rule that, when the ground for asking
dismissal is that the complaint states no cause of action, its sufficiency must be
determined only from the allegations in the complaint. "The rules of procedure are not
to be applied in a very rigid, technical sense; rules of procedure are used only to help
secure substantial justice. If a technical and rigid enforcement of the rules is made,
their aim would be defeated. Where the rules are merely secondary in importance are
made to override the ends of justice; the technical rules had been misapplied to the
prejudice of the substantial right of a party, said rigid application cannot be
countenanced" (Vol. 1, Francisco, Civil Procedure, 2 ed., 1973, p. 157, citing cases).
141
What more can be of greater importance than the interest of the public at large, more
particularly the welfare of the inhabitants of Olongapo City and Zambales province,
whose lives and properties are directly and immediately imperilled by forest
denudation.
The area covered by petitioner-appellant's timber license practically comprises the
entire Olongapo watershed (p. 265, CFI rec.). It is of public knowledge that
watersheds serves as a defense against soil erosion and guarantees the steady
supply of water. As a matter of general policy, the Philippine Constitution expressly
mandated the conservation and proper utilization of natural resources, which includes
the country's watershed. Watersheds in the Philippines had been subjected to
rampant abusive treatment due to various unscientific and destructive land use
practices. Once lush watersheds were wantonly deforested due to uncontrolled timber
cutting by licensed concessionaries and illegal loggers. This is one reason why, in
paragraph 27.of the rules and regulations included in the ordinary timber license it is
stated:
The terms and conditions of this license are subject to change at the
discretion of the Director of Forestry, and that this license may be made to
expire at an earlier date, when public interests so require (Exh. D, p. 22, CFI
rec.).
Considering the overriding public interest involved in the instant case, We therefore
take judicial notice of the fact that, on April 30, 1964, the area covered by petitioner-
appellant's timber license has been established as the Olongapo Watershed Forest
Reserve by virtue of Executive Proclamation No. 238 by then President Diosdado
Macapagal which in parts read as follows:
Pursuant to the provisions of Section 1824 of the Revised Administrative
Code, as amended, 1, Diosdado Macapagal, President of the Philippines do
hereby withdraw from entry, sale, or settlement and establish as Olongapo
Watershed Forest Reserve for watershed, soil protection, and timber
production purposes, subject to private rights, if any there be, under the
administration and control of the Director of Forestry, xx the following parcels
of land of the public domain situated in the municipality of Olongapo,
province of Zambales, described in the Bureau of Forestry map No. FR-132,
to wit: ... ... (60 O.G. No. 23, 3198).
Petitioner-appellant relies on Ordinary Timber License No. 20-'64 (NEW) for his
alleged right over the timber concession in question. He argues thus: "The facts
alleged in the petition show: (1) the legal right of the petitioner to log in the area
covered by his timber license; (2) the legal or corresponding obligation on the part of
the respondents to give effect, recognize and respect the very timber license they
issued to the petitioner; and (3) the act of the respondents in arbitrarily revoking the
timber license of the petitioner without giving him his day in court and in preventing
him from using and enjoying the timber license issued to him in the regular course of
official business" (p. 32, rec.).
In the light of petitioner-appellant's arguments, it is readily seen that the whole
controversy hinges on the validity or invalidity of his timber license.
WE fully concur with the findings of the trial court that petitioner- appellant's timber
license was signed and released without authority by then Acting Director Estanislao
R. Bernal of Forestry, and is therefore void ab initio. WE hereby quote such findings:
In the first place, in general memorandum order No. 46 dated May 30, 1963,
the Director of Forestry was authorized to grant a new ordinary timber
license only where the area covered thereby was not more than 3,000
hectares; the tract of public forest awarded to the petitioner contained 6,420
hectares (Exhs. 2-A and 2-B Ravago, embodied in Annex B; Exh. B). The
petitioner contends that only 1,756 hectares of the said area contain
commercial and operable forest; the authority given to the Director of
Forestry to grant a new ordinary timber license of not more than 3,000
hectares does not state that the whole area should be commercial and
operable forest. It should be taken into consideration that the 1,756 hectares
containing commercial and operable forest must have been distributed in the
whole area of 6,420 hectares. Besides the license states, 'Please see
attached sketch and technical description,' gives an area of 6,420 hectares
and does not state what is the area covered of commmercial and operable
forest (Exh. Ravago Also Annex B of the petition, which was marked as
Exhibit B, states:
Under Notice No. 2087, a tract of public forest containing 6,420 hectares located in
Olongapo, Zambales was declared available for timber utilization and development.
Pursuant to this Notice, there were received bid proposals from the following persons:
...
Wherefore, confirming the findings of said Committee, the area described in Notice
No. 2087 shall be awarded, as it is hereby awarded to Wenceslao Vinzons Tan,
subject to the following conditions: ... ...
In the second place, at the time it was released to the petitioner, the Acting Director of
Forestry had no more authority to grant any license. The license was signed by the
Acting Director of Forestry on December 19, 1963, and released to the petitioner on
January 6, 1964 (Exh. RavaGo The authority delegated to the Director of Forestry to
grant a new ordinary timber license was contained in general memorandum order No.
142
46 dated May 30, 1963. This was revoked by general memorandum order No. 60,
which was promulgated on December 19, 1963. In view thereof, the Director of
Forestry had no longer any authority to release the license on January 6, 1964, and
said license is therefore void ab initio (pp. 479480, CFI rec.).
The release of the license on January 6, 1964, gives rise to the impression that it was
ante-dated to December 19, 1963 on which date the authority of the Director of
Forestry was revoked. But, what is of greatest importance is the date of the release or
issuance, and not the date of the signing of the license. While petitioner-appellant's
timber license might have been signed on December 19, 1963 it was released only on
January 6, 1964. Before its release, no right is acquired by the licensee. As pointed
out by the trial court, the Director of Forestry had no longer any authority to release
the license on January 6, 1964. Therefore, petitioner-appellant had not acquired any
legal right under such void license. This is evident on the face of his petition as
supplemented by its annexes which includes Ordinary Timber License No. 20-'64
(NEW). Thus, in the case of World Wide Insurance & Surety Co., Inc. vs. Macrohon,
et al. (105 Phil. 250, Feb. 28, 1959), this Court held that if from the face of the
complaint, as supplemented by its annexes, plaintiff is not the owner, or entitled to the
properties it claims to have been levied upon and sold at public auction by the
defendants and for which it now seeks indemnity, the said complaint does not give
plaintiff any right of action against the defendants. In the same case, this Court further
held that, in acting on a motion to dismiss, the court cannot separate the complaint
from its annexes where it clearly appears that the claim of the plaintiff to be the A
owner of the properties in question is predicated on said annexes. Accordingly,
petitioner-appellant's petition must be dismissed due to lack of cause of action.
II
Petitioner-appellant, in his petition, alleged that he has exhausted all his
administrative remedies to no avail as respondents-appellees have failed, neglected,
refused and continue to refuse to allow petitioner-appellant to continue operation in
the area covered by his timber license. He further alleged that he has neither
recourse by way of appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law except thru this special civil action, as the last official act of the
respondent-appellee Secretary of Agriculture and Natural Resources in declaring void
the timber license referred to above after denying petitioner-appellant's motion for
reconsideration, is the last administrative act. Petitioner-appellant relies on the case
of Demaisip vs. The Court of Appeals, et al. (106 Phil. 237, Sept. 24, 1959), wherein it
was held that the failure of the plaintiff to appeal from the adverse decision of the
Secretary to the President cannot preclude the plaintiff from taking court action in
view of the theory that the Secretary of a department is merely an alter-ego of the
President. The presumption is that the action of the Secretary bears the implied
sanction of the President unless the same is disapproved by the latter (Villena vs. the
Secretary of Interior, 67 Phil. 451; p. 7, CFI rec.).
To this We cannot agree. Petitioner-appellant did not appeal the order of the
respondent Secretary of Agriculture and Natural Resources to the President of the
Philippines, who issued Executive Proclamation No. 238 withdrawing the area from
private exploitation, and establishing it as the Olongapo Watershed Forest Reserve.
Considering that the President has the power to review on appeal the orders or acts
of the respondents-appellees, the failure of the petitioner-appellant to take that appeal
is failure on his part to exhaust his administrative remedies. Thus, this Court, in the
case of Calo vs. Fuertes (5 SCRA 399, 400, June 29, 1962), held that:
At any rate, the appellant's contention that, as the Secretary of Agriculture
and Natural Resources is the alter ego of the President and his acts or
decisions are also those of the latter, he need not appeal from the decision
or opinion of the former to the latter, and that, such being the case, after he
had appealed to the Secretary of Agriculture and Natural Resources from the
decision or opinion of the Director of Lands he had exhausted the
administrative remedies, is untenable.
The withdrawal of the appeal taken to the President of the Philippines is
tantamount to not appealing all thereto. Such withdrawal is fatal, because
the appeal to the President is the last step he should take in an
administrative case.
In 1912, in the case of Lamb vs. Phipps (22 Phil. 491-92, July 22, 1912), this Court
stressed the doctrine of exhaustion of administrative remedies, thus:
When a plain, adequate and speedy remedy is afforded by and within the
executive department of the government the courts will not interfere until at
least that remedy has been exhausted. Jao Igco vs. Shuster, 10 Phil. Rep.
448; Ekiu vs. U.S., 142 U.S. 651; U.S. vs. Sing Tuck, 194 U.S. 161; U.S. vs.
Ju Toy 198 U.S. 253; Chill Yow vs. U.S., 28 Sup. Ct. Rep. 201). The
administrative remedies afforded by law must first be exhausted before
resort can be had to the courts, especially when the administrative remedies
are by law exclusive and final. Some matters and some questions are by law
delegated entirely and absolutely to the discretion of particular branches of
the executive department of the government. When the law confers
exclusive and final jurisdiction upon the executive department of the
government to dispose of particular questions, their judgments or the
judgments of that particular department are no more reviewable by the
courts than the final judgment or decisions of the courts are subject to be
reviewed and modified by them" (emphasis supplied).
143
Moreover, this being a special civil action, petitioner-appellant must allege and prove
that he has no other speedy and adequate remedy (Diego vs. The Court of Appeals,
et al., 54 Off. Gaz., No. 4, 956). In the case at bar, petitioner- appellant's speedy and
adequate remedy is an appeal to the President of the Philippines.
Accordingly, "it is settled to the point of being elementary that the only question
involved n certiorari is jurisdiction, either want of jurisdiction or excess thereof, and
abuse of discretion shall warrant the issuance of the extraordinary remedy of
certiorari when the same is so grave as when the power is exercised in an arbitrary or
despotic manner by reason of passion, prejudice or personal hostility, and it must be
so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal
to perform a duty enjoined, or to act at all in contemplation of law" FS Divinagracia
Agro-Commercial Inc. vs. Court of Appeals, 104 SCRA 191 [April .1, 1981]). The
foregoing is on the assumption that there is any irregularity, albeit there is none in the
acts or omissions of the respondents-appellees. certiorari is not a substitute for
appeal as held time and again by this Court (People vs. Villanueva, 110 SCRA 465),
"it being a time honored and well known principle that before seeking judicial redress,
a party must first exhaust the administrative remedies available" (Garcia vs.
Teehankee, 27 SCRA 944, April 18, 1969).
Moreover, from the decision of the Secretary of Agriculture and Natural Resources
complained of, petitioners had a plain, speedy and adequate remedy by appealing
therefrom to the Chief Executive. In other words, before filing the present action for
certiorari in the court below, they should have availed of this administrative remedy
and their failure to do so must be deemed fatal to their case [Calo vs. Fuertes, et al.,
G.R. No. L-16537, June 29,1962]. To place petitioners' case beyond the pale of this
rule, they must show that their case falls which it does not within the cases
where, in accordance with our decisions, the aggrieved party need not exhaust
administrative remedies within his reach in the ordinary course of the law [Tapales vs.
The President and the Board of Regents of the U.P., G.R. No. L-17532, March 30,
1963; Mangubat vs. Osmena, G.R. No. L- 12837, April 30, 1959; Baguio vs. Hon.
Jose Rodriguez, G. R. No. L-11078, May 27, 1959; Pascual vs. Provincial Board,
G.R. No. L-11959, Oct. 31, 1959; Marinduque Iron Mines, etc. vs. Secretary of Public
Works, G.R. No. L-15982, May 31, 1963; Alzate vs. Aldaba, G.R. No. L-14407, Feb.
29, 1960 and Demaisip vs. Court of Appeals, G.R. No. L- 13000, Sept. 25, 1959]
(Ganob vs. Ramas, 27 SCRA 1178, April 28, 1969).
III
Petitioner-appellant not only failed to exhaust his administrative remedies, but also
failed to note that his action is a suit against the State which, under the doctrine of
State immunity from suit, cannot prosper unless the State gives its consent to be
sued Kawananakoa vs. Polybank, 205 U.S. 349; Siren vs. U.S., 7 Wall. 152; Sec. 16,
Art. XV, 1973 Constitution).
The respondents-appellees, in revoking the petitioner-appellant's timber license, were
acting within the scope of their authority. Petitioner-appellant contends that "this case
is not a suit against the State but an application of a sound principle of law whereby
administrative decisions or actuations may be reviewed by the courts as a protection
afforded the citizens against oppression" (p. 122, CFI rec.). But, piercing the shard of
his contention, We find that petitioner-appellant's action is just an attempt to
circumvent the rule establishing State exemption from suits. He cannot use that
principle of law to profit at the expense and prejudice of the State and its citizens. The
promotion of public welfare and the protection of the inhabitants near the public forest
are property, rights and interest of the State. Accordingly, "the rule establishing State
exeraiption from suits may not be circumvented by directing the action against the
officers of the State instead of against the State itself. In such cases the State's
immunity may be validly invoked against the action as long as it can be shown that
the suit really affects the property, rights, or interests of the State and not merely
those of the officer nominally made party defendant" (SINCO, Phil. Political Law, 10th
ed., p. 35; Salgado vs. Ramos, 64 Phil. 724; see also Angat River Irrigation System
vs. Angat River Workers' Union, G.R. No. L-10943-44, Dec. 28, 1957, 102 Phil. 789,
800-802; Mobil PhiL vs. Customs Arrastre Service, 18 SCRA 1120, 1121-1125;
Bureau of Printing vs. Bureau of Printing Employees' Association, 1 SCRA 340, 341,
343).
Both the Secretary of Agriculture and Natural Resources and the Director of Forestry
acted in their capacity as officers of the State, representatives of the sovereign
authority discharging governmental powers. A private individual cannot issue a timber
license.
Consequently, a favorable judgment for the petitioner-appellant would result in the
government losing a substantial part of its timber resources. This being the case,
petitioner-appellant's action cannot prosper unless the State gives its consent to be
sued.
IV
Granting arguendo, that petitioner-appellant's timber license is valid, still respondents-
appellees can validly revoke his timber license. As pointed out earlier, paragraph 27
of the rules and regulations included in the ordinary timber license states: "The terms
and conditions of this license are subject to change at the discretion of the Director of
144
Forestry, and that this license may be made to expire at an earlier date, when public
interests so require" (Exh. D, p. 22, CFI rec.). A timber license is an instrument by
which the State regulates the utilization and disposition of forest resources to the end
that public welfare is promoted. A timber license is not a contract within the purview of
the due process clause; it is only a license or privilege, which can be validly
withdrawn whenever dictated by public interest or public welfare as in this ceise
"A license is merely a permit or privilege to do what otherwise would be unlawful, and
is not a contract between the authority, federal, state, or municipal, granting it and the
person to whom it is granted; neither is it property or a property right, nor does it
create a vested right; nor is it taxation" (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights, neither is it property or property
rights (People vs. Ong Tin 54 O.G. 7576). In the case of Pedro vs. Provincial Board of
Rizal (56 Phil. 123), it was held that:
A license authorizing the operation and exploitation of a cockpit is not
property of which the holder may not be deprived without due process of law,
but a mere privilege which may be revoked when public interests so require.
The welfare of the people is the supreme law. Thus, no franchise or right can be
availed of to defeat the proper exercise of police power (Surigao Electric Co., Inc. vs.
Municipality of Surigao, 24 SCRA 898, Aug. 30, 1968). The State has inherent power
enabling it to prohibit all things hurtful to comfort, safety, and welfare of society (Edu
vs. Ericta, 35 SCRA 481, Oct. 24,1970).
V
As provided in the aforecited provision, timber licenses are subject to the authority of
the Director of Forestry. The utilization and disposition of forest resources is directly
under the control and supervision of the Director of Forestry. However, "while Section
1831 of the Revised Administrative Code provides that forest products shall be cut,
gathered and removed from any forest only upon license from the Director of
Forestry, it is no less true that as a subordinate officer, the Director of Forestry is
subject to the control of the Department Head or the Secretary of Agriculture and
Natural Resources (See. 79[c], Rev. Adm. Code), who, therefore, may impose
reasonable regulations in the exercise of the powers of the subordinate officer"
(Director of Forestry vs. Benedicto, 104 SCRA 309, May 5, 1981). The power of
control of the Department Head over bureaus and offices includes the power to
modify, reverse or set aside acts of subordinate officials (Province of Pangasinan vs.
Secretary of Public Works and Communications, 30 SCRA 134, Oct. 31, 1969;
Montano vs. Silvosa, 97 Phil. 143, 144, 147-148). Accordingly, respondent-appellee
Secretary of Agriculture and Natural Resources has the authority to revoke, on valid
grounds, timber licenses issued by the Director of Forestry. There being supporting
evidence, the revocation of petitioner-appellant's timber license was a wise exercise
of the power of the respondent- appellee (Secretary of Agriculture and Natural
Resources) and therefore, valid.
Thus, "this Court had rigorously adhered to the principle of conserving forest
resources, as corollary to which the alleged right to them of private individuals or
entities was meticulously inquired into and more often than not rejected. We do so
again" (Director of Forestry vs. Benedicto, supra). WE reiterate Our fidelity to the
basic policy of conserving the national patrimony as ordained by the Constitution.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, THE ORDER APPEALED
FROM IS HEREBY .AFFIRMED IN TOTO. COSTS AGAINST PETITIONER-
APPELLANT.
SO ORDERED,
Concepcion Jr., Guerrero, Abad Santos and Escolin, JJ., concur.
SECOND DIVISION
G.R. No. L-45445 June 16, 1978
THE HEIRS OF JOSE FUENTES, FELICIDAD GALGO VDA. DE FUENTES,
ANTONIO FUENTES and VIOLETA TUPAS, petitioners,
vs.
HON. ANTONIA C. MACANDOG, Presiding Judge, Court of First Instance of
Negros Occidental, Branch X, San Carlos City, Provincial Sheriff of Negros
Occidental; and FRANCISCO A. JAO RIVERA, and wife ELIZABETH BARROCA,
LORNA A. JAO RIVERA and husband CANUTO DOTE, LOURDES A. JAO
RIVERA and husband SANTIAGO SALVILLA, ANASTACIO A. JAO RIVERA and
wife GERTRUDES SOLIDUM, MONSERRAT A. JAO RIVERA, JOSE A. JAO
RIVERA and wife CAROLINA PESUENA, ROMEO A. JAO RIVERA and ELNORA
CABENTA VDA. DE MONTOYA, respondents.
BARREDO, J.:
Petition for certiorari and mandamus praying mainly for the annulment and setting
aside of the decision by default rendered by respondent Court of First Instance of
Negros Occidental, Branch X, sitting in San Carlos City, in its Civil Case No. X-303,
entitled Francisco A. Jao Rivera et al. vs. Heirs of Jose Fuentes et al., on November
22, 1976 as well as all its actuations subsequent thereto, particularly, the issuance of
a writ of execution of said decision, and for a mandate to respondent court to conduct
145
the appropriate proceedings therein, petitioners claiming that in declaring them in
default and proceeding subsequently on the basis of said declaration to hold an ex-
parte hearing and rendering its decision, and subsequently declaring the same final
and executory and issuing a writ of execution, respondent court denied their right to
due process, since they were not given due notice of the setting of the pre-trial in
which their absence was considered as the cause of their being considered in default,
and further, that in fact, the case was not even ready whether for the pre-trial or trial,
considering that their affirmative defense of prescription which was set for a
preliminary hearing as if a motion to dismiss the complaint had been filed pursuant to
Section 5 of Rule 16 had not yet been resolved by the court, and still further, that their
motion for reconsideration of the default judgment which the court ignored as pro
forma was filed in due time and was in accordance with the rules and not pro
forma, hence respondent court acted with grave abuse of discretion in acting the way
it did.
The aforementioned Civil Case No. X-303 is an action for reconveyance filed by
therein private respondents, Francisco A. Jao Rivera and her husband Canuto Dote,
of three (3) parcels of land known as Lots Nos. 75 and 1454-A and 1454-B of the
Cadastral Survey of Sagay, Negros Occidental , the first measuring 579,534 square
meters and the second and third together 223,609 square meters, alleging as main
cause of action that said lands were owned by the spouses Nicolas A. Jao Rivera and
Gregorio Padilla, the ascendants of said private respondents from whom they
inherited the same, but over which, "through misinterpretation, fraud and falsification
of official records, " and " without any consideration whatsoever" the defendants were
able to secure Transfer Certificates of title Nos. 31057, 15779 and 151 84, of the
Register of Deeds of Negros Occidental, on August 1, 1940, October 10, 1932,
respectively, to be issued in the names of Jose Fuentes and his wife herein petitioner
Felicidad Galgo, the other peitioner Antonio Fuentes being the son of said spouses
while peitioner Violeta Tupas is the wife of Antonio. In due time, the said defendants
filed their answer alleging that "Lot No. 75 of the Cadastral Survey of Sagay has
always been owned by Jose Fuentes and Felicidad Galgo as they have been the
decreed owner of said parcel of land pursuant to the Decree of Registration
No.723387, issued on July 17, 1940, under Cadastral Case No. 27, G.L.R.O. Record
No. 284, for which an Original Certificate of Title No. RO-1319 (31057) was issued in
the name of the said spouses as original owners thereof; while Lot No. 1454 of the
Cadastral Survey of Sagay was owned and possessed by the spouses Jose Fuentes
and Felicidad Galgo long before the Second World War after they (had) acquired the
same legally in good faith and for value." They also alleged inter alia the following
affirmative defenses:
3. That the plaintiff are guilty of laches;
4. That the cause of action, if any, is already barred by the Statute of
Limitations or that any cause of action has already prescribed;
5. That the defendants and their predecessors-in-interest have acquired the
property in good faith and for value;
6. That the properties in question have been the subject of Special
Proceedings No. 305-S, 'Intestate Estate of the Late Jose Fuentes', and
titles over said properties have been transferred to defendants with the
approval of the Court and as such any claim now on the estate is already
barred;
7. That even on the basis of acquisitive prescription alone, the defendants
are already the legal and absolute owners of the properties in question since
they have been in actual possession of the properties for more than 30 years
in the concept of owner. peaceful, adverse and uninterrupted; (Pp. 26-27,
Record.)
On August 5, 1976, respondent judge issued the following order which is self-
explanatory:
This case was scheduled and for hearing today, August 4, 1976, and both
parties were represented by their counsels. Atty. Reynaldo Depasucat as
counsel and for the defendants and Atty. Jose M. Dy as counsel and for the
plaintiffs.
Counsel and for the defendants submitted a motion and for the preliminary
hearing on the affirmative defense of prescription which he alleged as a
ground and for the dismissal of this case, and counsel and for the plaintiffs
vehemently objected to this motion inasmuch as this should have been
presented long before the scheduled pre-trial of this case.
On the basis of the argument in order to enlighten this Court in deciding the
issues, orders both counsels to submit their memoranda simultaneously.
Both counsels have agreed to submit their simultaneous memoranda 15
days from today and the deadline will be on August 19, 1976. (Page 33,
Rec.)
Complying with this order, both parties filed their respective memoranda on time,
Annexes E and F of the petition. What happened afterwards is stated by respondent
judge in the assailed decision, Annex J of the petition, thus:
146
 ... It must be noted that, per records of this case, Atty. Depasucat was duly
notified of the Pre-Trial and Trial of this case, and he was even personally
informed by the Officer-in-Charge by telephone in Bacolod City last
November 14, 1976, the said Officer- in charge was in Bacolod at that time
considering that the telegram was sent last November 8, 1976, yet, the
confirmation copy attached in the record of this case, instructing the officer-
in-charge of this court to set the Pre-Trial and Trial of this case on November
17, 1976, and said instruction was immediately complied with the officer-in-
charge, as evidenced by the notice of hearing dated November 9, 1976,
which was personally delivered to Atty. Jose Dy c/o Bacolod Second Hand
Store, Gonzaga Street, Bacolod City, and sent to Atty, Depasucat by
registered mail, having Registry Receipt No, 3503. and also defendant F,
Galgo Fuentes by Registered Mail, as evidenced by Registry Receipt No.
6948, So, Atty. Depasucat counsel and for defendants was given enough
time to know of the setting of this case, The defendants did not also appear,
they, having been notified of the said hearing set on November 17, 1976.
This Court declared the defendants in default and thus hereby ordered the
plaintiffs to present their evidence ex-parte on November 17, 1976. (Pp. 51-
52, Record.)
and in Her Honor's Statement and/or Comment dated April 11, 1977 as follows:
1. Neither defendants nor their counsel appeared during the scheduled
hearing on Pre-Trial and Trial on November 17, 1976- despite the
corresponding notices issued to them on November 9, 1976, thru registered
mail, which was followed by other means enumerated below:
2. That due to the non-appearance of any of the defendants and counsel,
plaintiff's counsel who had registered his appearance, verbally moved to
have defendants declared in default and that the proceedings be had ex-
parte due to the non-appearance of defendants counsel, Atty. Reynaldo C.
Depasucat despite notice as borne out by the records. The transcript of the
stenographic notes taken down by Amapola V. Briones, court stenographer
11, pages 1 to 15 of the November 17, 1976 proceedings and copy of which
was secured by defendants, justifies the and court's action based upon the
oral motion of plaintiff's counsel to declare defendants in default;
3. That on the August 4, 1976 hearing; which was initial Pre-Trial attended
by parties and their respective attorneys. nothing was achieved or arrived at
due to the defendants having filed their Motion and/or Preliminary Hearing of
their affirmative defenses, an equivalent of a Motion to Dismiss, and which
incident was considered submitted by the filing parties' respective
memoranda as called for in the Order of August 5, 1976;
4. That consequently, as borne out by the Notice of Hearing appearing on
page 63, Records, sent out to the parties and their respective counsels,
xerox copy of which is attached hereto as Annex 'I' hereof the proceedings
on November 17, 1976, was the continuation of the Pre-Trial and Trial on the
merits, including all other incidents;
5. That due to the non-appearance of defendants counsel, Atty. Reynaldo C.
Depasucat who had been notified of the November 17, 1977, proceedings,
was ordered to pay a fine of P50.00 in contempt of court, as borne out in the
transcript of stenographic notes of Amapola V. Briones, page 14 thereof;
6. That as also borne out in the transcript of stenographic notes, respondent
judge had the Officer-in-Charge of the Court advised or notified Atty.
Reynaldo C. Depasucat by long distance telephone call of the continuation
of the hearing the following day, November 18, 1976, so that he may cross-
examine the witnesses presented on November 17, 1976, but said counsel
fatted to come to court the following day. Had he appeared the following day,
the Order of default of November 17, 1976, would have been lifted (TSN
BRIONES, November 17, 1976, p. 14);
7. That n order to prevent clogging of cases in court, the Decision of
November 22, 1976 was issued embodying therein the declaration of default
of the defendants.
II
That the parties, including the defendants and their counsel, Atty. Reynaldo
C. Depasucat were notified of the Pre-Trial and trial set for November 17,
1976, as borne out by the records of the case (pages 63. 67 & 68, Records),
Page 63 is the Notice of Hearing, the xerox copy of which is attached as
Annex '1' hereof, while page 67 is the envelope addressed to Felicidad
Galgo Vda. de Fuentes, et al sent by registered mail, inclosing therein the
Notice of Hearing, and xerox copy of the envelope is attached hereto as
Annex '2' hereof, which also portrays the back of said envelope wherein is
the notation of the Postmaster that at 7:45 AM delivery of the letter was
attempted but part it as out. That formal notices of the November 17, 1976
147
hearing were sent The defendants and are borne out by the following facts,
to wit:
l. Copy of the Notice of Hearing for November 17, 1976 as sent out to the
parties, in xerox form, is attached as Annex thereof;
2. That service of the summons in the original case before Branch X, CFI,
Negros Occidental at San Carlos city, presided over by respondent judge, to
all defendants therein with their common address at Hacienda santa Julia,
Sagay, Negros Occidental, was acknowledged, for all of them, by Violeta T.
Fuentes, who is the wife of another defendant, Antonio Fuentes , as
appearing at the back of page 7 of the Records and these original
defendants are: Heirs of Jose Fuentes, Felicidad Galgo Vda. de Fuentes,
Antonio Fuentes and Violeta Tupas, who are the petitioners before this
Honorable Supreme Court;
3. An envelope enclosing the Notice of Hearing, was sent thru registered
mail, ti Mrs Felicidad Galgo Vda. de Fuentes, et al., using their address in
the record which Id Hacienda Santa Julia, Sagay, Negros Occidental, and
the xerox copy of the envelope whcih is page 67 of the Records is attached
hereto as Annex '2' hereof. As shown on the face of the envelope, the
content was Notice of Pre-Trial and Trial in Civil Case No. X-303, which is
the Rivera et al., vs. Fuentes et al., case. At the back of the envelope can be
read the notation: 'attempted "del" party out 11-16-76 7:45 AM". But at the
face is the notation that RETURNED TO SENDER Reason: 'PARTY
MOVED'. These show that the mailman attemptyed to deliver the letter to
Mrs. Felicidad Galgo Vda. de Fuentes et al., at Hacienda Santa Julia, Sagay,
Negros Occidental at 7:45 AM of November 16, 1976, but party was out.
Records show that defendant's addresses is Hacienda Santa Julia, Sagay,
Negros Occidental' (par. 1, Complaint, p. 1 REcords) which is admitted by
the defendants' Answer (par. 1, p. 11 Records). That defendant Felicida
Galgo Vda. de Fuentes could not be delivered the Notice of Hearing is no
fault of anybody else but hers/theirs as no forwarding address appears in the
records. At the back of the return slip which accompanied the envelope, can
be seen that it was a Notice of Hearing of the case and desisted to receive
the letter or said Notice for Hearing;
4. That of effectuate the service by registered mail, a radio message was
sent on November 9, 1976 by the Deputy Clerk of Court to the Station
Commander, San Carlos City, Negros Occidental to the Station Commander,
Sagay, or Sagay Police Station, Sagay, Negros Occidental, to notify
Felicidad Galgo Vda. de Fuentes and Antonio Fuentes, et al., to appear for
Pre-Trial and Trial and on other incidents in civil Case No. X-303, Branch X,
CFI, San Carlos City, at 8:30 AM of November 17, 1976. Despite this,
defendants did not appear.
5. That defendants' counsel, Atty. Reynaldo C. Depasucat was advised of
this hearing on November 17, 1976, by means of the Notice of Hearing on
Pre-Trial and Trial on all incidents as can be seen in the xerox copy (Annex
'1' hereof sent thru registered mail. Aside from this written notice of hearing,
he was contacted thru telephone by the Officer-in-Charge of the Court and
this telephone ad. vice has been admitted by him as, in fact, due to this
telephone advice, on November 15, 1976, a telegraphic request for
postponement of the hearing was sent by said Atty. Depasucat due to an
alleged previous court comment before Branch VI at Himamaylan, Negros
Occidental. Xerox copy of the telegram appearing on page 70, Records, is
attached hereto as Annex '3' hereof. But this telegram was known to the
respondent judge only in the morning of November 17, 1976, during the
hearing, as can be read from the transcripts of the proceedings had on that
day. It is clear, therefore, that he accepted such notice as he, in fact, acted
upon it by sending a telegram Annex '3' hereof
6. That defendants' counsel having been notified by telephone of the hearing
of November 17, 1976, on or before November 15, 1976, if he were not
negligent, he should have advised his clients by any fast means of the notice
of hearing made known to him by the Officer-in-Charge of the Court, Jerry C.
Centeno. It would either be negligence or unbelievable to say that this
counsel, taking into account the importance and magnitude of this case,
would not employ any Possible means to advise his clients. If he did not,
then it could be that it was the scheme of the Party defendants to unduly
delay the proceedings which, otherwise, they should have helped towards
an early determination of the case.
7. Or, that, is it not the behavior of counsel to delay the proceedings of the
court as shown in various instances by the records of this court (Branch X,
CFI, Negros Occidental)? For was the same counsels' failure to answer the
complaint against his clients in Civil Case No. X-249 not the basis of the
Court's declaration of his clients in default as ordered by now Justice Rafael
C. Climaco on August 28, 1975? And was it not due to the same counsel's
non- appearance on July 28, 1976 in Criminal Case No. X-259, the reason
148
 why he was made to explain why he should not be punished for contempt of 42 CITE NEGATIVE
court for failure to appear despite notice sent to him as early as July 1,
1976? It seems that counsel has been taking this court for granted resulting TEXT
to the unduly delay of the court proceedings which manner and behavior are
abhorred by to Honorable Supreme Court. (Pp. 198-206, Record. PLEASE NOTIFY FELICIDAD GALGO VDA DE FUENTES AND ANTONIO
FUENTES TO APPEAR PRE-TRIAL AND TRIAL HEARING OF PENDING
as well as in Her Honor's Supplemental Statement and/or Comment dated April 19, INCIDENT IN CIVIL CASE NO. X-303 RIVERA ET AL VS. FUENTES ET AL
1977 this wise: WILL BE ON 17 NOV. '76 AT 08:30 A.M. BEFORE CFI BRANCH X SAN
CARLOS CITY.
RESPONDENT JUDGE, supplementing her Statement and/or Comment
dated April 11, 1977, unto this Honorable Supreme Court, respectively (Sgd.) CENTENODEPUTY CLERK
submits the following and states:
OF COURT
1. That in connection with the radio message mentioned in Par. 4 on pages 6
and 7 of her Statement and Comment, examination of the records of the XHTTD BY:
Office of the Station, Commander at Sagay, Negros Occidental and with t to
the radio message which is found on page 68, Recorder, it has been found
PAT. APURADO SAN CARLOS
out that said radio message was delivered to petitioner Antonio Fuentes, one
of the defendants in Civil Case No. XL, 303, Court of First Instance of
Negros Occidental Branch X, San Carlo City on November 10, 1976, at 2:45 TOR 10 1130 H NOV P76/
P.M.
RCVD BY:
2. That said radio message is quoted below:
A FUENTES DATE 11/10/76
PLEASE NOTIFY FELICIDAD GALGO VDA. DE FUENTES AND ANTONIO
FUENTES TO APPEAR PRE-TRIAL AND TRIAL HEARING OF PENDING TIME: 245 PM
INCIDENTS IN CIVIL CASE NO. X-303 RIVERA ET AL VS FUENTES, ET
AL WILL BE ON NOV. 12, '76 at 08:30 A M BEFORE CFI BRANCH X SAN CERTIFIED XEROX Copy:
CITY
(Sgd.) SIMON JIMENEZ
(Sgd.) CENTENO
Police Sgt.
Deputy Clerk of Court
4. That the radio message having been received by Antonio Fuentes who
3. The records at the Sagay Station Commander, Sagay. Negros Occidental affixed his signature at the bottom of the message at 2:45 PM of November
bears the following, to wit: 10, 1976 as appearing in the xerox copy attached hereto as Annex 'i ' hereof,
defendant Antonio Fuentes who is the husband of defendant Violeta
RADIO MESSAGE Fuentes, had admitted to have received such service of the notice of hearing
on Pre-Trial and Trial for November 17, 1977, hence under Sec. 10 Rule 13,
FRM: SAN CARLOS CITY P10 1030 H NOV '76 Revised Rules of Court, such written admission consists of proof of service.
(Pp 334-336. Record).
TO: STN COMDR POL STN GROUP

149
And to complete Her Honor's version of the material circumstances of this case, it
must be mentioned that to her letter to Atty. Juanito Ranjo, Clerk of Court of the
Second Division of this Court, dated October 6, 1977, (Annex III of said letter) which
although addressed to said Atty. Ranjo must have been intended for action by the
Court, since the letter itself says "for further justification that there was proof of
service to the defendants in Civil Case No. X- 303 etc.", there is attached the affidavit
of Rodolfo D. Sumanting reading.
I, RODOLFO DIOKSON SUMANTING, of legal age, married. Filipino, with
residence and postal address at Sagay, Negros Occidental after being duly
sworn, to, hereby depose and say:
That I am one of the letter-carrier employed in the Post Office of Sagay,
Negros Occidental; "That I was the one who delivered a registered letter
addressed to Felicidad Galgo Vda. de Fuentes, et al., Hda. Santa Julia,
Sagay, Negros Occidental, on November 16, 1976, at around 7:45 A.M., at
the Hardware & Auto Supply Store owned by the Fuenteses also located at
Sagay, Negros Occidental said registered letter from the CFI, Branch X, San
Carlos City;
That there were three (3) employees present at the abovenamed Hardware
& Auto Supply Store owned by the Fuenteses, namely: Halili Talisic, Flora
Sinogbuhan ang Joni Sinogbuhan. when I, delivered the registered letter on
November 16, 1976:
That the registered letter was received and the return card was signed by
one of the employees at the Hardware and Auto Supply Store, owned by
Antonio Fuentes, but after the return card was signed by the said employee,
after she have read that the envelope of the registered letter and the return
card came from CFI Branch X, San Carlos City, she returned the envelope of
the registered letter together with the return card to me. informing me that
the owner of the store, Antonio Fuentes was out and that Felicidad Galgo
Vda, de Fuentes is no longer living at Hda. Sta, Julia, Sagay, Negros Occ
that Why that Special Delivery Registered Book was not. signed. although
there already appears a signature or the return card which we sent back to
CFI, Branch X, San Carlos City, together with the registered letter unopened;
That this affidavit is executed to show t hat tie registered letter above
mentioned was The Hardware & Auto Supply Store owned by the
Fuenteses', but after the return card was signed, the registered letter
including the return card was returned to me, so I noted down on the
envelope of the said registered letter 'attempted delivery party out
11/16/176, 7:45 A.M.', and have the same initialed.
IN TESTIMONY WHEREOF, I have hereunto affix my signature this 28th day
of Sept., 1971. at San Carlos. City, Neg. Occ., Phils, (Page 375, Rec )
In other words, from the foregoing affidavit, it appears clearly that the only attempt to
serve notice of the setting of the "pre-trial, trial, etc." in question upon private
respondent Felicidad Galgo Vda. de Fuentes was made on November 16, 1916 at
7:45 o'clock in the morning in Sagay, Occidental Negros, that is, one day before the
date set for said "pre-trial, trial, etc.", not to mention the fact that there is no showing
that the Hardware & Auto Supply referred to, aside from being ,Owned by the
Fuenteses", was also the residence or office of said Felicidad Galgo Vda. de Fuentes
and that the one upon whom delivery of the registered mail concerned was attempted
to be made was duly authorized by her to receive the same as contemplated by the
pertinent postal rules. (Hernandez vs. Navarro, 48 SCRA 44, 62-64.) 1
We need not pass upon all the issues raised by the parties, in the lengthy and
detailed discussion of which they included matters which if interesting and rather
related to the subject case are not really indispensable in the determination or
resolution of the pivotal issue in the instant petition. Anyway, if the petitioners were
indeed improperly or illegally declared in default, as We can see is really the case
here, then all the subsequent actuations of respondent court would necessarily fall
like a house of cards.
We do not hesitate to hold, as We do hold, that petitioners were improperly declared
in default, for the following considerations:
To start with, We are not convinced petitioners were given due and sufficient notice of
the setting of the case on pa November 17, 1976 "for pre-trial, and trial hearing of all
n. ding incidents. "
Since the case was set for pre-trial, inter alia it was indispensable under the specific
provisions of Section 1 of Rule 20 and the jurisprudence thereunder that not only the
counsel of record of the defendants but also all the defendants should be separately
served with notice. (Pineda vs. Court of Appeals, 67 SCRA 228, 234.) So, the
immediate subject of inquiry should be whether or not this imperative requirement has
been complied with in the instant case.
In this connection, however, it must be clarified that common sense and fairness
demand a notice of pre-trial or trial or for that matter, of any proceeding in which
notice to the parties is mandatory, must be such as to give them and their counsel
ample opportunity to appear, having in view not only the distance of the place of
hearing but also the time that would be needed to reach the same from where the
party notified may be at the time of notice and the circumstance, in which they are at
the time of such service that is, whether or not said circumstance would
150
reasonably enable them to comply with the notice. It is certainly inconsistent with
simple justice for Us to hold that it is the inescapable duty of a party to appear before
any court pursuant to a notice regardless of circumstances not of his own making and
fault which render it physically impossible to do so, just because he has actually
received the notice.
In the instant case, it is not disputed that the notice setting the pre-trial in question for
November 17, 1976 was received by Atty. Reynaldo C. Depasucat counsel of record
for petitioners in the court below by registered mail only in the afternoon of November
17, 1976, that is, after the trial had started in the morning or after the declaration of
default had already been made. It is, however, admitted by said counsel that he was
advised by the Officer-in-Charge (or Acting Deputy Clerk of Court) of respondent
court by long distance telephone or. November 14, 1976 of such setting, albeit as
noted in the very decision of Her honor counsel then and there already informed the
said Officer-in-Charge that he had a conflicting previous engagement in another
court. Anyway, on November 16, 1976, counsel formally advised the court by
telegram of said conflict, and this telegram, the record reveals, was brought to the
attention of Her Honor when proceedings were to tart on November 17, 1976.
In the light of these circumstances, respondent court held that Atty. Depasucat should
not have assumed that his telegraphic motion would be granted and that if really, he
would in fact be busy in another court by previous engagement, he should have sent
another lawyer from his office to take his place.
In other words, Her Honor adopted a strict and technical attitude. To be sure, she was
not entirely without reason for doing so, but on the main and giving due consideration
to the attendant circumstances, We believe that her inflexible attitude did not conform
with the requirements of fairness and justice.
It is obvious that the case before her is substantially controversial. Indeed, the
negative and affirmative defenses alleged in the answer of the defendants are not
insubstantial, much less flimsy. For one thing, the defendants have no less than
usually formidable Torrens Titles to show as basis for their defense. The subject-
matter involved is not a mere trifle about i hectares of sugar land in Negros
Occidental where such properties are highly priced, The complaint was filed only on
March 1, 1976. Defendants' request for deferment was the first postponement
requested in the case. True it is, it was found later that, ill fact, Atty. Depasucat
appeared on the same day in a trial at Silay City, which was not Himamaylan, the
place mentioned in his telegram to the court; still, it was a fact that he had a
conflicting court engagement, which rendered it physically impossible for him to be in
San Carlos City on the same day. He could not be entirely blamed, if he attended to a
trial set earlier by another court.
Withal, the court had not yet resolved the motion to dismiss of the defendants which
had been submitted for resolution on August 19, 1976. Consequently because of such
inaction of the (court. the case cannot be clearly said to be ready even only for pre-
trial. By having their special defense of prescription set for preliminary hearing, the
defendants became entitled to previous notice of the court's resolution thereon before
the case could be set for pre-trial or trial, for the same reasons that under Section 4 of
the same rule, (Rule 16) where a motion to dismiss has been filed and the same is
overruled, the defendant is inalienably entitled to the corresponding period to file his
responsive pleading or answer, so that he may have the opportunity to adjust matters
to the situation that might ensue in consequence of such denial.
So much with petitioners' counsel. As far as petitioner Violeta Tupas Fuentes, the wife
of petitioner Antonio Fuentes, is concerned, there is not even any pretense that she
was notified at all. Surely, the fact that she is the wife of the other respondent Antonio
Fuentes, who is alleged to have been notified by radio thru the facilities of the
Napolcom as early as November 10, 1976, assuming the explanation of respondent
judge to such effect can stand against the denial by said petitioner, does not justify
the omission to notify her separately. She is charged in the complaint of having
committed fraud, together with her co-defendants, in securing the Torrens titles to the
lands in question in their names. She is not sued merely as wife of Antonio Fuentes.
Definitely, she is not a mere formal party in the case.
Accordingly to the very explanation of respondents, there was a failure to notify the
other petitioner herein, Felicidad Galgo Vda. de Fuentes, who is also defendant in the
case below because when the registered mail addressed to her trial containing the
notice in question was being delivered at the Hardware and Auto Supply Store
"owned by Fuenteses also located at Sagay," to one of the employees thereat, the
latter refused to accept the same after he had initially signed the return card, per
affidavit of Rodolfo Diokson Sumanting, the letter carrier in charge of said delivery.
Respondents would lay the blame for such failure upon petitioners.
The Court cannot consider such attempted delivery to be valid service of the notice in
dispute. The address of said petitioner in the record is Hda. Santa Julia, Sagay
Negros Occidental. There is not even any indication before Us that the store referred
to by Sumanting in his affidavit is within said Hda. Santa Julia There is no proof that
said store was either her office or residence, much less than the employee who is
alleged to have signed the return card was authorized by her to receive her mail.
(Hernandez vs, Navarro, supra.)
Moreover, it was already at 7:45 am November 16, 1976 that the attempt to serve her
the notice was made. We hold. therefore, that there was failure to properly notify her
due to no fault of her own. If by any stretch of the meaning of the rules or of the
imagination, the above-related attempt to deliver the registered mail addressed to her
151
can at all be deemed as complete under Section 8 of Rule 13, still, such resulting one
day notice is not reasonable enough to place her under obligation to attend the
proceeding scheduled for November 17, 1976 in San Carlos City, a place
considerably distant from her residence.
Default is not a mechanical gadget for the acceleration of judicial litigations. The
laudable intention of respondent judge to terminate the subject case promptly is no
excuse for cutting corners that the rules have fixed to insure that the constitutional
requirement of due process is observed and safeguarded. The expeditious dispatch
of court matters does not have to be gained by causing unnecessary inconvenience
to any of the parties. As We said in Lim Tanhu et al vs. Ramolete et al., 66 SCRA 425,
"the plain injunction of Section 2 of Rule 1 is that 'the rules shall be liberally construed
in order to promote their object and assist the parties in obtaining not only speedy' but
more imperatively, 'just and inexpensive determination of every action and
proceeding. ' " (pp. 441-442) Whether or not to declare a defendant in default requires
mature consideration of all attendant circumstances, a sound discretion and a great
deal of circumspection. A court is not supposed to grab the first opportunity, no matter
how insubstantially grounded, to knock the defendant out of court. "A judgment by
default may amount to a positive and considerable injustice to the defendant; and the
possibility of serious consequences necessitates a careful and liberal examination of
the grounds upon which the defendant may seek to set it aside," (Coombs vs. Santos,
24 Phil. 446, 449-450.) We reiterated this view in Pineda vs. Court of Appeals, 67
SCRA 228, thus: ". . . We maintain feral to the principle that courts should be liberal in
setting aside orders of default, for default judgment is frowned upon, and unless it
clearly appears that the reopening of the case is intended for delay, it is best that trial
courts give both parties every chance to fight their case fairly trial in the open, without
resort to technicality." (at pp. 234-235) We have given full consideration to all the
points raised by Her Honor and her co-respondents, and We are not persuaded
petitioners have been proven to be engaged in any dilatory tactics.
Carefully and conscientiously scrutinizing all the relevant circumstances extant in the
record, We hold that petitioners are entitled to the relief prayed or in their petition. We
have purposely avoided discussing the other issues discussed by the parties in order
to leave the parties at liberty to pursue in the proper forum and at the opportune time
whatever action they deem wise to take in regard to their mutual accusations against
each other, and that includes the respondent judge. There are, to be sure, some
interesting and important point of procedure touched in the pleadings of the parties as
may be gleaned from the very nature of the assailed actuations of respondent judge
indicated at the outset of this opinion. However, it is obvious that this case can be
decided without resolving them. Accordingly, We prefer to rule on them in more
appropriate cases. Nonetheless, with respect to the setting of the subject case on the
same date for pre-trial and trial hearing of all pending incidents, the Court is of the
considered opinion that it is preferable to hold only the pre-trial first trial to schedule
the trial hearing of other incidents on later dates. For reasons obvious to an
experienced practitioners, it is not always feasible, much less easy, to prepare for all
of them at the same time. Preparation for trial, to be what it should be, is best done
only after the pre-trial. Moreover, Section 5 of Rule 20 which provides that "the court
shall cause to be prepared a pre-trial calendar of cases for consideration as above
provided," more than suggests the preference of the rules that particular dates be set
only for pre-trials separately from the ones for the holding of trials proper.
It is to be noted that respondent court did not issue any separate order of default.
Neither did it act on the petitioners . motion to dismiss as a distinct matter in a
separate order, Such procedure is to say the least unusual. To discuss all three
matters, namely, default, prescription and the merits of the other phases of the case
in the decision itself could lead to confusion or failure on the part of the court to
accord full and proper attention to all the points involved in each of them. Thus, while
the decision in question states Her Honor's considerations regarding the issue of
prescription, and, on the other hand, the petition now before Us assails those
considerations and contends that the court's conclusion is predicated on an
erroneous view of the matter, We prefer not to deal on that issue at this juncture, We
believe it would be better for the trial court to reexamine the points raised in
petitioners' affirmative defense/motion to dismiss. To that end, petitioners should file a
new motion for reconsideration devoted exclusively to the issue of prescription, the
trial court's attention being invited to the apparent necessity of distinguishing the facts
of the subject case, should Her Honor be still minded to maintain her default order,
from those involved in the cases of Jaramil vs. Court of Appeals,
L-31858, Aug. 31, 1977, 78 SCRA 420, De la Cerna vs. De la Cerna, L-28838, Aug.
31, 1976, 72 SCRA 514, trial cases therein cited, wherein this Court made
pronouncements relative to the opposing contentions on the question of prescription
of the parties in this case.
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered annulling and
setting aside the decision by default rendered by respondent court on November 25,
1976 in its Civil Case No. X- 303, including, for the reasons stated in the above
opinion, the denial therein of petitioners' motion to dismiss. All proceedings
subsequent to said decision, including the issuance of the writ of execution by said
respondent are correspondingly set aside. Respondent court is ordered to conduct
appropriate continuation proceedings consistently with the foregoing opinion, In
regard to the accusations of the parties against each other, their respective rights to
take them up in the proper forum and occasion is hereby reserved. Costs against
private respondents.
Fernando (Chairman), Antonio, Aquino, and Santos, JJ., concur.
EN BANC
152

G.R. No. 110526 February 10, 1998
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,
vs.
PHILIPPINE COCONUT AUTHORITY, respondent.
MENDOZA, J.:
At issue in this case is the validity of a resolution, dated March 24, 1993, of the
Philippine Coconut Authority in which it declares that it will no longer require those
wishing to engage in coconut processing to apply to it for a license or permit as a
condition for engaging in such business.
Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as
APCD) brought this suit for certiorari and mandamus against respondent Philippine
Coconut Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and
the certificates of registration issued under it on the ground that the resolution in
question is beyond the power of the PCA to adopt, and to compel said administrative
agency to comply instead with the mandatory provisions of statutes regulating the
desiccated coconut industry, in particular, and the coconut industry, in general.
As disclosed by the parties' pleadings, the facts are as follows:
On November 5, 1992, 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. 1
On November 6, 1992, the trial court issued a temporary restraining order and, on
November 25, 1992, a writ of preliminary injunction, enjoining the PCA from
processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar
(Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of
P100,000.00. 2
Subsequently and while the case was pending in the Regional Trial Court, the
Governing Board of the PCA issued on March 24, 1993 Resolution No. 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. The full text of the
resolution reads:
RESOLUTION NO. 018-93
POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS
WHEREAS, it is the policy of the State to promote free enterprise
unhampered by protective regulations and unnecessary bureaucratic red
tapes;
WHEREAS, the deregulation of certain sectors of the coconut industry, such
as marketing of coconut oils pursuant to Presidential Decree No. 1960, the
lifting of export and commodity clearances under Executive Order No. 1016,
and relaxation of regulated capacity for the desiccated coconut sector
pursuant to Presidential Memorandum of February 11, 1988, has become a
centerpiece of the present dispensation;
WHEREAS, the issuance of permits or licenses prior to business operation
is a form of regulation which is not provided in the charter of nor included
among the powers of the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and
further support the deregulation policy and effort of the government to
promote free enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that,
henceforth, PCA shall no longer require any coconut oil mill, coconut oil
refinery, coconut desiccator, coconut product processor/factory, coconut fiber
plant or any similar coconut processing plant to apply with PCA and the latter
shall no longer issue any form of license or permit as condition prior to
establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply
registering the aforementioned coconut product processors for the purpose
of monitoring their volumes of production, administration of quality standards
with the corresponding service fees/charges.
153
 ADOPTED this 24th day of March 1993, at Quezon City. 3
The PCA then proceeded to issue "certificates of registration" to those wishing to
operate desiccated coconut processing plants, prompting petitioner to appeal to the
Office of the President of the Philippines on April 26, 1993 not to approve the
resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993,
petitioner received no reply from the Office of the President. The "certificates of
registration" issued in the meantime by the PCA has enabled a number of new
coconut mills to operate. Hence this petition.
Petitioner alleges:
I
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND
VOID FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY
AN ADMINISTRATIVE BODY.
II
ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS
WITHOUT ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE
IN VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA
VIOLATED THE PROCEDURAL DUE PROCESS REQUIREMENT OF
CONSULTATION PROVIDED IN PRESIDENTIAL DECREE NO. 1644,
EXECUTIVE ORDER NO. 826 AND PCA ADMINISTRATIVE ORDER NO.
002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA
alleges that this petition should be denied on the ground that petitioner has a pending
appeal before the Office of the President. Respondent accuses petitioner of forum-
shopping in filing this petition and of failing to exhaust available administrative
remedies before coming to this Court. Respondent anchors its argument on the
general rule that one who brings an action under Rule 65 must show that one has no
appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.
I.
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. To be sure, the PCA is under the direct
supervision of the President of the Philippines but there is nothing in P.D. No. 232,
P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers and functions of
the PCA which requires rules and regulations issued by it to be approved by the
President before they become effective.
In any event, although the APCD has appealed the resolution in question to the Office
of the President, considering the fact that two months after they had sent their first
letter on April 26, 1993 they still had to hear from the President's office, meanwhile
respondent PCA was issuing certificates of registration indiscriminately to new
coconut millers, we hold that petitioner was justified in filing this case on June 25,
1993. 5 Indeed, after writing the Office of the President on April 26, 1993 6 petitioner
sent inquiries to that office not once, but twice, on May 26, 19937 and on June 2,
1993, 8 but petitioner did not receive any reply.
II.
We now turn to the merit of the present petition. The Philippine Coconut Authority was
originally created by P.D. 232 on June 30, 1973, to take over the powers and
functions of the Coconut Coordinating Council, the Philippine Coconut Administration
and the Philippine Coconut Research Institute. On June 11, 1978, by P.D. No. 1468, it
was made "an independent public corporation . . . directly reporting to, and
supervised by, the President of the Philippines," 9 and charged with carrying out the
State's policy "to promote the rapid integrated development and growth of the coconut
and other palm oil industry in all its aspects and to ensure that the coconut farmers
become direct participants in, and beneficiaries of, such development and
growth." 10 through a regulatory scheme set up by law. 11
Through this scheme, the government, on August 28, 1982, temporarily prohibited the
opening of new coconut processing plants and, four months later, phased out some of
the existing ones in view of overproduction in the coconut industry which resulted in
cut-throat competition, underselling and smuggling of poor quality products and
ultimately in the decline of the export performance of coconut-based commodities.
The establishment of new plants could be authorized only upon determination by the
PCA of the existence of certain economic conditions and the approval of the
154
President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982,
provided:
Sec. 1. Prohibition. Except as herein provided, no government agency or
instrumentality shall hereafter authorize, approve or grant any permit or
license for the establishment or operation of new desiccated coconut
processing plants, including the importation of machinery or equipment for
the purpose. In the event of a need to establish a new plant, or expand the
capacity, relocate or upgrade the efficiencies of any existing desiccated
plant, the Philippine Coconut Authority may, upon proper determination of
such need and evaluation of the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
d. other circumstances which may affect the growth or viability of the
industry concerned,
authorize or grant the application for, the establishment or expansion of
capacity, relocation or upgrading of efficiencies of such desiccated coconut
processing plant, subject to the approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered by the
government after finding that "a mere freeze in the present capacity of existing plants
will not afford a viable solution to the problem considering that the total available
limited market is not adequate to support all the existing processing plants, making it
imperative to reduce the number of existing processing plants." 12 Accordingly, it was
ordered: 13
Sec. 1. The Philippine Coconut Authority is hereby ordered to take such
action as may be necessary to reduce the number of existing desiccated
coconut processing plants to a level which will insure the survival of the
remaining plants. The Authority is hereby directed to determine which of the
existing processing plants should be phased out and to enter into
appropriate contracts with such plants for the above purpose.
It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87,
authorizing the establishment and operation of additional DCN plants, in view of the
increased demand for desiccated coconut products in the world's markets, particularly
in Germany, the Netherlands and Australia. Even then, the opening of new plants was
made subject to "such implementing guidelines to be set forth by the Authority" and
"subject to the final approval of the President."
The guidelines promulgated by the PCA, as embodied in Administrative Order No.
002, series of 1991, inter alia authorized the opening of new plants in "non-congested
areas only as declared by the PCA" and subject to compliance by applicants with "all
procedures and requirements for registration under Administrative Order No. 003,
series of 1981 and this Order." In addition, as the opening of new plants was
premised on the increased global demand for desiccated coconut products, the new
entrants were required to submit sworn statements of the names and addresses of
prospective foreign buyers.
This form of "deregulation" was approved by President Aquino in her memorandum,
dated February 11, 1988, to the PCA. Affirming the regulatory scheme, the President
stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for
the protection of the Desiccated Coconut Industry, the Philippine Coconut
Authority evaluated the conditions relating to: (a) the existing market
demands; (b) the production capacity prevailing in the country or locality; (c)
the level and flow of raw materials; and (d) other circumstances which may
affect the growth or viability of the industry concerned and that the result of
such evaluation favored the expansion of production and market of
desiccated coconut products.
In view hereof and the favorable recommendation of the Secretary of
Agriculture, the deregulation of the Desiccated Coconut Industry as
recommended in Resolution No. 058-87 adopted by the PCA Governing
Board on October 28, 1987 (sic) is hereby approved. 14
These measures the restriction in 1982 on entry into the field, the reduction the
same year of the number of the existing coconut mills and then the lifting of the
restrictions in 1987 were adopted within the framework of regulation as established
by law "to promote the rapid integrated development and growth of the coconut and
other palm oil industry in all its aspects and to ensure that the coconut farmers
become direct participants in, and beneficiaries of, such development and
growth." 15 Contrary to the assertion in the dissent, the power given to the Philippine
Coconut Authority and before it to the Philippine Coconut Administration "to
formulate and adopt a general program of development for the coconut and other
palm oils industry" 16 is not a roving commission to adopt any program deemed
necessary to promote the development of the coconut and other palm oils industry,
but one to be exercised in the context of this regulatory structure.
155
In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the
questioned resolution which allows not only the indiscriminate opening of new
coconut processing plants but the virtual dismantling of the regulatory infrastructure
whereby, forsaking controls theretofore placed in its keeping, the PCA limits its
function to the innocuous one of "monitoring" compliance by coconut millers with
quality standards and volumes of production. In effect, the PCA would simply be
compiling statistical data on these matters, but in case of violations of standards there
would be nothing much it would do. The field would be left without an umpire who
would retire to the bleachers to become a mere spectator. As the PCA provided in its
Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED,
that, henceforth, PCA shall no longer require any coconut oil mill, coconut oil
refinery, coconut desiccator, coconut product processor/factory, coconut fiber
plant or any similar coconut processing plant to apply with PCA and the latter
shall no longer issue any form of license or permit as condition prior to
establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply
registering the aforementioned coconut product processors for the purpose
of monitoring their volumes of production, administration of quality standards
with the corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to carry out
its mandate under the law "to promote the accelerated growth and development of
the coconut and other palm oil industry." 17 The issue rather is whether it can
renounce the power to regulate implicit in the law creating it for that is what the
resolution in question actually is.
Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA
is "To formulate and adopt a general program of development for the coconut and
other palm oil industry in all its aspects." By limiting the purpose of registration to
merely "monitoring volumes of production [and] administration of quality standards" of
coconut processing plants, the PCA in effect abdicates its role and leaves it almost
completely to market forces how the coconut industry will develop.
Art. II, 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-
products by establishing standards for domestic trade and export and,
thereafter, to conduct an inspection of all copra and its by-products proposed
for export to determine if they conform to the standards established;
Instead of determining the qualifications of market players and preventing the entry
into the field of those who are unfit, the PCA now relies entirely on competition with
all its wastefulness and inefficiency to do the weeding out, in its naive belief in
survival of the fittest. The result can very well be a repeat of 1982 when free
enterprise degenerated into a "free-for-all," resulting in cut-throat competition,
underselling, the production of inferior products and the like, which badly affected the
foreign trade performance of the coconut industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other
statutory provisions, particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority
to regulate the marketing and export of copra, coconut oil and their by-
products, in furtherance of the steps being taken to rationalize the coconut
oil milling industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine
Coconut Authority may initiate and implement such measures as may be
necessary to attain the rationalization of the coconut oil milling industry,
including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut
oil and their by-products;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular
markets;
(d) Inspection and survey of export shipments through an independent
international superintendent or surveyor.
In the exercise of its powers hereunder, the Philippine Coconut Authority
shall consult with, and be guided by, the recommendation of the coconut
farmers, through corporations owned or controlled by them through the
Coconut Industry Investment Fund and the private corporation authorized to
be organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or
by the coconut farmers under Sections 9 and 10, Article III hereof, the
156
 Authority shall have full power and authority to regulate the production,
distribution and utilization of all subsidized coconut-based products, and to
require the submission of such reports or documents as may be deemed
necessary by the Authority to ascertain whether the levy payments and/or
subsidy claims are due and correct and whether the subsidized products are
distributed among, and utilized by, the consumers authorized by the
Authority.
The dissent seems to be saying that in the same way that restrictions on entry into
the field were imposed in 1982 and then relaxed in 1987, they can be totally lifted now
without prejudice to reimposing them in the future should it become necessary to do
so. There is really no renunciation of the power to regulate, it is claimed. Trimming
down of PCA's function to registration is not an abdication of the power to regulate
but is regulation itself. But how can this be done when, under Resolution No. 018-93,
the PCA no longer requires a license as condition for the establishment or operation
of a plant? If a number of processing firms go to areas which are already congested,
the PCA cannot stop them from doing so. If there is overproduction, the PCA cannot
order a cut back in their production. This is because the licensing system is the
mechanism for regulation. Without it the PCA will not be able to regulate coconut
plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the PCA
invokes a policy of free enterprise that is "unhampered by protective regulations and
unnecessary bureaucratic red tape" as justification for abolishing the licensing
system. There can be no quarrel with the elimination of "unnecessary red tape." That
is within the power of the PCA to do and indeed it should eliminate red tape. Its
success in doing so will be applauded. But free enterprise does not call for removal of
"protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-
faire as an economic principle. 18Although the present Constitution enshrines free
enterprise as a policy, 19 it nonetheless reserves to the government the power to
intervene whenever necessary to promote the general welfare. This is clear from the
following provisions of Art. XII of the Constitution which, so far as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to
own, establish, and operate economic enterprises, subject to the duty of the
State to promote distributive justice and to intervene when the common
good so demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair
competition shall be allowed. (Emphasis added).
At all events, any change in policy must be made by the legislative department of the
government. The regulatory system has been set up by law. It is beyond the power of
an administrative agency to dismantle it. Indeed, petitioner charges the PCA of
seeking to render moot a case filed by some of its members questioning the grant of
licenses to certain parties by adopting the resolution in question. It is alleged that
members of petitioner complained to the court that the PCA had authorized the
establishment and operation of new plants in areas which were already crowded, in
violation of its Administrative Order No. 002, series of 1991. In response, the Regional
Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing
licenses to the private respondent in that case.
These allegations of petitioner have not been denied here. It would thus seem that
instead of defending its decision to allow new entrants into the field against
petitioner's claim that the PCA decision violated the guidelines in Administrative Order
No. 002, series of 1991, the PCA adopted the resolution in question to render the
case moot. In so doing, the PCA abdicated its function of regulation and left the field
to untrammeled competition that is likely to resurrect the evils of cut-throat
competition, underselling and overproduction which in 1982 required the temporary
closing of the field to new players in order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for authority to
adopt the resolution in question. As already stated, what President Aquino approved
in 1988 was the establishment and operation of new DCN plants subject to the
guidelines to be drawn by the PCA. 20 In the first place, she could not have intended to
amend the several laws already mentioned, which set up the regulatory system, by a
mere memoranda to the PCA. In the second place, even if that had been her
intention, her act would be without effect considering that, when she issued the
memorandum in question on February 11, 1988, she was no longer vested with
legislative authority. 21
WHEREFORE, the 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.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Puno, Kapunan, Francisco, Panganiban and
Martinez, JJ., concur.
157
THIRD DIVISION
[G.R. No. 103953. March 25, 1999]
SAMAHANG MAGBUBUKID NG KAPDULA, INC., petitioner-appellant, vs. THE
HONORABLE COURT OF APPEALS, PONCIANO DUCUSIN, AQUILINO
DUCUSIN, EUFEMIO CABINGAN, LEONARDO DIAZ, REYNALDO
PEREZ, SERAPIO FIRME, RICARDO BRAZA, ANTONIO BAUTISTA,
ROMULO BUCLATIN, EULOGIO PARANAQUE, JR., AGAPITO
DUCUSIN, DELFIN DUCUSIN, REYNALDO GARCIA, MARTIN
SALAZAR, MELECIO LAYON, CIRIACO ABEJERO, BASILIO
BUCLATIN, FERLITA BUCLATIN, RUFINA BUCLATIN, BONIFACIO
BUCLATIN, LUNINGNING BUCLATIN, LEONARDO BEJESON,
REGENTOR COTONER, DANILO GONZALES, EMILIO DUCUSIN,
GERMAN DUCUSIN, MARCIANO BACAY, IRENEO DUCUSIN,
LEONARDO DUCUSIN, ALEJANDRO DUCUSIN, SERGIO DUCUSIN,
WILLIE CADESALE, MARTIN DE LA CUESTA, DOMINGO ORENSE,
CRESENCIANA LOPEZ, PONCIANO BELTRAN, JUN DOYOLA, DONATO
CRUZ, MIGUEL BUGAGAO, LUCIO ILAO, ALFREDO COSTACIO,
HILARION CARAIG, LARRY DE LA VEGA, RAYMUNDO SOBEJANO,
AVELINO DUCUSIN, RESENDO DUCUSIN, VICENTE RIVERA,
BONGBONG BACAY, DONATO CASCANO, EDGARDO DUCUSIN,
OLIVER DUCUSIN, ARMANDO BEJESON, ROMEO OBIAS, JOMARIE
LALAGON, ROGELIO SEVILLA, MICHAEL DUCUSIN, MAURA
BUCLATIN, ERNESTO MOGAR, FILEMON ANARNA, RUPERTO ILAO,
RUPERTO MENDOZA, CARLOS MENDOZA, ALFREDO DRIZ, MARIO
CABINGAN, JUAN SOMBILLO, EUGENIO MERCADO, CECILIO BENIG,
JR., ROMIE LUYAS, ALFONSO BULAHAN, ADAM CARBADILLA,
PEPITO CADESALE, LIWAYWAY CAPARAS, EVARISTO CREUS, RAUL
GONZAGA, ANTONIO GONZAGA, SANO ADION, REYNALDO ZORINO,
WILFREDO ALILING, and BERNARDO ASUNCION, respondents-appellees.
DECISION
PURISIMA, J.:
At bar is a petition for review on certiorari under rule 45 of the Revised Rules of Court
assailing the Decision[1] of the Court of Appeals in CA-G.R. SP No. 26173.
The facts that matter are as follows:
Macario Aro was the former owner of two (2) parcels of agricultural land with an
aggregate area of 168.7 hectares, more or less, in Barangay Malinta, Dasmarinas, Cavite. The
members of petitioner Samahang Magbubukid Ng Kapdula, Inc. were the tenants on the two
(2) parcels of land.
Sometime in 1979 or 1980, Mr. Aro sold the said parcels of land to Arrow Head Golf
Club, Inc., which was founded by Ricardo Silverio who envisioned to establish a car assembly
plant within the area. In the process, the members of petitioner were evicted. But the
establishment of a car assembly plant in the place never materialized.
The parcels of land in question were later leased to the spouses, Ruben Rodriguez and
Gloria Bugagao, for a term of seven (7) years from July 8, 1983 to July 8, 1990 [2], and were
then developed into a sugarcane plantation, with the herein private respondents as the regular
farmworkers.
On July 13, 1984, the same property was acquired by the Philippine National Bank
(PNB) at a Sheriffs auction sale.[3]
In 1986, the members of petitioner sought the assistance of the former Ministry of
Agrarian Reform (MAR), now Department of Agrarian Reform (DAR), through then Minister
Heherson Alvarez, for their reinstatement as farmworkers thereon, but nothing came out of
such efforts.
The ownership of subject parcels of land was later transferred to the Asset Privatization
Trust (APT) which conveyed the same on March 19, 1991 to the Republic of the Philippines,
represented by the DAR[4]
On March 26, 1991, in furtherance of its objective of instituting agrarian reform in the
country, the DAR issued Certificate of Land Ownership (CLOA) Nos. 1116 [5] and 1117[6] for
the said parcels of land in favor of the petitioner.
On September 27, 1991, the private respondents filed a Petition for Certiorari with the
Court of Appeals, assailing the issuance of said CLOAs to the petitioner.
On January 30, 1992, the Court of Appeals granted the petition, disposing thus:
WHEREFORE, the petition is hereby GRANTED in that the respondent Department of
Agrarian Reform be directed to conduct a hearing and/or investigation, with due notice to the
herein petitioners, to determine the rightful beneficiaries of the subject parcels of land in
accordance with R.A. No. 6657 or the CARP; and to cause the cancellation of the Transfer
Certificate of Title Nos. CLOA-1116 and 1117 in the name of private respondent, should
private respondent be found not entitled to the subject parcels of land. [7]
158
 Dissatisfied therewith, the petitioner has come to this Court to assail the Decision of the
Court of Appeals, contending that:
I WITH FINALITY THE FINDINGS OF FACT OF DAR.
THE RESPONDENT COURT ERRED IN NOT DISMISSING THE PETITION FOR
CERTIORARI FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES.
I-A
THE RESPONDENT COURT ERRED IN ITS FINDING THAT HEREIN PRIVATE
RESPONDENTS WERE NOT GIVEN OPPORTUNITY TO BE HEARD IN THE
ADMINISTRATIVE PROCEEDINGS CONDUCTED PRECEDING THE ISSUANCE OF
THE AWARDS.
I-B
THE RESPONDENT COURT ERRED IN ITS FINDING THAT DETERMINATION OF
QUALIFIED BENEFICIARIES IS A DECISION OF THE SECRETARY AND THAT
RESORTING TO THE DAR ADJUDICATION BOARD TO QUESTION SUCH DECISION
IS UNAVAILING.
II
THE RESPONDENT COURT ERRED IN ITS FINDING THAT THERE WAS FAILURE TO
OBSERVE DUE PROCESS IN THE ISSUANCE OF TCT NOS. CLOA-1116 AND CLOA-
1117 IN THE NAME OF HEREIN PETITIONER.
II-A
THE RESPONDENT COURT ERRED IN NOT UPHOLDING THE PRESUMPTION THAT
OFFICIAL DUTY HAS BEEN REGULARLY PERFORMED ABSENT EVIDENCE TO
THE CONTRARY.
III
THE RESPONDENT COURT ERRED IN DIRECTING THE DAR TO CONDUCT A
HEARING AND/OR INVESTIGATION, WITH DUE NOTICE TO HEREIN PRIVATE
RESPONDENTS, TO DETERMINE THE RIGHTFUL BENEFICIARIES OF THE
SUBJECT PARCELS OF LAND IN ACCORDANCE WITH R.A. NO. 6657, AND TO
CAUSE THE CANCELLATION OF TCT NOS. CLOA-1116 AND CLOA-1117 IN THE
NAME OF HEREIN PETITIONER SHOULD IT BE FOUND NOT ENTITLED THERETO.
III-A
THE RESPONDENT COURT ERRED IN NOT GIVING RESPECT AND REGARDING
IV
THE RESPONDENT COURT ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN ITS FINDING OF FACTS WHICH IS
NOT SUPPORTED BY EVIDENCE.
Petitioner-appellants submissions boil down to two pivotal issues:
1. Whether or not there was observance of due process by the Department of
Agrarian Reform prior to the issuance of CLOA Nos. 1116 and 1117 in favor
of petitioner; and
2. Whether there was a need for the private respondents to exhaust administrative
remedies before filing their petition for certiorari with the Court of Appeals.
Petitioner contends that before taking recourse to the Court of Appeals, the private
respondents should have first exhausted all administrative remedies available to them. On the
ground of non-exhaustion of administrative remedies, the respondent court should have
dismissed the petition of private respondents. To buttress its stance, petitioner cited Section
50[8] of Republic Act No. 6657 (RA 6657) and Section 1, Rule II of the Revised Rules of DAR
Adjudication Board[9] vesting the DAR and DAR Adjudication Board (DARAB) with
jurisdiction to resolve agrarian reform disputes, including the issuance of CLOAs.
The Court of Appeals, on the other hand, opined that determination by Secretary of the
Department of Agrarian Reform as to the rightful beneficiaries has the effect of a final ruling
or award by the DAR itself and therefore, resort to DARAB to question the ruling of the
Secretary would be improper. There is thus no need to exhaust administrative remedies, under
the premises.
From the DARAB Revised Rules of Procedure, it can be gleaned that decisions of the
DAR Secretary cannot be questioned before DARAB. Pertinent rules, provide:
SECTION 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication
Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate
all agrarian disputes, cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program under Republic Act No.
6657, Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by
159
Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their
implementing rules and regulations.
Specifically, such jurisdiction shall extend over but not be limited to the following:
xxx
(c) Cases involving the annulment or cancellation of orders or decisions of DAR
officials other than the Secretary, lease contracts or deeds of sale or their amendments under
the administration and disposition of the DAR and LBP; (Rule II, DARAB Revised Rules of
Procedure) (italics ours)
From the foregoing, it is decisively clear that DARAB may only entertain appeals from
decisions or orders of DAR officials other than the Secretary. It is also irrefutable that the
issuance of subject CLOAs constituted a decision of the Secretary, who issued and signed the
same.[10]
Consequently, the propriety of the recourse by private respondents to the respondent
court on a petition for certiorari, to assail the issuance by the DAR of the CLOAs in question,
is beyond cavil. Under Section 54 of RA 6657, decisions and awards of the DAR may be
brought to the Court of Appeals by certiorari.[11]
Time and again, this court has ruled that in cases of denial of due process, exhaustion of
available administrative remedies is unnecessary[12] The aggrieved party may seek judicial
relief outright.
But was there a denial of due process under the attendant facts and
circumstances? Respondent court found that herein private respondents were denied the
opportunity to ventilate their stance before the DAR. But according to the petitioner, during
the investigation and conferences conducted on the question of inclusion of subject properties
in the Comprehensive Agrarian Reform Program of the government, Mr. Ruben Rodriguez
was notified of the same, as evidenced by Annexes E[13], F[14]1, F-1[15], and F-2[16]
Records show, however, that the letter (Annex E), which was supposed to be the notice
to the private respondents regarding the inclusion of subject properties in the CARP, was
ineffective. First of all, the letter of Provincial Agrarian Reform Officer Serapio T. Magpayo to
Mr. Ruben Rodriguez indicates no receipt of the same by Mr. Rodriguez nor was it signed by
Mr. Magpayo. Secondly, if it was ever sent, it was sent too late, the same being dated June 5,
1991, when the said parcels of land had already been awarded to the members of petitioner.
(The CLOAs under controversy were issued on March 26, 1991.) Thirdly, the letter was
addressed to Mr. Ruben Rodriguez, who no longer possessed the said properties as his lease
thereover ended on July 8, 1990.
There is thus a need for further hearings to determine the beneficiaries of subject parcels
of land. In such hearings, the private respondents, who were deprived of an opportunity to be
heard before the DAR, should participate. This is in pursuance of the provisions of Section
40(4)[17], in relation to Section 22 [18] of RA 6657, providing for the order or priority of the
qualified beneficiaries of CARP.
WHEREFORE, the petition is hereby DENIED and the Decision of the Court of
Appeals in CA-G.R. SP No. 26173 AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Romero (Chairman), Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.
EN BANC
G.R. No. L-12944 March 30, 1959
MARIA NATIVIDAD VDA. DE TAN, petitioner-appellee,
vs.
VETERANS BACKPAY COMMISSION, respondent-appellant.
Atilano R. Cinco and Aguilan and Rosero Law Offices for appellee.
Acting Solicitor General Guillermo E. Torres and Solicitor Camilo D. Quiason for
appellant.
REYES, J.B.L., J.:
On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the
Court of First Instance of Manila a verified petition for mandamus seeking an order to
compel the respondent-appellant Veterans Back Pay Commission: (1) to declare
deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national, entitled to
backpay rights, privileges, and prerogatives under Republic Act No. 304, as amended
by Republic Act No. 897; and (2) to give due course to the claim of petitioner, as the
widow of the said veterans, by issuing to her the corresponding backpay certificate of
indebtedness.
Respondent Commission filed its answer in due time asserting certain special and
affirmative defenses, on the basis of which, the Commission unsuccessfully moved to
dismiss the petition.
160
The parties then submitted a stipulation of facts hereinbelow reproduced:
Come now the petitioner and respondent in the above-entitled case through
their respective counsel, and to this Honorable Court respectfully agree and
stipulate that the following facts are true:
1. That the petitioner is of legal age, widow, and a resident of 400 Lallana,
Tondo, Manila; that the respondent is a government instrumentality or
agency, with offices in the City of Manila, Philippines, duly vested with
authority to implement the provisions of the Backpay Law, otherwise known
as Republic Act No. 879, further amending Republic Act No. 304;
2. That the petitioner is the widow of the late Lt. Tan Chiat Bee alias Tan
Lian Lay, a Chinese national, and a bona fide member of the 1st Regiment,
United States-Chinese Volunteers in the Philippines;
3. That the United States-Chinese Volunteers in the Philippines is a guerrilla
organization duly recognized by the Army of the United States and forming
part and parcel of the Philippine Army;
4. That Tan Chiat Bee alias Tan Lian Lay died in the service on April 4, 1945
in the battle at Ipo Dam, Rizal Province, Philippines; he was duly recognized
as a guerrilla veteran and certified to by the Armed Forces of the Philippines
as having rendered meritorious military services during the Japanese
occupation;
5. That petitioner as the widow of the said recognized deceased veteran,
filed an application for back pay under the provisions of Republic Act No.
897, the resolution of the Veterans Back Pay Commissions dated November
19, 1953 and the letter of the Veterans Back Pay Commission dated
December 9, 1953;
6. That on June 18, 1955, the Secretary and the Chief of Office Staff of
Veterans Back Pay Commission sent a letter to General Vicente Lopez of
the United States-Chinese Volunteers in the Philippines apprising the latter
that the Commission has reaffirmed its resolution granting the back pay to
alien members;
7. That the Adjutant, Armed Forces of the Philippines, has verified and
certified that deceased veteran has rendered service as a recognized
guerrilla for the period indicated in his (Adjutant's) indorsement to the
Chief, Finance Service Armed Forces of the Philippines;
8. That, likewise, the Chief of Finance Service, Camp Murphy, has computed
the backpay due the petitioner and the same was passed in audit by
representatives of the Auditor General;
9. That after due liberation respondent revoked its previous stands and ruled
that aliens are not entitled to back pay;
10. That on February 13, 1957, the respondent Veterans Back Pay
Commission, through its Secretary & Chief of Office Staff, made a formal
reply to the aforesaid claim of the herein petitioner denying her request on
the ground that aliens are not entitled to back pay;
11. That upon refusal of the Veterans Back Pay Commission the petitioner
brought the case direct to this Honorable Court by way of mandamus;
12. That petitioner and respondent admit the existence and authenticity of
the following documents;
Annex AResolution of the Veterans Back Pay dated November 19, 1953.
Annex BLetter dated December 9, 1953.
Annex CLetter dated June 18, 1955.
Annex DExecutive Order No. 21 dated October 28, 1944.
Annex EExecutive Order No. 68 dated September 26, 1945.
Annex FMinutes of the Resolution of the Back Pay Commission regarding
the opinion of the Secretary of Justice dated February 8, 1956.
Annex GLetter of Back Pay Commission dated February 26, 1954 to
Secretary of Justice.
Annex HOpinion No. 213 series of 1956 of the Secretary of Justice.
Annex IReply of Veterans Backpay Commission.
Annex JExplanatory Note to House Bill No. 1953.
Annex KExplanatory note to Senate Bill No. 10.
161
 Annex LExplanatory note to House Bill No. 1228, now Republic Act No.
897.
Annex MJoint Resolution No. 5 of the First Congress of the Philippines.
13. That the parties waive the presentation of further evidence;
14. That the respondents will file its memorandum within ten (10) days from
August 1, 1957 and the petitioner may file her memorandum within ten (10)
days from receipt of respondent's memorandum, after which the case is
deemed submitted for decision.
Manila, July 31, 1957.
Based on the foregoing, the lower court rendered judgment the dispositive portion of
which, reads:
Wherefore, the petition is granted, ordering respondent Commission to give
due course to the claim of herein petitioner to the backpay to which her
deceased husband was entitled as member of a duly recognized guerrilla
organization.
Against the decision, the respondent instituted this appeal averring once more, in its
assignment of errors, the special and affirmative defenses that the petitioner failed to
exhaust available administrative remedies; that the suit is, in effect, an action to
enforce a money claim against the government without its consent;
that mandamus will not lie to compel the exercise of a discretionary function; and
that the Republic Act Nos. 304 and 897 already referred to were never intended to
benefit aliens.
We find no merit in the appeal. As to the claim that mandamus is not the proper
remedy to correct the exercise of discretion of the Commission, it may well be
remembered that its discretion is limited to the facts of the case, i.e., in merely
evaluating the evidence whether or not the claimant is a member of a guerrilla force
duly recognized by the United States Army. Nowhere in the law is the respondent
Commission given the power to adjudicate or determine rights after such facts are
established. Having been satisfied that deceased Tan Chiat Bee was an officer of a
duly recognized guerrilla outfit, certified to by the Armed Forces of the Philippines,
having served under the United States-Chinese Volunteers in the Philippines, a
guerrilla unit recognized by the United States army and forming part of the Philippine
Army, it becomes the ministerial duty of the respondent to give due course to his
widow's application. (See sections 1 and 6, Republic Act 897). Note that the Chief of
the Finance Service, Camp Murphy, has accepted the backpay due the petitioner's
husband and the same was passed in audit by the representatives of the Auditor
General.
It is insisted by the respondent Commission that aliens are not included within the
purview of the law. We disagree. The law is contained in Republic Act Nos. 304 and
897 is explicit enough, and it extends its benefits to members of "guerrilla forces duly
recognized by the Army of the United States." From the plain and clear language
thereof, we fail to see any indication that its operation should be limited to citizens of
the Philippines only, for all that is required is that the guerrilla unit be duly recognized
by the Army of the United States. We are in full accord with Opinion No. 213, series of
1956, of the Secretary of Justice, which reads:
Section 1 of the cited Act (Republic act No. 304, as amended by Republic
Act No. 897), otherwise known as the Back Pay Law, recognizes the rights
to the backpay of members of "guerrilla forces duly recognized by the Army
of the United States, among others. A perusal of its provisions reveals
nothing which may be construed to mean that only Filipino citizens are
entitled to back pay thereunder. On the contrary, the statute expressly
includes within its coverage "persons under contract with the Government of
the Commonwealth", which clause was construed by this office to refer to
service" by the government (Opinion No. 137, s. 1953), a majority of whom
were non-citizens. Thus, the Opinion No. 30, s. 1949, this office ruled that a
civil service employee of the U.S. Coast and Geodetic Survey rendering the
service to the Philippine Government when war broke out on December 8,
1941, was entitled to back pay.
As regards guerrillas, it seems clear that all the law requires is that they be
"duly recognized by the Army of the United States." Section 1 of the Back
Pay Law, it is also noted, enumerates those who are not entitled to its
benefits; recognized guerrillas who were not Filipino citizens are not among
those expressly mentioned. The maxim expressio unius est exclusio alterius,
I think, finds application here.
Moreover, Executive Order No. 21, dated October 28, 1944, expressly
declared that, Sections 22 (a) and 27 of Commonwealth Act No. 1 to the
contrary notwithstanding, "all persons of any nationality or citizenship, who
are actively serving in recognized military forces in the Philippines, are
thereby considered to be on active service in the Philippine Army."
It is the respondent's main argument that it could not have been the intention of
Congress to extend its benefit to aliens, as the purpose of the law was "precisely to
help rehabilitate members of the Armed Forces of the Philippines and recognized
guerrillas by giving them the right to acquire public lands and public property by using
162
the back pay certificate", and "it is fundamental under the Constitution that aliens
except American citizens cannot acquire public lands or exploit our natural
resources". Respondent Commission fails to realize that this is just one of the various
uses of the certificate; and that it may also be utilized for the payment of obligations to
the Government or to any of its branches or instrumentalities, i.e., taxes, government
hospital bills, etc. (See Sec. 2, Rep. act No. 897).

As further observed by the lower court:

It is one thing to be entitled to backpay and to receive acknowledgment

therefor, and another thing to receive backpay certificates in accordance with
G.R. No. 78946 April 15, 1988
the resolutions of the Commission and to make use of the same.

DR. NENITA PALMA-FERNANDEZ, petitioner,

It was, therefore, unreasonable if not arbitrary on the part of respondent Commission
vs.
to deny petitioner's claim on the basis.
DR. ADRIANO DE LA PAZ, DR. SOSEPATRO AGUILA, and THE SECRETARY OF
HEALTH, respondents.
It is further contended by the Commission that the petitioner should have first
exhausted her administrative remedies by appealing to the President of the
Oscar C. Fernandez for petitioner.
Philippines, and that her failure to do so is a bar to her action in court (Montes vs. The
Civil Service Board of Appeals, 101 Phil., 490; 54 Off. Gaz. [7] 2174. The respondent
Commission is in estoppel to invoke this rule, considering that in its resolution (Annex The Solicitor General for respondents.
F of the Stipulation of Facts) reiterating its obstinate refusal to abide by the opinion of
the Secretary of Justice, who is the legal adviser of the Executive Department, the
Commission declared that
MELENCIO-HERRERA, J.:
The opinions promulgated by the Secretary of Justice are advisory in nature,
which may either be accepted or ignored by the office seeking the opinion, This is a Petition for Quo Warranto filed by petitioner, Dr. Nenita Palma-Fernandez,
and any aggrieved party has the court for recourse, (Annex F) claiming entitlement to the position of Assistant Director for Professional Services at
the East Avenue Medical Center (formerly Hospital ng Bagong Lipunan) alleged to be
thereby leading the petitioner to conclude that only a final judicial ruling in her favor unlawfully held by private respondent, Dr. Sosepatro Aguila.
would be accepted by the Commission.
The background facts follow:
Neither is there substance in the contention that the petition is, in effect, a suit against
the government without its consent. the relief prayed for is simply "the recognition of On 1 May 1985, petitioner was extended a permanent appointment to the position of
the petitioner-appellee" under the provisions of sections 1 and 2 of Republic Act No. Chief of Clinics at the Hospital ng Bagong Lipunan (now East Avenue Medical Center)
897, and consists in "directing an agency of the government to perform an act . . . it is by then Minister of Health and Chairman of the Board of Governors of the Center,
bound to perform." Republic Act Nos. 304 and 897 necessarily embody state consent Jesus C. Azurin.
to an action against the officers entrusted with the implementation of said Acts in case
of unjustified refusal to recognize the rights of proper applicants. Previous to this appointment, petitioner, a career physician, occupied the positions of
Medical Specialist I in 1978, Medical Specialist II from October 1982 to April 1985,
The decision appealed from should be, and hereby is, affirmed. No costs. So ordered. until her appointment as Chief of Clinics on 1 May 1985. Even during her incumbency

163
as Medical Specialist II, petitioner was already designated as Acting Chief of Clinics
since September 1983 up to her permanent appointment to said position.
As Chief of Clinics, petitioner exercised direct control and supervision over all heads
of departments in the Medical Center
In 1986, the new organizational structure of the Center retitled the position of Chief of
Clinics to Assistant Director for Professional Services. In partial implementation of this
new set-up, respondent Dr. Adriano de la Paz, as Medical Center Chief, issued
Hospital Order No. 30, Series of 1986, on 8 August 1986, designating petitioner as
Assistant Director of Professional Services (Annex 3, Comment, p. 48, Rollo). As
such, she continued to exercise direct control and supervision over all heads of
departments in the Medical Center.
On 30 January 1987, Executive Order No. 119 known as the "Reorganization Act of
the Ministry of Health" was promulgated.
On 29 May 1987, respondent De la Paz, as Medical Center Chief, designated
respondent Dr. Aguila, who was then Medical Specialist I, as Assistant Director for
Professional Services "vice Dr. Nenita Palma-Fernandez, who will be transferred to
the Research Office." (Hospital Order No. 21, series of 1987, Annex B, Petition). Said
order was purportedly issued "in the interest of the hospital service."
On the same date, Hospital Order No. 22, series of 1987, (Annex C, Petition), was
issued by respondent De la Paz, whereby petitioner was relieved "of her present
duties and responsibilities as Chief of Clinic and hereby transferred to the Research
Office. This order being issued in the interest of the hospital service.
Upon receipt of Hospital Order No. 22, petitioner filed on 1 June 1987 a letter-protest
with respondent Secretary of Health, furnishing copies to respondents De la Paz and
Aguila, as well as to the Commissioner of Civil Service and the Chairman of the
Government Reorganization Commission.
Failing to secure any action on her protest within a month's time, petitioner filed on 8
July 1987 the instant Petition for Quo Warranto with Preliminary Injunction against
respondents Dr. de la Paz, Dr. Aguila, and the Secretary of Health.
On 14 July 1987, this Court issued a Temporary Restraining Order enjoining the
implementation of Hospital Orders Nos. 21 and 22, series of 1987.
After considering and deliberating on all Comments, the Reply, and the Rejoinder of
the Solicitor General to said Reply, the Court, on 17 March 1988, Resolved to give
due course to the Petition, and dispensing with memoranda, declared the case
submitted for resolution.
The Solicitor General has aptly framed the issues for resolution as follows:
1. Whether or not respondent De la Paz has the power or authority to issue the two
Hospital Orders in question;
2. Whether or not petitioner has a valid cause of action; and
3. Whether or not the rule on exhaustion of administrative remedies precludes the
filing of the instant Petition.
The Solicitor General, on behalf of the Secretary of Health, makes common cause
with petitioner and answers the first and third issues in the negative, and the second
in the affirmative. For their part, Respondents De la Paz and Aguila uphold the
opposite views.
We rule for petitioner.
1. Since the East Avenue Medical Center is one of the National Health Facilities
attached to the Department of Health, the power to appoint and remove subordinate
officers and employees, like petitioner, is vested in the Secretary of Health, not the
Medical Center Chief. The latter's function is confined to recommendation. Thus,
Section 79 (D). of the Revised Administrative Code provides:
Section 79 (D). Power to appoint and remove. The Department Head,
upon the recommendation of the Chief of the bureau or office concerned,
shall appoint all subordinate officers and employees whose appointment is
not expressly vested by law in the President of the Philippines, and may
remove or punish them, except as especially provided otherwise, in
accordance with the Civil Service Law...
The Department Head also may, from time to time, in the interest of the service,
change the distribution among the several bureaus and offices of his Department of
the employees or subordinates authorized by law.
Executive Order No. 119, or the Reorganization Act of the Ministry of Health, likewise
states:
164
SEC. 26. New Structure and Pattern...
The new position structure and staffing pattern of the Ministry shag be
prescribed by the Minister within one hundred twenty (120) days from the
approval of this executive order subject to approval by the Office of
Compensation and Classification and the authorized positions created
thereunder shall be filled thereafter with regular appointments by him or the
President, as the case may be as herein provided...
Respondent Medical Center Chiefs argument that petitioner was not appointed but
was merely transferred in the interest of the public service to the Research Office
pursuant to Section 24 (c) of Presidential Decree No. 807, or the Civil Service Decree
of the Philippines 1 will not alter the situation. Even a transfer requires an
appointment, which is beyond the authority of respondent Medical Center Chief to
extend, supra. Besides, the transfer was without petitioner's consent, was tantamount
to removal without valid cause, and as such is invalid and without any legal effect
(Garcia, et al. vs. Lejano, et al., 109 Phil. 116). A removal without cause is violative of
the Constitutional guarantee that "no officer or employee of the civil service shall be
removed or suspended except for cause provided by law" (Article IX, B, Section
2(3),1987 Constitution).
Petitioner's "designation" as Assistant Director for Professional Services on 8 August
1986 in accordance with the organizational structure of the Department of Health
under Hospital Order No. 30, Series of 1986, issued by respondent Medical Center
Chief did not make her occupancy of that position temporary in character. It bears
stressing that the positions of Chief of Clinics and Assistant Director for Professional
Services are basically one and the same except for the change in nomenclature.
Petitioner's permanent appointment on 1 May 1985 to the position of Chief of Clinics,
therefore, remained effective.
Neither can respondent Medical Center Chief rely on Section 2, Article III of the
Freedom Constitution and its Implementing Rules and Regulations embodied in
Executive Order No. 17, Series of 1986. The relevant provision was effective only
"within a period of one year from February 25, 1 986." 2 The Hospital Orders in
question were issued only on 29 May, 1987.
Executive Order No. 119, or the 'Reorganization Act of the Ministry of Health"
promulgated on 30 January 1987, neither justifies petitioner's removal. The pertinent
provision thereof reads:
Sec. 26. New Structure and Pattern. Upon approval of this Executive
Order, the officers and employees of the Ministry shall, in a holdover
capacity, continue to perform their respective duties and responsibilities and
receive the corresponding salaries and benefits unless in the meantime they
are separated from government service pursuant to Executive Order No. 17
(1986) or Article III of the Freedom Constitution.
The argument that, on the basis of this provision, petitioner's term of office ended on
30 January 1987 and that she continued in the performance of her duties merely in a
hold over capacity and could be transferred to another position without violating any
of her legal rights, is untenable. The occupancy of a position in a hold over capacity
was conceived to facilitate reorganization and would have lapsed on 25 February
1987 (under the Provisional Constitution), but advanced to 2 February 1987 when the
1987 Constitution became effective (De Leon, et al. vs. Hon. Benjamin B. Esquerra,
et al., G.R. No. 78059, 31 August 1987). After the said date the provisions of the latter
on security of tenure govern.
And while it may be that the designation of respondent Aguila as Assistant Director for
Professional Services and the relief of petitioner from the said position were not
disapproved by respondent Secretary of Health, it by no means implies that the
questioned acts of respondent Medical Center Chief were approved by the former
official.
2. It follows from the foregoing disquisition that petitioner has a valid cause of action.
Where there is usurpation or intrusion into an office, quo warranto is the proper
remedy. (Lota vs. Court of Appeals, No. L-14803, June 30, 1961, 2 SCRA 715).
3. The doctrine on exhaustion of administrative remedies does not preclude petitioner
from seeking judicial relief This rule is not a hard and fast one but admits of
exceptions among which are that (1) the question in dispute is "purely a legal one"
and (2) the controverted act is 'patently illegal" (Carino vs. ACCFA, No. L-19808,
September 29,1966,18 SCRA 183). The questions involved here are purely legal. The
subject Hospital Orders violated petitioner's constitutional right to security of in tenure
and were, therefore, "patently illegal." Judicial intervention was called for to enjoin the
implementation of the controverted acts.
There was substantial compliance by petitioner with the requirement of exhaustion of
administrative remedies since she had filed a letter-protest With the respondent
Secretary of Health, with copies furnished the Commissioner of Civil Service, and the
Chairman of the Government Reorganization Commission, but the same remained
unacted upon and proved an inadequate remedy. Besides, an action for quo
warranto must be filed within one year after the cause of action accrues (Sec. 16,
Rule 66, Rules of Court), and the pendency of administrative remedies does not
operate to suspend the running of the one-year period (Cornejo vs. Secretary of
Justice L-32818, June 24, 1974, 57 SCRA 663).
165
WHEREFORE, the Writ of Quo Warranto is granted and petitioner, Dr. Nenita Palma-
Fernandez, is hereby held entitled to the position of Assistant Director of Professional
Services of the East Avenue Medical Center up to the expiration of her term. The
Temporary Restraining Order heretofore issued enjoining the implementation of
Hospital Orders Nos. 21 and 22, both dated 29 May 1987, is hereby made
permanent.SO ORDERED.
FIRST DIVISION
[G.R. No. 121035. April 12, 2000]
RUFINO NORBERTO F. SAMSON, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, SCHERING-PLOUGH CORPORATION, LEO RICONALLA and
JOSE L. ESTINGOR, respondents.
DECISION
KAPUNAN, J.:
Through this petition for certiorari, Rufino Norberto F. Samson ("petitioner") assails
the Decision, dated 17 March 1995, of the National Labor Relations Commission in
the consolidated cases of NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-
94. Petitioner likewise assails the Resolution, dated 10 May 1995, of the NLRC
denying his motion for reconsideration.
The assailed decision of the NLRC reversed and set aside the Decision, dated 25
August 1994, of Labor Arbiter Ricardo C. Nora finding respondent Schering-Plough
Corporation ("respondent company") guilty of illegal dismissal and ordering it to
reinstate petitioner to his former position as District Sales Manager and to pay him
backwages.
As culled from the decisions of the labor arbiter and the NLRC, the facts of the case
are as follows:
This pertains to the case (NCR-00-01-00652-94) filed by the complainant
Rufino Norberto F. Samson against the respondents Schering Plough Corp.
(SPC for brevity) and Mr. Leo C. Riconalla, National Sales Manager, for
money equivalent of rice subsidy for the period April 1990 to December 1992
and holiday pay, now deemed submitted for resolution based on records
available.
On February 1, 1994, said complainant filed another case (NCR-00-02-
00887-94) for illegal preventive suspension raffled to the Honorable Labor
Arbiter Donato G. Quinto, Jr. and consolidated to the above case number.
Likewise, on February 4, 1994, complainant filed a Motion to Amend
Complaint and averred pertinently that x x x complainant was placed under
an indefinite preventive suspension on 25 January 1994; and x x x was
arbitrarily and summarily terminated from employment on 03 February 1994
on ground of loss of confidence.
As culled from the records of the instant case, what really precipitated
complainants preventive suspension culminating to his dismissal is (sic) the
incident that took place on December 17, 1993 as gleaned from the
exchange of letters/memoranda from both parties.
In a letter dated 25 January 1994 (Annex A) addressed to the complainant
Mr. Samson signed by one J.L. Estingor, the latter called the attention of
(sic) the complainants conduct x x x in a manner inimical to the interests of
SPC and enumerated the following acts committed by the complainant; to
wit:
xxxxxxxxx
1. On or about 17 December 1993, during the Sales and Marketing
Christmas gathering, you made utterances of obscene, insulting, and
offensive words, referring to or directed against SPCs Management
Committee, in the presence of several co-employees.
2. On that same occasion, and again in the presence of several co-
employees, you uttered obscene, insulting and offensive words, and made
malicious and lewd gestures, all of which referred to or were directed against
Mr. Epitacio D. Titong, Jr. President and General Manager of SPC.
3. Also on that same occasion, you repeated your malicious utterances and
threatened to disrupt or otherwise create violence during SPCs forthcoming
National Sales Conference, and enjoined your co-employees not to prepare
for the said conference.
4. Subsequently, on or about 3 January 1994, you repeated your threats to
some co-employees, advising them to watch out for some disruptive actions
to happen during the National Sales Conference. (Underscoring ours)
166
Complainant was given two (2) days from receipt of the foregoing letter and
to explain x x x why no disciplinary action, including termination, should be
taken against the complainant and in the meantime was placed on
preventive suspension effective immediately, until further notice.
Complainant on the very same date 25 January 1994 and in reply to the
above-mentioned letter/memo (Annex B) wrote an explanation stating:
xxxxxxxxx
Relative to the said memo I would like to categorically state the following
facts:
1. That the act(s) alluded in the memo, specifically paragraph[s] 1 and 2,
which alleged that I uttered obscene, insulting and offensive words is not
true. If ever I happened to utter such words it was made in reference to the
decision taken by the management committee on the Cua Lim case and not
to any particular or specific person(s) as stated in the memo.
2. I beg to disagree with the statement made in Paragraphs 3 and 4
of the same memo as I deny to have uttered much less threaten to
create violence and disrupt the holding of the National Sales
Conference.
Finally, I am lodging a formal protest for being placed under preventive
suspension it being contrary to the memo which gave me two (2) days within
which to explain my position before any disciplinary action could be initiated.
I believe that the pre-empted imposition of the preventive suspension is not
only arbitrary but is violative of my constitutional 'right to due process'.
Submitted for your information.(Underscoring ours)
Again, on January 27, 1994, complainant wrote a letter (Annex 'C')
addressed to Mr. J.L. Estingor, HRD Manager, which in part reads:
xxxxxxxxx
Being a staff (DSM) assigned in the field I seldom stay in the office except on extreme
necessity or when my presence is required. Under such situation my continued
employment will not in any way poses [sic] serious or imminent threat to the life and
property of the company as well as my co-employees. The preventive suspension
meted out against me is not only abusive, arbitrary but indiscriminately applied under
the guise of managerial prerogative but violative of my right under the law.
I trust that my immediate reinstatement will be acted upon without any
further delay.
In a letter dated February 3, 1994, respondent SPC thru Mr. J.L. Estingor, wrote a
letter (Annex D) to the complainant Mr. Samson, the dispositive part of which reads
as follows:
xxxxxxxxx
In view of the foregoing, notice is hereby given that your employment from
Schering Plough Corporation is terminated effective at the close of business
hours of 3 February 1994.
We reiterate our previous directive for you to turn over the service vehicle, all
money, documents, records and other property in your possession or
custody to the National Sales Manager. Please comply with this directive
immediately."[1]
On the basis of the pleadings filed by the parties and evidence on record, the labor
arbiter rendered his Decision, dated 25 August 1994, declaring the dismissal of
petitioner illegal. The labor arbiter ruled that petitioners conduct is not so serious as to
warrant his dismissal because: 1) the alleged offensive words were uttered during an
informal and unofficial get-together of employees where there was social drinking and
petitioner was already tipsy; 2) the words were uttered to show disapproval over
managements decision on the "Cua Lim" case; 3) the penalty for the offense is only
"verbal reminder" under respondent companys rules and regulations; and 4) petitioner
was already admonished during a meeting on 4 January 1994. Accordingly,
respondent company was ordered to reinstate petitioner as District Sales Manager
and to pay him backwages.[2]
Both parties appealed said decision to the NLRC. Petitioner filed a partial appeal of
the denial of his claim for holiday pay and the cash equivalent of the rice subsidy. For
its part, respondent company sought the reversal of the decision of the labor arbiter
alleging that the latter erred in ruling that petitioners employment was terminated
without valid cause and in ordering his reinstatement.
167
In reversing the labor arbiters decision, the NLRC found that there was just
cause, i.e., gross misconduct, for petitioners dismissal. The NLRC made the following
disquisition, thus:
It is well established in the records that complainant made insulting and
obscene utterances directed at the respondent companys management
committee in the presence of several employees. Again, he directed his
verbal abuse against General Manager and President Epitacio D. Titong, Jr.
by uttering "Si EDT, bullshit yan", "sabihin mo kay EDT yan"; and "sabihin
mo kay EDT, bullshit yan" while gesturing and making the "dirty finger" sign.
(page 7, Decision) These utterances were made by the complainant in [a]
loud manner. (Affidavit of Leo C. Riconalla, Annex "1", of respondents
position paper) He was further accused of threatening to disrupt respondents
national sales conference by telling Ms. Anita Valdezco that the conference
will be a "very bloody one." (Respondents position paper)
We consider the foregoing actuations of the complainant as constituting
gross misconduct, sufficient to justify respondents in terminating his
services. The actuation of the complainant is destructive of the morals of his
co-employees and, therefore, his continuance in the position of District Sales
Manager would be patently inimical to the respondent companys interest.
Complainant is a managerial employee as he is a District Sales Manager. As
such, his position carries the highest degree of responsibility in improving
and upholding the interests of the employer and in exemplifying the utmost
standard of discipline and good conduct among his-co-employees. (Top
Form Mfg. Inc., vs. NLRC, 218 SCRA 313) In terminating the employment of
managerial employees, the employer is allowed a wider latitude of discretion
than in the case of ordinary rank-and-file employee. (Aurelio vs. NLRC, et
al., G.R. 99034, April 12, 1993)[3]
Preliminarily, we find it necessary to resolve the procedural issues raised by
respondent company in its Comment (with Motion for Clarification), dated 6
September 1995. Respondent company harped on the fact that the caption of the
petition did not include the docket numbers of the cases before the NLRC in violation
of Supreme Court Circular 28-91. We do not find this omission fatal as the pertinent
docket numbers had been set out in the first and second pages of the petition. The
same constitutes substantial compliance with the requirement of the law.
Respondent company further opined that the petition should be summarily dismissed
as the decision had become final and executory citing Section 114, Rule VII and
Section 2 (b), Rule VIII of the Rules of Procedure of the NLRC. This contention is
likewise untenable. As an original action for certiorari, the petition was merely
required to be filed within a reasonable time from receipt of a copy of the questioned
decision or resolution.[4] Under the rules then in effect at the time of the filing of the
instant petition, a period of three (3) months was considered to be "reasonable time".
[5]
In this case, petitioner received a copy of the assailed NLRC decision on 25 April
1995. He filed a motion for reconsideration on 27 April 1995 but it was denied by the
NLRC in its assailed resolution, a copy of which was received by petitioner on 1 July
1995. The instant petition was filed twenty-seven (27) days after said receipt or on 28
July 1995. Clearly, the instant petition was filed well within the reglementary period
provided by law.
Having settled that, we now address the substantive issue involved in this case, i.e.,
whether the NLRC acted with grave abuse of discretion amounting to lack or excess
of jurisdiction in reversing the decision of the labor arbiter and ruling that petitioner
was validly dismissed.
We rule in favor of petitioner.
The issue of whether petitioner was validly dismissed is a factual one and generally,
factual findings of the NLRC are accorded respect. In this case, however, there is
compelling reason to deviate from this salutary principle because the findings of facts
of the NLRC are in conflict with that of the labor arbiter. Accordingly, this Court must
of necessity review the records to determine which findings should be preferred as
more conformable to the evidentiary facts.[6]
To constitute valid dismissal, two (2) requisites must be met: (1) the dismissal must be
for any of the causes expressed in Article 282 of the Labor Code; and (2) the
employee must be given an opportunity to be heard and defend himself.[7] Article 282
of the Labor Code provides:
Art. 282. Termination by employer. An employer may terminate an
employment for any of the following causes:
a. Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
168
 d. Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representative; and
e. Other causes analogous to the foregoing.
As borne by the records, petitioners dismissal was brought about by the utterances
he made during an informal Christmas gathering of respondent companys Sales and
Marketing Division on 17 December 1993. Petitioner was heard to have uttered, "Si
EDT (referring to Epitacio D. Titong, General Manager and President of respondent
company), bullshit yan," "sabihin mo kay EDT yan" and "sabihin mo kay EDT, bullshit
yan," while making the "dirty finger" gesture. Petitioner likewise told his co-employees
that the forthcoming national sales conference of respondent company would be a
"very bloody one."
The NLRC ruled that the foregoing actuation of petitioner constituted gross
misconduct warranting his dismissal. Citing jurisprudence, the NLRC held that "in
terminating the employment of managerial employees, the employer is allowed a
wider latitude of discretion than in the case of ordinary rank-and-file."[8]
We do not agree with the findings of the NLRC.
Misconduct is improper or wrong conduct. It is the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful in character,
and implies wrongful intent and not mere error in judgment. The misconduct to be
serious must be of such grave and aggravated character and not merely trivial and
unimportant. Such misconduct, however serious, must, nevertheless, be in
connection with the employees work to constitute just cause for his separation.[9]
In this case, the alleged misconduct of petitioner, when viewed in its context, is not of
such serious and grave character as to warrant his dismissal. First, petitioner made
the alleged offensive utterances and obscene gesture during an informal Christmas
gathering of respondent companys district sales managers and marketing staff. The
gathering was just a casual get-together of employees. It is to be expected during this
kind of gatherings, where tongues are more often than not loosened by liquor or other
alcoholic beverages, that employees freely express their grievances and gripes
against their employers. Employees should be allowed wider latitude to freely express
their sentiments during these kinds of occasions which are beyond the disciplinary
authority of the employer. Significantly, it does not appear in the records that
petitioner possessed any ascendancy over the employees who heard his utterances
as to cause demoralization in the ranks.
Second, petitioners outburst was in reaction to the decision of the management in the
"Cua Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making
lewd gesture to express his dissatisfaction over said management decision were
clearly in bad taste but these acts were not intended to malign or cast aspersion on
the person of respondent companys president and general manager.
The instant case should be distinguished from the previous cases where we held that
the use of insulting and offensive language constituted gross misconduct justifying an
employees dismissal. In De la Cruz vs. NLRC,[10] the dismissed employee shouted
"sayang ang pagka-professional mo!" and "putang ina mo" at the company physician
when the latter refused to give him a referral slip. In Autobus Workers Union (AWU)
vs. NLRC,[11] the dismissed employee called his supervisor "gago ka" and taunted the
latter by saying "bakit anong gusto mo, tang ina mo." In these cases, the dismissed
employees personally subjected their respective superiors to the foregoing verbal
abuses. The utter lack of respect for their superiors was patent. In contrast, when
petitioner was heard to have uttered the alleged offensive words against respondent
companys president and general manager, the latter was not around.
In Asian Design and Manufacturing Corporation vs. Deputy Minister of Labor,[12] the
dismissed employee made false and malicious statements against the foreman (his
superior) by telling his co-employees: "If you dont give a goat to the foreman you will
be terminated. If you want to remain in this company, you have to give a goat." The
dismissed employee therein likewise posted a notice in the comfort room of the
company premises which read: "Notice to all Sander - Those who want to remain in
this company, you must give anything to your foreman. Failure to do so will be
terminated Alice 80." In Reynolds Philippine Corporation vs. Eslava,[13] the dismissed
employee circulated several letters to the members of the companys board of
directors calling the executive vice-president and general manager a "big fool," "anti-
Filipino" and accusing him of "mismanagement, inefficiency, lack of planning and
foresight, petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to
labor, anti-Filipino utterances and activities." In this case, the records do not show that
petitioner made any such false and malicious statements against any of his superiors.
Third, respondent company itself did not seem to consider the offense of petitioner
serious and grave enough to warrant an immediate investigation on the matter. It
must be recalled that petitioner uttered the alleged offensive language at an informal
gathering on 17 December 1993. He then allegedly made threatening remarks about
the forthcoming sales conference on 3 January 1994. During a meeting on 4 January
1994, Mr. Titong, Jr., the president and general manager of respondent company and
allegedly to whom the offensive words were directed, merely admonished petitioner
stating that, "when there is a disagreement, act in a professional and civilized
manner." Respondent company allowed several weeks to pass before it deemed it
necessary to require petitioner to explain why no disciplinary action should be taken
169
against him for his behavior. This seeming lack of urgency on the part of respondent
company in taking any disciplinary action against petitioner negates its charge that
the latters misbehavior constituted serious misconduct.
Further, respondent companys rules and regulations[14] provide as follows:
NATURE OF THE OFFENSE
1. xxx
2. Loafing or loitering, engaging in fistcuffs or loudmouthed quarreling or
provoking or engaging others to such behaviour, inflicting bodily harm to
another, any violent act or language which affects adversely morals,
production or the maintenance of discipline, indecent or immoral conduct
during working hours; unauthorized participation in activities during official
hours which are outside of regularly assigned duties: malingering;
unauthorized absence such as undertime; going on sick leave although not
actually sick; frequently receiving visitors during official hours for personal
matter.
3. Willful and intentional refusal without valid reason to accept work or follow
specific instructions; disrespect; insolence; and like behavior towards a
superior authority of a high ranking officer of the company.
PENALTIES
First Offense: Verbal reminder
Second Offense: Written reprimand
Third offense: Payroll deduction for time not worked due offenses. Review
with Dept. Head with written follow up.
Fourth Offense: 2nd written reprimand with warning of suspension
Fifth Offense: Suspension and final reprimand with warning of dismissal if
reoccurs.
Sixth Offense: Dismissal
Petitioners conduct on 17 December 1993 may be properly considered as falling
under either paragraph number 2, i.e., use of violent language, or paragraph number
3, i.e., insolence or disrespect towards a superior authority. Being a first offense, the
appropriate penalty imposable on petitioner is only a "verbal reminder" and not
dismissal.
Indeed, the penalty of dismissal is unduly harsh considering that petitioner had been
in the employ of respondent company for eleven (11) years and it does not appear
that he had a previous derogatory record. It is settled that notwithstanding the
existence of a valid cause for dismissal, such as breach of trust by an employee,
nevertheless, dismissal should not be imposed, as it is too severe a penalty if the
latter had been employed for a considerable length of time in the service of his
employer, and such employment is untainted by any kind of dishonesty and
irregularity.[15]
This concern of the Court for the termination of employment even on the assumption
that conduct far from exemplary was indulged in was made evident in the case
of Almira vs. B.F. Goodrich Philippines, Inc.,[16] where this Court held:
It would imply at the very least that where a penalty less punitive would
suffice, whatever missteps may be committed by labor ought not to be
visited with a consequence so severe. It is not only because of the laws
concern for the workingman. There is, in addition, his family to consider.
Unemployment brings untold hardships and sorrows on those dependent on
the wage-earner. The misery and pain attendant on the loss of jobs then
could be avoided if there be acceptance of the view that under all
circumstances of this case, petitioners should not be deprived of their means
of livelihood. Nor is this to condone what had been done by them. For all this
while, since private respondent considered them separated from the service,
they had not been paid. From the strictly juridical standpoint, it cannot be too
strongly stressed, to follow Davis in his masterly work, Discretionary Justice,
that where a decision may be made to rest on informed judgment rather than
rigid rules, all the equities of the case must be accorded their due weight.[17]
Given the environmental circumstances of this case, the acts of petitioner clearly do
not constitute serious misconduct as to justify his dismissal. Neither is his dismissal
justified on ground of loss of confidence. As a ground for dismissal, the term "trust
and confidence" is restricted to managerial employees.[18] We share the view of the
Solicitor General that petitioner is not a managerial employee. Before one may be
properly considered a managerial employee, all the following conditions must be met:
(1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or sub-division thereof;
170
 (2) They customarily and regularly direct the work of two or more employees
therein;
(3) They have the authority to hire or fire other employees of lower
rank; or their suggestions and recommendations as to the hiring
and firing and as to the promotion or any other change of status of
other employees are given particular weight.[19]
Further, it is the nature of the employees functions, and not the nomenclature or title
given to his job, which determines whether he has rank-and-file, supervisory or
managerial status.[20] Petitioner describes his functions as District Sales Manager as
follows:
"The office of a District Sales Managers primary responsibility is to achieve
or surpass the sales and profit targets for each territory in the assigned
district through: (a) efficient planning; (b) management function; and (c)
auditing and control. "Management action," on the other hand, means to
direct the activities of the Professional Medical Representatives [by]: (1)
[making] decisions that are compatible with district, national and corporate
objectives; (2) [directing] the activities of representative through - (a)
frequent field visits (must spend at least 80% of working days in a quarter,
allocating eight (8) working days per PMR/quarter excluding travel time); (b)
written communications; (c) sales meetings (3) [training] PMRs in
medical/product knowledge; (4) [motivating] and [developing] PMRs toward
greater productivity; (5) [acting] as a channel between field and home office;
(6) [maintaining] records as basis for quick analysis of the district
performance; (7) [overseeing] special projects assuring the cost benefit
value of such benefit; (8) x x x suggesting to sales management new ideas,
methods, devices to increase productivity of sales district or individual
properties; and [insuring] safe custody and proper maintenance of all
company properties (e.g. company cars, audio-visuals).[21]
The above job description does not mention that petitioner possesses the power "to
lay down policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees." Absent this crucial element, petitioner cannot be considered a
managerial employee despite his designation as District Sales Manager.
Granting arguendo that petitioner were to be considered a managerial employee, the
ground for "loss of confidence" is still without basis. Loss of trust and confidence to be
a valid ground for an employees dismissal must be clearly established.[22] A breach is
willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
It must rest on substantial grounds and not on the employers arbitrariness, whims,
caprices or suspicion, otherwise, the employee would remain at the mercy of the
employer.[23] When petitioner made the offensive utterances, it can be said that he
merely acted "carelessly, thoughtlessly or heedlessly" and not "intentionally,
knowingly, purposely, or without justifiable excuse."
In fine, there being no just cause for petitioners dismissal, the same is consequently
unlawful. Petitioner is thus entitled to reinstatement to his position as District Sales
Manager, unless such position no longer exists, in which case he shall be given a
substantially equivalent position without loss of seniority rights. He is likewise entitled
to the payment of his full backwages.
With respect to petitioners other monetary claims, however, we agree with the
findings of the labor arbiter that he failed to establish his entitlement thereto. We
quote with approval the labor arbiters pertinent findings as follows:
Anent the monetary claims of complainant for payment of the holiday pay
and the cash equivalent of the rice subsidy for the period April 1990 to
December 1992 vis-a-vis the documentary evidence available on records
(Annexes "H" and "I") this Office is inclined to deny said claims for failure of
the complainant to substantially and convincingly prove the same.
When complainant was appointed District Sales Manager effective April 1,
1990, his salary was increased by PESOS: Two Thousand Five Hundred
Only (P2,500.00) (Annex "H") in accordance with respondents "Salary
Administrative Policy".
Again, effective January 1, 1993, complainants salary was increased by
PESOS: One Thousand One Hundred Four, so much so that in the span of
two (2) years, complainants salary reached the amount of Twenty Thousand
Five Hundred Thirty Six (P20,536.00) Pesos which lends credence to the
position of the respondent SPC that said claims for holiday pay and rice
subsidy is already integrated in complainants salary.[24]
WHEREFORE, the instant petition is GRANTED. The Decision, dated 17 March
1995, and Resolution, dated 10 May 1995, of the NLRC in the consolidated cases of
NLRC NCR-00-01-00652-94 and NLRC NCR-00-02-00887-94 are REVERSED and
SET ASIDE. The Decision, dated 25 August 1994, of the labor arbiter is
REINSTATED.
SO ORDERED.
G.R. No. 117577 December 1, 1995
171
ALEJANDRO B. TY AND MVR PICTURE TUBE, INC., petitioners,
vs.
THE HON. AURELIO C. TRAMPE, in his capacity as Judge of the Regional Trial
Court of Pasig, Metro Manila, THE HON. SECRETARY OF FINANCE, THE
MUNICIPAL ASSESSOR OF PASIG AND THE MUNICIPAL TREASURER OF
PASIG, respondents.
PANGANIBAN, J.:
ARE THE INCREASED REAL ESTATE TAXES imposed by and being collected in the
Municipality (now City) of Pasig, effective from the year 1994, valid an legal? This is
the question brought before this Court for resolution.
The Parties
Petitioner Alejandro B. Ty is a resident of and registered owner of lands and buildings
in the Municipality (now City) of Pasig, while petitioner MVR Picture Tube, Inc. is a
corporation duly organized and existing under Philippine laws and is likewise a
registered owner of lands and buildings in said Municipality 1 .
Respondent Aurelio C. Trampe is being sued in his capacity as presiding judge of
Branch 163. Regional Trial Court of the National Capital Judicial Region, sitting in
Pasig, whose Decision dated 14 July 1994 and Order dated 30 September 1994 in
Special Civil Action No. 629 (entitled "Alejandro B. Ty and MVR Picture Tube, Inc. vs.
The Hon. Secretary of Finance. et al.") are sought to be set aside. Respondent
Secretary of Finance is impleaded as the government officer who approved the
Schedule of Market Values used as basis for the new tax assessments being
enforced by respondents Municipal Assessor and Municipal Treasurer of Pasig and
the legality of which is being questioned in this petition 2 .
The Antecedent Facts
On 06 January 1994, respondent Assessor sent a notice of assessment respecting
certain real properties of petitioners located in Pasig, Metro Manila. In a letter dated
18 March 1994, petitioners through counsel "request(ed) the Municipal Assessor to
reconsider the subject assessments" 3 .
Not satisfied, petitioners on 29 March 1994 filed with the Regional Trial Court of the
National Capital Judicial Region, Branch 163, presided over by respondent Judge, a
Petition for Prohibition with prayer for a restraining order and/or writ of preliminary
injunction to declare null and void the new tax assessments and to enjoin the
collection of real estate taxes based on said assessments. In a Decision 4 dated 14
July 1994, respondent Judge denied the petition "for lack of merit" in the following
disposition.
WHEREFORE, foregoing premises considered, petitioners' prayer to declare
unconstitutional the schedule of market values as prepared by the Municipal
Assessor of Pasig, Metro Manila, and to enjoin permanently the Municipal
Treasurer of Pasig, Metro Manila, from collecting the real property taxes
based thereof (sic) is hereby DENIED for lack of merit. Cost (sic) de oficio.
Subsequently, petitioners' Motion for Reconsideration was also denied by respondent
Judge in an Order 5 dated 30 September 1994.
Rebuffed by said Decision and Order, petitioners filed this present Petition for Review
directly before this Court, raising pure questions of law and assigning the following
errors:
The Court a quo gravely erred in holding that Presidential Decree No. 921
was expressly repealed by R.A. 7160 and that said presidential decree
including its Implementing Rules (P.D. 464) went down to the statutes'
graveyard together with the other decision(s) of the Supreme Court affecting
the same.
The Court a quo while holding that the new tax assessments have
tremendously increased ranging from 418.8% to 570%, gravely erred in
blaming petitioners for their failure to exhaust administrative remedies
provided for by law.
The Court a quo blatantly erred in not declaring the confiscatory and
oppressive nature of the assessments as illegal. void ab initio and
unconstitutional constituting a deprivation of property without due process of
law. 6
In a resolution dated 21 November 1994, this Court, without giving due course to the
petition, required respondents to comment thereon. Respondents Municipal Treasurer
and Municipal Assessor, through counsel, filed their Comment on 19 December 1994,
and respondent Secretary of Finance, through the Solicitor General, submitted his on
11 May 1995. Petitioners filed their Reply to the Comment of respondent Assessor
and Treasurer 06 January 1995, and their Reply to that of the respondent Secretary
on 18 May 1995. After careful deliberation on the above pleadings, the Court resolved
to give due course to the petition, and, inasmuch as the issues are relatively simple,
the Court dispensed with requiring the parties to submit further memoranda and
172
instead decided to consider the respondents' respective Comments as their answers
and memoranda. Thus the case is now considered submitted for resolution.
The Issues
The issues brought by the parties for decision by this Court are:
1. Whether Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, repealed the provisions of Presidential Decree
No. 921;
2. Whether petitioners are required to exhaust administrative remedies prior
to seeking judicial relief; and
3. Whether the new tax assessments are oppressive and confiscatory, and
therefore unconstitutional.
In disposing of the above issues against petitioners, the court a quo ruled that the
schedule of market values and the assessments based thereon prepared solely by
respondent assessor are valid and legal, they having been prepared in accordance
with the provisions of the Local Government Code of 1991 (R.A. 7160). It held also
that said Code had effectively repealed the previous law on the matter, P.D. 921,
which required, in the preparation of said schedule, joint action by all the city and
municipal assessors in the Metropolitan Manila area. The lower court also faulted
petitioners with failure to exhaust administrative remedies provided under Sections
226 and 252 of R.A. 7160. Finally, it found the questioned assessments consistent
with the "tremendously increased . . . price of real estate anywhere in the country." 7
Stated the court:
This Court is inclined to agree with the view of defendants that R.A. 7160 in
its repealing clause provide (sic) that Presidential Decree Nos. . . . 464 . . .
are hereby repealed and rendered of no force and effect. Hence said
presidential decrees including their implementing rules went down to the
statutes' graveyard together with the decisions of the Supreme Court on
cases effecting (sic) the same.
This Court is also in accord with respondents (sic) view that petitioners failed
to avail of either Section 226 of R.A. 7160, that is by appealing the
assessment of their properties to the Board of Assessment Appeal within
sixty 160) days from the date of receipt of the written Notice of Assessment,
and if it is true that petitioner (sic) as alleged in their pleadings was not
afforded the opportunity to appeal to the board of assessment appeal, then
they could have availed of the provisions of Section 252, of the same R.A.
7160 by paying the real estate tax under protest. Because of petitioners (sic)
failure to avail of either Sections 226 or 252 of R.A. 7160, they failed to
exhaust administratives (sic) remedies provided for by law before bringing
the case to Court. (Buayan Cattle Co., Inc. vs. Quintillan, 128 SCRA 276).
Therefore the filing of this case before this Court is premature, the same not
falling under the exception because the issue involved is not a question of
law but of fact (Valmonte vs. Belmonte, Jr., 170 SCRA 256).
Petitioners also alleged that the New Tax Assessments are not only
oppressive and confiscatory but also destructive in view of the tremendous
increase in its valuation, from P855,360.00 to P4,121,280.00 a marked
increase of 418.8% of one of its properties, while the other, from
P857,600.00 to P4,374,410.00, an increased (sic) of 510%. This Court agree
(sic) with petitioners (sic) observation, but the reality (sic) the price of real
property anywhere in the country tremendously increased. This is shown in
the Real Estate Monitor of Economic Incorporated (copy attached with the
memorandum of respondents). For example real properties in Pasig in 1991
located at the Ortigas Commercial Complex command (sic) a price of
P42,000.00 per square meter which price is supported by a case filed before
this Court (civil case no. 64506, Jesus Fajardo, et al. vs. Ortigas and Co.) for
Recovery (sic) of agents (sic) commission. The property subject of the sale
which was also located at the Ortigas Commercial Complex at Pasig, Metro
Manila was sold to a Taiwanese at P42,000.00 per square meter. It is
therefore not surprising that the assessment of real properties in Pasig has
increased tremendously. Had petitioners first exhausted administrative
remedies they would have realized the fact that prices of real estate has (sic)
tremendously increased and would have known the reason/reasons why. 8
In its Order dated 30 September 1994 denying the Motion for Reconsideration, the
court a quo ruled:
This Court despite petitioners' exhaustive and thorough research and
discussion of the point in issue, is still inclined to sustain the view that P.D.
921 was impliedly repealed by R.A. 7160. P.D. 921 to the mind of this Court
is an implementing law of P.D. 464, Sections 3, 6, 9, 12 and 13 of said P.D.
provide how certain provisions of P.D. 464 shall be implemented. Since P.D.
464 was expressly repealed by R.A. 7160. P.D. 921 must necessarily be
considered repealed, otherwise, what should Sections 3, 6, 9, 12 and 13 of
P.D. 921 implement? And, had the law makers intended to have said P.D.
921 remain valid and enforceable they would have provided so in R.A. 7160.
Since there is none, P.D. 921 must be considered repealed. 9
173
 Re: The First Issue:
Repeal of P.D. 921?
To resolve the first issue, it is necessary to revisit the following provisions of law:
1. Section 15 of P.D. No. 464, promulgated on 20 May 1974, otherwise known as the
Peal Property Tax Code:
Sec. 15. Preparation of Schedule of Values. Before any general revision
of property assessments is made, as provided in this Code, there shall be
prepared for the province or city a Schedule of Market Value for the different
classes of real property therein situated in such form and detail as shall be
prescribed by the Secretary of Finance.
Said schedule, together with an abstract of the data (on) which it is based,
shall be submitted to the Secretary of Finance for review not later than the
thirty-first day of December immediately preceding the calendar year the
general revision of assessments shall be undertaken. The Secretary of
Finance shall have ninety days from the date of receipt within which to
review said schedule to determine whether it conforms with the provisions of
this Code.
2. Subsequently, on 12 April 1976, P.D. 921 was promulgated, which in Section 9
thereof, states:
Sec. 9. Preparation of Schedule of Values for Real Property within the
Metropolitan Area. The Schedule of Values that will serve as the basis for
the appraisal and assessment for taxation purposes of real properties
located within the Metropolitan Area shall be prepared jointly by the City
Assessors of the Districts created under Section one hereof, with the City
Assessor of Manila acting as Chairman, in accordance with the pertinent
provisions of Presidential Decree No. 464, as amended, otherwise known as
the Real Property Tax Code, and the implementing rules and regulations
thereof issued by the Secretary of Finance.
3. Section One of P.D. 921, referred to above, provides:
Sec. 1. Division of Metropolitan Manila into Local Treasury and Assessment
Districts. For purposes of effective fiscal management, Metropolitan
Manila is hereby divided into the following Local Treasury and Assessment
Districts:
First District Manila
Second District Quezon City, Pasig, Marikina,
Mandaluyong and San Juan
Third District Caloocan City, Malabon,
Navotas and Valenzuela
Fourth District Pasay City, Makati, Paranaque,
Muntinlupa, Las Pias, Pateros and
Taguig
Manila, Quezon City, Caloocan City and Pasay City shall be the
respective Centers of the aforesaid Treasury and Assessment
Districts.
4. On 01 January 1992, Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, took effect. Section 212 of said law is quoted as follows:
Sec. 212. Preparation of Schedule of Fair Market Values. Before any
general revision of property assessment is made pursuant to the provisions
of this Title, there shall be prepared a schedule of fair market values by the
provincial, city and the municipal assessors of the municipalities within the
Metropolitan Manila Area for the different classes of real property situated in
their respective local government units for enactment by ordinance of the
sanggunian concerned. The schedule of fair market values shall be
published in a newspaper of general circulation in the province, city or
municipality concerned, or in the absence thereof, shall be posted in the
provincial capitol, city or municipal hall and in two other conspicuous public
place therein.
5. The repealing clause of R.A. 7160 found in the Section 534 thereof is hereby
reproduced as follows:
Sec. 534. Repealing Clause.
(a) . . .
(b) . . .
(c) . . . ; and Presidential Decree Nos. 381, 436, 464, 477, 626, 632, 752,
and 1136 are hereby repealed and rendered of no force and effect.
174
 xxx xxx xxx
(f) All general and special laws, acts, city charter, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed
or modified accordingly. (emphasis supplied)
It is obvious from the above provisions of R.A 7160, specifically Sec. 534, that P.D.
921 was NOT EXPRESSLY repealed by said statute. Thus, the question is: Was P.D.
921 IMPLIEDLY repealed by R.A. 7160?
Petitioners contend that, contrary to the aforequoted Decision of the lower court,
"whether the assessment is made before or after the effectivity of R.A. 7160, the
observance of, and compliance with, the explicit requirement of P.D. 921 is strict and
mandatory either" because P.D. 921 was not impliedly repealed by R.A. 7160 and is
therefore still the applicable statute, or because the Supreme Court, in three related
cases 10 promulgated on 16 December 1993 after the Local Government Code of
1991 already took effect ruled that a schedule of market values and the
corresponding assessments based thereon "prepared solely by the city assessor . . .
failed to comply with the explicit requirement (of collegial and joint action by all the
assessors in the Metropolitan Manila area under P.D. 921) . . . and are on that
account illegal and void."
On the other hand, respondents aver that Section 9 of P.D. 921 and Section 212 of
R.A. 7160 are clearly and unequivocally incompatible because they dwell on the
same subject matter, namely, the preparation of a schedule of values for real property
within the Metropolitan Manila Area. Under P.D. 921, the schedule shall be
prepared jointly by the city assessors of the District, while, under R.A. 7160, such
schedule shall be prepared "by the provincial, city and municipal assessors of the
municipalities within the Metropolitan Manila area . . . ". Furthermore, they claim that
"Section 9 (of P.D. 921) merely supplement(ed) Section 15 of P.D. 464 in so far as the
preparation of the schedule of values in Metro Manila (is concerned)." Thus, "with the
express repeal of P.D. 464 . . . P.D. 921 . . .can not therefore exist independently on
its own." They also argue that although the aforecited Supreme Court decision was
promulgated after R.A. 7160 took effect, "the assessment of the Municipal Assessors
in those three (3) cited cases were assessed in 1990 prior to the effectivity of the
Code." Hence, the doctrine in said cases cannot be applied to those prepared in 1994
under R.A. 7160.
We rule for petitioners.
R.A. 7160 has a repealing provision (Section 534) and, if the intention of the
legislature was to abrogate P.D. 921, it would have included it in such repealing
clause, as it did in expressly rendering of no force and effect several other
presidential decrees. Hence, any repeal or modification of P.D. 921 can only be
possible under par. (f) of said Section 534, as follows:
(f) All general and special laws, acts, city charter, decrees, executive orders,
proclamations and administrative regulations, part or parts thereof which are
inconsistent with any of the provisions of the Code are hereby repealed or
modified accordingly.
The foregoing partakes of the nature of a general repealing provision. It is a basic rule
of statutory construction that repeals by implication are not favored. An implied repeal
will not be allowed unless it is convincingly and unambiguously demonstrated that the
two laws are so clearly repugnant and patently inconsistent that they cannot co-exist.
This is based on the rationale that the will of the legislature cannot be overturned by
the judicial function of construction and interpretation. Courts cannot take the place of
Congress in repealing statutes. Their function is to try to harmonize, as much as
possible, seeming conflicts in the laws and resolve doubts in favor of their validity and
co-existence.
In Villegas v. Subido, 11 the issue raised before the Court was whether the
Decentralization Act had the effect of repealing what was specifically ordained in the
Charter of the City of Manila. Under the Charter, it was provided in its Section 22 that
"The President of the Philippines with the consent of the Commission on
Appointments shall appoint . . . the City Treasurer and his Assistant." Under the
Decentralization Act, it was provided that "All other employees, except teachers paid
out of provincial, city or municipal general funds and other local funds shall . . . be
appointed by the provincial governor, city or municipal mayor upon recommendation
of the head of office concerned."
The Court, in holding that there was no implied repeal in this
case 12 , said:
. . . It has been the constant holding of this Court that repeals by implication
are not favored and will not be so declared unless it be manifest that the
legislature so intended. Such a doctrine goes as far back as United States
v. Reyes, a 1908 decision (10 Phil. 423, Cf. U.S. v. Academia, 10 Phil. 431
[1908]). It is necessary then before such a repeal is deemed to exist that it
be shown that the statutes or statutory provisions deal with the same subject
matter and that the latter be inconsistent with the former. (Cf. Calderon v.
Provincia del Santisimo Rosario, 28 Phil. 164 [1914]). There must be a
showing of repugnancy clear and convincing in character. The language
used in the latter statute must be such as to render it irreconcilable with what
has been formerly enacted. An inconsistency that falls short of that standard
175
 does not suffice. What is needed is a manifest indication of the legislative
purpose to repeal. [Citing numerous cases]
More specifically, a subsequent statute, general in character as to its terms and
application, is not to be construed as repealing a special or specific enactment,
unless the legislative purpose to do so is manifest. This is so even if the provisions of
the latter are sufficiently comprehensive to include what was set forth in the special
act. This principle has likewise been consistently applied in decisions of the Court
from Manila Railroad Co. v. Rafferty (40 Phil 224), decided as far back as 1919. A
citation from an opinion of Justice Tuason is illuminating. Thus: "From another angle
the presumption against repeal is stronger. A special law is not regarded as having
been amended or repealed by a general law unless the intent to repeal or alter is
manifest. Generalia specialibus non derogant. An this is true although the terms of the
general act are broad enough to include the matter in the special statute. . . . At any
rate, in the event harmony between provisions of this type in the same law or in two
laws is impossible, the specific provision controls unless the statute, considered in its
entirety, indicates a contrary intention upon the part of the legislature. . . . A general
law is one which embraces a class of subjects or places and does not omit any
subject or place naturally belonging to such class, while a special act is one which
relates to particular persons or things of a class." (citing Valera v. Tuason, 80 Phil.
823, 827-828 [1948].)
In the relatively recent case of Mecano vs. Commission on Audit 13 , the Court en
banc had occasion to reiterate and to reinforce the rule against implied repeals, as
follows:
Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect. Hence, before
there can be a repeal, there must be a clear showing on the part of the law
maker that the intent in enacting the new law was to abrogate the old one.
The intention to repeal must be clear and manifest; otherwise, at least, as a
general rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and will continue so far as the two acts are the
same from the time of the first enactment.
There are two categories of repeal by implication. The first is where
provisions in the two acts on the same subject matter are in an irreconcilable
conflict, the later act to the extent of the conflict constitutes an implied repeal
of the earlier one. The second is if the later act covers the whole subject of
the earlier one and is clearly intended as a substitute, it will operate to repeal
the earlier law.
Implied repeal by irreconcilable inconsistency take place when the two
statutes cover the same subject matter; they are so clearly inconsistent and
incompatible with each other that they cannot be reconciled or harmonized;
and both cannot be given effect, that is that one law cannot be enforced
without nullifying the other.
In the same vein, but in different words, this Court ruled in Gordon vs. Veridiano 14 :
Courts of justice, when confronted with apparently conflicting statutes,
should endeavor to reconcile the same instead of declaring outright the
invalidity of one as against the other. Such alacrity should be avoided. The
wise policy is for the judge to harmonize them if this is possible, bearing in
mind that they are equally the handiwork of the same legislature, and so give
effect to both while at the same time also according due respect to a
coordinate department of the government. It is this policy the Court will apply
in arriving at the interpretation of the laws above-cited and the conclusions
that should follow therefrom.
In the instant case, and using the Courts' standard for implied repeal in Mecano, we
compared the two laws.
Presidential Decree No. 921 was promulgated on 12 April 1976, with the aim of, inter
alia, evolving "a progressive revenue raising program that will not unduly burden the
tax payers . . . " 15 in Metropolitan Manila. Hence, it provided for the "administration of
local financial services in Metropolitan Manila" only, and for this purpose, divided the
area into four Local Treasury and Assessment Districts, regulated the duties and
functions of the treasurers and assessors in the cities and municipalities in said area
and spelled out the process of assessing, imposing and distributing the proceeds of
real estate taxes therein.
Upon the other hand, Republic Act No. 7160, otherwise "known and cited as the Local
'Government Code of 1991'" 16 took effect on 01 January 1992 17. It declared "genuine
and meaningful local autonomy" as a policy of the state. Such policy was meant to
decentralize government "powers, authority, responsibilities and resources" from the
national government to the local government units "to enable them to attain their
fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals." 18 In the formulation and implementation
of policies and measures on local autonomy, ''(l)ocal government units may group
themselves, consolidate or coordinate their efforts, services and resources for
purposes commonly beneficial to them." 19
From the above, it is clear that the two laws are not co-extensive and mutually
inclusive in their scope and purpose. While R.A. 7160 covers almost all governmental
176
functions delegated to local government units all over the country, P.D. 921 embraces
only the Metropolitan Manila area and is limited to the administration of financial
services therein, especially the assessment and collection of real estate (and some
other local) taxes.
Coming down to specifics, Sec. 9 of P.D. 921 requires that the schedule of values of
real properties in the Metropolitan Manila area shall be prepared jointly by the city
assessors in the districts created therein: while Sec. 212 of R.A. 7160 states that the
schedule shall be prepared "by the provincial, city and municipal assessors of the
municipalities within the Metropolitan Manila Area for the different classes of real
property situated in their respective local government units for enactment by
ordinance of the sanggunian concerned. . . ."
It is obvious that harmony in these provisions is not only possible, but in fact
desirable, necessary and consistent with the legislative intent and policy. By reading
together and harmonizing these two provisions, we arrive at the following steps in the
preparation of the said schedule, as follows:
1. The assessor in each municipality or city in the Metropolitan Manila area shall
prepare his/her proposed schedule of values, in accordance with Sec. 212, R.A.
7160.
2. Then, the Local Treasury and Assessment District shall meet, per Sec. 9, P.D. 921.
In the instant case, that district shall be composed of the assessors in Quezon City,
Pasig, Marikina, Mandaluyong and San Juan, pursuant to Sec. 1 of said P.D. In this
meeting, the different assessors shall compare their individual assessments, discuss
and thereafter jointly agree and produce a schedule of values for their district, taking
into account the preamble of said P.D. that they should evolve "a progressive revenue
raising program that will not unduly burden the taxpayers".
3. The schedule jointly agreed upon by the assessors shall then be published in a
newspaper of general circulation and submitted to the sanggunian concerned for
enactment by ordinance, per Sec. 212, R.A. 7160.
By this harmonization, both the preamble of P.D. 921 decreeing that the real estate
taxes shall "not unduly burden the taxpayer" and the "operative principle of
decentralization" provided under Sec. 3, R.A. 7160 encouraging local government
units to "consolidate or coordinate their efforts, services and resources" shall be
fulfilled. Indeed the essence of joint local action for common good so cherished in the
Local Government Code finds concrete expression in this harmonization.
How about respondents' claim that, with the express repeal of P.D. 464, P.D. 921
being merely a "supplement" of said P.D. cannot "exist independently on its own"?
Quite the contrary is true. By harmonizing P.D. 921 with R.A. 7160, we have just
demonstrated that it can exist outside of P.D. 464, as a support, supplement and
extension of R.A. 7160, which for this purpose, has replaced P.D. 464.
Since it is now clear that P.D. 921 is still good law, it is equally clear that this Court's
ruling in the Mathay/Javier/Puyat-Reyes cases (supra) is still the prevailing and
applicable doctrine. And, applying the said ruling in the present case, it is likewise
clear that the schedule of values prepared solely by the respondent municipal
assessor is illegal and void.
Re: The Second Issue:
Exhaustion of Administrative Remedies
We now come to the second issue. The provisions of Sections 226 and 252 of R.A.
7160 being material to this issue, are set forth below:
Sec. 226. Local Board of Assessment Appeals. Any owner or person having legal
interest in the property who is not satisfied with the action of the provincial, city or
municipal assessor in the assessment of his property may, within sixty (60) days from
the date of receipt of the written notice of assessment, appeal to the Board of
Assessment Appeals of the province or city by filing a petition under oath in the form
prescribed for the purpose, together with copies of the tax declarations and such
affidavits or documents submitted in support of the appeal.
Sec. 252. Payment under Protest. (a) No protest shall be entertained unless the
taxpayer first pays the tax. There shall be annotated on the tax receipts the words
"paid under protest". The protest in writing must be filed within thirty (30) days from
payment of the tax to the provincial, city treasurer or municipal treasurer, in the case
of a municipality within Metropolitan Manila Area, who shall decide the protest within
sixty (60) days from receipt.
(b) The tax or a portion thereof paid under protest shall be held in trust by the
treasurer concerned.
(c) In the event that the protest is finally decided in favor of the taxpayer, the amount
or portion of the tax protested shall be refunded to the protestant, or applied as tax
credit against his existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the sixty-day
period prescribed in subparagraph (a), the taxpayer may avail of the
remedies as provided for in Chapter 3, Title Two, Book II of this Code.
177
Respondents argue that this case is premature because petitioners neither appealed
the questioned assessments on their properties to the Board of Assessment Appeal,
pursuant to Sec. 226, nor paid the taxes under protest, per Sec. 252.
We do not agree. Although as a rule, administrative remedies must first be exhausted
before resort to judicial action can prosper, there is a well-settled exception in cases
where the controversy does not involve questions of fact but only of law. 20 In the
present case, the parties, even during the proceedings in the lower court on 11 April
1994, already agreed "that the issues in the petition are legal" 21 , and thus, no
evidence was presented in said court.
In laying down the powers of the Local Board of Assessment Appeals, R.A. 7160
provides in Sec. 229 (b) that "(t)he proceedings of the Board shall be conducted
solely for the purpose of ascertaining the facts . . . ." It follows that appeals to this
Board may be fruitful only where questions of fact are involved. Again, the protest
contemplated under Sec. 252 of R.A. 7160 is needed where there is a question as to
the reasonableness of the amount assessed. Hence, if a taxpayer disputes the
reasonableness of an increase in a real estate tax assessment, he is required to "first
pay the tax" under protest. Otherwise, the city or municipal treasurer will not act on
his protest. In the case at bench however, the petitioners are questioning the very
authority and power of the assessor, acting solely and independently, to impose the
assessment and of the treasurer to collect the tax. These are not questions merely of
amounts of the increase in the tax but attacks on the very validity of any increase.
Finally, it will be noted that in the consolidated cases of Mathay/Javier/Puyat-Reyes
cited earlier, the Supreme Court referred the petitions (which similarly questioned the
schedules of market values prepared solely by the respective assessors in the local
government units concerned) to the Board of Assessment Appeal, not for the latter, to
exercise its appellate jurisdiction, but rather to act only as a fact-finding commission.
Said the
Court 22 thru Chief Justice Andres R. Narvasa:
On November 5, 1991, the Court issued a Resolution clarifying its earlier one of May
16, 1991. It pointed out that the authority of the Central Board of Assessment Appeals
"to take cognizance of the factual issues raised in these two cases by virtue of the
referral by this Court in the exercise of its extraordinary or certiorari jurisdiction should
not be confused with its appellate jurisdiction over appealed assessment cases under
Section 36 of P.D. 464 otherwise known as the Real Property Tax Code. The Board is
not acting in its appellate jurisdiction in the instant cases but rather, it is acting as a
Court-appointed fact-finding commission to assist the Court in resolving the factual
issues raised in G.R. Nos. 97618 and 97760."
In other words, the Court gave due course to the petitions therein in spite of the fact
that the petitioners had not, a priori, exhausted administrative remedies by filing an
appeal before said Board. Because there were factual issues raised in the Mathay, et
al. cases, the Supreme Court constituted the Central Board of Assessment Appeals
as a fact-finding body to assist the Court in resolving said factual issues. But in the
instant proceedings, there are no such factual issues. Therefore, there is no reason to
require petitioners to exhaust the administrative remedies provided in R.A. 7160, nor
to mandate a referral by this Court to said Board.
Re: The Third Issue:
Constitutionality of the Assessments
Having already definitively disposed of the case through the resolution of the
foregoing two issues, we find no more need to pass upon the third. It is axiomatic that
the constitutionality of a law, regulation, ordinance or act will not be resolved by courts
if the controversy can be, as in this case it has been, settled on other grounds. In the
recent case of Macasiano vs. National Housing Authority 23 , this Court declared:
It is a rule firmly entrenched in our jurisprudence that the constitutionality of an act of
the legislature will not be determined by the courts unless that question is properly
raised and presented in appropriate cases and is necessary to a determination of the
case, i.e., the issue of constitutionality must be the very lis mota presented. To
reiterate, the essential requisites for a successful judicial inquiry into the
constitutionality of a law are: (a) the existence of an actual case or controversy
involving a conflict of legal rights susceptible of judicial determination, (b) the
constitutional question must be raised by a proper party, (c) the constitutional
question must be raised at the earliest opportunity, and (d) the resolution of the
constitutional question must be necessary to the decision of the case. (emphasis
supplied)
The aforequoted decision in Macasiano merely reiterated the ruling in Laurel
vs. Garcia 24, where this Court held:
The Court does not ordinarily pass upon constitutional questions unless these
questions are properly raised in appropriate cases and their resolution is necessary
for the determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will
not pass upon a constitutional question although properly presented by the record if
the case can be disposed of on some other ground such as the application of a
statute or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909],
Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]). 25 (emphasis supplied)
178
In view of the foregoing ruling, the question may be asked: what happens to real
estate tax payments already made prior to its promulgation and finality? Under the
law 26 , "the taxpayer may file a written claim for refund or credit for taxes and
interests . . . ."
Finally, this Tribunal would be remiss in its duty as guardian of the judicial branch if
we let pass unnoticed the ease by which the respondent Judge consigned "to the
statutes' graveyard" a legislative enactment "together with the (three) decisions of the
Supreme Court" promulgated jointly and unanimously en banc. An elementary regard
for the sacredness of laws and the stability of judicial doctrines laid down by superior
authority should have constrained him to be more circumspect in rendering his
decision and to spell out carefully and precisely the reasons for his decision to
invalidate such acts, instead of imperiously decreeing an implied repeal. He knows or
should have known the legal precedents against implied repeals. Respondent Judge,
in his decision, did not even make an attempt to try to reconcile or harmonize the laws
involved. Instead, he just unceremoniously swept them and this Court's decisions into
the dustbin of "judicial history." In his future acts and decisions, he is admonished to
be more judicious in setting aside established laws, doctrines and precedents.
WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE the
questioned Decision and Order of respondent Judge, DECLARING as null and void
the questioned Schedule of Market Values for properties in Pasig City prepared by
respondent Assessor, as well as the corresponding assessments and real estate tax
increases based thereon; and ENJOINING the respondent Treasurer from collecting
the real estate tax increases made on the basis of said Schedule and assessments.
No costs. SO ORDERED.
THIRD DIVISION
[G.R. No. 119645. August 22, 1996]
SPO3 NOEL CABADA and SPO3 RODOLFO G. DE GUZMAN, petitioners, vs.
HON. RAFAEL M. ALUNAN III, Secretary of the Department of Interior
and Local Government & Chairman, National Police Commission
(NAPOLCOM); HON. ALEXIS CANONIZADO, Commissioner,
NAPOLCOM, Manila; Chairman LEODEGARIO ALFARO, Regional
Appellate Board VIII; Regional Director EDMUNDO LAVILLA LARROZA,
Philippine National Police (PNP) Regional Command VIII; and MARIO
VALDEZ, respondents.
DECISION
DAVIDE, JR., J.:
This is a special civil action for certiorari under Rule 65 of the Rules of Court [1] to
set aside the decision (in the form of a letter) of 24 March 1995 [2] of public respondent
National Police Commission (NAPOLCOM), which denied due course for lack of
jurisdiction the appeal and the petition for review filed by petitioners SPO3 Noel
Cabada and SPO3 Rodolfo G. de Guzman, respectively. Challenged in the said
appeal and petition for review were the decision of 15 August 1994 [3] and resolution of
25 October 1994[4] of the Regional Appellate Board of the Eighth Regional Command
(RAB 8), which affirmed their dismissal from the service.
The pleadings and annexes filed by the parties disclose the following factual and
procedural backdrop of this case:
On 29 October 1993, a complaint against the petitioners for Grave Misconduct,
Arbitrary Detention, and Dishonesty was filed with the Office of the Commission on
Human Rights in Tacloban City by private respondent Mario Valdez. [5] The complaint
was referred to the Philippine National Police Eighth Regional Command (PNP-
RECOM 8) which, after conducting its own investigation, filed an administrative
charge of Grave Misconduct against the petitioners and instituted summary dismissal
proceedings.
On 7 April 1994, the Regional Director of PNP-RECOM 8 handed down a
decision[6] finding the petitioners guilty of grave misconduct and ordering their
dismissal from the police service. Pursuant to this decision, Special Order No. 174,
dated 23 April 1994,[7] was issued ordering, among other things, the dismissal of the
petitioners from the service.
The petitioners claimed that they were not formally furnished with a copy of the
decision and that they were able to secure a copy thereof thru their own effort and
initiative only on 13 June 1994.[8] However, they received a copy of Special Order No.
174 on 26 April 1994.
Although they insist that the basis of the appeal before RAB 8 was Special
Order No. 174,[9] petitioner Cabada stated under oath in his Appeal [10] filed with the
Department of Interior and Local Government (DILG) that he in fact seasonably filed a
motion for reconsideration of the decision of the Regional Director of PNP-RECOM8,
who, however, failed or refused to act on the said motion, and that he asked that the
said motion be treated as an appeal to the RAB.
In its decision of 15 August 1994, [11] the RAB 8 affirmed the decision of the
Regional Director. In its resolution of 25 October 1994,[12] it denied the petitioners
179
motion for reconsideration of its decision. The petitioners received a copy of this
resolution on 26 January 1995.
Petitioners Cabada and De Guzman then filed with the Honorable Secretary of
the DILG and Chairman of the NAPOLCOM their Appeal[13] dated 5 February 1995
and Petition for Review[14] dated 4 February 1995, respectively.
In its decision of 24 March 1995, the NAPOLCOM, through Commissioner Alexis
Canonizado, denied due course to the petitioners appeal and petition for review for
lack of jurisdiction it appearing x x x that both the Decision and the Resolution of the
Regional Appellate Board had long become final and executory and there being no
showing that the RAB failed to decide respondents appeal within the reglementary
period of sixty (60) days.[15] In support thereof, the NAPOLCOM cited Section 23, Rule
IV of NAPOLCOM Memorandum Circular No. 91-002 and Section 5, Rule III
of NAPOLCOM Memorandum Circular No. 91-006, which provide as follows:
Section 23. Effect of Failure to Decide Appeal. Failure of the Regional Appellate Board to
decide the appeal within the reglementary period shall render the decision final and executory
without prejudice, however, to the filing of an appeal by either party with the Secretary of the
Department of the Interior and Local Government.
xxx xxx xxx
Section 5. Finality of Decision/Resolution. The decision of the Regional Appellate Board on
an appealed case shall become final and executory after ten (10) days from receipt of a copy
thereof by the appellant, if no Motion for Reconsideration is filed within said period.
A motion for Reconsideration may be filed by either party from a Decision rendered by the
Regional Appellate Board on an appealed case, provided that the same is filed within ten (10)
days from receipt of a copy of the decision in question. However, only one (1) Motion for
Reconsideration may be allowed.
Hence, the instant petition.
The Office of the Solicitor General seeks to dismiss this petition on the ground of
prematurity because the petitioners failed to exhaust administrative remedies; they
should have instead appealed to the Civil Service Commission (CSC) pursuant to
Section 47, Chapter 6, Subtitle A, Title I, Book V of the Administrative Code of 1987
(E.O. No. 292), which vests upon the CSC appellate jurisdiction over disciplinary
cases of government personnel where the penalty imposed is, inter alia, dismissal
from office. The said provision reads:
Section 47. Disciplinary Jurisdiction. (1) The Commission shall decide upon appeal all
administrative disciplinary cases involving the imposition of a penalty of suspension for more
than thirty days, or fine in an amount exceeding thirty days salary, demotion in rank or salary
or transfer, or removal or dismissal from office. x x x
(2) The Secretaries x x x shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction. x x x In case the
decision rendered by a bureau or office head is appealable to the Commission, the same may
be initially appealed to the Department and finally to the Commission and pending appeal, the
same shall be executory except when the penalty is removal, in which case, the same shall be
executory only after confirmation by the Secretary concerned.
The Office of the Solicitor General opines that this provision
covers PNP personnel, like the petitioners; consequently, they should have appealed
to the CSC. It also advances the view that the instant petition should have been filed
with the proper forum, the Regional Trial Court.
The core issues that present themselves for our determination are whether
(1) the NAPOLCOM committed grave abuse of discretion in denying due
course, for lack of jurisdiction, the petitioners appeal from and petition
for review of the decision and resolution of the RAB 8; and
(2) this special civil action was prematurely filed for failure of the petitioners
to exhaust administrative remedies.
I
Section 45 of the DILG Act of 1990[16] provides for the finality of disciplinary
actions against members of the PNP as follows:
SEC. 45. Finality of Disciplinary Action. The disciplinary action imposed upon a member of
the PNP shall be final and executory: Provided, That a disciplinary action imposed by the
regional director or by the PLEB involving demotion or dismissal from the service may be
appealed to the regional appellate board within ten (10) days from receipt of the copy of the
notice of decision: Provided, further, That the disciplinary action imposed by the Chief of the
PNP involving demotion or dismissal may be appealed to the National Appellate Board within
ten (10) days from receipt thereof: Provided furthermore, That, the regional or National
Appellate Board, as the case may be, shall decide the appeal within sixty (60) days from
receipt of the notice of appeal: Provided, finally, That failure of the regional appellate board
to act on the appeal within said period shall render the decision final and executory without
180
prejudice, however, to the filing of an appeal by either party with the Secretary. (Italics
supplied)
The last proviso of this section is restated in Section 23,
Rule IV of NAPOLCOM Memorandum Circular No. 91-002. And Section 3, Rule III
of NAPOLCOM Memorandum Circular No. 92-006 provides:
Section 3. Period Within Which to Decide Appealed Cases; Finality of RAB/NAB Decisions.
The NAPOLCOM appellate board concerned shall decide the appealed cases within sixty (60)
days from receipt of the entire records of the case from the PNP summary dismissal
authority. However, failure of the NAPOLCOM Regional Appellate Board (RAB) to act on the
appeal within said period renders the decision final and executory without prejudice to the
filing of an appeal by the respondent-appellant with the Secretary of the Department of the
Interior and Local Government. The decision rendered by the NAPOLCOM National
Appellate Board (NAB) disposing an appealed case shall be final and executory unless a
timely Motion for Reconsideration is filed within ten (10) days from receipt thereof, in which
case, it shall become final and executory upon receipt by the respondent-appellant of the
resolution of the aforesaid board denying, modifying or affirming the decision.
Section 45 of the DILG Act of 1990 specifically provides that if a RAB fails to
decide an appeal within the reglementary period of sixty days, the appealed decision
becomes final and executory without, however, prejudice to the right of the aggrieved
party to appeal to the Secretary of the DILG. The said provision is, however, silent as
regards the availability of an appeal from a decision rendered by a RAB within the
reglementary period.
This gap in Section 45 cannot be construed to prohibit appeals from decisions of
the RAB rendered within the reglementary period, for while the epigraph of the
section is worded Finality of Disciplinary Action, there is nothing therein that explicitly
bars any further appeal. Complementary laws on discipline of government officials
and employees must then be inquired into considering that in conformity with the
mandate of the Constitution that the PNP must be national in scope and civilian in
character,[17] it is now a part, as a bureau, of the reorganized DILG.[18] As such, it falls
within the definition of the civil service in Section 2(1), Article IX-B of the Constitution.
[19]
For this reason, Section 91 of the DILG Act of 1990 provides:
SEC. 91. Application of Civil Service Laws. The Civil Service Law and its implementing rules
and regulations shall apply to all personnel of the Department.
The Civil Service Law referred to in Section 91 of the DILG Act of 1990 is
Subtitle A, Title I, Book V of the Administrative Code of 1987 (E.O. No. 292). Section
47 of Chapter 6 thereof provides, inter alia, that in cases where the decision rendered
by a bureau or office is appealable to the Commission, the same may initially be
appealed to the department and finally to the Commission.
The rules and regulations implementing the Civil Service Law referred to in
Section 91 of the DILG Act of 1990 is the Omnibus Rules Implementing Book V of
Executive Order No. 292 known as the Administrative Code of 1987 promulgated by
the CSC. Sections 31 and 32, Rule XIV of the said Rules provide as follows:
SEC. 31. Except as otherwise provided by the Constitution or by law, the Commission shall
have the final authority to pass upon the removal, separation and suspension of all officers and
employees in the civil service and upon all matters relating to the conduct, discipline and
efficiency of such officers and employees.
SEC. 32. The Secretaries and heads of agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving disciplinary
action against officers and employees under their jurisdiction. Their decisions shall be final in
case the penalty imposed is suspension for not more than thirty (30) days or fine in an amount
not exceeding thirty (30) days salary. In case the decision rendered by a bureau or office head
is appealable to the Commission, the same may be initially appealed to the department, then to
the Merit Systems Protection Board, and finally to the Commission and pending appeal, the
same shall be executory except when the penalty is removal, in which case the same shall be
executory only after confirmation by the Secretary concerned.
Under Section 7 of E.O. No. 262,[20] the Secretary of the DILG has the power of
supervision and control of his Department. His powers and functions thereunder are
recognized and affirmed in Section 10 of the DILG Act of 1990.[21]
In view then of the aforementioned gap in Section 45 of the DILG Act of 1990,
the provisions of the Civil Service Law and the rules and regulations implementing it
must be taken into account in light of the maxim interpretare concordare legibus est
optimus interpretandi or every statute must be so construed and harmonized with
other statutes as to form a uniform system of jurisprudence.[22]
As thus construed and harmonized, it follows that if a RAB fails to decide an
appealed case within sixty days from receipt of the notice of appeal, the appealed
decision is deemed final and executory, and the aggrieved party may forthwith appeal
therefrom to the Secretary of the DILG. Likewise, if the RAB has decided the appeal
within the sixty-day period, its decision may still be appealed to the Secretary of
the DILG.
181
 In the instant case, Cabadas appeal was addressed to the Honorable Secretary
of the Department of the Interior and Local Government x x x as Chairman and
Presiding Officer of the National Police Commission, [23] while De Guzmans petition for
review was addressed to the Honorable Secretary, Department of the Interior and
Local Government and Chairman, National Police Commission, Makati City, Metro
Manila.[24]
We consider the appeal and the petition for review as appeals to the Secretary
of the DILG under Section 45 of the DILG Act of 1990.
Only the Secretary of the DILG can act thereon, one way or the
other. The NAPOLCOM did not have authority over the appeal and the petition for
review, and just because both mentioned the Secretary of the DILG as Chairman or
Presiding Officer of the NAPOLCOM did not bring them within the jurisdiction of
the NAPOLCOM. The latter does not have such jurisdiction because Section 14 of
the DILG Act of 1990 pertinently provides as follows:
SEC. 14. Powers and Functions of the Commission. x x x
xxx xxx xxx
(j) Affirm, reverse or modify, through the National Appellate Board, personnel disciplinary
action involving demotion or dismissal from the service imposed upon members of the
Philippine National Police by the Chief of the Philippine National Police;
(k) Exercise appellate jurisdiction through the regional appellate boards over administrative
cases against policemen and over decisions on claims for police benefits. x x x
This section clearly shows that the NAPOLCOM exercises appellate jurisdiction only
on the following cases and THROUGH (a) the NAB in personnel disciplinary actions
involving demotion or dismissal from the service imposed by the Chief of the PNP,
and (b) the RAB in administrative cases against policemen and over decisions on
claims for police benefits. It has no appellate jurisdiction over decisions rendered by
the NAB and the RAB.
Consequently, the NAPOLCOM did not have the power or authority to issue,
through Commissioner Alexis Canonizado, the 24 March 1995 decision denying due
course to the appeal and petition for review filed by petitioners Cabada and De
Guzman, respectively, for lack of jurisdiction because of Section 5,
Rule III of NAPOLCOMMemorandum Circular No. 91-006 and Section 23,
Rule IV of NAPOLCOM Memorandum Circular No. 91-002. The reference to these
rules suggest that the NAPOLCOMbelieves it has jurisdiction over appeals from
decisions of the RAB if the latter has not decided the appeal within the reglementary
period of sixty days. Such a suggestion is flawed because it would allow a ridiculous
situation where the NAPOLCOM vests upon itself an appellate jurisdiction from a
decision rendered by it in the exercise of its appellate jurisdiction through the RAB,
per Section 14(k) of the DILG Act of 1990. Moreover, Commissioner Canonizado
cannot, singly, act for the NAPOLCOM because it is a collegial body composed of a
Chairman and four Commissioners, pursuant to Section 13 of the DILG Act of 1990.
In light of the foregoing, the petitioners could properly invoke our original
jurisdiction to issue the extraordinary writ of certiorari under Rule 65 of the Rules of
Court to annual and set aside the NAPOLCOMs decision of 24 March 1995. It being a
patent nullity, the filing of a motion for its reconsideration before the institution of this
special civil action may be dispensed with.[25]
II
The plea of the Office of the Solicitor General that the instant action is
premature for non-exhaustion of administrative remedies is thus untenable. We would
have sustained it if the Secretary of the DILG was the one who denied due course to
or dismissed the appeal of petitioner Cabada and the petition for review of petitioner
De Guzman. By then, pursuant to Section 91 of the DILG Act of 1990; Section 47,
Chapter 6, Subtitle A, Title I, Book V of the Administrative Code of 1987; and Sections
31 and 32 of the Omnibus Rules Implementing Book V of Executive Order No. 292,
the appeal would have to be filed with the CSC. And futile would be the petitioners
claim in their Reply to the Comment of the OSG that their case falls within the
exceptions to the rule on exhaustion of administrative remedies.
In view of all the foregoing, a discussion on the other issues raised by the
petitioners relating to the merits of the case and on the issue of due process is
unnecessary.
WHEREFORE, premises considered, the instant petition
is GRANTED. The decision (in the form of a letter) of the National Police Commission
of 24 March 1995 isANNULLED and SET ASIDE. The Secretary of the Department of
Interior and Local Government is DIRECTED to RESOLVE with reasonable dispatch
the appeal and petition for review of petitioners SPO3 NOEL
CABADA and SPO3 RODOLFO G. DE GUZMAN, respectively, from the decision of
15 August 1994 and resolution of 25 October 1994 of the Regional Appellate Board,
Eighth Regional Command, if the same were filed on time.
No pronouncement as to costs.
SO ORDERED.
182
 [G.R. No. 104768. July 21, 2003]
Republic of the Philippines, petitioner, vs. Sandiganbayan, Major General
Josephus Q. Ramas and Elizabeth Dimaano, respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari seeking to set aside the
Resolutions of the Sandiganbayan (First Division) [1] dated 18 November 1991 and 25
March 1992 in Civil Case No. 0037. The first Resolution dismissed petitioners
Amended Complaint and ordered the return of the confiscated items to respondent
Elizabeth Dimaano, while the second Resolution denied petitioners Motion for
Reconsideration. Petitioner prays for the grant of the reliefs sought in its Amended
Complaint, or in the alternative, for the remand of this case to the Sandiganbayan
(First Division) for further proceedings allowing petitioner to complete the presentation
of its evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA
Revolution, then President Corazon C. Aquino issued Executive Order No. 1 (EO No.
1) creating the Presidential Commission on Good Government (PCGG). EO No. 1
primarily tasked the PCGG to recover all ill-gotten wealth of former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and close
associates. EO No. 1 vested the PCGG with the power (a) to conduct investigation as
may be necessary in order to accomplish and carry out the purposes of this order and
the power (h) to promulgate such rules and regulations as may be necessary to carry
out the purpose of this order. Accordingly, the PCGG, through its then Chairman
Jovito R. Salonga, created an AFP Anti-Graft Board (AFP Board) tasked to investigate
reports of unexplained wealth and corrupt practices by AFP personnel, whether in the
active service or retired.[2]
Based on its mandate, the AFP Board investigated various reports of alleged
unexplained wealth of respondent Major General Josephus Q. Ramas (Ramas). On
27 July 1987, the AFP Board issued a Resolution on its findings and recommendation
on the reported unexplained wealth of Ramas. The relevant part of the Resolution
reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and lot located at 15-
Yakan St., La Vista, Quezon City. He is also the owner of a house and lot located in Cebu
City.The lot has an area of 3,327 square meters.
The value of the property located in Quezon City may be estimated modestly at P700,000.00.
The equipment/items and communication facilities which were found in the premises of
Elizabeth Dimaano and were confiscated by elements of the PC Command of Batangas were
all covered by invoice receipt in the name of CAPT. EFREN SALIDO, RSO Command Coy,
MSC, PA. These items could not have been in the possession of Elizabeth Dimaano if not
given for her use by respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the raiding team
was also able to confiscate money in the amount of P2,870,000.00 and $50,000 US Dollars in
the house of Elizabeth Dimaano on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security Command, Philippine
Army, stationed at Camp Eldridge, Los Baos, Laguna, disclosed that Elizabeth Dimaano is the
mistress of respondent. That respondent usually goes and stays and sleeps in the alleged house
of Elizabeth Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives,
Elizabeth Dimaano embraces and kisses respondent. That on February 25, 1986, a person who
rode in a car went to the residence of Elizabeth Dimaano with four (4) attache cases filled with
money and owned by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of
income and is supported by respondent for she was formerly a mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military
equipment/items seized in her house on March 3, 1986 without the consent of respondent, he
being the Commanding General of the Philippine Army. It is also impossible for Elizabeth
Dimaano to claim that she owns the P2,870,000.00 and $50,000 US Dollars for she had no
visible source of income.
This money was never declared in the Statement of Assets and Liabilities of respondent. There
was an intention to cover the existence of these money because these are all ill-gotten and
unexplained wealth. Were it not for the affidavits of the members of the Military Security Unit
assigned at Camp Eldridge, Los Baos, Laguna, the existence and ownership of these money
would have never been known.
183
The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and
analysis by the Boards consultant. Although the amount of P2,870,000.00 and $50,000 US
Dollars were not included, still it was disclosed that respondent has an unexplained wealth
of P104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against respondent for
ill-gotten and unexplained wealth in the amount of P2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried
for violation of RA 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices
Act and RA 1379, as amended, otherwise known as The Act for the Forfeiture of Unlawfully
Acquired Property.[3]
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic
Act No. 1379 (RA No. 1379) [4] against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I.
Chavez filed an Amended Complaint naming the Republic of the Philippines
(petitioner), represented by the PCGG, as plaintiff and Ramas as defendant. The
Amended Complaint also impleaded Elizabeth Dimaano (Dimaano) as co-defendant.
The Amended Complaint alleged that Ramas was the Commanding General of
the Philippine Army until 1986. On the other hand, Dimaano was a confidential agent
of the Military Security Unit, Philippine Army, assigned as a clerk-typist at the office of
Ramas from 1 January 1978 to February 1979. The Amended Complaint further
alleged that Ramas acquired funds, assets and properties manifestly out of proportion
to his salary as an army officer and his other income from legitimately acquired
property by taking undue advantage of his public office and/or using his power,
authority and influence as such officer of the Armed Forces of the Philippines and as
a subordinate and close associate of the deposed President Ferdinand Marcos.[5]
The Amended Complaint also alleged that the AFP Board, after a previous
inquiry, found reasonable ground to believe that respondents have violated RA No.
1379.[6]The Amended Complaint prayed for, among others, the forfeiture of
respondents properties, funds and equipment in favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and
Compulsory Counterclaim to the Amended Complaint. In his Answer, Ramas
contended that his property consisted only of a residential house at La Vista
Subdivision, Quezon City, valued at P700,000, which was not out of proportion to his
salary and other legitimate income. He denied ownership of any mansion in Cebu City
and the cash, communications equipment and other items confiscated from the house
of Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting her
employment as a clerk-typist in the office of Ramas from January-November 1978
only, Dimaano claimed ownership of the monies, communications equipment, jewelry
and land titles taken from her house by the Philippine Constabulary raiding team.
After termination of the pre-trial,[7] the court set the case for trial on the merits on
9-11 November 1988.
On 9 November 1988, petitioner asked for a deferment of the hearing due to its
lack of preparation for trial and the absence of witnesses and vital documents to
support its case. The court reset the hearing to 17 and 18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the complaint in
order to charge the delinquent properties with being subject to forfeiture as having
been unlawfully acquired by defendant Dimaano alone x x x.[8]
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded
with petitioners presentation of evidence on the ground that the motion for leave to
amend complaint did not state when petitioner would file the amended complaint. The
Sandiganbayan further stated that the subject matter of the amended complaint was
on its face vague and not related to the existing complaint. The Sandiganbayan also
held that due to the time that the case had been pending in court, petitioner should
proceed to present its evidence.
After presenting only three witnesses, petitioner asked for a postponement of
the trial.
On 28 September 1989, during the continuation of the trial, petitioner manifested
its inability to proceed to trial because of the absence of other witnesses or lack of
further evidence to present. Instead, petitioner reiterated its motion to amend the
complaint to conform to the evidence already presented or to change the averments
to show that Dimaano alone unlawfully acquired the monies or properties subject of
the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the case for over
a year mainly because of its many postponements. Moreover, petitioner would want
the case to revert to its preliminary stage when in fact the case had long been ready
184
for trial. The Sandiganbayan ordered petitioner to prepare for presentation of its
additional evidence, if any.
During the trial on 23 March 1990, petitioner again admitted its inability to
present further evidence. Giving petitioner one more chance to present further
evidence or to amend the complaint to conform to its evidence, the Sandiganbayan
reset the trial to 18 May 1990. The Sandiganbayan, however, hinted that the re-
setting was without prejudice to any action that private respondents might take under
the circumstances.
However, on 18 May 1990, petitioner again expressed its inability to proceed to
trial because it had no further evidence to present. Again, in the interest of justice, the
Sandiganbayan granted petitioner 60 days within which to file an appropriate
pleading. The Sandiganbayan, however, warned petitioner that failure to act would
constrain the court to take drastic action.
Private respondents then filed their motions to dismiss based on Republic v.
Migrino.[9] The Court held in Migrino that the PCGG does not have jurisdiction to
investigate and prosecute military officers by reason of mere position held without a
showing that they are subordinates of former President Marcos.
On 18 November 1991, the Sandiganbayan rendered a resolution, the
dispositive portion of which states:
WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without
pronouncement as to costs. The counterclaims are likewise dismissed for lack of merit, but the
confiscated sum of money, communications equipment, jewelry and land titles are ordered
returned to Elizabeth Dimaano.
The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has
primary jurisdiction over the forfeiture cases under R.A. No. 1379, for such appropriate action
as the evidence warrants. This case is also referred to the Commissioner of the Bureau of
Internal Revenue for a determination of any tax liability of respondent Elizabeth Dimaano in
connection herewith.
SO ORDERED.
On 4 December 1991, petitioner filed its Motion for Reconsideration.
In answer to the Motion for Reconsideration, private respondents filed a Joint
Comment/Opposition to which petitioner filed its Reply on 10 January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the
Motion for Reconsideration.
Ruling of the Sandiganbayan
The Sandiganbayan dismissed the Amended Complaint on the following
grounds:
(1.) The actions taken by the PCGG are not in accordance with the rulings of the
Supreme Court in Cruz, Jr. v. Sandiganbayan[10] and Republic v.
Migrino[11] which involve the same issues.
(2.) No previous inquiry similar to preliminary investigations in criminal cases was
conducted against Ramas and Dimaano.
(3.) The evidence adduced against Ramas does not constitute a prima facie case against
him.
(4.) There was an illegal search and seizure of the items confiscated.
The Issues
Petitioner raises the following issues:
A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT
PETITIONERS EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND
THAT THERE WAS NO SHOWING OF CONSPIRACY, COLLUSION OR
RELATIONSHIP BY CONSANGUINITY OR AFFINITY BY AND BETWEEN
RESPONDENT RAMAS AND RESPONDENT DIMAANO NOTWITHSTANDING
THE FACT THAT SUCH CONCLUSIONS WERE CLEARLY UNFOUNDED AND
PREMATURE, HAVING BEEN RENDERED PRIOR TO THE COMPLETION OF
THE PRESENTATION OF THE EVIDENCE OF THE PETITIONER.
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE
ACTIONS TAKEN BY THE PETITIONER, INCLUDING THE FILING OF THE
ORIGINAL COMPLAINT AND THE AMENDED COMPLAINT, SHOULD BE
STRUCK OUT IN LINE WITH THE RULINGS OF THE SUPREME COURT IN
CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA 474 AND REPUBLIC v. MIGRINO,
189 SCRA 289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra,
are clearly not applicable to this case;
185
 2. Any procedural defect in the institution of the complaint in Civil Case No. 0037
was cured and/or waived by respondents with the filing of their
respective answers with counterclaim; and
3. The separate motions to dismiss were evidently improper considering that they
were filed after commencement of the presentation of the evidence of
the petitioner and even before the latter was allowed to formally offer
its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE
ARTICLES AND THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS
EQUIPMENT, JEWELRY AND LAND TITLES CONFISCATED FROM THE
HOUSE OF RESPONDENT DIMAANO WERE ILLEGALLY SEIZED AND
THEREFORE EXCLUDED AS EVIDENCE.[12]
The Courts Ruling
First Issue: PCGGs Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court
in Cruz, Jr. v. Sandiganbayan[13] and Republic v. Migrino.[14]
The primary issue for resolution is whether the PCGG has the jurisdiction to
investigate and cause the filing of a forfeiture petition against Ramas and Dimaano for
unexplained wealth under RA No. 1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and
corrupt practices of AFP personnel, whether in the active service or retired. [15] The
PCGG tasked the AFP Board to make the necessary recommendations to appropriate
government agencies on the action to be taken based on its findings. [16] The PCGG
gave this task to the AFP Board pursuant to the PCGGs power under Section 3 of EO
No. 1 to conduct investigation as may be necessary in order to accomplish and to
carry out the purposes of this order. EO No. 1 gave the PCGG specific
responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the President in regard to
the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including
the takeover and sequestration of all business enterprises and entities
owned or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public office and/
or using their powers, authority, influence, connections or relationship.
(b) The investigation of such cases of graft and corruption as the President may
assign to the Commission from time to time.
x x x.
The PCGG, through the AFP Board, can only investigate the unexplained wealth
and corrupt practices of AFP personnel who fall under either of the two categories
mentioned in Section 2 of EO No. 1. These are: (1) AFP personnel who have
accumulated ill-gotten wealth during the administration of former President Marcos by
being the latters immediate family, relative, subordinate or close associate, taking
undue advantage of their public office or using their powers, influence x x x; [17] or (2)
AFP personnel involved in other cases of graft and corruption provided the President
assigns their cases to the PCGG.[18]
Petitioner, however, does not claim that the President assigned Ramas case to
the PCGG. Therefore, Ramas case should fall under the first category of AFP
personnel before the PCGG could exercise its jurisdiction over him. Petitioner argues
that Ramas was undoubtedly a subordinate of former President Marcos because of
his position as the Commanding General of the Philippine Army. Petitioner claims that
Ramas position enabled him to receive orders directly from his commander-in-chief,
undeniably making him a subordinate of former President Marcos.
We hold that Ramas was not a subordinate of former President Marcos in the
sense contemplated under EO No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a
subordinate as this term is used in EO Nos. 1, 2, 14 and 14-A absent a showing that
he enjoyed close association with former President Marcos. Migrino discussed this
issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show what is
contemplated within the term subordinate. The Whereas Clauses of EO No. 1 express the
urgent need to recover the ill-gotten wealth amassed by former President Ferdinand E. Marcos,
his immediate family, relatives, and close associates both here and abroad.
186
EO No. 2 freezes all assets and properties in the Philippines in which former President Marcos
and/or his wife, Mrs. Imelda Marcos, their close relatives, subordinates, business associates,
dummies, agents, or nominees have any interest or participation.
Applying the rule in statutory construction known as ejusdem generis that is-
[W]here general words follow an enumeration of persons or things by words of a particular
and specific meaning, such general words are not to be construed in their widest extent, but are
to be held as applying only to persons or things of the same kind or class as those specifically
mentioned [Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing
Black on Interpretation of Laws, 2nd Ed., 203].
[T]he term subordinate as used in EO Nos. 1 & 2 refers to one who enjoys a close association
with former President Marcos and/or his wife, similar to the immediate family member,
relative, and close associate in EO No. 1 and the close relative, business associate, dummy,
agent, or nominee in EO No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a government official or
employee during the administration of former President Marcos. There must be a prima facie
showing that the respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife. (Emphasis supplied)
Ramas position alone as Commanding General of the Philippine Army with the
rank of Major General[19] does not suffice to make him a subordinate of former
President Marcos for purposes of EO No. 1 and its amendments. The PCGG has to
provide a prima facie showing that Ramas was a close associate of former President
Marcos, in the same manner that business associates, dummies, agents or nominees
of former President Marcos were close to him. Such close association is manifested
either by Ramas complicity with former President Marcos in the accumulation of ill-
gotten wealth by the deposed President or by former President Marcos acquiescence
in Ramas own accumulation of ill-gotten wealth if any.
This, the PCGG failed to do.
Petitioners attempt to differentiate the instant case from Migrino does not
convince us. Petitioner argues that unlike in Migrino, the AFP Board Resolution in the
instant case states that the AFP Board conducted the investigation pursuant to EO
Nos. 1, 2, 14 and 14-A in relation to RA No. 1379. Petitioner asserts that there is a
presumption that the PCGG was acting within its jurisdiction of investigating crony-
related cases of graft and corruption and that Ramas was truly a subordinate of the
former President. However, the same AFP Board Resolution belies this
contention. Although the Resolution begins with such statement, it ends with the
following recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried
for violation of RA 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices
Act and RA 1379, as amended, otherwise known as The Act for the Forfeiture of Unlawfully
Acquired Property.[20]
Thus, although the PCGG sought to investigate and prosecute private respondents
under EO Nos. 1, 2, 14 and 14-A, the result yielded a finding of violation of Republic
Acts Nos. 3019 and 1379 without any relation to EO Nos. 1, 2, 14 and 14-A. This
absence of relation to EO No. 1 and its amendments proves fatal to petitioners case.
EO No. 1 created the PCGG for a specific and limited purpose, and necessarily its
powers must be construed to address such specific and limited purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint do
not show that the properties Ramas allegedly owned were accumulated by him in his
capacity as a subordinate of his commander-in-chief. Petitioner merely enumerated
the properties Ramas allegedly owned and suggested that these properties were
disproportionate to his salary and other legitimate income without showing that
Ramas amassed them because of his close association with former President
Marcos.Petitioner, in fact, admits that the AFP Board resolution does not contain a
finding that Ramas accumulated his wealth because of his close association with
former President Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of
the Philippines did not categorically find a prima facie evidence showing that respondent
Ramas unlawfully accumulated wealth by virtue of his close association or relation with
former President Marcos and/or his wife, it is submitted that such omission was not
fatal. The resolution of the Anti-Graft Board should be read in the context of the law creating
the same and the objective of the investigation which was, as stated in the above, pursuant to
Republic Act Nos. 3019 and 1379 in relation to Executive Order Nos. 1, 2, 14 and 14-a;
[21]
(Emphasis supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima
facie showing that the ill-gotten wealth was accumulated by a subordinate of former
President Marcos that vests jurisdiction on PCGG. EO No. 1[22] clearly premises the
creation of the PCGG on the urgent need to recover all ill-gotten wealth amassed by
former President Marcos, his immediate family, relatives, subordinates and close
187
associates. Therefore, to say that such omission was not fatal is clearly contrary to
the intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan,[23] the Court outlined the cases that fall under
the jurisdiction of the PCGG pursuant to EO Nos. 1, 2,[24] 14,[25] 14-A:[26]
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1,
2 and 3 of Executive Order No. 14, shows what the authority of the respondent PCGG to
investigate and prosecute covers:
(a) the investigation and prosecution of the civil action for the recovery of ill-
gotten wealth under Republic Act No. 1379, accumulated by former
President Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including
the take-over or sequestration of all business enterprises and entities
owned or controlled by them, during his administration, directly or
through his nominees, by taking undue advantage of their public office
and/or using their powers, authority and influence, connections or
relationships; and
(b) the investigation and prosecution of such offenses committed in the
acquisition of said ill-gotten wealth as contemplated under Section 2(a) of
Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise
falling under the foregoing categories, require a previous authority of the President for
the respondent PCGG to investigate and prosecute in accordance with Section 2 (b) of
Executive Order No. 1. Otherwise, jurisdiction over such cases is vested in the
Ombudsman and other duly authorized investigating agencies such as the provincial and
city prosecutors, their assistants, the Chief State Prosecutor and his assistants and the
state prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and
prosecute forfeiture petitions not falling under EO No. 1 and its amendments. The
preliminary investigation of unexplained wealth amassed on or before 25 February
1986 falls under the jurisdiction of the Ombudsman, while the authority to file the
corresponding forfeiture petition rests with the Solicitor General.[27] The Ombudsman
Act or Republic Act No. 6770 (RA No. 6770) vests in the Ombudsman the power to
conduct preliminary investigation and to file forfeiture proceedings involving
unexplained wealth amassed after 25 February 1986.[28]
After the pronouncements of the Court in Cruz, the PCGG still pursued this case
despite the absence of a prima facie finding that Ramas was a subordinate of former
President Marcos. The petition for forfeiture filed with the Sandiganbayan should be
dismissed for lack of authority by the PCGG to investigate respondents since there is
no prima facie showing that EO No. 1 and its amendments apply to respondents. The
AFP Board Resolution and even the Amended Complaint state that there are
violations of RA Nos. 3019 and 1379. Thus, the PCGG should have recommended
Ramas case to the Ombudsman who has jurisdiction to conduct the preliminary
investigation of ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and cause the
prosecution of private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG
must also be enjoined from proceeding with the case, without prejudice to any action that may
be taken by the proper prosecutory agency. The rule of law mandates that an agency of
government be allowed to exercise only the powers granted to it.
Petitioners argument that private respondents have waived any defect in the
filing of the forfeiture petition by submitting their respective Answers with counterclaim
deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is no
jurisdiction to waive in the first place. The PCGG cannot exercise investigative or
prosecutorial powers never granted to it. PCGGs powers are specific and
limited. Unless given additional assignment by the President, PCGGs sole task is only
to recover the ill-gotten wealth of the Marcoses, their relatives and cronies. [29] Without
these elements, the PCGG cannot claim jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the PCGG to
investigate and prosecute their cases by filing their Motion to Dismiss as soon as they
learned of the pronouncement of the Court in Migrino. This case was decided on 30
August 1990, which explains why private respondents only filed their Motion to
Dismiss on 8 October 1990. Nevertheless, we have held that the parties may raise
lack of jurisdiction at any stage of the proceeding. [30] Thus, we hold that there was no
waiver of jurisdiction in this case. Jurisdiction is vested by law and not by the parties
to an action.[31]
Consequently, the petition should be dismissed for lack of jurisdiction by the
PCGG to conduct the preliminary investigation. The Ombudsman may still conduct
the proper preliminary investigation for violation of RA No. 1379, and if warranted, the
Solicitor General may file the forfeiture petition with the Sandiganbayan. [32] The right
of the State to forfeit unexplained wealth under RA No. 1379 is not subject to
prescription, laches or estoppel.[33]
Second Issue: Propriety of Dismissal of Case
188
 Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case
before completion of the presentation of petitioners evidence.
We disagree.
Based on the findings of the Sandiganbayan and the records of this case, we
find that petitioner has only itself to blame for non-completion of the presentation of its
evidence. First, this case has been pending for four years before the Sandiganbayan
dismissed it. Petitioner filed its Amended Complaint on 11
August 1987, and onlybegan to present its evidence on 17 April 1989. Petitioner had
almost two years to prepare its evidence. However, despite this sufficient time,
petitioner still delayed the presentation of the rest of its evidence by filing numerous
motions for postponements and extensions. Even before the date set for the
presentation of its evidence, petitioner filed, on 13 April 1989, a Motion for Leave to
Amend the Complaint.[34] The motion sought to charge the delinquent properties
(which comprise most of petitioners evidence) with being subject to forfeiture as
having been unlawfully acquired by defendant Dimaano alone x x x.
The Sandiganbayan, however, refused to defer the presentation of petitioners
evidence since petitioner did not state when it would file the amended complaint. On
18 April 1989, the Sandiganbayan set the continuation of the presentation of evidence
on 28-29 September and 9-11 October 1989, giving petitioner ample time to prepare
its evidence. Still, on 28 September 1989, petitioner manifested its inability to proceed
with the presentation of its evidence. The Sandiganbayan issued an Order expressing
its view on the matter, to wit:
The Court has gone through extended inquiry and a narration of the above events because this
case has been ready for trial for over a year and much of the delay hereon has been due to the
inability of the government to produce on scheduled dates for pre-trial and for trial documents
and witnesses, allegedly upon the failure of the military to supply them for the preparation of
the presentation of evidence thereon. Of equal interest is the fact that this Court has been held
to task in public about its alleged failure to move cases such as this one beyond the
preliminary stage, when, in view of the developments such as those of today, this Court is now
faced with a situation where a case already in progress will revert back to the preliminary
stage, despite a five-month pause where appropriate action could have been undertaken by the
plaintiff Republic.[35]
On 9 October 1989, the PCGG manifested in court that it was conducting a
preliminary investigation on the unexplained wealth of private respondents as
mandated by RA No. 1379.[36] The PCGG prayed for an additional four months to
conduct the preliminary investigation. The Sandiganbayan granted this request and
scheduled the presentation of evidence on 26-29 March 1990. However, on the
scheduled date, petitioner failed to inform the court of the result of the preliminary
investigation the PCGG supposedly conducted. Again, the Sandiganbayan gave
petitioner until 18 May 1990 to continue with the presentation of its evidence and to
inform the court of what lies ahead insofar as the status of the case is concerned x x
x.[37] Still on the date set, petitioner failed to present its evidence. Finally, on 11 July
1990, petitioner filed its Re-Amended Complaint.[38] The Sandiganbayan correctly
observed that a case already pending for years would revert to its preliminary stage if
the court were to accept the Re-Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for
failure to complete the presentation of its evidence. The Sandiganbayan gave
petitioner more than sufficient time to finish the presentation of its evidence. The
Sandiganbayan overlooked petitioners delays and yet petitioner ended the long-string
of delays with the filing of a Re-Amended Complaint, which would only prolong even
more the disposition of the case.
Moreover, the pronouncements of the Court in Migrino and Cruz prompted the
Sandiganbayan to dismiss the case since the PCGG has no jurisdiction to investigate
and prosecute the case against private respondents. This alone would have been
sufficient legal basis for the Sandiganbayan to dismiss the forfeiture case against
private respondents.
Thus, we hold that the Sandiganbayan did not err in dismissing the case before
completion of the presentation of petitioners evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties
confiscated from Dimaanos house as illegally seized and therefore inadmissible in
evidence.This issue bears a significant effect on petitioners case since these
properties comprise most of petitioners evidence against private respondents.
Petitioner will not have much evidence to support its case against private respondents
if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaanos residence
a search warrant captioned Illegal Possession of Firearms and Ammunition. Dimaano
was not present during the raid but Dimaanos cousins witnessed the raid. The raiding
team seized the items detailed in the seizure receipt together with other
items notincluded in the search warrant. The raiding team seized these items: one
baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition; one pistol,
caliber .45; communications equipment, cash consisting of P2,870,000 and
US$50,000, jewelry, and land titles.
189
 Petitioner wants the Court to take judicial notice that the raiding team conducted
the search and seizure on March 3, 1986 or five days after the successful EDSA
revolution.[39] Petitioner argues that a revolutionary government was operative at that
time by virtue of Proclamation No. 1 announcing that President Aquino and Vice
President Laurel were taking power in the name and by the will of the Filipino people.
[40]
Petitioner asserts that the revolutionary government effectively withheld the
operation of the 1973 Constitution which guaranteed private respondents
exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal
search applies only beginning 2 February 1987, the date of ratification of the 1987
Constitution. Petitioner contends that all rights under the Bill of Rights had already
reverted to its embryonic stage at the time of the search. Therefore, the government
may confiscate the monies and items taken from Dimaano and use the same in
evidence against her since at the time of their seizure, private respondents did not
enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated
in President Aquinos Proclamation No. 3 dated 25 March 1986, the EDSA Revolution
was done in defiance of the provisions of the 1973 Constitution.[41] The resulting
government was indisputably a revolutionary government bound by no constitution or
legal limitations except treaty obligations that the revolutionary government, as the de
jure government in the Philippines, assumed under international law.
The correct issues are: (1) whether the revolutionary government was bound by
the Bill of Rights of the 1973 Constitution during the interregnum, that is, after the
actual and effective take-over of power by the revolutionary government following the
cessation of resistance by loyalist forces up to 24 March 1986 (immediately before
the adoption of the Provisional Constitution); and (2) whether the protection accorded
to individuals under the International Covenant on Civil and Political Rights
(Covenant) and the Universal Declaration of Human Rights (Declaration) remained in
effect during the interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not operative
during the interregnum. However, we rule that the protection accorded to individuals
under the Covenant and the Declaration remained in effect during the interregnum.
During the interregnum, the directives and orders of the revolutionary
government were the supreme law because no constitution limited the extent and
scope of such directives and orders. With the abrogation of the 1973 Constitution by
the successful revolution, there was no municipal law higher than the directives and
orders of the revolutionary government. Thus, during the interregnum, a person could
not invoke any exclusionary right under a Bill of Rights because there was neither a
constitution nor a Bill of Rights during the interregnum. As the Court explained
in Letter of Associate Justice Reynato S. Puno:[42]
A revolution has been defined as the complete overthrow of the established government in any
country or state by those who were previously subject to it or as a sudden, radical and
fundamental change in the government or political system, usually effected with violence or at
least some acts of violence. In Kelsen's book, General Theory of Law and State, it is defined
as that which occurs whenever the legal order of a community is nullified and replaced by a
new order . . . a way not prescribed by the first order itself.
It was through the February 1986 revolution, a relatively peaceful one, and more popularly
known as the people power revolution that the Filipino people tore themselves away from an
existing regime. This revolution also saw the unprecedented rise to power of the Aquino
government.
From the natural law point of view, the right of revolution has been defined as an inherent
right of a people to cast out their rulers, change their policy or effect radical reforms in their
system of government or institutions by force or a general uprising when the legal and
constitutional methods of making such change have proved inadequate or are so obstructed as
to be unavailable. It has been said that the locus of positive law-making power lies with the
people of the state and from there is derived the right of the people to abolish, to reform and to
alter any existing form of government without regard to the existing constitution.
xxx
It is widely known that Mrs. Aquinos rise to the presidency was not due to constitutional
processes; in fact, it was achieved in violation of the provisions of the 1973 Constitution as
a Batasang Pambansa resolution had earlier declared Mr. Marcos as the winner in the
1986 presidential election. Thus it can be said that the organization of Mrs. Aquinos
Government which was met by little resistance and her control of the state evidenced by the
appointment of the Cabinet and other key officers of the administration, the departure of the
Marcos Cabinet officials, revamp of the Judiciary and the Military signaled the point where
the legal system then in effect, had ceased to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative
during the interregnum would render void all sequestration orders issued by the
Philippine Commission on Good Government (PCGG) before the adoption of the
Freedom Constitution. The sequestration orders, which direct the freezing and even
the take-over of private property by mere executive issuance without judicial action,
would violate the due process and search and seizure clauses of the Bill of Rights.
190
 During the interregnum, the government in power was concededly a
revolutionary government bound by no constitution. No one could validly question the
sequestration orders as violative of the Bill of Rights because there was no Bill of
Rights during the interregnum. However, upon the adoption of the Freedom
Constitution, the sequestered companies assailed the sequestration orders as
contrary to the Bill of Rights of the Freedom Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on
Good Government,[43] petitioner Baseco, while conceding there was no Bill of Rights
during the interregnum, questioned the continued validity of the sequestration orders
upon adoption of the Freedom Constitution in view of the due process clause in its Bill
of Rights. The Court ruled that the Freedom Constitution, and later the 1987
Constitution, expressly recognized the validity of sequestration orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to the validity
and propriety of sequestration, freeze and takeover orders, it should be dispelled by the fact
that these particular remedies and the authority of the PCGG to issue them have received
constitutional approbation and sanction. As already mentioned, the Provisional or Freedom
Constitution recognizes the power and duty of the President to enact measures to achieve the
mandate of the people to . . . (r)ecover ill-gotten properties amassed by the leaders and
supporters of the previous regime and protect the interest of the people through orders of
sequestration or freezing of assets or accounts. And as also already adverted to, Section 26,
Article XVIII of the 1987 Constitution treats of, and ratifies the authority to issue
sequestration or freeze orders under Proclamation No. 3 dated March 25, 1986.
The framers of both the Freedom Constitution and the 1987 Constitution were
fully aware that the sequestration orders would clash with the Bill of Rights. Thus, the
framers of both constitutions had to include specific language recognizing the validity
of the sequestration orders. The following discourse by Commissioner Joaquin G.
Bernas during the deliberations of the Constitutional Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the arguments in
defense of the present amendment.
For instance, I have carefully studied Minister Salongas lecture in the Gregorio
Araneta University Foundation, of which all of us have been given a copy. On the
one hand, he argues that everything the Commission is doing is traditionally legal.
This is repeated by Commissioner Romulo also. Minister Salonga spends a major
portion of his lecture developing that argument. On the other hand, almost as an
afterthought, he says that in the end what matters are the results and not the legal
niceties, thus suggesting that the PCGG should be allowed to make some legal
shortcuts, another word for niceties or exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for
special protection? The answer is clear. What they are doing will not stand the
test of ordinary due process, hence they are asking for protection, for
exceptions. Grandes malos, grandes remedios, fine, as the saying stands, but let us
not say grandes malos, grande y malos remedios. That is not an allowable
extrapolation. Hence, we should not give the exceptions asked for, and let me
elaborate and give three reasons:
First, the whole point of the February Revolution and of the work of the
CONCOM is to hasten constitutional normalization. Very much at the heart of the
constitutional normalization is the full effectivity of the Bill of Rights. We cannot,
in one breath, ask for constitutional normalization and at the same time ask for a
temporary halt to the full functioning of what is at the heart of constitutionalism.
That would be hypocritical; that would be a repetition of Marcosian protestation of
due process and rule of law. The New Society word for that is backsliding. It is
tragic when we begin to backslide even before we get there.
Second, this is really a corollary of the first. Habits tend to become ingrained. The
committee report asks for extraordinary exceptions from the Bill of Rights for six
months after the convening of Congress, and Congress may even extend this
longer.
Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the
committee report is asking for is that we should allow the new government to
acquire the vice of disregarding the Bill of Rights.
Vices, once they become ingrained, become difficult to shed. The practitioners of
the vice begin to think that they have a vested right to its practice, and they will
fight tooth and nail to keep the franchise. That would be an unhealthy way of
consolidating the gains of a democratic revolution.
Third, the argument that what matters are the results and not the legal niceties is an
argument that is very disturbing. When it comes from a staunch Christian like
Commissioner Salonga, a Minister, and repeated verbatim by another staunch
Christian like Commissioner Tingson, it becomes doubly disturbing and even
discombobulating. The argument makes the PCGG an auctioneer, placing the Bill
of Rights on the auction block. If the price is right, the search and seizure clause
will be sold. Open your Swiss bank account to us and we will award you the
search and seizure clause. You can keep it in your private safe.
Alternatively, the argument looks on the present government as hostage to the
hoarders of hidden wealth. The hoarders will release the hidden health if the
ransom price is paid and the ransom price is the Bill of Rights, specifically the due
191
 process in the search and seizure clauses. So, there is something positively
revolving about either argument. The Bill of Rights is not for sale to the highest
bidder nor can it be used to ransom captive dollars. This nation will survive and
grow strong, only if it would become convinced of the values enshrined in the
Constitution of a price that is beyond monetary estimation.
For these reasons, the honorable course for the Constitutional Commission is to
delete all of Section 8 of the committee report and allow the new Constitution to
take effect in full vigor. If Section 8 is deleted, the PCGG has two options. First, it
can pursue the Salonga and the Romulo argument that what the PCGG has been
doing has been completely within the pale of the law. If sustained, the PCGG can
go on and should be able to go on, even without the support of Section 8. If not
sustained, however, the PCGG has only one honorable option, it must bow to the
majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch Christians. Let me
conclude with what another Christian replied when asked to toy around with the
law. From his prison cell, Thomas More said, "I'll give the devil benefit of law for
my nations safety sake. I ask the Commission to give the devil benefit of law for
our nations sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the amendment
excepting sequestration orders from the Bill of Rights, the Constitutional Commission
still adopted the amendment as Section 26,[44] Article XVIII of the 1987
Constitution. The framers of the Constitution were fully aware that absent Section 26,
sequestration orders would not stand the test of due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force
during the interregnum, absent a constitutional provision excepting sequestration
orders from such Bill of Rights, would clearly render all sequestration orders void
during the interregnum. Nevertheless, even during the interregnum the Filipino people
continued to enjoy, under the Covenant and the Declaration, almost the same rights
found in the Bill of Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de jure government,
assumed responsibility for the States good faith compliance with the Covenant to
which the Philippines is a signatory. Article 2(1) of the Covenant requires each
signatory State to respect and to ensure to all individuals within its territory and
subject to its jurisdiction the rights [45] recognized in the present Covenant. Under
Article 17(1) of the Covenant, the revolutionary government had the duty to insure
that [n]o one shall be subjected to arbitrary or unlawful interference with his privacy,
family, home or correspondence.
The Declaration, to which the Philippines is also a signatory, provides in its
Article 17(2) that [n]o one shall be arbitrarily deprived of his property. Although the
signatories to the Declaration did not intend it as a legally binding document, being
only a declaration, the Court has interpreted the Declaration as part of the generally
accepted principles of international law and binding on the State.[46] Thus, the
revolutionary government was also obligated under international law to observe the
rights[47]of individuals under the Declaration.
The revolutionary government did not repudiate the Covenant or the Declaration
during the interregnum. Whether the revolutionary government could have repudiated
all its obligations under the Covenant or the Declaration is another matter and is not
the issue here. Suffice it to say that the Court considers the Declaration as part of
customary international law, and that Filipinos as human beings are proper subjects
of the rules of international law laid down in the Covenant. The fact is the
revolutionary government did not repudiate the Covenant or the Declaration in the
same way it repudiated the 1973 Constitution. As the de jure government, the
revolutionary government could not escape responsibility for the States good faith
compliance with its treaty obligations under international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986
that the directives and orders of the revolutionary government became subject to a
higher municipal law that, if contravened, rendered such directives and orders
void. The Provisional Constitution adopted verbatim the Bill of Rights of the 1973
Constitution.[48] The Provisional Constitution served as a self-limitation by the
revolutionary government to avoid abuses of the absolute powers entrusted to it by
the people.
During the interregnum when no constitution or Bill of Rights existed, directives
and orders issued by government officers were valid so long as these officers did not
exceed the authority granted them by the revolutionary government. The directives
and orders should not have also violated the Covenant or the Declaration. In this
case, the revolutionary government presumptively sanctioned the warrant since the
revolutionary government did not repudiate it. The warrant, issued by a judge upon
proper application, specified the items to be searched and seized. The warrant is thus
valid with respect to the items specifically described in the warrant.
However, the Constabulary raiding team seized items not included in the
warrant. As admitted by petitioners witnesses, the raiding team confiscated items not
included in the warrant, thus:
192
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
Q. According to the search warrant, you are supposed to seize only
for weapons. What else, aside from the weapons, were seized
from the house of Miss Elizabeth Dimaano?
A. The communications equipment, money in Philippine currency
and US dollars, some jewelries, land titles, sir.
Q. Now, the search warrant speaks only of weapons to be seized
from the house of Elizabeth Dimaano. Do you know the
reason why your team also seized other properties not
mentioned in said search warrant?
A. During the conversation right after the conduct of said raid, I was
informed that the reason why they also brought the other
items not included in the search warrant was because the
money and other jewelries were contained in attach cases
and cartons with markings Sony Trinitron, and I think three (3)
vaults or steel safes. Believing that the attach cases and the
steel safes were containing firearms, they forced open these
containers only to find out that they contained money.
xxx
Q. You said you found money instead of weapons, do you know the
reason why your team seized this money instead of
weapons?
A. I think the overall team leader and the other two officers assisting
him decided to bring along also the money because at that
time it was already dark and they felt most secured if they will
bring that because they might be suspected also of taking
money out of those items, your Honor.[49]
Cross-examination
Atty. Banaag
Q. Were you present when the search warrant in connection with this
case was applied before the Municipal Trial Court of
Batangas, Branch 1?
A. Yes, sir.
Q. And the search warrant applied for by you was for the search and
seizure of five (5) baby armalite rifles M-16 and five (5) boxes
of ammunition?
A. Yes, sir.
xxx
AJ AMORES
Q. Before you applied for a search warrant, did you conduct
surveillance in the house of Miss Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance together with
the MSU elements, your Honor.
Q. And this party believed there were weapons deposited in
the house of Miss Elizabeth Dimaano?
A. Yes, your Honor.
Q. And they so swore before the Municipal Trial Judge?
A. Yes, your Honor.
Q. But they did not mention to you, the applicant for the
search warrant, any other properties or contraband which
could be found in the residence of Miss Elizabeth Dimaano?
A. They just gave us still unconfirmed report about some hidden
items, for instance, the communications equipment and
money. However, I did not include that in the application for
search warrant considering that we have not established
concrete evidence about that. So when
193
 Q. So that when you applied for search warrant, you had reason to
believe that only weapons were in the house of Miss
Elizabeth Dimaano?
A. Yes, your Honor.[50]
xxx
Q. You stated that a .45 caliber pistol was seized along with one
armalite rifle M-16 and how many ammunition?
A. Forty, sir.
Q. And this became the subject of your complaint with the issuing
Court, with the fiscals office who charged Elizabeth Dimaano
for Illegal Possession of Firearms and Ammunition?
A. Yes, sir.
Q. Do you know what happened to that case?
A. I think it was dismissed, sir.
Q. In the fiscals office?
A. Yes, sir.
Q. Because the armalite rifle you seized, as well as the .45 caliber
pistol had a Memorandum Receipt in the name of Felino
Melegrito, is that not correct?
A. I think that was the reason, sir.
Q. There were other articles seized which were not included in
the search warrant, like for instance, jewelries. Why did you
seize the jewelries?
A. I think it was the decision of the overall team leader and his
assistant to bring along also the jewelries and other items,
sir. I do not really know where it was taken but they brought
along also these articles. I do not really know their reason for
bringing the same, but I just learned that these were taken
because they might get lost if they will just leave this behind.
xxx
Q. How about the money seized by your raiding team, they were not
also included in the search warrant?
A. Yes sir, but I believe they were also taken considering that the
money was discovered to be contained in attach cases. These
attach cases were suspected to be containing pistols or other
high powered firearms, but in the course of the search the
contents turned out to be money. So the team leader also
decided to take this considering that they believed that if they
will just leave the money behind, it might get lost also.
Q. That holds true also with respect to the other articles that were
seized by your raiding team, like Transfer Certificates of Title
of lands?
A. Yes, sir. I think they were contained in one of the vaults that were
opened.[51]
It is obvious from the testimony of Captain Sebastian that the warrant did not
include the monies, communications equipment, jewelry and land titles that the
raiding team confiscated. The search warrant did not particularly describe these items
and the raiding team confiscated them on its own authority. The raiding team had no
legal basis to seize these items without showing that these items could be the subject
of warrantless search and seizure.[52] Clearly, the raiding team exceeded its authority
when it seized these items.
The seizure of these items was therefore void, and unless these items are
contraband per se,[53] and they are not, they must be returned to the person from
whom the raiding seized them. However, we do not declare that such person is the
lawful owner of these items, merely that the search and seizure warrant could not be
used as basis to seize and withhold these items from the possessor. We thus hold
that these items should be returned immediately to Dimaano.
194
 WHEREFORE, the petition for certiorari is DISMISSED. The questioned
Resolutions of the Sandiganbayan dated 18 November 1991 and 25 March 1992 in
Civil Case No. 0037, remanding the records of this case to the Ombudsman for such
appropriate action as the evidence may warrant, and referring this case to the
Commissioner of the Bureau of Internal Revenue for a determination of any tax
liability of respondent Elizabeth Dimaano, are AFFIRMED.
SO ORDERED.
SECOND DIVISION
[G.R. Nos. 115121-25. February 9, 1996]
NATIONAL FOOD AUTHORITY and ROMEO G. DAVID, petitioners, vs. THE HON.
COURT OF APPEALS, HON. BERNARDO P. ABESAMIS, Presiding
Judge, Regional Trial Court, Branch 85, Quezon City, HON. RODOLFO
ORTIZ, Presiding Judge, Regional Trial Court, Branch 89, Quezon City,
HON. TIRSO D. C. VELASCO, Presiding Judge, Regional Trial Court,
Branch 88, Quezon City, HON. BENEDICTO B. ULEP, Presiding Judge,
Branch 105, Quezon City, HON. JUSTO M. SULTAN, Presiding Judge,
Branch 98, Quezon City, COL. FELIX M. MANUBAY, MASADA
SECURITY AGENCY, CONTINENTAL WATCHMAN AND SECURITY
AGENCY, ALBERTO T. LASALA, and NORMAN D.
MAPAGAY, respondents.
DECISION
PUNO, J.:
The case at bar involves the legality of negotiated security contracts awarded by
the National Food Authority (NFA), a government-owned and controlled corporation
and its Administrator, Romeo G. David, to several private security agencies, in default
of a public bidding. Petitioners NFA and David seek a modification of the decision of
the Court of Appeals insofar as it nullifies and enjoins the implementation of the said
negotiated security contracts.
The facts are not disputed.
In 1990, the NFA, through then Administrator Pelayo J. Gabaldon, conducted a
public bidding to award security contracts for the protection of its properties and
facilities all over the country. Twelve security agencies were awarded one-year
contracts. among whom were private respondents Col. Felix
M. Manubay (doing business under the name Greenview Investigation and
Security Agency), Continental Watchman and Security Agency, Alberto T. Lasala
(doing business under the name PSF Watchman and Investigation Agency) and
Norman D. Mapagay (doing business under the name Peoples Protective and
Security Agency).
In August 1992, petitioner Romeo G. David became NFA Administrator. He
caused a review of all security service contracts, procedures on the accreditation of
private security agencies and the bidding for security services. Pending this review,
Administrator David extended the services of private respondents and the other
incumbent security agencies on a periodic basis.
The review was completed in March 1993 and new terms for accreditation,
bidding and hiring of security agencies were made. The bidding areas were also
reclassified and reduced from fourteen NFA regions to only five NFA areas
nationwide. A special order was thereafter issued for the implementation of the new
rules and procedure.
On April 6, 1993, Special Order No. 04-07 was issued under which Administrator
David created a Prequalification, Bids and Awards Committee (PBAC) to undertake
the prequalification of prospective bidders, conduct the bidding, evaluate the bids
tendered and recommend to the Administrator the bids accepted. Notices for
prequalification and bidding for security services were published in a newspaper of
national circulation. All incumbent security contractors were required to prequalify and
only those prequalified were to be allowed to participate in the prebidding and bidding
scheduled on June 4 and 18, 1993, respectively.
The prebidding and bidding dates were later reset to June 18 and 30, 1993 to
give more time for the participants to comply with documentary requirements. Forty-
195
one security agencies, composed of the incumbents and new applicants, including
private respondent Masada Security Agency, submitted the necessary documents for
prequalification.
Upon a review of the documents submitted, the PBAC disqualified respondent
Mapagay for failure to submit proof of his financial capability to support his bid. It also
disqualified respondent Lasala for alleged failure to meet the five-year service
requirement. Only respondents Manubay, Continental and Masada participated in the
prebidding and were declared on June 17, 1993 prequalified to bid.
Meanwhile, however, two of the applicants who failed to prequalify, namely
Lanting Security and Watchman Agency and respondent Lasala, filed separate
complaints with the Regional Trial Court, Quezon City to restrain Administrator David
and the PBAC from proceeding with the public bidding. As prayed for, restraining
orders were issued by the two courts on June 29, 1993 which the NFA received
on June 30, 1993, the day of the scheduled bidding. No bidding thus took place on
said date.
On respondent Lasalas application, the Regional Trial Court, Branch
93, Quezon City issued on July 20, 1993 a preliminary injunction ordering the PBAC
to refrain from proceeding with the bidding until the merits of the case shall have been
heard and resolved.
During the effectivity of the writ of preliminary injunction, Administrator David
sent to all incumbent security agencies, including four of herein private respondents,
notices of termination dated July 30, 1993. Private respondents were informed that
their services were to end on August 16, 1993 inasmuch as their respective contracts
had expired and they no longer enjoyed the trust and confidence of the NFA. They
were thus instructed to withdraw their security guards from all NFA installations.
On August 4, 1993, Administrator David contracted the services of seven new
security agencies starting August 16, 1993 on a month-to-month basis pending
resolution of the injunction against the bidding. Private respondents forthwith filed
separate complaints with the Regional Trial Court, Branches 85, 89, 88, 105 and
98, Quezon City for prohibition, mandamus and damages with a prayer for the
issuance of a preliminary injunction and restraining order.[1]
The trial courts issued five separate restraining orders and injunctions ordering
the NFA to desist from terminating the services of respondents, and from awarding
and installing the new security agencies replacing them.
These orders were challenged by NFA and David in separate petitions before
the Court of Appeals alleging grave abuse of discretion by respondent judges. The
Court of Appeals consolidated the petitions and on March 11, 1994 rendered a
decision partially granting the same by annulling that part of the orders restraining
NFA from terminating the contracts with the incumbent security agencies but affirming
the orders insofar as they enjoined NFA from awarding the contracts to the seven new
security agencies. The Court of Appeals ordered:
WHEREFORE, premises considered, the petition is found meritorious in part and partially
given DUE COURSE. The assailed orders and writs of preliminary injunction are
ANNULLED and SET ASIDE insofar as they order petitioners to cease and desist from
terminating or implementing the termination of private respondents expired security contracts
with NFA. The said assailed orders and writs of preliminary injunction issued are, however,
declared LEGAL, VALID and NOT issued in excess of jurisdiction or with grave abuse of
discretion insofar as they enjoin petitioners from awarding the security service contracts to the
seven (7) security agencies named by petitioners and/or implementing said awards. To this
extent the petitions are DISMISSED for lack of merit. [2]
Reconsideration was denied on April 15, 1994.
Petitioners now assail that part of the decision of the Court of Appeals nullifying
and enjoining the implementation of the contracts with the new security agencies.
They plead that we restrain the lower courts from enforcing the injunction as against
the new security agencies. They argue that the new security agencies were hired as
an emergency measure after the contracts with the incumbent security agencies
expired. They claim that without the new security agencies, the properties of the NFA
worth billions of pesos would be exposed to danger of loss and dissipation.[3]
On May 18, 1994, we issued a temporary restraining order enjoining
respondents from enforcing the decision of the Court of Appeals and the writs of
preliminary injunction issued by the trial courts insofar as the same nullify or
otherwise stop the implementation of the subject interim negotiated NFA security
contracts. We however ordered petitioners to proceed with the public bidding of the
security contracts without delay and submit to us a report on the result of such
bidding within 30 days from the holding thereof.[4]
On July 21, 1994, petitioners submitted a report dated July 19, 1994 informing
the Court that a public bidding was held on June 21, 1994 but no contract had been
awarded because the PBAC had to study and evaluate each and every bid proposal.
[5]
A second report dated March 3, 1995 was filed by petitioners informing us that
deliberation on the bids was prolonged by the necessity of passing upon the technical
merits of each bid and by the discovery of collusion between two bidders which
196
spawned threats against the life of the members of the PBAC. The PBAC decided to
conduct a rebidding in Areas 1, 2, and 3 and apprise the court of the results thereof.[6]
A third report dated July 13, 1995 was submitted where petitioners manifested
that still no contract had been awarded because the minimum number of bidders per
area was not met. Two bidders [7] for Areas 3, 4 and 5 submitted identical bids which
were held collusive by the PBAC per advice of the Office of the Government
Corporate Counsel. The rejection of the two agencies reduced the number of bidders
in each area below the required minimum compelling the PBAC to recommend a
failure of bidding in all five NFA areas. Petitioners, however, could not act on the
PBACs recommendation because a temporary restraining order was issued on April
10, 1995 by the Regional Trial Court, Branch 17, Davao. One of the bidders found in
collusion[8] filed a complaint with the said Regional Trial Court questioning the legality
of the PBACs rejection of its bids and enjoining NFA and the PBAC from awarding
security contracts to any lowest or next lowest qualified bidder.[9]
We shall now resolve the contentions of petitioners that the Court of Appeals
gravely erred:
I Agriculture pursuant to the provisions of the Administrative Code of 1987 [11] was not a
IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS HAVE NO RIGHT AND
CAUSE OF ACTION AGAINST PETITIONERS, AND THEREFORE, ARE NOT
ENTITLED TO THE QUESTIONED RELIEF GRANTED THEM BY RESPONDENTS RTC
JUDGES AND COURT OF APPEALS;
II
IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS DID NOT AVAIL OF,
MUCH LESS EXHAUST, AVAILABLE ADMINISTRATIVE REMEDIES, THEREBY
RENDERING THEIR COMPLAINT PREMATURE AND LEGALLY DEFICIENT TO
MERIT THE GRANT OF JUDICIAL RELIEF;
III
IN ITS FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE NEW INTERIM
MONTHLY NEGOTIATED SECURITY CONTRACTS OF NFA, INTENDED TO
PROVIDE NFA WITH AMPLE SECURITY DURING THE TEMPORARY EMERGENCY
PERIOD THAT A PUBLIC BIDDING CANNOT BE CONDUCTED BY REASON OF THE
INJUNCTIVE ORDERS OF THE COURTS A QUO, ARE SANCTIONED BY LAW, BEING
LEGITIMATE EXCEPTION TO THE GENERAL REQUIREMENT OF A PUBLIC
BIDDING;
IV
IN ITS GENERAL FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE
INTERIM MONTHLY NEGOTIATED NFA SECURITY CONTRACTS ARE A VALID
EXERCISE OF BUSINESS JUDGMENT WITHIN THE PERIMETERS OF NFA
MANAGEMENTS AREA OF COMPETENCE. THE CA, MOREOVER, SERIOUSLY
ERRED WHEN IT FAILED TO CONSIDER THAT THE LAW AND THE SITUATIONAL
FACTS OF THE CASE SANCTION AND EVEN CALL FOR THE IMMEDIATE
IMPLEMENTATION OF SAID INTERIM CONTRACTS.[10]
We reject these contentions.
The principle of exhaustion of administrative remedies is not a hard and fast
rule. It is subject to some limitations and exceptions. In this case, private respondents
contracts were terminated in the midst of bidding preparations and their replacements
hired barely five days after their termination. In fact, respondent Masada, a
prequalified bidder, submitted all requirements and was preparing for the public
bidding only to find out that contracts had already been awarded by negotiation.
Indeed, an appeal to the NFA Board or Council of Trustees and the Secretary of
plain, speedy and adequate remedy in the ordinary course of the law.[12] The urgency
of the situation compelled private respondents to go to court to stop the
implementation of these negotiated security contracts.
We are neither impressed by petitioners claim that the subject contracts were
negotiated as a necessity to stave off a crisis that gripped the NFA, i.e., the loss,
destruction and dissipation of their properties, warehouses, rice and corn stocks and
facilities with an estimated value of P19 billion. Petitioners allege they were merely
exercising their sound business judgment in an emergency situation brought about by
respondent security agencies themselves who, in the first place, obtained the
injunctions from the Quezon City trial courts.
First of all, the restraining orders and writ of preliminary injunction issued by the
two Quezon City trial courts on complaint by Lanting and respondent Lasala
suspending the public bidding scheduled on June 30, 1993 did not result in the
emergency situation petitioners alleged. The security vacuum was created when
petitioners terminated the services of the incumbent security agencies after the
issuance of the said orders and before the injunctions issued by respondent trial
courts on application by private respondents.
When the bidding did not take place on June 30, 1993, the incumbent security
agencies continued rendering services to petitioners, albeit on a temporary and
197
provisional basis. However, one month later, they were all terminated on grounds of
expiration of contract and loss of trust and confidence.
We agree with the Court of Appeals that it was well within the power of
petitioners to discontinue the services of the incumbent security agencies. Their
contracts with the NFA expired in 1992, hence, their services were deemed
terminated on said date.[13] The fact that these agencies continued rendering services
to NFA did not amount to an implied renewal of their respective contracts.
Respondents do not have any vested right to continue their contracts with NFA. They
remained and continued performing their tasks at the tolerance of NFA who, by
sending the notices of termination, simply reminded them of the expiration of their
contracts.[14] These contracts can be renewed, revived or extended only by mutual
consent of the parties. No court can compel a party to agree to a contract thru the
instrumentality of a writ of preliminary injunction.
Nevertheless, what causes eyebrows to arch is the act of petitioners in
discontinuing the incumbents services. Respondents Manubay and Lasala allege that
their agencies had been rendering security services to the NFA since 1985[15] and
1988,[16] respectively. Moreover, Manubay and Continental passed the prequalification
stage and were declared by the PBAC eligible to join the public bidding. Scarcely a
month later, however, their services were terminated at the same time and for the
same reasons as the rest of the incumbent security agencies. It is certainly strange
why petitioners chose to do away with the incumbents services at a time when a
security void would directly and most necessarily result from their withdrawal. The
least petitioners could have done under the circumstances was to maintain the status
quo until the writ of preliminary injunction obtained by respondent Lasala shall have
been lifted.
Assuming arguendo that an emergency actually existed and the negotiated
contracts were justified, petitioners continued failure to conduct a public bidding and
select the bidder within a reasonable time casts doubts on the good faith behind the
negotiated contracts. This Court, on May 18, 1994, specifically ordered petitioners to
conduct a public bidding and report the results within thirty days from holding thereof.
In compliance, a public bidding was conducted on June 21, 1994 but until now no
bidder has been chosen and no contract has been awarded.
Petitioners cited various reasons for the delay. They alleged that the minimum
number of bidders in three of the five areas had not been met and that two bidders in
the other two areas were in collusion. This suspicion of collusion generated so much
controversy that the PBAC could not decide whether to include the bids of the two
agencies. Finally, the PBAC excluded them and recommended that the Administrator
declare a failure of bidding in all five areas of responsibility.
The Administrator should have immediately acted upon the PBACs
recommendation and accordingly scheduled another public bidding but somehow
petitioners chose to abide by a restraining order of the Davao trial court. It must be
noted that what the Davao trial court issued was a temporary restraining order
enjoining petitioners from awarding the contracts to the lowest or next lowest bidder
at the June 21, 1994 public bidding. It was not a writ of preliminary injunction nor was
it an order restraining the holding of another bidding.
Petitioners and the PBAC are obviously taking their sweet time to select and
award security contracts to winning bidders. They took one year evaluating and
deliberating on thirteen bid proposals only to declare a failure of bidding in all five
areas of responsibility. Then they relied on a restraining order of a trial court after no
less than this Highest Court specifically ordered them to conduct and conclude a
public bidding.
Litigants should be conscious of the position lower courts occupy in the
operation of the integrated judicial system of the nation. [17] There is only one Supreme
Court and all courts and litigants should take their bearings from this Court.[18]
Petitioners manifest reluctance to hold a public bidding and award a contract to
the winning bidder smacks of favoritism and partiality toward the security agencies to
whom it awarded the negotiated contracts and cannot be countenanced. A
competitive public bidding aims to protect the public interest by giving the public the
best possible advantages thru open competition. It is a mechanism that enables the
government agency to avoid or preclude anomalies in the execution of public
contracts.[19]
The General Appropriations Act (GAA) of 1993[20] cannot be used by petitioners
to justify their actuations. An appropriations act is primarily a special type of legislation
whose content is limited to specified sums of money dedicated to a specific purpose
or a separate fiscal unit.[21] Section 3 1 on the General Provisions of the GAA of 1993
merely authorizes the heads of departments, bureaus, offices or agencies of the
national government to hire, through public bidding or negotiated contracts,
contractual personnel to perform specific activities or services related or incidental to
their functions. This law specifically authorizes expenditures for the hiring of these
personnel.[22]It is not the governing law on the award of service contracts by
government agencies nor does not do away with the general requirement of public
bidding.[23]
IN VIEW WHEREOF, the petition is dismissed and the decision dated March 11,
1994 and resolution dated April 15, 1994 of the Court of Appeals in CA-G.R. SP Nos.
32213, 32230 and 32274-76 are affirmed. The temporary restraining order issued by
this Court on May 18 1994 is hereby lifted. Treble costs against petitioners.
198
 SO ORDERED.
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN
REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR
FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU,
BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner
and the validity of the acquisition of these haciendas by the government under
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three
haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in the
Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is
registered under Transfer Certificate of Title (TCT) No. 985. This land is covered by
Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is
1,050 hectares in area, registered under TCT No. 924 and covered by Tax
Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in
area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C.
Aquino. In February 1986, President Aquino issued Proclamation No. 3 promulgating
a Provisional Constitution. As head of the provisional government, the President
exercised legislative power "until a legislature is elected and convened under a new
Constitution." 1 In the exercise of this legislative power, the President signed on July
22, 1987, Proclamation No. 131 instituting a Comprehensive Agrarian Reform
Program and Executive Order No. 229 providing the mechanisms necessary to
initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over
legislative power from the President. 2 This Congress passed Republic Act No. 6657,
the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the
President on June 10, 1988 and took effect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a
voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229.
Haciendas Palico and Banilad were later placed under compulsory acquisition by
respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian
Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to
Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel, Hda.
Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner to a conference on
October 6, 1989 at the DAR office in Nasugbu to discuss the results of the DAR
investigation of Hacienda Palico, which was "scheduled for compulsory acquisition
this year under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after
investigation and ocular inspection of the Hacienda. In the first Report, the MARO
found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and 470 were "flat
to undulating (0-8% slope)" and actually occupied and cultivated by 34 tillers of
sugarcane. 5 In the second Report, the MARO identified as "flat to undulating"
approximately 339 hectares under Tax Declaration No. 0234 which also had several
actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found
approximately 75 hectare under Tax Declaration No. 0354 as "flat to undulating" with
33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed
jointly by the MARO, representatives of the Barangay Agrarian Reform Committee
(BARC) and Land Bank of the Philippines (LBP), and by the Provincial Agrarian
Reform Officer (PARO). The Report recommended that 333.0800 hectares of
Hacienda Palico be subject to compulsory acquisition at a value of
P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They
recommended that 270.0876 hectares and 75.3800 hectares be placed under
compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47,
respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam
D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as
follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
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Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were
subject to immediate acquisition and distribution by the government under the CARL;
that based on the DAR's valuation criteria, the government was offering
compensation of P3.4 million for 333.0800 hectares; that whether this offer was to be
accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and
Distribution (BLAD) of the DAR; that in case of petitioner's rejection or failure to reply
within thirty days, respondent DAR shall conduct summary administrative
proceedings with notice to petitioner to determine just compensation for the land; that
if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with
an accessible bank if it rejects the same, the DAR shall take immediate possession of
the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to
the LBP Land Valuation Manager three (3) separate Memoranda entitled "Request to
Open Trust Account." Each Memoranda requested that a trust account representing
the valuation of three portions of Hacienda Palico be opened in favor of the petitioner
in view of the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for
conversion of Haciendas Palico and Banilad from agricultural to non-agricultural lands
under the provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter to the
DAR Regional Director reiterating its request for conversion of the two haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the
acquisition of the two Haciendas. The LBP trust accounts as compensation for
Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. 15 On
October 22, 1993, from the mother title of TCT No. 985 of the Hacienda, respondent
DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October
30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu,
Batangas, sent a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to
compulsory acquisition under the CARL; that should petitioner wish to avail
of the other schemes such as Voluntary Offer to Sell or Voluntary Land
Transfer, respondent DAR was willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel
inviting the latter to attend a conference on September 21, 1989 at the MARO Office
in Nasugbu to discuss the results of the MARO's investigation over Hacienda
Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO
submitted two (2) Reports. In his first Report, he found that approximately 709
hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating
(0-8% slope)." On this area were discovered 162 actual occupants and tillers of
sugarcane. 20 In the second Report, it was found that approximately 235 hectares
under Tax Declaration No. 0390 were "flat to undulating," on which were 92 actual
occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the
conference were representatives of the prospective farmer beneficiaries, the BARC,
the LBP, and Jaime Pimentel on behalf of the landowner. 22 After the meeting, on the
same day, September 21, 1989, a Summary Investigation Report was submitted
jointly by the MARO, representatives of the BARC, LBP, and the PARO. They
recommended that after ocular inspection of the property, 234.6498 hectares under
Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by
CLOA. 23The following day, September 22, 1989, a second Summary Investigation
was submitted by the same officers. They recommended that 737.2590 hectares
under Tax Declaration Nos. 0236 and 0237 be likewise placed under compulsory
acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to
petitioner two (2) separate "Notices of Acquisition" over Hacienda Banilad. These
Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico.
Unlike the Notice over Hacienda Palico, however, the Notices over Hacienda Banilad
were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190
hectares and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation
Manager a "Request to Open Trust Account" in petitioner's name as compensation for
234.6493 hectares of Hacienda Banilad. 27 A second "Request to Open Trust
Account" was sent on November 18, 1991 over 723.4130 hectares of said
Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and
P21,234,468.78 in cash and LBP bonds had been earmarked as compensation for
petitioner's land in Hacienda Banilad. 29
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On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and
Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6,
1988 before the effectivity of the CARL. The Hacienda has a total area of 867.4571
hectares and is covered by four (4) titles TCT Nos. T-44662, T-44663, T-44664 and
T-44665. On January 12, 1989, respondent DAR, through the Regional Director for
Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner's
voluntary offer to sell Hacienda Caylaway, particularly TCT Nos. T-44664 and T-
44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda
to the LBP Regional Manager requesting for the valuation of the land under TCT Nos.
T-44664 and T-44663. 32 On the same day, respondent DAR, through the Regional
Director, sent to petitioner a "Notice of Acquisition" over 241.6777 hectares under
TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the
Resolutions of Acceptance, the Notice of Acquisition was addressed to petitioner at its
office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas,
sent a letter to the Secretary of respondent DAR withdrawing its VOS of Hacienda
Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from agricultural to non-agricultural. As a
result, petitioner informed respondent DAR that it was applying for conversion of
Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner
that a reclassification of the land would not exempt it from agrarian reform.
Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground
that withdrawal could only be based on specific grounds such as unsuitability of the
soil for agriculture, or if the slope of the land is over 18 degrees and that the land is
undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993,
petitioner filed its application for conversion of both Haciendas Palico and
Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas,
reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the
following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge,
Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman,
Quezon City dated March 1, 1993 stating that the lands subject of
referenced titles "are not feasible and economically sound for further
agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas
approving the Zoning Ordinance reclassifying areas covered by the
referenced titles to non-agricultural which was enacted after extensive
consultation with government agencies, including [the Department of
Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated
March 8, 1993 approving the Zoning Ordinance enacted by the Municipality
of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the
Municipal Planning & Development, Coordinator and Deputized Zoning
Administrator addressed to Mrs. Alicia P. Logarta advising that the
Municipality of Nasugbu, Batangas has no objection to the conversion of the
lands subject of referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with
respondent DAR Adjudication Board (DARAB) praying for the cancellation of the
CLOA's issued by respondent DAR in the name of several persons. Petitioner alleged
that the Municipality of Nasugbu, where the haciendas are located, had been
declared a tourist zone, that the land is not suitable for agricultural production, and
that the Sangguniang Bayan of Nasugbu had reclassified the land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case
involved the prejudicial question of whether the property was subject to agrarian
reform, hence, this question should be submitted to the Office of the Secretary of
Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No.
32484. It questioned the expropriation of its properties under the CARL and the denial
of due process in the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the
MARO on November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28,
1994. 39 Petitioner moved for reconsideration but the motion was denied on January
17, 1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
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 A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE
TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT
ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE
DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A
PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE
OF LAW ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE
UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF
THE UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE
BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING
ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING
CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY
LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS
CONCEDED BY RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR
VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT
RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR
THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE PETITIONER
AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE
ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT
FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND
ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST
COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID
JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY
STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF
CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A.
6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take
cognizance of this petition despite petitioner's failure to exhaust administrative
remedies; (2) whether the acquisition proceedings over the three haciendas were
valid and in accordance with law; and (3) assuming the haciendas may be reclassified
from agricultural to non-agricultural, whether this court has the power to rule on this
issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely
erred in finding that petitioner failed to exhaust administrative remedies. As a general
rule, before a party may be allowed to invoke the jurisdiction of the courts of justice,
he is expected to have exhausted all means of administrative redress. This is not
absolute, however. There are instances when judicial action may be resorted to
immediately. Among these 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
respondent acted in disregard of due process; (6) when the respondent is a
department secretary whose acts, as an alter ego of the President, bear the implied
or assumed approval of the latter; (7) when irreparable damage will be suffered; (8)
when there is no other plain, speedy and adequate remedy; (9) when strong public
interest is involved; (10) when the subject of the controversy is private land; and (11)
in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its
rights and to require it to exhaust administrative remedies before the DAR itself was
not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer
beneficiaries over portions of petitioner's land without just compensation to petitioner.
A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a
beneficiary under R.A. 6657, the Comprehensive Agrarian Reform Law of
1988. 43 Before this may be awarded to a farmer beneficiary, the land must first be
acquired by the State from the landowner and ownership transferred to the former.
The transfer of possession and ownership of the land to the government are
conditioned upon the receipt by the landowner of the corresponding payment or
deposit by the DAR of the compensation with an accessible bank. Until then, title
remains with the landowner. 44 There was no receipt by petitioner of any
compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides
that the deposit must be made only in "cash" or "LBP bonds." 45 Respondent DAR's
opening of trust account deposits in petitioner' s name with the Land Bank of the
Philippines does not constitute payment under the law. Trust account deposits are not
cash or LBP bonds. The replacement of the trust account with cash or LBP bonds did
not ipso facto cure the lack of compensation; for essentially, the determination of this
compensation was marred by lack of due process. In fact, in the entire acquisition
proceedings, respondent DAR disregarded the basic requirements of administrative
due process. Under these circumstances, the issuance of the CLOA's to farmer
beneficiaries necessitated immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition
proceedings themselves. Before we rule on this matter, however, there is need to lay
down the procedure in the acquisition of private lands under the provisions of the law.
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A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL),
provides for two (2) modes of acquisition of private land: compulsory and voluntary.
The procedure for the compulsory acquisition of private lands is set forth in Section
16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of
acquisition of private lands, the following procedures shall be followed:
a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to
the owners thereof, by personal delivery or registered mail, and
post the same in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Said
notice shall contain the offer of the DAR to pay a corresponding
value in accordance with the valuation set forth in Sections 17, 18,
and other pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice
by personal delivery or registered mail, the landowner, his
administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay
the landowner the purchase price of the land within thirty (30) days
after he executes and delivers a deed of transfer in favor of the
Government and surrenders the Certificate of Title and other
muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from receipt of
the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case
within thirty (30) days after it is submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or,
in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to
the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter
to the court of proper jurisdiction for final determination of just
compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and
the farmer beneficiaries must first be identified. After identification, the DAR shall
send a Notice of Acquisition to the landowner, by personal delivery or registered mail,
and post it in a conspicuous place in the municipal building and barangay hall of the
place where the property is located. Within thirty days from receipt of the Notice of
Acquisition, the landowner, his administrator or representative shall inform the DAR of
his acceptance or rejection of the offer. If the landowner accepts, he executes and
delivers a deed of transfer in favor of the government and surrenders the certificate of
title. Within thirty days from the execution of the deed of transfer, the Land Bank of
the Philippines (LBP) pays the owner the purchase price. If the landowner rejects the
DAR's offer or fails to make a reply, the DAR conducts summary administrative
proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just
compensation within fifteen days from notice. Within thirty days from submission, the
DAR shall decide the case and inform the owner of its decision and the amount of just
compensation. Upon receipt by the owner of the corresponding payment, or, in case
of rejection or lack of response from the latter, the DAR shall deposit the
compensation in cash or in LBP bonds with an accessible bank. The DAR shall
immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be
redistributed to the farmer beneficiaries. Any party may question the decision of the
DAR in the regular courts for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to
hasten the implementation of the Comprehensive Agrarian Reform Program
(CARP). 46 Under Section 16 of the CARL, the first step in compulsory acquisition is
the identification of the land, the landowners and the beneficiaries. However, the law
is silent on how the identification process must be made. To fill in this gap, the DAR
issued on July 26, 1989 Administrative Order No. 12, Series or 1989, which set the
operating procedure in the identification of such lands. The procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in
his area of responsibility. The masterlist shall include such information as
required under the attached CARP Masterlist Form which shall include the
name of the landowner, landholding area, TCT/OCT number, and tax
declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title
(OCT/TCT) or landholding covered under Phase I and II of the CARP except
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 those for which the landowners have already filed applications to avail of
other modes of land acquisition. A case folder shall contain the following duly
accomplished forms:
a) CARP CA Form 1 MARO Investigation Report
b) CARP CA Form 2 Summary Investigation Report of Findings
and Evaluation
c) CARP CA Form 3 Applicant's Information Sheet
d) CARP CA Form 4 Beneficiaries Undertaking
e) CARP CA Form 5 Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned
forms have been examined and verified by him and that the same are true and
correct.
3. Send a Notice of Coverage and a letter of invitation to a
conference/meeting to the landowner covered by the Compulsory Case
Acquisition Folder. Invitations to the said conference/meeting shall also be
sent to the prospective farmer-beneficiaries, the BARC representative(s), the
Land Bank of the Philippines (LBP) representative, and other interested
parties to discuss the inputs to the valuation of the property. He shall
discuss the MARO/BARC investigation report and solicit the
views, objection, agreements or suggestions of the participants thereon. The
landowner shall also be asked to indicate his retention area. The minutes of
the meeting shall be signed by all participants in the conference and shall
form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform
Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his
MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the
land in accordance with A.O. No. 6, Series of 1988. 47 The valuation
worksheet and the related CACF valuation forms shall be duly certified
correct by the PARO and all the personnel who participated in the
accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through
ocular inspection and verification of the property. This ocular inspection and
verification shall be mandatory when the computed value exceeds = 500,000
per estate.
4. Upon determination of the valuation, forward the case folder, together with
the duly accomplished valuation forms and his recommendations, to the
Central Office. The LBP representative and the MARO concerned shall be
furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition
and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review,
evaluate and determine the final land valuation of the property covered by
the case folder. A summary review and evaluation report shall be prepared
and duly certified by the BLAD Director and the personnel directly
participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized
representative, a Notice of Acquisition (CARP CA Form 8) for the subject
property. Serve the Notice to the landowner personally or through registered
mail within three days from its approval. The Notice shall include, among
others, the area subject of compulsory acquisition, and the amount of just
compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall
prepare and submit to the Secretary for approval the Order of Acquisition.
However, in case of rejection or non-reply, the DAR Adjudication Board
(DARAB) shall conduct a summary administrative hearing to determine just
compensation, in accordance with the procedures provided under
Administrative Order No. 13, Series of 1989. Immediately upon receipt of the
DARAB's decision on just compensation, the BLAD shall prepare and submit
to the Secretary for approval the required Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit
of payment in the designated bank, in case of rejection or non-response, the
Secretary shall immediately direct the pertinent Register of Deeds to issue the
corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. Once the property is transferred, the DAR, through the PARO, shall take
possession of the land for redistribution to qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian
Reform Officer (MARO) keep an updated master list of all agricultural lands under the
CARP in his area of responsibility containing all the required information. The MARO
prepares a Compulsory Acquisition Case Folder (CACF) for each title covered by
CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of
invitation" to a "conference/meeting" over the land covered by the CACF. He also
204
sends invitations to the prospective farmer-beneficiaries the representatives of the
Barangay Agrarian Reform Committee (BARC), the Land Bank of the Philippines
(LBP) and other interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of the parties. At
the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer
(PARO) who shall complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be mandatory when the computed value
of the estate exceeds P500,000.00. Upon determination of the valuation, the PARO
shall forward all papers together with his recommendation to the Central Office of the
DAR. The DAR Central Office, specifically, the Bureau of Land Acquisition and
Distribution (BLAD), shall review, evaluate and determine the final land valuation of
the property. The BLAD shall prepare, on the signature of the Secretary or his duly
authorized representative, a Notice of Acquisition for the subject property. 48 From this
point, the provisions of Section 16 of R.A. 6657 then apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the
Notice of Coverage and letter of invitation to a preliminary conference sent to the
landowner, the representatives of the BARC, LBP, farmer beneficiaries and other
interested parties pursuant to DAR A.O. No. 12, Series of 1989; and (2) the Notice of
Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of
invitation to the conference, and its actual conduct cannot be understated. They are
steps designed to comply with the requirements of administrative due process. The
implementation of the CARL is an exercise of the State's police power and the power
of eminent domain. To the extent that the CARL prescribes retention limits to the
landowners, there is an exercise of police power for the regulation of private property
in accordance with the Constitution. 50 But where, to carry out such regulation, the
owners are deprived of lands they own in excess of the maximum area allowed, there
is also a taking under the power of eminent domain. The taking contemplated is not a
mere limitation of the use of the land. What is required is the surrender of the title to
and physical possession of the said excess and all beneficial rights accruing to the
owner in favor of the farmer beneficiary. 51 The Bill of Rights provides that "[n]o person
shall be deprived of life, liberty or property without due process of law." 52 The CARL
was not intended to take away property without due process of law. 53 The exercise of
the power of eminent domain requires that due process be observed in the taking of
private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung,
was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O.
No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the
conference meeting were expanded and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of
Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition
Pursuant to R.A. 6657," requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting
documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at least
one week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for
agriculture and productivity of the land and jointly prepare Field Investigation
Report (CARP Form No. 2), including the Land Use Map of the property.
b) Interview applicants and assist them in the preparation of the Application
For Potential CARP Beneficiary (CARP Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found qualified,
cause the signing of the respective Application to Purchase and Farmer's
Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the ocular
inspection/investigation of the property and documents submitted. See to it
that Field Investigation Report is duly accomplished and signed by all
concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/ subdivision
survey delineating areas covered by OLT, retention, subject of VOS, CA (by
phases, if possible), infrastructures, etc., whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner concerned or
his duly authorized representative inviting him for a conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public
hearing to prospective farmer-beneficiaries, landowner, representatives of
BARC, LBP, DENR, DA, NGO's, farmers' organizations and other interested
parties to discuss the following matters:
Result of Field Investigation
205
Comments/recommendations by all parties concerned. Documentation
xxx xxx xxx
d) Prepares Summary of Minutes of the conference/public hearing to be guided by 5 DARMO Issue Notice of Coverage CARP
CARP Form No. 7. to LO by personal delivery Form No. 2
with proof of service, or
registered mail with return
e) Forwards the completed VOCF/CACF to the Provincial Agrarian Reform Office card, informing him that his
(PARO) using CARP Form No. 8 (Transmittal Memo to PARO). property is now under CARP
coverage and for LO to select
xxx xxx xxx his retention area, if he desires
to avail of his right of retention;
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell and at the same time invites him
(VOS) and Compulsory Acquisition (CA) transactions involving lands enumerated to join the field investigation to
under Section 7 of the CARL. 54 In both VOS and CA. transactions, the MARO be conducted on his property
prepares the Voluntary Offer to Sell Case Folder (VOCF) and the Compulsory which should be scheduled at
Acquisition Case Folder (CACF), as the case may be, over a particular landholding. least two weeks in advance of
The MARO notifies the landowner as well as representatives of the LBP, BARC and said notice.
prospective beneficiaries of the date of the ocular inspection of the property at least A copy of said Notice shall CARP
one week before the scheduled date and invites them to attend the same. The be posted for at least one Form No. 17
MARO, LBP or BARC conducts the ocular inspection and investigation by identifying week on the bulletin board of
the land and landowner, determining the suitability of the land for agriculture and the municipal and barangay
productivity, interviewing and screening prospective farmer beneficiaries. Based on its halls where the property is
investigation, the MARO, LBP or BARC prepares the Field Investigation Report which located. LGU office concerned
shall be signed by all parties concerned. In addition to the field investigation, a notifies DAR about compliance
boundary or subdivision survey of the land may also be conducted by a Survey Party with posting requirements thru
of the Department of Environment and Natural Resources (DENR) to be assisted by return indorsement on CARP
the MARO. 55 This survey shall delineate the areas covered by Operation Land Form No. 17.
Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the 6 DARMO Send notice to the LBP, CARP
areas subject to VOS and CA. After the survey and field investigation, the MARO BARC, DENR representatives Form No. 3
sends a "Notice of Coverage" to the landowner or his duly authorized representative and prospective ARBs of the schedule of the field investigation
inviting him to a conference or public hearing with the farmer beneficiaries, to be conducted on the subject
representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non- property.
government organizations, farmer's organizations and other interested parties. At the 7 DARMO With the participation of CARP
public hearing, the parties shall discuss the results of the field investigation, issues BARC the LO, representatives of Form No. 4
that may be raised in relation thereto, inputs to the valuation of the subject LBP the LBP, BARC, DENR Land Use
landholding, and other comments and recommendations by all parties concerned. DENR and prospective ARBs, Map
The Minutes of the conference/public hearing shall form part of the VOCF or CACF Local Office conducts the investigation on
which files shall be forwarded by the MARO to the PARO. The PARO reviews, subject property to identify
evaluates and validates the Field Investigation Report and other documents in the the landholding, determines
VOCF/CACF. He then forwards the records to the RARO for another review. its suitability and productivity;
and jointly prepares the Field
Investigation Report (FIR)
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. and Land Use Map. However,
DAR A.O. No. 1, Series of 1993 provided, among others, that: the field investigation shall
proceed even if the LO, the
IV. OPERATING PROCEDURES: representatives of the DENR and
Steps Responsible Activity Forms/ prospective ARBs are not available
Agency/Unit Document provided, they were given due
(requirements) notice of the time and date of
A. Identification and investigation to be conducted.

206
Similarly, if the LBP representative
is not available or could not come
on the scheduled date, the field
investigation shall also be conducted,
after which the duly accomplished
Part I of CARP Form No. 4 shall
be forwarded to the LBP
representative for validation. If he agrees
to the ocular inspection report of DAR,
he signs the FIR (Part I) and
accomplishes Part II thereof.
In the event that there is a
difference or variance between
the findings of the DAR and the
LBP as to the propriety of
covering the land under CARP,
whether in whole or in part, on
the issue of suitability to agriculture,
degree of development or slope,
and on issues affecting idle lands,
the conflict shall be resolved by
a composite team of DAR, LBP,
DENR and DA which shall jointly
conduct further investigation
thereon. The team shall submit its
report of findings which shall be
binding to both DAR and LBP,
pursuant to Joint Memorandum
Circular of the DAR, LBP, DENR
and DA dated 27 January 1992.
8 DARMO Screen prospective ARBs
BARC and causes the signing of CARP
the Application of Purchase Form No. 5
and Farmer's Undertaking
(APFU).
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No. 4
the landowner by personal
delivery with proof of
service or registered mail
will return card and posts
a copy thereof for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located.
LGU office concerned CARP
notifies DAR about Form No. 17
compliance with posting
requirement thru return
endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or segregation survey or
DENR delineating areas covered Segregation
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope
and above, unproductive/
unsuitable to agriculture,
retention, infrastructure.
In case of segregation or
subdivision survey, the
plan shall be approved
by DENR-LMS.
C. Review and Completion
of Documents
11. DARMO Forward VOCF/CACF CARP
to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the
number of government agencies involved in the identification and delineation of the
land subject to acquisition. 56 This time, the Notice of Coverage is sent to the
landowner before the conduct of the field investigation and the sending must comply
with specific requirements. Representatives of the DAR Municipal Office (DARMO)
must send the Notice of Coverage to the landowner by "personal delivery with proof
of service, or by registered mail with return card," informing him that his property is
under CARP coverage and that if he desires to avail of his right of retention, he may
choose which area he shall retain. The Notice of Coverage shall also invite the
landowner to attend the field investigation to be scheduled at least two weeks from
notice. The field investigation is for the purpose of identifying the landholding and
determining its suitability for agriculture and its productivity. A copy of the Notice of
Coverage shall be posted for at least one week on the bulletin board of the municipal
and barangay halls where the property is located. The date of the field investigation
shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC,
DENR and prospective farmer beneficiaries. The field investigation shall be
conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field
investigation shall proceed, provided they were duly notified thereof. Should there be
a variance between the findings of the DAR and the LBP as to whether the land be
placed under agrarian reform, the land's suitability to agriculture, the degree or
development of the slope, etc., the conflict shall be resolved by a composite team of
the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The
team's findings shall be binding on both DAR and LBP. After the field investigation,
the DAR Municipal Office shall prepare the Field Investigation Report and Land Use
Map, a copy of which shall be furnished the landowner "by personal delivery with
proof of service or registered mail with return card." Another copy of the Report and
207
Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice
of Acquisition set forth in Section 16 of the law. They also include the Notice of
Coverage first laid down in DAR A.O. No. 12, Series of 1989 and subsequently
amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1, Series of 1993.
This Notice of Coverage does not merely notify the landowner that his property shall
be placed under CARP and that he is entitled to exercise his retention right; it also
notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall
be conducted where he and representatives of the concerned sectors of society may
attend to discuss the results of the field investigation, the land valuation and other
pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also
informs the landowner that a field investigation of his landholding shall be conducted
where he and the other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano,
sent a letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to
petitioner corporation, through Jaime Pimentel, the administrator of Hacienda
Palico. 57 The invitation was received on the same day it was sent as indicated by a
signature and the date received at the bottom left corner of said invitation. With
regard to Hacienda Banilad, respondent DAR claims that Jaime Pimentel,
administrator also of Hacienda Banilad, was notified and sent an invitation to the
conference. Pimentel actually attended the conference on September 21, 1989 and
signed the Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes
was also signed by the representatives of the BARC, the LBP and farmer
beneficiaries. 59 No letter of invitation was sent or conference meeting held with
respect to Hacienda Caylaway because it was subject to a Voluntary Offer to Sell to
respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent
to the various parties the Notice of Coverage and invitation to the conference, DAR
A.O. No. 12, Series of 1989 was already in effect more than a month earlier. The
Operating Procedure in DAR Administrative Order No. 12 does not specify how
notices or letters of invitation shall be sent to the landowner, the representatives of
the BARC, the LBP, the farmer beneficiaries and other interested parties. The
procedure in the sending of these notices is important to comply with the requisites of
due process especially when the owner, as in this case, is a juridical entity. Petitioner
is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its
shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the
landowner by "personal delivery or registered mail." Whether the landowner be a
natural or juridical person to whose address the Notice may be sent by personal
delivery or registered mail, the law does not distinguish. The DAR Administrative
Orders also do not distinguish. In the proceedings before the DAR, the distinction
between natural and juridical persons in the sending of notices may be found in the
Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of
pleadings before the DARAB is governed by Section 6, Rule V of the DARAB Revised
Rules of Procedure. Notices and pleadings are served on private domestic
corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president,
manager, secretary, cashier, agent, or any of its directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14
provides:
Sec. 13. Service upon private domestic corporation or partnership. If the
defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president,
manager, secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation
before the DARAB and the regular courts are served on the president, manager,
secretary, cashier, agent or any of its directors. These persons are those through
whom the private domestic corporation or partnership is capable of action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of
petitioner corporation. Is he, as administrator of the two Haciendas, considered an
agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it
reasonably certain that the corporation will receive prompt and proper notice in an
action against it. 63 Service must be made on a representative so integrated with the
corporation as to make it a priori supposable that he will realize his responsibilities
and know what he should do with any legal papers served on him, 64 and bring home
to the corporation notice of the filing of the action. 65 Petitioner's evidence does not
show the official duties of Jaime Pimentel as administrator of petitioner's haciendas.
The evidence does not indicate whether Pimentel's duties is so integrated with the
corporation that he would immediately realize his responsibilities and know what he
should do with any legal papers served on him. At the time the notices were sent and
the preliminary conference conducted, petitioner's principal place of business was
listed in respondent DAR's records as "Soriano Bldg., Plaza Cervantes,
Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila." 67 Pimentel did not hold office at the principal place of business of petitioner.
Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-
Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually
resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers
away from Metro Manila.
208
Curiously, respondent DAR had information of the address of petitioner's principal
place of business. The Notices of Acquisition over Haciendas Palico and Banilad
were addressed to petitioner at its offices in Manila and Makati. These Notices were
sent barely three to four months after Pimentel was notified of the preliminary
conference. 68Why respondent DAR chose to notify Pimentel instead of the officers of
the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the
notices and letters of invitation were validly served on petitioner through him, there is
no showing that Pimentel himself was duly authorized to attend the conference
meeting with the MARO, BARC and LBP representatives and farmer beneficiaries for
purposes of compulsory acquisition of petitioner's landholdings. Even respondent
DAR's evidence does not indicate this authority. On the contrary, petitioner claims that
it had no knowledge of the letter-invitation, hence, could not have given Pimentel the
authority to bind it to whatever matters were discussed or agreed upon by the parties
at the preliminary conference or public hearing. Notably, one year after Pimentel was
informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued
and this required that the Notice of Coverage must be sent "to the landowner
concerned or his duly authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its
haciendas, the areas found actually subject to CARP were not properly identified
before they were taken over by respondent DAR. Respondents insist that the lands
were identified because they are all registered property and the technical description
in their respective titles specifies their metes and bounds. Respondents admit at the
same time, however, that not all areas in the haciendas were placed under the
comprehensive agrarian reform program invariably by reason of elevation or
character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two
haciendas, but only portions thereof. Hacienda Palico has an area of 1,024 hectares
and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an
area of 1,050 hectares but only 964.0688 hectares were subject to CARP. The
haciendas are not entirely agricultural lands. In fact, the various tax declarations over
the haciendas describe the landholdings as "sugarland," and "forest, sugarland,
pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically
requires that the land subject to land reform be first identified. The two haciendas in
the instant case cover vast tracts of land. Before Notices of Acquisition were sent to
petitioner, however, the exact areas of the landholdings were not properly segregated
and delineated. Upon receipt of this notice, therefore, petitioner corporation had no
idea which portions of its estate were subject to compulsory acquisition, which
portions it could rightfully retain, whether these retained portions were compact or
contiguous, and which portions were excluded from CARP coverage. Even
respondent DAR's evidence does not show that petitioner, through its duly authorized
representative, was notified of any ocular inspection and investigation that was to be
conducted by respondent DAR. Neither is there proof that petitioner was given the
opportunity to at least choose and identify its retention area in those portions to be
acquired compulsorily. The right of retention and how this right is exercised, is
guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. . . . .
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner; Provided, however, That in case
the area selected for retention by the landowner is tenanted, the tenant shall
have the option to choose whether to remain therein or be a beneficiary in
the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be
considered a leaseholder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a leaseholder to the land retained by
the landowner. The tenant must exercise this option within a period of one
(1) year from the time the landowner manifests his choice of the area for
retention.
Under the law, a landowner may retain not more than five hectares out of the total
area of his agricultural land subject to CARP. The right to choose the area to be
retained, which shall be compact or contiguous, pertains to the landowner. If the area
chosen for retention is tenanted, the tenant shall have the option to choose whether
to remain on the portion or be a beneficiary in the same or another agricultural land
with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the
subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on
May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS
transactions were first governed by DAR Administrative Order No. 19, series of
1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard and
processed in accordance with the procedure provided for in Executive Order No. 229,
thus:
III. All VOS transactions which are now pending before the DAR and for
which no payment has been made shall be subject to the notice and hearing
requirements provided in Administrative Order No. 12, Series of 1989, dated
26 July 1989, Section II, Subsection A, paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall
be heard and processed in accordance with the procedure provided for in
Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
209
 Sec. 9. Voluntary Offer to Sell. The government shall purchase all
agricultural lands it deems productive and suitable to farmer cultivation
voluntarily offered for sale to it at a valuation determined in accordance with
Section 6. Such transaction shall be exempt from the payment of capital
gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private
land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely
reiterates the procedure of acquisition in Section 16, R.A. 6657. In other words, the
E.O. is silent as to the procedure for the identification of the land, the notice of
coverage and the preliminary conference with the landowner, representatives of the
BARC, the LBP and farmer beneficiaries. Does this mean that these requirements
may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land,
landowner and beneficiaries of the land subject to agrarian reform be identified before
the notice of acquisition should be issued. 74 Hacienda Caylaway was voluntarily
offered for sale in 1989. The Hacienda has a total area of 867.4571 hectares and is
covered by four (4) titles. In two separate Resolutions both dated January 12, 1989,
respondent DAR, through the Regional Director, formally accepted the VOS over the
two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only
648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner claims it
does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the
four titles were conducted in 1989, and that petitioner, as landowner, was not denied
participation therein, The results of the survey and the land valuation summary report,
however, do not indicate whether notices to attend the same were actually sent to and
received by petitioner or its duly authorized representative. 77 To reiterate, Executive
Order No. 229 does not lay down the operating procedure, much less the notice
requirements, before the VOS is accepted by respondent DAR. Notice to the
landowner, however, cannot be dispensed with. It is part of administrative due
process and is an essential requisite to enable the landowner himself to exercise, at
the very least, his right of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform
because they have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring
the municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including
the subject haciendas, were allegedly reclassified as non-agricultural 13 years before
the effectivity of R. A. No. 6657. 79 In 1993, the Regional Director for Region IV of the
Department of Agriculture certified that the haciendas are not feasible and sound for
agricultural development. 80 On March 20, 1992, pursuant to Proclamation No. 1520,
the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19
reclassifying certain areas of Nasugbu as non-agricultural. 81 This Resolution
approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance
of Nasugbu 82 which zoning ordinance was based on a Land Use Plan for Planning
Areas for New Development allegedly prepared by the University of the
Philippines. 83Resolution No. 19 of the Sangguniang Bayan was approved by the
Sangguniang Panlalawigan of Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in
1991 when it approved conversion of 1,827 hectares in Nasugbu into a tourist area
known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as
within the potential tourist belt. 85 Petitioner present evidence before us that these
areas are adjacent to the haciendas subject of this petition, hence, the haciendas
should likewise be converted. Petitioner urges this Court to take cognizance of the
conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition
of petitioner's landholdings does not ipso facto give this Court the power to adjudicate
over petitioner's application for conversion of its haciendas from agricultural to non-
agricultural. The agency charged with the mandate of approving or disapproving
applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure
governing the processing and approval of applications for land use conversion was
the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for conversion is
filed with the MARO where the property is located. The MARO reviews the application
and its supporting documents and conducts field investigation and ocular inspection
of the property. The findings of the MARO are subject to review and evaluation by the
Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field
investigation and submit a supplemental report together with his recommendation to
the Regional Agrarian Reform Officer (RARO) who shall review the same. For lands
less than five hectares, the RARO shall approve or disapprove applications for
conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO
Report and forward the records and his report to the Undersecretary for Legal Affairs.
Applications over areas exceeding fifty hectares are approved or disapproved by the
Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4
(j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the
CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the
President. The DAR's jurisdiction over applications for conversion is provided as
follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or
disapprove applications for conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of
Executive Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive
authority to approve or disapprove applications for conversion of agricultural
lands for residential, commercial, industrial and other land uses.
210
 C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, likewise empowers the DAR to authorize
under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of
the President, provides that "action on applications for land use conversion
on individual landholdings shall remain as the responsibility of the DAR,
which shall utilize as its primary reference, documents on the
comprehensive land use plans and accompanying ordinances passed upon
and approved by the local government units concerned, together with the
National Land Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990
entitled "Revised Rules and Regulations Governing Conversion of Private Agricultural
Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled
"Rules of Procedure Governing the Processing and Approval of Applications for Land
Use Conversion." These A.O.'s and other implementing guidelines, including
Presidential issuances and national policies related to land use conversion have been
consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the
guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same
time, recognizing the need of the other sectors of society (housing, industry
and commerce) for land, when coinciding with the objectives of the
Comprehensive Agrarian Reform Law to promote social justice,
industrialization and the optimum use of land as a national resource for
public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation,
development and management. "Land Use Conversion" refers to the act or process of
changing the current use of a piece of agricultural land into some other use as
approved by the DAR. 89 The conversion of agricultural land to uses other than
agricultural requires field investigation and conferences with the occupants of the
land. They involve factual findings and highly technical matters within the special
training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with
specificity how the DAR must go about its task. This time, the field investigation is not
conducted by the MARO but by a special task force, known as the Center for Land
Use Policy Planning and Implementation (CLUPPI-DAR Central Office). The
procedure is that once an application for conversion is filed, the CLUPPI prepares the
Notice of Posting. The MARO only posts the notice and thereafter issues a certificate
to the fact of posting. The CLUPPI conducts the field investigation and dialogues with
the applicants and the farmer beneficiaries to ascertain the information necessary for
the processing of the application. The Chairman of the CLUPPI deliberates on the
merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or
Secretary of Agrarian Reform. Applications involving more than fifty hectares are
approved or disapproved by the Secretary. The procedure does not end with the
Secretary, however. The Order provides that the decision of the Secretary may be
appealed to the Office of the President or the Court of Appeals, as the case may
be, viz:
Appeal from the decision of the Undersecretary shall be made to the
Secretary, and from the Secretary to the Office of the President or the Court
of Appeals as the case may be. The mode of appeal/motion for
reconsideration, and the appeal fee, from Undersecretary to the Office of the
Secretary shall be the same as that of the Regional Director to the Office of
the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto
itself authority to resolve a controversy the jurisdiction over which is initially lodged
with an administrative body of special competence. 91Respondent DAR is in a better
position to resolve petitioner's application for conversion, being primarily the agency
possessing the necessary expertise on the matter. The power to determine whether
Haciendas Palico, Banilad and Caylaway are non-agricultural, hence, exempt from
the coverage of the CARL lies with the DAR, not with this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of
due process in the acquisition proceedings does not give this Court the power to
nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is
to short-circuit the administrative process, which has yet to run its regular course.
Respondent DAR must be given the chance to correct its procedural lapses in the
acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer
beneficiaries in 1993. 92 Since then until the present, these farmers have been
cultivating their lands. 93 It goes against the basic precepts of justice, fairness and
equity to deprive these people, through no fault of their own, of the land they till.
Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the
land.
211
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings copy of the Notice of Land Valuation and Acquisition dated July 24, 1997, offering to
over the three haciendas are nullified for respondent DAR's failure to observe due pay it P229,014.33 as compensation for the lot covered by TCT No. T-90476.
process therein. In accordance with the guidelines set forth in this decision and the
applicable administrative procedure, the case is hereby remanded to respondent DAR
for proper acquisition proceedings and determination of petitioner's application for On January 12, 1998, respondent filed with the PARO a Protest rejecting the
conversion. SO ORDERED. offer of compensation and contending that its lands are not covered by R.A. No. 6657
because they were classified as residential even prior to the effectivity of the
THIRD DIVISION law. Attached to its protest are copies of its land titles, tax declarations, location map
and other supporting documents.
[G.R. No. 149422. April 10, 2003]
On March 27, 1998, respondent filed with the PARO a Supplemental Protest
with (a) the Certification issued by Engineer Baltazar M. Usis, Regional Irrigation
DEPARTMENT OF AGRARIAN REFORM, petitioner vs. APEX INVESTMENT AND
Manager of the National Irrigation Administration, Region IV, stating that respondents
FINANCING CORPORATION (now SM Investment
lots are not covered by any irrigation project; and (b) the Certification issued by
Corporation), respondent.
Engineer Gregorio Bermejo, Municipal Engineer and Deputized Zoning Administrator
of Dasmarias, Cavite, attesting that the same lots are within the residential
DECISION
zone based on the Land Use Plan of the Municipality of Dasmarias duly approved by
the Housing and Land Use Regulatory Board (HLURB) in its Resolution No. R-42-A-3
SANDOVAL-GUTIERREZ, J.: dated February 11, 1981.

Before us is a petition for review on certiorari[1] filed by the Department of It was only on February 15, 1999, or more than one year after respondent filed
Agrarian Reform (DAR) assailing the Decision[2] of the Court of Appeals dated April its protest, that the PARO forwarded to petitioner DAR the said protest together with
26, 2001 in CA-G.R. SP No. 55052, Apex Investment and Financing Corporation vs. the records of the compulsory acquisition proceedings.
Department of Agrarian Reform, et al.; and its Resolution dated August 2, 2001
denying petitioners motion for reconsideration.
On June 21, 1999, respondent received a letter dated May 28, 1999 from
petitioner requiring it to submit certified true copies of the TCTs covering its lots and a
Respondent Apex Investment and Financing Corporation (now SM Investments Certification from the HLURB attesting that they are within the residential zone of
Corporation), registered under the laws of the Philippines, owns several lots located Dasmarias based on HLURB Resolution No. R-42-A-3 dated February 11, 1981.
at Barangay Paliparan, Dasmarias, Cavite, covered by Transfer Certificates of Title
(TCT) Nos. T-72491, T-90474, T-90475, T-90476, and T-90477.
Thereafter, respondent learned that on June 24, 1999, the Registry of Deeds of
Cavite cancelled one of its titles, TCT No. T-90476, and in lieu thereof, issued TCT
On August 24, 1994, the Municipal Agrarian Reform Office (MARO) of No. T-868471 in the name of the Republic of the Philippines.
Dasmarias initiated compulsory acquisition proceedings over those lots pursuant to
Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
On July 26, 1999, respondent came to know that TCT No. T-868471 was
of 1988. The MARO issued a Notice of Coverage informing respondent of the
cancelled and in lieu thereof, TCT No. CLOA-2473 was issued in the name of Angel
compulsory acquisition and inviting it to a meeting set on September 8, 1994; and
M. Umali, a farmer-beneficiary allegedly occupying the land. This prompted
Notice of Acquisition. Copies of these notices were sent to respondents office at 627
respondent to file with the Court of Appeals a petition for certiorari and prohibition
Echague Street, Manila. However, respondent denied having received the same
praying that the compulsory acquisition proceedings over its landholdings be declared
because it was no longer holding office there.
void and that TCT No. CLOA-2473 issued to Angel Umali be cancelled.

Respondent learned of the compulsory acquisition proceedings from the

In its comment, petitioner alleged that respondent failed to exhaust all
December 11, 1997 issue of the Balita stating, among others, that TCT No. T-90476,
administrative remedies before filing its petition. Hence, the same should be
covering respondents lot consisting of 23,614 square meters, has been placed
dismissed.
under the compulsory acquisition program. Forthwith, petitioner sent respondent a

212
 On April 26, 2001, the Court of Appeals rendered its Decision, the dispositive
portion of which reads:
WHEREFORE, the petition for certiorari is hereby granted and judgment is hereby rendered
as follows:
a) declaring the compulsory acquisition under Republic Act No. 6657 as null and void ab
initio;
b) prohibiting public respondents PARO and DAR from continuing with the compulsory
acquisition proceedings over TCT No. T-72491; TCT No. T-90474; TCT No. T-90475; and
TCT No. T-90477;
compulsory acquisition proceedings over TCT No. T-72491; TCT No. T-90474; TCT No. T-
90475; and TCT No. T-90477;
c) prohibiting public respondent Register of Deeds of Cavite from cancelling the land titles of
petitioner, i.e., TCT No. T-72491; TCT No. T-90474; TCT No. T-90475; and TCT No. T-90477
and the transferring, conveying and alienation thereof; and
d) ordering the Register of Deeds of Cavite to restore TCT No. T-90476 (now CLOA 2473) in
the name of petitioner.
SO ORDERED.
Petitioner filed a motion for reconsideration but was denied in the Resolution
dated August 2, 2001.
Hence, the instant petition for review on certiorari.
Petitioner ascribes to the Court of Appeals the following errors: (a) in ruling that
respondent corporation did not violate the principle of exhaustion of remedies; (b) in
holding that respondent was deprived of its right to due process; and (c) in concluding
that the subject parcels of land are residential, hence, not covered by R.A. No. 6657.
On the first assigned error, this Court has consistently held that the doctrine of
exhaustion of administrative remedies is a relative one and is flexible depending on
the peculiarity and uniqueness of the factual and circumstantial settings of a case.
[3]
Among others, it is disregarded where, as in this case, (a) there are circumstances
indicating the urgency of judicial intervention;[4] and (b) the administrative action is
patently illegal and amounts to lack or excess of jurisdiction.[5]
Records show that the PARO did not take immediate action on respondents
Protest filed on January 12, 1998. It was only on February 15, 1999, or after more
than one year, that it forwarded the same to petitioner DAR. Since then, what
petitioner has done was to require respondent every now and then to submit copies of
supporting documents which were already attached to its Protest. In the meantime,
respondent found that the PARO had caused the cancellation of its title and that a
new one was issued to an alleged farmer-beneficiary.
In Natalia Realty vs. Department of Agrarian Reform,[6] we held that the
aggrieved landowners were not supposed to wait until the DAR acted on their letter-
protests (after it had sat on them for almost a year) before resorting to judicial
process. Given the official indifference which, under the circumstances could have
continued forever, the landowners had to act to assert and protect their
interests. Thus, their petition for certiorari was allowed even though the DAR had not
yet resolved their protests. In the same vein, respondent here could not be expected
to wait for petitioner DAR to resolve its protest before seeking judicial
intervention. Obviously, petitioner might continue to alienate respondents lots during
the pendency of its protest. Hence, the Court of Appeals did not err in concluding that
on the basis of the circumstances of this case, respondent need not exhaust all
administrative remedies before filing its petition for certiorari and prohibition.
As to the second assigned error, we find that petitioner was deprived of its
constitutional right to due process.
Section 16 of R.A. No. 6657, provides:
Section 16. Procedures for Acquisition of Private Lands. For purposes of acquisition of private
lands, the following procedures shall be followed:
(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send
its notice to acquire the land to the owners thereof, by personal delivery or registered
mail, and post the same in a conspicuous place in the municipal building and barangay hall of
the place where the property is located. Said notice shall contain the offer of the DAR to pay a
corresponding value in accordance with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.
xxx
In Roxas & Co., Inc. vs. Court of Appeals,[7] we held:
For a valid implementation of the CAR program, two notices are required: (1) the Notice of
Coverage and letter of invitation to preliminary conference sent to the landowner, the
213
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant
to DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner
under Section 16 of R.A. No. 6657.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation
to the conference, and its actual conduct cannot be understated. They are steps designed
to comply with the requirements of administrative due process. The implementation of
the CARL is an exercise of the States police power and the power of eminent domain. To
the extent that the CARL prescribes retention limits to the landowners, there is an
exercise of police power for the regulation of private property in accordance with the
Constitution (Association of Small Landowners in the Philippines vs. Secretary of Agrarian
Reform, 175 SCRA 343, 373-374 [1989]). But where, to carry out such regulation, the
owners are deprived of lands they own in excess of the maximum area allowed there is
also a taking under the power of eminent domain. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title to and physical
possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer beneficiary (id.). The Bill of Rights provides that [n]o person shall be deprived of
life, liberty or property without de process of law (Section 1, Article III of the 1987
Constitution). The CARL was not intended to take away property without due process of
law (Development Bank of the Philippines vs. Court of Appeals, 262 SCRA 245, 253
[1996]). The exercise of the power of eminent domain requires that due process be
observed in the taking of private property.
In the instant case, petitioner does not dispute that respondent did not
receive the Notice of Acquisition and Notice of Coverage sent to the latters old
address.Petitioner explained that its personnel could not effect personal service of
those notices upon respondent because it changed its juridical name from Apex
Investment and Financing Corporation to SM Investment Corporation. While it is true,
that personal service could not be made, however, there is no showing that petitioner
caused the service of the notices via registered mail as required by Section 16(a) of
R.A. No. 6657. On this point, petitioner claimed that the notices were sent not only by
registered mail but also by personal delivery and that there was actual receipt by
respondent as shown by the signature appearing at the bottom left-hand corner of
petitioners copies of the notices. But petitioner could not identify the name of
respondents representative who allegedly received the notices. In fact, petitioner
admitted that the signature thereon is illegible. It is thus safe to conclude that
respondent was not notified of the compulsory acquisition proceedings. Clearly,
respondent was deprived of its right to procedural due process. It is elementary that
before a person can be deprived of his property, he should be informed of the claim
against him and the theory on which such claim is premised.[8]
On the last assigned error, Section 4 of R.A. No. 6657 provides that the
Comprehensive Agrarian Reform Law shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural lands.
Section 3(c) defines agricultural land, as land devoted to agricultural activity as
defined in this Act and not classified as mineral, forest, residential, commercial or
industrial land.
Respondent vehemently insists that its lots had been classified as residential
prior to June 15, 1988, the date of effectivity of R.A. No. 6657. As earlier mentioned,
Engineer Gregorio Bermejo, Municipal Engineer and Deputized Zoning Administrator
of Dasmarias, Cavite, certified that respondents lands are within the residential
zoneof Dasmarias, based on the Land Use Plan of that municipality duly approved by
the HLURB in its Resolution No. R-42-A-3 dated February 11, 1981. We observe,
however, that this factual issue was never determined below. Thus, we cannot
conclude that respondents parcels of land are residential.
WHEREFORE, the challenged Decision dated April 26, 2001 of the Court of
Appeals in CA-G.R. SP No. 55052 is AFFIRMED with MODIFICATION in the sense
that we allow the DAR to conduct appropriate proceedings to determine whether the
subject parcels of land are indeed residential and are thus outside the coverage of
R.A. No. 6657.
SO ORDERED.
SECOND DIVISION
G.R. No. L-54597 December 15, 1982
FELICIDAD ANZALDO, petitioner,
vs.
JACOBO C. CLAVE as Chairman of the Civil Service Commission and as
Presidential Executive Assistant; JOSE A. R. MELO, as Commissioner of the
Civil Service Commission, and EULALIA L. VENZON, respondents.
Antonio P. Amistad for petitioner.
Artemio E. Valenton for private respondent.
Madamba, Deza & Almario Law Offices for respondent .
Demegildo Laborte & Lazano Law Offices for respondent public officials.
214
AQUINO, J.:
This is a controversy over the position of Science Research Supervisor II, whose
occupant heads the Medical Research Department in the Biological Research Center
of the National Institute of Science and Technology (NIST).
Doctor Felicidad Estores-Anzaldo 55, seeks to annul the decision of Presidential
Executive Assistant Jacobo C. Clave dated March 20, 1980, revoking her
appointment dated January 5, 1978 as Science Research Supervisor II and directing
the appointment to that position of Doctor Eulalia L. Venzon, 48.
The contested position became vacant in 1974 when its incumbent, Doctor Quintin
Kintanar, became Director of the Biological Research Center. Doctor Kintanar
recommended that Doctor Venzon be appointed to that position. Doctor Anzaldo
protested against that recommendation. The NIST Reorganization Committee found
her protest to be valid and meritorious (p. 34, Rollo). Because of that impasse, which
the NIST Commissioner did not resolve, the position was not filled up.
At the time the vacancy occurred, or on June 30, 1974, both Doctors Anzaldo and
Venzon were holding similar positions in the Medical Research Department: that of
Scientist Research Associate IV with an annual compensation of P12,013 per annum.
Both were next-in-rank to the vacant position.
Later, Doctor Pedro G. Afable, Vice-Chairman, became the Officer-in-Charge of the
NIST. Effective January 5, 1978, he appointed Doctor Anzaldo to the contested
position with compensation at P18,384 per annum. The appointment was approved
by the Civil Service Commission.
Doctor Afable, in his letter dated January 20, 1978, explained that the appointment
was made after a thorough study and screening of the qualifications of Doctors
Anzaldo and Venzon and upon the recommendation of the NIST Staff Evaluation
Committee that gave 88 points to Doctor Anzaldo and 61 points to Doctor Venzon (p.
78, Rollo).
Doctor Venzon in a letter dated January 23, 1978, addressed to Jacobo C. Clave,
appealed to the Office of the President of the Philippines (pp. 139-40). The appeal
was forwarded to the NIST Anzaldo to the contested position (p. 63, Rollo). The
appeal-protest was later sent to the Civil Service Commission.
Chairman Clave of the Civil Service Commission and Commissioner Jose A. R. Melo
recommended in Resolution No. 1178 dated August 23, 1979 that Doctor Venzon be
appointed to the contested position, a recommendation which is in conflict with the
1978 appointment of Doctor Anzaldo which was duly attested and approved by the
Civil Service Commission (pp. 30 and 48, Rollo).
The resolution was made pursuant to section 19(6) of the Civil Service Decree of the
Philippines, Presidential Decree No. 807 (which took effect on October 6, 1975) and
which provides that "before deciding a contested appointment, the Office of the
President shall consult the Civil Service Commission."
After the denial of her motion for the reconsideration of that resolution, or on January
5, 1980, Doctor Anzaldo appealed to the Office of the President of the Philippines. As
stated earlier, Presidential Executive Assistant Clave (who was concurrently
Chairman of the Civil Service Commission) in his decision of March 20, 1980 revoked
Doctor Anzaldo's appointment and ruled that, "as recommended by the Civil Service
Commission" (meaning Chairman Clave himself and Commissioner Melo), Doctor
Venzon should be appointed to the contested position but that Doctor Anzaldo's
appointment to the said position should be considered "valid and effective during the
pendency" of Doctor Venzon's protest (p. 36, Rollo).
In a resolution dated August 14, 1980, Presidential Executive Assistant Clave denied
Doctor Anzaldo's motion for reconsideration. On August 25, 1980, she filed in this
Court the instant special civil action of certiorari.
What is manifestly anomalous and questionable about that decision of Presidential
Executive Assistant Clave is that it is an implementation of Resolution No. 1178
dated August 23, 1979 signed by Jacobo C. Clave, as Chairman of the Civil Service
Commission and concurred in by Commissioner Jose A. Melo.
In that resolution, Commissioner Clave and Melo, acting for the Civil Service
Commission, recommended that Doctor Venzon be appointed Science Research
Supervisor II in place of Doctor Anzaldo.
When Presidential Executive Assistant Clave said in his decision that he was "inclined
to concur in the recommendation of the Civil Service Commission", what he meant
was that he was concurring with Chairman Clave's recommendation: he was
concurring with himself (p. 35, Rollo).
It is evident that Doctor Anzaldo was denied due process of law when Presidential
Executive Assistant Clave concurred with the recommendation of Chairman Clave of
the Civil Service Commission. The case is analogous to Zambales Chromite Mining
Co. vs. Court of Appeals, L-49711, November 7, 1979, 94 SCRA 261, where it was
215
held that the decision of Secretary of Agriculture and Natural Resources Benjamin M.
Gozon, affirming his own decision in a mining case as Director of Mines was void
because it was rendered with grave abuse of discretion and was a mockery of
administrative justice.
Due process of law means fundamental fairness. It is not fair to Doctor Anzaldo that
Presidential Executive Assistant Clave should decide whether his own
recommendation as Chairman of the Civil Service Commission, as to who between
Doctor Anzaldo and Doctor Venzon should be appointed Science Research
Supervisor II, should be adopted by the President of the Philippines.
Common sense and propriety dictate that the commissioner in the Civil Service
Commission, who should be consulted by the Office of the President, should be a
person different from the person in the Office of the President who would decide the
appeal of the protestant in a contested appointment.
In this case, the person who acted for the Office of the President is the same person
in the Civil Service Commission who was consulted by the Office of the
President: Jacobo C. Clave. The Civil Service Decree could not have contemplated
that absurd situation for, as held in the Zambales Chromite case, that would not be
fair to the appellant.
We hold that respondent Clave committed a grave abuse of discretion in deciding the
appeal in favor of Doctor Venzon. The appointing authority, Doctor Afable, acted in
accordance with law and properly exercised his discretion in appointing Doctor
Anzaldo to the contested position.
Doctor Anzaldo finished the pharmacy course in 1950 in the College of Pharmacy,
University of the Philippines. She obtained from the Centro Escolar University the
degree of Master of Science in Pharmacy in 1962 and in 1965 the degree of Doctor of
Pharmacy.
Aside from her civil service eligibility as a pharmacist, she is a registered medical
technologist and supervisor (unassembled).
She started working in the NIST in 1954 and has served in that agency for
about twenty-eight (28) years now. As already stated, in January, 1978, she was
appointed to the contested Position of Science Research Supervisor II. Her present
salary as Science Research Supervisor II, now known as Senior Science Research
Specialist, is P 30,624 per annum after she was given a merit increase by Doctor
Kintanar, effective July 1, 1981 (p. 259, Rollo).
On the other hand, Doctor Venzon finished the medical course in the University of
Santo Tomas in 1957. She started working in the NIST in 1960. She has been
working in that agency for more than twenty-one (21) years. Doctor Anzaldo is senior
to her in point of service.
Considering that Doctor Anzaldo has competently and satisfactorily discharged the
duties of the contested position for more than four (4) years now and that she is
qualified for that position, her appointment should be upheld. Doctor Venzon's protest
should be dismissed.
WHEREFORE, the decision of respondent Clave dated March 20, 1980 is set aside,
and petitioner Anzaldo's promotional appointment to the contested position is
declared valid. No costs. SO ORDERED.
SECOND DIVISION
G.R. No. L-54597 December 15, 1982
FELICIDAD ANZALDO, petitioner,
vs.
JACOBO C. CLAVE as Chairman of the Civil Service Commission and as
Presidential Executive Assistant; JOSE A. R. MELO, as Commissioner of the
Civil Service Commission, and EULALIA L. VENZON, respondents.
Antonio P. Amistad for petitioner.
Artemio E. Valenton for private respondent.
Madamba, Deza & Almario Law Offices for respondent .
Demegildo Laborte & Lazano Law Offices for respondent public officials.
AQUINO, J.:
This is a controversy over the position of Science Research Supervisor II, whose
occupant heads the Medical Research Department in the Biological Research Center
of the National Institute of Science and Technology (NIST).
216
Doctor Felicidad Estores-Anzaldo 55, seeks to annul the decision of Presidential
Executive Assistant Jacobo C. Clave dated March 20, 1980, revoking her
appointment dated January 5, 1978 as Science Research Supervisor II and directing
the appointment to that position of Doctor Eulalia L. Venzon, 48.
The contested position became vacant in 1974 when its incumbent, Doctor Quintin
Kintanar, became Director of the Biological Research Center. Doctor Kintanar
recommended that Doctor Venzon be appointed to that position. Doctor Anzaldo
protested against that recommendation. The NIST Reorganization Committee found
her protest to be valid and meritorious (p. 34, Rollo). Because of that impasse, which
the NIST Commissioner did not resolve, the position was not filled up.
At the time the vacancy occurred, or on June 30, 1974, both Doctors Anzaldo and
Venzon were holding similar positions in the Medical Research Department: that of
Scientist Research Associate IV with an annual compensation of P12,013 per annum.
Both were next-in-rank to the vacant position.
Later, Doctor Pedro G. Afable, Vice-Chairman, became the Officer-in-Charge of the
NIST. Effective January 5, 1978, he appointed Doctor Anzaldo to the contested
position with compensation at P18,384 per annum. The appointment was approved
by the Civil Service Commission.
Doctor Afable, in his letter dated January 20, 1978, explained that the appointment
was made after a thorough study and screening of the qualifications of Doctors
Anzaldo and Venzon and upon the recommendation of the NIST Staff Evaluation
Committee that gave 88 points to Doctor Anzaldo and 61 points to Doctor Venzon (p.
78, Rollo).
Doctor Venzon in a letter dated January 23, 1978, addressed to Jacobo C. Clave,
appealed to the Office of the President of the Philippines (pp. 139-40). The appeal
was forwarded to the NIST Anzaldo to the contested position (p. 63, Rollo). The
appeal-protest was later sent to the Civil Service Commission.
Chairman Clave of the Civil Service Commission and Commissioner Jose A. R. Melo
recommended in Resolution No. 1178 dated August 23, 1979 that Doctor Venzon be
appointed to the contested position, a recommendation which is in conflict with the
1978 appointment of Doctor Anzaldo which was duly attested and approved by the
Civil Service Commission (pp. 30 and 48, Rollo).
The resolution was made pursuant to section 19(6) of the Civil Service Decree of the
Philippines, Presidential Decree No. 807 (which took effect on October 6, 1975) and
which provides that "before deciding a contested appointment, the Office of the
President shall consult the Civil Service Commission."
After the denial of her motion for the reconsideration of that resolution, or on January
5, 1980, Doctor Anzaldo appealed to the Office of the President of the Philippines. As
stated earlier, Presidential Executive Assistant Clave (who was concurrently
Chairman of the Civil Service Commission) in his decision of March 20, 1980 revoked
Doctor Anzaldo's appointment and ruled that, "as recommended by the Civil Service
Commission" (meaning Chairman Clave himself and Commissioner Melo), Doctor
Venzon should be appointed to the contested position but that Doctor Anzaldo's
appointment to the said position should be considered "valid and effective during the
pendency" of Doctor Venzon's protest (p. 36, Rollo).
In a resolution dated August 14, 1980, Presidential Executive Assistant Clave denied
Doctor Anzaldo's motion for reconsideration. On August 25, 1980, she filed in this
Court the instant special civil action of certiorari.
What is manifestly anomalous and questionable about that decision of Presidential
Executive Assistant Clave is that it is an implementation of Resolution No. 1178
dated August 23, 1979 signed by Jacobo C. Clave, as Chairman of the Civil Service
Commission and concurred in by Commissioner Jose A. Melo.
In that resolution, Commissioner Clave and Melo, acting for the Civil Service
Commission, recommended that Doctor Venzon be appointed Science Research
Supervisor II in place of Doctor Anzaldo.
When Presidential Executive Assistant Clave said in his decision that he was "inclined
to concur in the recommendation of the Civil Service Commission", what he meant
was that he was concurring with Chairman Clave's recommendation: he was
concurring with himself (p. 35, Rollo).
It is evident that Doctor Anzaldo was denied due process of law when Presidential
Executive Assistant Clave concurred with the recommendation of Chairman Clave of
the Civil Service Commission. The case is analogous to Zambales Chromite Mining
Co. vs. Court of Appeals, L-49711, November 7, 1979, 94 SCRA 261, where it was
held that the decision of Secretary of Agriculture and Natural Resources Benjamin M.
Gozon, affirming his own decision in a mining case as Director of Mines was void
because it was rendered with grave abuse of discretion and was a mockery of
administrative justice.
Due process of law means fundamental fairness. It is not fair to Doctor Anzaldo that
Presidential Executive Assistant Clave should decide whether his own
recommendation as Chairman of the Civil Service Commission, as to who between
Doctor Anzaldo and Doctor Venzon should be appointed Science Research
Supervisor II, should be adopted by the President of the Philippines.
217
Common sense and propriety dictate that the commissioner in the Civil Service
Commission, who should be consulted by the Office of the President, should be a
person different from the person in the Office of the President who would decide the
appeal of the protestant in a contested appointment.
In this case, the person who acted for the Office of the President is the same person
in the Civil Service Commission who was consulted by the Office of the
President: Jacobo C. Clave. The Civil Service Decree could not have contemplated
that absurd situation for, as held in the Zambales Chromite case, that would not be
fair to the appellant.
We hold that respondent Clave committed a grave abuse of discretion in deciding the
appeal in favor of Doctor Venzon. The appointing authority, Doctor Afable, acted in
accordance with law and properly exercised his discretion in appointing Doctor
Anzaldo to the contested position.
Doctor Anzaldo finished the pharmacy course in 1950 in the College of Pharmacy,
University of the Philippines. She obtained from the Centro Escolar University the
degree of Master of Science in Pharmacy in 1962 and in 1965 the degree of Doctor of
Pharmacy.
Aside from her civil service eligibility as a pharmacist, she is a registered medical
technologist and supervisor (unassembled).
She started working in the NIST in 1954 and has served in that agency for
about twenty-eight (28) years now. As already stated, in January, 1978, she was
appointed to the contested Position of Science Research Supervisor II. Her present
salary as Science Research Supervisor II, now known as Senior Science Research
Specialist, is P 30,624 per annum after she was given a merit increase by Doctor
Kintanar, effective July 1, 1981 (p. 259, Rollo).
On the other hand, Doctor Venzon finished the medical course in the University of
Santo Tomas in 1957. She started working in the NIST in 1960. She has been
working in that agency for more than twenty-one (21) years. Doctor Anzaldo is senior
to her in point of service.
Considering that Doctor Anzaldo has competently and satisfactorily discharged the
duties of the contested position for more than four (4) years now and that she is
qualified for that position, her appointment should be upheld. Doctor Venzon's protest
should be dismissed.
WHEREFORE, the decision of respondent Clave dated March 20, 1980 is set aside,
and petitioner Anzaldo's promotional appointment to the contested position is
declared valid. No costs. SO ORDEREDECOND DIVISION
G.R. No. L-49711 November 7, 1979
ZAMBALES CHROMITE MINING CO., GONZALO P. NAVA, VIOLA S. NAVA,
FEDERICO S. NAVA, PERLA NAVA, HONORATO P. NAVA, ALEJANDRO S. NAVA,
PURIFICACION SISON, A. TORDESILLAS, GUIDO ADVINCULA, PEDRO
ANGULO and TOMAS MARAMBA, petitioners-appellants,
vs.
COURT OF APPEALS, SECRETARY OF AGRICULTURE AND NATURAL
RESOURCES, DIRECTOR OF MINES, GREGORIO E. MARTINEZ, ALEJANDRO
MENDEZ, NICANOR MARTY, VICENTE MISOLES, GUILLERMO YABUT, ANDRES
R. FIAGOY, MIGUEL A. MANIAGO, CASIMIRO N. EBIDO, ENRIQUE RIVERA,
SEVERINO MIVA, ELENITO B. MARTINEZ, LUCAS EDURAIN, FELIMON ENCIO,
EMILIO ILOCO, DIOSDADO MISOLA, ERNESTO VALVERDE, PABLO PABILONA,
ARMANDO MINAS, BARTOLOME MARAVE and CECILIO OOVILLA, respondents-
appellees.
Tordesilla & Advincula for petitioners-appellants.
Mariano M. Lozada for private respondents-appellees.
AQUINO, J.:
This is a mining case. The petitioners appealed from the second decision of the Court
of Appeals, reversing its first decision and holding that it was improper from Benjamin
M. Gozon, as Secretary of Agriculture and Natural Resources, to affirm his own
decision as Director of Mines.
The Court of Appeals further held that the trial court's judgment, confirming the
Secretary's decision, should be set aside and that the Minister of Natural Resources
should review anew the decision of the Director of Mines "and, thereafter, further
proceedings will be taken in the trial court". The antecedental proceedings are as
follows:
(1) In Mines Administrative Case No. V-227, Director Gozon issued an order dated
October 5, 1960 wherein he dismissed the case filed by the petitioners or protestants
(Zambales Chromite Mining Co., Inc. or the group of Gonzalo P. Nava). In that case,
218
they sought to be declared the rightful and prior locators and possessors of sixty-nine
mining claims located in Santa Cruz, Zambales.
On the basis of petitioners' evidence (the private respondents did not present any
evidence and they filed a demurrer to the evidence or motion to dismiss the protest),
Director Gozon found that the petitioners did not discover any mineral nor staked and
located mining claims in accordance with law.
In that same order, Director Gozon ruled that the mining claims of the groups of
Gregorio Martinez and Pablo Pabilona, now the private respondents-appellees, were
duly located and registered (pp. 224-231, Record on Appeal).
(2) The petitioners appealed from that order to the Secretary of Agriculture and
Natural Resources. While the appeal was pending, Director Gozon was appointed
Secretary of Agriculture and Natural Resources. Instead of inhibiting himself, he
decided the appeal, DANR Case No. 2151, on August 16, 1963 as it he was
adjudicating the case for the first time. 'Thus, Secretary Gozon exercised appellate
jurisdiction over a case which he had decided as Director of Mines. He acted as
reviewing authority in the appeal from his own decision. Or, to use another analogy,
he acted as trial judge and appellate judge in the same case.
He ruled that the petitioners had abandoned the disputed mining claims, while, on the
other hand, the Martinez and Pabilona groups had validly located the said claims.
Hence, he dismissed the appeal from his own decision (pp. 340-341, Record on
Appeal).
(3) On September 20, 1963, the petitioners filed a complaint in the Court of First
Instance of Zambales, assailing Secretary Gozon's decision and praying that they be
declared the prior locators and possessors of the sixty-nine mineral claims in
question. Impleaded as defendants in the case were the Secretary of Agriculture and
Natural Resources, the Director of Mines and the members of the Martinez and
Pabilona groups.
After hearing, the lower court sustained Secretary Gozon's decision and dismissed
the case. It held that the disqualification petition of a judge to review his own decision
or ruling (Sec. 1, Rule 137, Rules of Court) does not apply to administrative bodies;
that there is no provision in the Mining Law, disqualifying the Secretary of Agriculture
and Natural Resources from deciding an appeal from a case which he had decided as
Director of Mines; that delicadeza is not a ground for disqualification; that the
petitioners did not seasonably seek to disqualify Secretary Gozon from deciding their
appeal, and that there was no evidence that the Secretary acted arbitrarily and with
bias, prejudice, animosity or hostility to the petitioners (pp. 386-9, Record on Appeal).
(4) The petitioners appealed to the Court of Appeals. The Sixth Division of that Court
(Pascual, Agcaoili and Climaco, JJ.) in its decision dated February 15, 1978 reversed
the judgment of the trial court and declared that the petitioners were the rightful
locators and possessors of the said sixty-nine mining claims and held as invalid the
mining claims overlapping the same.
That Division found that the petitioners (Nava group) had discovered minerals and
had validly located the said sixty-nine mining claims and that there was no sufficient
basis for Secretary Gozon's finding that the mining claims of the Martinez and
Pabilona groups were validly located.
(5) The defendants, now the private respondents-appellees, filed a motion for
reconsideration based principally on the ground that the Court of Appeals should have
respected the factual findings of the Director of Mines and the Secretary of Agriculture
and Natural Resources on the theory that the facts found in administrative decisions
cannot be disturbed on appeal to the courts, citing Republic Act No. 4388 which
amended section 61 of the Mining Law effective June 19, 1965; Pajo vs. Ago, 108
Phil. 905; Palanan Lumber & Plywood Co., Inc. vs. Arranz 65 O.G. 8473; Timbancaya
vs. Vicente, 119 Phil. 169, Ortua vs. Singson Encarnacion, 59 Phil. 440.
The defendants-movants prayed that the appeal be dismissed, meaning that the
decisions of the lower court and of Director and Secretary Gozon be affirmed.
The petitioners opposed that motion for reconsideration. In their opposition, they
reiterated the contention in their brief that Secretary Gozon's decision was void and,
therefore, the factual findings therein are not binding on the courts.
As already stated, the same Sixth Division (composed of Pascula, Agrava and Maco,
JJ.) in its second decision of October 13, 1978, set aside its first decision and granted
the motion for curiously enough, the first decision was reconsidered not on the
ground advanced by the movants-defendants, now the private respondents (Martinez
and Pabilona groups), which was that the factual findings of the administrative
officials should be upheld, but on the ground raised in petitioners' opposition,
namely, that Secretary Gozon's decision was void because he was disqualified to
review his own decision as Director of Mines.
So, as already noted, the Court of Appeals in its second decision remanded the case
to the Minister of Natural Resources for another review of Director Gozon's decision.
This was the prayer of the petitioners in their brief but in their opposition to the motion
for reconsideration, they prayed that the first decision of the Court of Appeals in their
favor be maintained.
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(6) The second decision did not satisfy the parties. They filed motions for
reconsideration. The petitioners in their motion reiterated their prayer that the first
decision be reinstated. They abandoned their prayer that the case be returned to the
Minister of Natural Resources. On the other hand, the private respondents in their
motion insisted that the trial court's decision be affirmed on the basis of the factual
findings of the Director of Mines and the Secretary of Agriculture and Natural
Resources. The Court of Appeals denied both motions in its resolutions of December
27, 1978 and January 15, 1979.
Only the petitioners appealed from the second decision of the Court of Appeals.
There is an arresting and noteworthy peculiarity in the present posture of this case
now on appeal to this Court (as arresting and noteworthy as the peculiarity that
Secretary Gozon reviewed his own decision as Director of Mines),
That twist or peculiarity is that while the petitioners (Nava group) in their appellants'
brief in the Court of Appeals prayed that Secretary Gozon's decision, alleged to be
biased, be declared void and that the case be returned to the Secretary of Agriculture
and Natural Resources for another review of Director Gozon's order, in their
appellants' brief in this Court, they changed that relief and they now pray that the
second decision of the Court of Appeals, referring this case to the Minister of Natural
Resources for another review, be declared void and that its first decision be affirmed.
In contrast, the private respondents, who did not appeal from the second decision of
the Court of Appeals, instead of sustaining its holding that this case be referred to the
Minister of Natural Resources or instead of defending that second decision, they
being appellees, pray for the affirmance of the trial court's judgment sustaining the
decisions of Director and Secretary Gozon.
The inconsistent positions of the parties, which were induced by the contradictory
decisions of the Court of Appeals, constitute the peculiar twist of this case in this
Court.
We hold that Secretary Gozon acted with grave abuse of discretion in reviewing his
decision as Director of Mines. The palpably flagrant anomaly of a Secretary of
Agriculture and Natural Resources reviewing his own decision as Director of Mines is
a mockery of administrative justice. The Mining Law, Commonwealth Act No. 13-i,
provides:
SEC. 61. Conflicts and disputes arising out of mining locations shall be
submitted to the Director of Mines for decision:
Provided, That the decision or order of the Director of Mines may be
appealed to the Secretary of Agriculture and Natural Resources within thirty
days from the date of its receipt.
In case any one of the parties should disagree from the decision or order of
the Director of Mines or of the Secretary of Agriculture and Natural
Resources, the matter may be taken to the court of competent jurisdiction
within thirty days from the receipt of such decision or order; otherwise the
said decision or order shag be final and binding upon the parties concerned.
(As amended by Republic Act No. 746 approved on June 18,1952).*
Undoubtedly, the provision of section 61 that the decision of the Director of Mines
may be appealed to the Secretary of Agriculture and Natural Resources contemplates
that the Secretary should be a person different from the Director of Mines.
In order that the review of the decision of a subordinate officer might not turn out to be
a farce the reviewing officer must perforce be other than the officer whose decision is
under review; otherwise, there could be no different view or there would be no real
review of the case. The decision of the reviewing officer would be a biased view;
inevitably, it would be the same view since being human, he would not admit that he
was mistaken in his first view of the case.
That is the obvious, elementary reason behind the disqualification of a trial judge, who
is promoted to the appellate court, to sit in any case wherein his decision or ruling is
the subject of review (Sec. 1, Rule 137, Rules of Court: secs. 9 and 27, Judiciary
Law).
A sense of proportion and consideration for the fitness of things should have deterred
Secretary Gozon from reviewing his own decision as Director of Mines. He should
have asked his undersecretary to undertake the review.
Petitioners-appellants were deprived of due process, meaning fundamental fairness,
when Secretary Gozon reviewed his own decision as Director of Mines. (See Amos
Treat & Co. vs. Securities and Exchange Commission, 306 F. 2nd 260, 267.)
WHEREFORE, we set aside the order of the Secretary of Agriculture and Natural
Resources dated August 16, 1963 as affirmed by the trial court as well as the first
decision of the Court of Appeals.
We affirm its second decision, returning the case to the Minister of Natural
Resources, with the directive that petitioners' appeal to the Minister be resolved de
novo with the least delay as provided for in Presidential Decree No. 309, "establishing
220
rules and procedures for the speedy disposition or settlement of conflicting mining
claims".
We reverse the second part of that second decision stating that "thereafter, further
proceedings will be taken in the trial court". That portion is unwarranted because the
trial court does not retain any jurisdiction over the case once it is remanded to the
Minister of Natural Resources. No costs.
SO ORDERED.
G.R. No. 85156 February 5, 1991
HON. LOURDES R. QUISUMBING in her official capacity as Secretary of
Education, Culture and Sports (DECS), HON. TEOFILO GOMEZ and CRISANTO
B. DELAMIN, petitioners,
vs.
HON. MANUEL LUIS GUMBAN, Presiding Judge of the Regional Trial Court, Br.
23 General Santos City, South Cotabato, and ESTHER B. YAP, respondents.
Vencer Purisima & Associates for private respondent.
PARAS, J.:
This petition seeks to annul and set aside; the order* dated August 17, 1987 of the
Regional Trial Court, Branch 23, General Santos City, in a Special Civil Case No. 230
for prohibition, entitled Esther B. Yap vs. Hon. Lourdes Quisumbing, et al.", denying
the Omnibus Motion to Dismiss filed by the petitioners herein; the order dated August
25, 1987, granting the Writ of Preliminary Injunction; and, the order dated April 15,
1988, denying the petitioners' motion for Reconsideration.
On or before 1979, private respondent Esther B. Yap was appointed District
Supervisor of the Bureau of Public Schools and assigned to the District of Glan,
South Cotabato (Rollo, p. 2).
On February 11, 1987, in view of the agitation of teachers and concerned citizens of
Glan, then Secretary Lourdes Quisumbing issued a Memorandum Order, directing
Regional Director Teofilo E. Gomez to reassign or transfer Esther B. Yap to another
district (Rollo, p. 24), which was effected by Director Teofilo E. Gomez in his
Memorandum Order dated February 12, 1987, ordering the transfer of private
respondent Esther B. Yap as a public school district supervisor from Glan District to
Malapatan District and for Crisanto B. Delamin, another public school district
supervisor, to assume that of respondent's position at Glan (Rollo p. 25). The latter in
turn issued a Memorandum Order to the principals and headteachers of different
public schools at Glan informing them of his assumption of office (Rollo, p. 26).
However, private respondent Esther B. Yap defied the orders of her superiors and she
continued to perform the functions of public school district supervisor of Glan (Rollo,
p. 5).
On February 20, 1987, Yap filed a petition (docketed as Special Civil Case No. 230)
for prohibition with prayer for preliminary injunction/restraining order with the Regional
Trial Court, Branch 23m, General Santos City against the Hon. Lourdes R.
Quisumbing, et al. (Rollo, pp. 27-33) who filed an Omnibus Motion to Dismiss (Rollo,
pp. 45-47), which was denied by respondent Judge Manuel Luis Gumban in his order
dated August 17, 1987. On August 25, 1987, said Judge issued another order
granting the Writ of Preliminary injunction (Rollo, p. 57) and denied Quisumbing et
al.'s motion for reconsideration (Rollo, p. 65).
Quisumbing, et al. assailed the aforesaid orders on three (3) counts: (a) that the
transfer of respondent Yap is not violative of law, since it was made in the interest of
public service (Rollo, pp. 8-13); (b) that it was done outside the election ban period
(Rollo, pp. 14-17); and (c) that Esther B. Yap failed to exhaust all available
administrative remedies (Rollo, pp. 17-19).
On the other hand, Yap argued that: (a) the assailed orders are plainly interlocutory in
nature, hence, not correctible by certiorari (Rollo, pp. 74-75-b); (b) the order to
transfer Mrs. Esther B. Yap is a clear and open violation of the election law and was
done as a political accommodation (Rollo, pp. 76-81.) and (e) that the doctrine of non-
exhaustion of administrative remedies is not applicable to the case at bar as the
Memorandum Order issued by the petitioners, Lourdes Quisumbing and Teofilo
Gomez dated February 11, 1987 and February 12, 1987, respectively, would readily
show that the basis for the issuance of the orders are the unverified demands of
alleged concerned citizens without the benefit of investigation (Rollo, pp. 81-82).
After a careful scrutiny of the records, it is to be underscored that the appointment of
private respondent Yap is simply that of a District Supervisor of the Bureau of Public
Schools which does not indicate a specific station (Rollo, p. 13). As such, she could
be assigned to any station and she is not entitled to stay permanently at any specific
station (Bongbong v. Parado, 57 SCRA 623 [1974]; Department of Education Culture
and Sports v. Court of Appeals (G.R. 81032, March 22,1990), citing Brillantes v.
Guevarra (27 SCRA 138 [1969]).
Since the election period for the May 11, 1987 election had already elapsed, the issue
whether or not the transfer of private respondent is in violation of the election ban has
become moot and academic (Rollo, p. 17).
Finally, the lower court did not err in taking cognizance of the case. The doctrine of
exhaustion of administrative remedies is not a hard and fact rule. It has been
repeatedly held that the requiring previous exhaustion of administrative remedies is
not applicable where the question in dispute is purely a legal one: where the
controverted act is patently illegal or was performed without jurisdiction or in excess
of jurisdiction; 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; where
there are circumstances indicating the urgency of judicial intervention; or where the
respondent has acted in utter disregard of due process. The rule does not apply
where insistence on its observance would result in nullification of the claim being
asserted; and when the rule does not provide a plain, speedy and adequate remedy
(Laganapan v. Asedillo, 154 SCRA 377 [1987]).
221
While generally, an order denying a motion to dismiss is interlocutory and cannot be
the subject of a petition for certiorari unless the court acts without or in excess of
jurisdiction or with grave abuse of discretion (Cojuangco v. Romillo, Jr., 167 SCRA
751 [1988]), still in the instant case We deem it more felicitous and expedient to
resolve the same on the merits to avoid multiplicity of suits since after all the
circumstances warrant a final disposition of this petition, namely the granting thereof
because private respondent had previously been appointed as district
supervisor, without indicating any specific place as her permanent station. Her status
was therefore akin to that of a district supervisor at large. Her transfer was neither
whimsical, arbitrary, or capricious.
Accordingly, this petition is hereby GRANTED, and all the Orders complained of are
SET ASIDE and REVERSED.
SO ORDERED.
G.R. No. L-53485 February 6, 1991
PATRIA ESUERTE and HERMINIA JAYME, petitioners,
vs.
HON. COURT OF APPEALS (Eleventh Division), HON. RAFAEL T. MENDOZA,
Judge, Branch VI, Court of First Instance of Cebu and MA. BEVERLY
TAN, respondents.
Romeo B. Esuerte for petitioners.
Eleno V. Andales & Sisinio M. Andales for private respondent
MEDIALDEA, J.:
This petition for certiorari with a prayer for preliminary injunction seeks to set aside
the decision of the Court of Appeals in CA G.R. No. SP-08999-R, involving the same
parties.
An action for damages was filed by private respondent Beverly Tan against herein
petitioners Patria Esuerte and Herminia Jayme with the Court of First Instance (now
Regional Trial Court) of Cebu and docketed as Civil Case No. R-17584. The claim for
damages arose from an incident involving the parties and summarized by the Court of
Appeals, as follows:
. . . that on September 22, 23 and 27, 1978, private respondent Ma. Beverly
Tan, a Junior Resident Physician of Corazon Locsin-Montelibano Memorial
Hospital, Bacolod City, without any justifiable reason shouted at, humiliated
and insulted the petitioner, Patria Esuerte, Head Nurse, Medicare
Department of the said hospital and as a result of the said incident, said
petitioner complained to the Chief of the Hospital, Dr. Teodoro P. Motus, in
writing. The other petitioner, Herminia Jayme, who was one of those who
were present at the time of the incident also sent a letter to the Chief of the
Hospital, Dr. Teodoro Motus, informing the latter of what she had witnessed.
As a result thereof, private respondent was advised to explain in writing by
the Chief of the Hospital, but private respondent instead of explaining only
her side of the incident also complained against the petitioners. The
Discipline and Grievance Committee, Corazon Locsin-Montelibano Memorial
Hospital, conducted a fact-finding investigation and later, the Chief of the
Hospital, Dr. Teodoro P. Motus, issued a resolution dated November 8, 1978,
transmitting the records of the case to the Regional Health Office, No. 6,
Jaro, Iloilo City for appropriate action; . . . . (pp. 91-92, Rollo)
Esuerte and Jayme filed a motion to dismiss the complaint on the ground of improper
venue and for being premature for failure of Tan to exhaust administrative remedies.
On January 2, 1979, the trial court denied the motion to dismiss. The motion for
reconsideration of the denial was likewise denied by the court on February 16, 1979.
Esuerte and Jayme filed a petition for certiorari and prohibition with a prayer for
preliminary injunction with the Court of Appeals. On September 18, 1979, the petition
was dismissed without pronouncement as to costs. The motion for reconsideration of
the decision was likewise denied for lack of merit on February 18, 1980.
The following reasons were advanced by petitioners for the allowance of this petition:
1) The Court of Appeals committed gross error and grave abuse of discretion
when it dismissed the petition despite petitioners' overwhelming evidence
showing that the venue of private respondent's action (Civil Case No. R-
17584) was improperly laid.
2) The Court of Appeals committed gross error and grave abuse of discretion
when it dismissed the petition despite petitioners' overwhelming evidence
showing that the filing of Civil Case No. R-17584 is premature due to non-
exhaustion of administrative remedies.
It is the contention of petitioners that the proper venue of the action filed by Tan
should be Bacolod City and not Cebu City. At the time of the filing of her action in
court, Tan was actually residing and may be found in Bacolod City. In fact, in her
"Statement of Assets and Liabilities," submitted by Tan to her employer, the Corazon
Locsin Montelibano Memorial Hospital, she declared that she is a resident of FRAYU
INTERIOR, 6th Street, Bacolod City.
Section 2(b), Rule 4 of the Rules of Court provides:
Sec. 2. Venue in Courts of First Instance.
xxx xxx xxx
(b) Personal Actions. All other actions may be commenced and tried
where the defendants or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the election of the
plaintiff.
222
The choice of venue for personal actions cognizable by the Regional Trial Court is
given to the plaintiff but not to the plaintiff's caprice because the matter is regulated by
the Rules of Court (see Clavecilla Radio System v. Antillon, 19 SCRA 379). The rule
on venue, like other procedural rules, are designed to insure a just and orderly
administration of justice or the impartial and evenhanded determination of every
action and proceeding (Sy v. Tyson Enterprises Inc., 19 SCRA 367). The option of the
plaintiff in personal actions cognizable by the Regional Trial Court is either the place
where the defendant resides or may be found or the place where the plaintiff resides.
If plaintiff opts for the latter, he is limited to that place.
"Resides" in the rules on venue on personal actions means the place of abode,
whether permanent or temporary, of the plaintiff or defendants as distinguished from
"domicile" which denotes a fixed permanent residence (Dangwa Transportation Co.,
Inc. v. Sarmiento, G.R. No. L-22795, January 31, 1977, 75 SCRA 124). And, in
Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L-29791, January 10, 1978, 81
SCRA 75), venue of personal actions should be at the place of abode or place where
plaintiffs actually reside, not in domicile or legal residence.
In Koh v. CA, L-40428, December 17, 1975, 70 SCRA 298; 305, We ruled:
Applying the foregoing observation to the present case, We are fully
convinced that private respondent Coloma's protestations of domicile in San
Nicolas, Ilocos Norte, based on his manifested intention to return there after
the retirement of his wife from government service to justify his bringing of
an action for damages against petitioner in the C.F.I. of Ilocos Norte, is
entirely of no moment since what is of paramount importance is where he
actually resided or where he may be found at the time he brought the action,
to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of
Court, on venue of personal actions. . ..
As perspicaciously observed by Justice Moreland, the purpose of procedure is not to
restrict the court's jurisdiction over the subject matter but to give it effective facility "in
righteous action," "to facilitate and promote the administration of justice" or to insure
"just judgments" by means of a fair hearing. If the objective is not achieved, then "the
administration of justice becomes incomplete and unsatisfactory and lays itself open
to criticism." (Manila Railroad Co. v. Attorney General, 20 Phil. 523, 530).
There is no question that private respondent as plaintiff in the Civil Case is a legal
resident of Cebu City.1wphi1 Her parents live there. However, it cannot also be
denied that at the time of her filing of the complaint against petitioners, she was a
temporary resident of Bacolod City. She was then employed with the Corazon Locsin
Montelibano Memorial Hospital, Bacolod City, as resident physician. Moreover, the
acts complained of were committed in Bacolod City. The private respondents were all
residents of Bacolod City at the time of the bringing of the action. Though Tan's
employment was only temporary there was no showing when this employment will
end. Justice would be better served if the complaint were heard and tried in Bacolod
City where all the parties resided.
The second ground raised by petitioners is devoid of merit. The alleged need by
private respondent Tan to exhaust administrative remedies before filing the complaint
for damages does not apply to the instant case. Private respondent as plaintiff in the
civil Case for damages has no administrative remedy available to her. It is true that
the same incident complained of in the administrative case filed by petitioners against
Tan is the subject of the action for damages filed by Tan against the petitioners in the
trial court. However, the cause of action in the administrative case is different from
that of the civil case for damages. While the complainant in the administrative case
may be a private person, it is the government who is the aggrieved party and no
award for damages may be granted in favor of private persons. In the civil action for
damages, the trial court's concern is whether or not damages, personal to the plaintiff,
were caused by the acts of the defendants. The civil action for damages can proceed
notwithstanding the pendency of the administrative action.
WHEREFORE, the position is GRANTED. The questioned decision of the Court of
Appeals is SET ASIDE. Civil Case No. R-17584 is DISMISSED for improper venue.
SO ORDERED.
[G.R. No. 159139. January 13, 2004]
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON
M. AKOL, MIGUEL UY, EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX
C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ
JR., petitioners, vs. COMMISSION ON ELECTIONS; COMELEC
CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and
AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS
GIDEON DE GUZMAN, JOSE F. BALBUENA, LAMBERTO P. LLAMAS, and
BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and
MEGA PACIFIC CONSORTIUM, respondents.
DECISION
PANGANIBAN, J.:
There is grave abuse of discretion (1) when an act is done contrary to the
Constitution, the law or jurisprudence;[1] or (2) when it is executed whimsically,
capriciously or arbitrarily out of malice, ill will or personal bias. [2] In the present case,
the Commission on Elections approved the assailed Resolution and awarded the
subject Contract not only in clear violation of law and jurisprudence, but also in
reckless disregard of its own bidding rules and procedure. For the automation of the
counting and canvassing of the ballots in the 2004 elections, Comelec awarded the
Contract to Mega Pacific Consortium an entity that had not participated in the
bidding. Despite this grant, the poll body signed the actual automation Contract with
Mega Pacific eSolutions, Inc., a company that joined the bidding but had not met the
eligibility requirements.
Comelec awarded this billion-peso undertaking with inexplicable haste, without
adequately checking and observing mandatory financial, technical and legal
requirements. It also accepted the proferred computer hardware and software even if,
223
at the time of the award, they had undeniably failed to pass eight critical requirements
designed to safeguard the integrity of elections, especially the following three items:
They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the
Comelec itself
They were not able to detect previously downloaded results at various canvassing or
consolidation levels and to prevent these from being inputted again
They were unable to print the statutorily required audit trails of the count/canvass at
different levels without any loss of data
Because of the foregoing violations of law and the glaring grave abuse of
discretion committed by Comelec, the Court has no choice but to exercise its solemn
constitutional duty[3] to void the assailed Resolution and the subject Contract. The
illegal, imprudent and hasty actions of the Commission have not only desecrated
legal and jurisprudential norms, but have also cast serious doubts upon the poll bodys
ability and capacity to conduct automated elections. Truly, the pith and soul of
democracy -- credible, orderly, and peaceful elections -- has been put in jeopardy by
the illegal and gravely abusive acts of Comelec.
The Case
[4]
Before us is a Petition under Rule 65 of the Rules of Court, seeking (1) to
declare null and void Resolution No. 6074 of the Commission on Elections (Comelec),
which awarded Phase II of the Modernization Project of the Commission to Mega
Pacific Consortium (MPC); (2) to enjoin the implementation of any further contract
that may have been entered into by Comelec either with Mega Pacific Consortium
and/or Mega Pacific eSolutions, Inc. (MPEI); and (3) to compel Comelec to conduct a
re-bidding of the project.
The Facts
The following facts are not disputed. They were culled from official documents,
the parties pleadings, as well as from admissions during the Oral Argument on
October 7, 2003.
On June 7, 1995, Congress passed Republic Act 8046, [5] which authorized
Comelec to conduct a nationwide demonstration of a computerized election system
and allowed the poll body to pilot-test the system in the March 1996 elections in the
Autonomous Region in Muslim Mindanao (ARMM).
On December 22, 1997, Congress enacted Republic Act 8436 [6] authorizing
Comelec to use an automated election system (AES) for the process of voting,
counting votes and canvassing/consolidating the results of the national and local
elections. It also mandated the poll body to acquire automated counting machines
(ACMs), computer equipment, devices and materials; and to adopt new electoral
forms and printing materials.
Initially intending to implement the automation during the May 11, 1998
presidential elections, Comelec -- in its Resolution No. 2985 dated February 9,
1998[7] -- eventually decided against full national implementation and limited the
automation to the Autonomous Region in Muslim Mindanao (ARMM). However, due to
the failure of the machines to read correctly some automated ballots in one town, the
poll body later ordered their manual count for the entire Province of Sulu.[8]
In the May 2001 elections, the counting and canvassing of votes for both
national and local positions were also done manually, as no additional ACMs had
been acquired for that electoral exercise allegedly because of time constraints.
On October 29, 2002, Comelec adopted in its Resolution 02-0170 a
modernization program for the 2004 elections. It resolved to conduct biddings for the
three (3) phases of its Automated Election System; namely, Phase I - Voter
Registration and Validation System; Phase II - Automated Counting and Canvassing
System; and Phase III - Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive
Order No. 172, which allocated the sum of P2.5 billion to fund the AES for the May
10, 2004 elections. Upon the request of Comelec, she authorized the release of an
additional P500 million.
On January 28, 2003, the Commission issued an Invitation to Apply for Eligibility
and to Bid, which we quote as follows:
INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos.
8189 and 8436, invites interested offerors, vendors, suppliers or lessors to apply for eligibility
and to bid for the procurement by purchase, lease, lease with option to purchase, or otherwise,
supplies, equipment, materials and services needed for a comprehensive Automated Election
System, consisting of three (3) phases: (a) registration/verification of voters, (b) automated
counting and consolidation of votes, and (c) electronic transmission of election results, with an
approved budget of TWO BILLION FIVE HUNDRED MILLION (Php2,500,000,000) Pesos.
Only bids from the following entities shall be entertained:
a. Duly licensed Filipino citizens/proprietorships;
b. Partnerships duly organized under the laws of the Philippines and of which at least
sixty percent (60%) of the interest belongs to citizens of the Philippines;
c. Corporations duly organized under the laws of the Philippines, and of which at least
sixty percent (60%) of the outstanding capital stock belongs to citizens of the
Philippines;
d. Manufacturers, suppliers and/or distributors forming themselves into a joint venture,
i.e., a group of two (2) or more manufacturers, suppliers and/or distributors
that intend to be jointly and severally responsible or liable for a particular
contract, provided that Filipino ownership thereof shall be at least sixty
percent (60%); and
e. Cooperatives duly registered with the Cooperatives Development Authority.
Bid documents for the three (3) phases may be obtained starting 10 February 2003, during
office hours from the Bids and Awards Committee (BAC) Secretariat/Office of Commissioner
Resurreccion Z. Borra, 7th Floor, Palacio del Governador, Intramuros, Manila, upon payment
at the Cash Division, Commission on Elections, in cash or cashiers check, payable to the
Commission on Elections, of a non-refundable amount of FIFTEEN THOUSAND PESOS
(Php15,000.00) for each phase. For this purpose, interested offerors, vendors, suppliers or
224
lessors have the option to participate in any or all of the three (3) phases of the comprehensive
Automated Election System.
A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall,
Commission on Elections, Postigo Street, Intramuros, Manila. Should there be questions on
the bid documents, bidders are required to submit their queries in writing to the BAC
Secretariat prior to the scheduled Pre-Bid Conference.
Deadline for submission to the BAC of applications for eligibility and bid envelopes for the
supply of the comprehensive Automated Election System shall be at the Session Hall,
Commission on Elections, Postigo Street, Intramuros, Manila on 28 February 2003 at 9:00
a.m.
The COMELEC reserves the right to review the qualifications of the bidders after the bidding
and before the contract is executed. Should such review uncover any misrepresentation made
in the eligibility statements, or any changes in the situation of the bidder to materially
downgrade the substance of such statements, the COMELEC shall disqualify the bidder upon
due notice without any obligation whatsoever for any expenses or losses that may be incurred
by it in the preparation of its bid.[9]
On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain
eligibility criteria for bidders and the schedule of activities for the project bidding, as
follows:
1.) Open to Filipino and foreign corporation duly registered and licensed to do
business and is actually doing business in the Philippines, subject to Sec.
43 of RA 9184 (An Act providing In the Modernization Standardization
and Regulation of the Procurement Activities of the Government and for
other purposes etc.)
2.) Track Record:
a) For counting machines should have been used in at least one (1) political
exercise with no less than Twenty Million Voters;
b) For verification of voters the reference site of an existing data base
installation using Automated Fingerprint Identification System
(AFIS) with at least Twenty Million.
3.) Ten percent (10%) equity requirement shall be based on the total project cost;
and
4.) Performance bond shall be twenty percent (20%) of the bid offer.
RESOLVED moreover, that:
1) A. Due to the decision that the eligibility requirements and the rest of the Bid
documents shall be released at the same time, and the memorandum of
Comm. Resurreccion Z. Borra dated February 7, 2003, the documents to
be released on Friday, February 14, 2003 at 2:00 oclock p.m. shall be the
eligibility criteria, Terms of Reference (TOR) and other pertinent
documents;
B. Pre-Bid conference shall be on February 18, 2003; and
C. Deadline for the submission and receipt of the Bids shall be on March 5,
2003.
2) The aforementioned documents will be available at the following offices:
a) Voters Validation: Office of Comm. Javier
b) Automated Counting Machines: Office of Comm. Borra
c) Electronic Transmission: Office of Comm. Tancangco[10]
On February 17, 2003, the poll body released the Request for Proposal (RFP) to
procure the election automation machines. The Bids and Awards Committee (BAC) of
Comelec convened a pre-bid conference on February 18, 2003 and gave prospective
bidders until March 10, 2003 to submit their respective bids.
Among others, the RFP provided that bids from manufacturers, suppliers and/or
distributors forming themselves into a joint venture may be entertained, provided that
the Philippine ownership thereof shall be at least 60 percent. Joint venture is defined
in the RFP as a group of two or more manufacturers, suppliers and/or distributors that
intend to be jointly and severally responsible or liable for a particular contract.[11]
Basically, the public bidding was to be conducted under a two-envelope/two
stage system. The bidders first envelope or the Eligibility Envelope should establish
the bidders eligibility to bid and its qualifications to perform the acts if accepted. On
the other hand, the second envelope would be the Bid Envelope itself. The RFP
outlines the bidding procedures as follows:
25. Determination of Eligibility of Prospective Bidders
25.1 The eligibility envelopes of prospective Bidders shall be opened first to
determine their eligibility. In case any of the requirements specified in Clause 20
is missing from the first bid envelope, the BAC shall declare said prospective
Bidder as ineligible to bid. Bid envelopes of ineligible Bidders shall be
immediately returned unopened.
25.2 The eligibility of prospective Bidders shall be determined using simple
pass/fail criteria and shall be determined as either eligible or ineligible. If the
prospective Bidder is rated passed for all the legal, technical and financial
requirements, he shall be considered eligible. If the prospective Bidder is rated
failed in any of the requirements, he shall be considered ineligible.
26. Bid Examination/Evaluation
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26.1 The BAC will examine the Bids to determine whether they are complete,
whether any computational errors have been made, whether required securities
have been furnished, whether the documents have been properly signed, and
whether the Bids are generally in order.
26.2 The BAC shall check the submitted documents of each Bidder against the
required documents enumerated under Clause 20, to ascertain if they are all
present in the Second bid envelope (Technical Envelope). In case one (1) or more
of the required documents is missing, the BAC shall rate the Bid concerned as
failed and immediately return to the Bidder its Third bid envelope (Financial
Envelope) unopened. Otherwise, the BAC shall rate the first bid envelope as
passed.
26.3 The BAC shall immediately open the Financial Envelopes of the Bidders
whose Technical Envelopes were passed or rated on or above the passing
score. Only Bids that are determined to contain all the bid requirements for both
components shall be rated passed and shall immediately be considered for
evaluation and comparison.
26.4 In the opening and examination of the Financial Envelope, the BAC shall
announce and tabulate the Total Bid Price as calculated. Arithmetical errors will
be rectified on the following basis: If there is a discrepancy between words and
figures, the amount in words will prevail. If there is a discrepancy between the
unit price and the total price that is obtained by multiplying the unit price and the
quantity, the unit price shall prevail and the total price shall be corrected
accordingly. If there is a discrepancy between the Total Bid Price and the sum of
the total prices, the sum of the total prices prevail and the Total Bid Price shall be
corrected accordingly.
26.5 Financial Proposals which do not clearly state the Total Bid Price shall be
rejected. Also, Total Bid Price as calculated that exceeds the approved budget for
the contract shall also be rejected.
27. Comparison of Bids
27.1 The bid price shall be deemed to embrace all costs, charges and fees
associated with carrying out all the elements of the proposed Contract, including
but not limited to, license fees, freight charges and taxes.
27.2 The BAC shall establish the calculated prices of all Bids rated passed and
rank the same in ascending order.
xxxxxxxxx
29. Postqualification
29.1 The BAC will determine to its satisfaction whether the Bidder selected as
having submitted the lowest calculated bid is qualified to satisfactorily perform
the Contract.
29.2 The determination will take into account the Bidders financial, technical and
production capabilities/resources. It will be based upon an examination of the
documentary evidence of the Bidders qualification submitted by the Bidder as
well as such other information as the BAC deems necessary and appropriate.
29.3 A bid determined as not substantially responsive will be rejected by the BAC
and may not subsequently be made responsive by the Bidder by correction of the
non-conformity.
29.4 The BAC may waive any informality or non-conformity or irregularity in a
bid which does not constitute a material deviation, provided such waiver does not
prejudice or affect the relative ranking of any Bidder.
29.5 Should the BAC find that the Bidder complies with the legal, financial and
technical requirements, it shall make an affirmative determination which shall be
a prerequisite for award of the Contract to the Bidder. Otherwise, it will make a
negative determination which will result in rejection of the Bidders bid, in which
event the BAC will proceed to the next lowest calculated bid to make a similar
determination of that Bidders capabilities to perform satisfactorily.[12]
Out of the 57 bidders,[13] the BAC found MPC and the Total Information
Management Corporation (TIMC) eligible. For technical evaluation, they were referred
to the BACs Technical Working Group (TWG) and the Department of Science and
Technology (DOST).
In its Report on the Evaluation of the Technical Proposals on Phase II, DOST
said that both MPC and TIMC had obtained a number of failed marks in the technical
evaluation. Notwithstanding these failures, Comelec en banc, on April 15, 2003,
promulgated Resolution No. 6074 awarding the project to MPC. The Commission
publicized this Resolution and the award of the project to MPC on May 16, 2003.
On May 29, 2003, five individuals and entities (including the herein Petitioners
Information Technology Foundation of the Philippines, represented by its president,
Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter [14] to Comelec Chairman
Benjamin Abalos Sr. They protested the award of the Contract to Respondent MPC
due to glaring irregularities in the manner in which the bidding process had been
conducted. Citing therein the noncompliance with eligibility as well as technical and
procedural requirements (many of which have been discussed at length in the
Petition), they sought a re-bidding.
In a letter-reply dated June 6, 2003,[15] the Comelec chairman -- speaking
through Atty. Jaime Paz, his head executive assistant -- rejected the protest and
declared that the award would stand up to the strictest scrutiny.
Hence, the present Petition.[16]
226
 The Issues
In their Memorandum, petitioners raise the following issues for our
consideration:
1. The COMELEC awarded and contracted with a non-eligible entity; x x x
2. Private respondents failed to pass the Technical Test as required in the RFP.
Notwithstanding, such failure was ignored. In effect, the COMELEC
changed the rules after the bidding in effect changing the nature of the
contract bidded upon.
3. Petitioners have locus standi.
4. Instant Petition is not premature. Direct resort to the Supreme Court is justified.
[17]
In the main, the substantive issue is whether the Commission on Elections, the
agency vested with the exclusive constitutional mandate to oversee elections, gravely
abused its discretion when, in the exercise of its administrative functions, it awarded
to MPC the contract for the second phase of the comprehensive Automated Election
System.
Before discussing the validity of the award to MPC, however, we deem it proper
to first pass upon the procedural issues: the legal standing of petitioners and the
alleged prematurity of the Petition.
This Courts Ruling
The Petition is meritorious.
First Procedural Issue:
Locus Standi of Petitioners
Respondents chorus that petitioners do not possess locus standi, inasmuch as
they are not challenging the validity or constitutionality of RA 8436. Moreover,
petitioners supposedly admitted during the Oral Argument that no law had been
violated by the award of the Contract. Furthermore, they allegedly have no actual and
material interest in the Contract and, hence, do not stand to be injured or prejudiced
on account of the award.
On the other hand, petitioners -- suing in their capacities as taxpayers,
registered voters and concerned citizens -- respond that the issues central to this
case are of transcendental importance and of national interest. Allegedly, Comelecs
flawed bidding and questionable award of the Contract to an unqualified entity would
impact directly on the success or the failure of the electoral process. Thus, any taint
on the sanctity of the ballot as the expression of the will of the people would inevitably
affect their faith in the democratic system of government. Petitioners further argue
that the award of any contract for automation involves disbursement of public funds in
gargantuan amounts; therefore, public interest requires that the laws governing the
transaction must be followed strictly.
We agree with petitioners. Our nations political and economic future virtually
hangs in the balance, pending the outcome of the 2004 elections. Hence, there can
be no serious doubt that the subject matter of this case is a matter of public concern
and imbued with public interest;[18] in other words, it is of paramount public
interest[19] and transcendental importance.[20] This fact alone would justify relaxing the
rule on legal standing, following the liberal policy of this Court whenever a case
involves an issue of overarching significance to our society.[21] Petitioners legal
standing should therefore be recognized and upheld.
Moreover, this Court has held that taxpayers are allowed to sue when there is a
claim of illegal disbursement of public funds,[22] or if public money is being deflected to
any improper purpose;[23] or when petitioners seek to restrain respondent from
wasting public funds through the enforcement of an invalid or unconstitutional law.
[24]
In the instant case, individual petitioners, suing as taxpayers, assert a material
interest in seeing to it that public funds are properly and lawfully used. In the Petition,
they claim that the bidding was defective, the winning bidder not a qualified entity, and
the award of the Contract contrary to law and regulation. Accordingly, they seek to
restrain respondents from implementing the Contract and, necessarily, from making
any unwarranted expenditure of public funds pursuant thereto. Thus, we hold that
petitioners possess locus standi.
Second Procedural Issue:
Alleged Prematurity Due to Non-Exhaustion
of Administrative Remedies
Respondents claim that petitioners acted prematurely, since they had not first
utilized the protest mechanism available to them under RA 9184, the Government
Procurement Reform Act, for the settlement of disputes pertaining to procurement
contracts.
Section 55 of RA 9184 states that protests against decisions of the Bidding and
Awards Committee in all stages of procurement may be lodged with the head of the
procuring entity by filing a verified position paper and paying a protest fee. Section 57
of the same law mandates that in no case shall any such protest stay or delay the
bidding process, but it must first be resolved before any award is made.
On the other hand, Section 58 provides that court action may be resorted to only
after the protests contemplated by the statute shall have been completed. Cases filed
in violation of this process are to be dismissed for lack of jurisdiction. Regional trial
courts shall have jurisdiction over final decisions of the head of the procuring entity,
and court actions shall be instituted pursuant to Rule 65 of the 1997 Rules of Civil
Procedure.
Respondents assert that throughout the bidding process, petitioners never
questioned the BAC Report finding MPC eligible to bid and recommending the award
of the Contract to it (MPC). According to respondents, the Report should have been
appealed to the Comelec en banc, pursuant to the aforementioned sections of RA
9184. In the absence of such appeal, the determination and recommendation of the
BAC had become final.
The Court is not persuaded.
Respondent Comelec came out with its en banc Resolution No. 6074 dated April
15, 2003, awarding the project to Respondent MPC even before the BAC managed to
issue its written report and recommendation on April 21, 2003. Thus, how could
petitioners have appealed the BACs recommendation or report to the head of the
procuring entity (the chairman of Comelec), when the Comelec en banc had already
approved the award of the contract to MPC even before petitioners learned of the
BAC recommendation?
227
 It is claimed[25] by Comelec that during its April 15, 2003 session, it received and
approved the verbal report and recommendation of the BAC for the award of the
Contract to MPC, and that the BAC subsequently re-affirmed its verbal report and
recommendation by submitting it in writing on April 21, 2003. Respondents insist that
the law does not require that the BAC Report be in writing before Comelec can act
thereon; therefore, there is allegedly nothing irregular about the Report as well as the
en banc Resolution.
However, it is obvious that petitioners could have appealed the BACs report and
recommendation to the head of the procuring entity (the Comelec chair) only upon
their discovery thereof, which at the very earliest would have been on April 21, 2003,
when the BAC actually put its report in writing and finally released it. Even then, what
would have been the use of protesting/appealing the report to the Comelec chair,
when by that time the Commission en banc (including the chairman himself) had
already approved the BAC Report and awarded the Contract to MPC?
And even assuming arguendo that petitioners had somehow gotten wind of the
verbal BAC report on April 15, 2003 (immediately after the en banc session), at that
point the Commission en banc had already given its approval to the BAC Report
along with the award to MPC. To put it bluntly, the Comelec en banc itself made it
legally impossible for petitioners to avail themselves of the administrative remedy that
the Commission is so impiously harping on. There is no doubt that they had not been
accorded the opportunity to avail themselves of the process provided under Section
55 of RA 9184, according to which a protest against a decision of the BAC may be
filed with the head of the procuring entity. Nemo tenetur ad impossible,[26] to borrow
private respondents favorite Latin excuse.[27]
Some Observations on the
BAC Report to the Comelec
We shall return to this issue of alleged prematurity shortly, but at this interstice,
we would just want to put forward a few observations regarding the BAC Report and
the Comelec en bancs approval thereof.
First, Comelec contends that there was nothing unusual about the fact that the
Report submitted by the BAC came only after the former had already awarded the
Contract, because the latter had been asked to render its report and recommendation
orally during the Commissions en banc session on April 15, 2003. Accordingly,
Comelec supposedly acted upon such oral recommendation and approved the award
to MPC on the same day, following which the recommendation was subsequently
reduced into writing on April 21, 2003. While not entirely outside the realm of the
possible, this interesting and unique spiel does not speak well of the process that
Comelec supposedly went through in making a critical decision with respect to a
multi-billion-peso contract.
We can imagine that anyone else standing in the shoes of the Honorable
Commissioners would have been extremely conscious of the overarching need for
utter transparency. They would have scrupulously avoided the slightest hint of
impropriety, preferring to maintain an exacting regularity in the performance of their
duties, instead of trying to break a speed record in the award of multi-billion-peso
contracts. After all, between April 15 and April 21 were a mere six (6) days. Could
Comelec not have waited out six more days for the written report of the BAC, instead
of rushing pell-mell into the arms of MPC? Certainly, respondents never cared to
explain the nature of the Commissions dire need to act immediately without awaiting
the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the uncommon dispatch with
which Comelec acted to approve the multi-billion-peso deal, with its claim of having
been impelled by only the purest and most noble of motives.
At any rate, as will be discussed later on, several other factors combine to
lend negative credence to Comelecs tale.
Second, without necessarily ascribing any premature malice or premeditation on
the part of the Comelec officials involved, it should nevertheless be conceded that this
cart-before-the-horse maneuver (awarding of the Contract ahead of the BACs written
report) would definitely serve as a clever and effective way of averting and frustrating
any impending protest under Section 55.
Having made the foregoing observations, we now go back to the question of
exhausting administrative remedies. Respondents may not have realized it, but the
letter addressed to Chairman Benjamin Abalos Sr. dated May 29, 2003 [28] serves to
eliminate the prematurity issue as it was an actual written protest against the decision
of the poll body to award the Contract. The letter was signed by/for, inter alia, two of
herein petitioners: the Information Technology Foundation of the Philippines,
represented by its president, Alfredo M. Torres; and Ma. Corazon Akol.
Such letter-protest is sufficient compliance with the requirement to exhaust
administrative remedies particularly because it hews closely to the procedure outlined
in Section 55 of RA 9184.
And even without that May 29, 2003 letter-protest, the Court still holds that
petitioners need not exhaust administrative remedies in the light of Paat v. Court of
Appeals.[29] Paat enumerates the instances when the rule on exhaustion of
administrative remedies may be disregarded, as follows:
(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.
[30]
228
 The present controversy precisely falls within the exceptions listed as Nos. 7, 10
and 11: (7) when to require exhaustion of administrative remedies would be
unreasonable; (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. As already stated, Comelec itself made the exhaustion of administrative
remedies legally impossible or, at the very least, unreasonable.
In any event, the peculiar circumstances surrounding the unconventional
rendition of the BAC Report and the precipitate awarding of the Contract by the
Comelec en banc -- plus the fact that it was racing to have its Contract with MPC
implemented in time for the elections in May 2004 (barely four months away) -- have
combined to bring about the urgent need for judicial intervention, thus prompting this
Court to dispense with the procedural exhaustion of administrative remedies in this
case.
Main Substantive Issue:
Validity of the Award to MPC
We come now to the meat of the controversy. Petitioners contend that the award
is invalid, since Comelec gravely abused its discretion when it did the following:
1. Awarded the Contract to MPC though it did not even participate in the bidding
2. Allowed MPEI to participate in the bidding despite its failure to meet the
mandatory eligibility requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite
the issuance by the BAC of its Report, which formed the basis of the assailed
Resolution, only on April 21, 2003[31]
4. Awarded the Contract, notwithstanding the fact that during the bidding
process, there were violations of the mandatory requirements of RA 8436 as well as
those set forth in Comelecs own Request for Proposal on the automated election
system
5. Refused to declare a failed bidding and to conduct a re-bidding despite the
failure of the bidders to pass the technical tests conducted by the Department of
Science and Technology
6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding
for the automated counting machines
After reviewing the slew of pleadings as well as the matters raised during the
Oral Argument, the Court deems it sufficient to focus discussion on the
following major areas of concern that impinge on the issue of grave abuse of
discretion:
A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder
B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests
C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and
their effect on the present controversy
A.
Failure to Establish the Identity,
Existence and Eligibility of the
Alleged Consortium as a Bidder
On the question of the identity and the existence of the real bidder, respondents
insist that, contrary to petitioners allegations, the bidder was not Mega Pacific
eSolutions, Inc. (MPEI), which was incorporated only on February 27, 2003, or 11
days prior to the bidding itself. Rather, the bidder was Mega Pacific Consortium
(MPC), of which MPEI was but a part. As proof thereof, they point to the March 7,
2003 letter of intent to bid, signed by the president of MPEI allegedly for and on
behalf of MPC.They also call attention to the official receipt issued to MPC,
acknowledging payment for the bidding documents, as proof that it was the
consortium that participated in the bidding process.
We do not agree. The March 7, 2003 letter, signed by only one signatory -- Willy
U. Yu, President, Mega Pacific eSolutions, Inc., (Lead Company/ Proponent) For:
Mega Pacific Consortium -- and without any further proof, does not by itself prove the
existence of the consortium. It does not show that MPEI or its president have been
duly pre-authorized by the other members of the putative consortium to represent
them, to bid on their collective behalf and, more important, to commit them jointly and
severally to the bid undertakings. The letter is purely self-serving and uncorroborated.
Neither does an official receipt issued to MPC, acknowledging payment for the
bidding documents, constitute proof that it was the purported consortium that
participated in the bidding. Such receipts are issued by cashiers without any legally
sufficient inquiry as to the real identity or existence of the supposed payor.
To assure itself properly of the due existence (as well as eligibility and
qualification) of the putative consortium, Comelecs BAC should have examined the
bidding documents submitted on behalf of MPC. They would have easily discovered
the following fatal flaws.
Two-Envelope,
Two-Stage System
As stated earlier in our factual presentation, the public bidding system designed
by Comelec under its RFP (Request for Proposal for the Automation of the 2004
Election) mandated the use of a two-envelope, two-stage system. A bidders first
envelope (Eligibility Envelope) was meant to establish its eligibility to bid and its
qualifications and capacity to perform the contract if its bid was accepted, while
the second envelope would be the Bid Envelope itself.
The Eligibility Envelope was to contain legal documents such as articles of
incorporation, business registrations, licenses and permits, mayors permit, VAT
certification, and so forth; technical documents containing documentary evidence to
establish the track record of the bidder and its technical and production capabilities to
perform the contract; and financial documents, including audited financial statements
for the last three years, to establish the bidders financial capacity.
229
 In the case of a consortium or joint venture desirous of participating in the
bidding, it goes without saying that the Eligibility Envelope would necessarily have to
include a copy of the joint venture agreement, the consortium agreement or
memorandum of agreement -- or a business plan or some other instrument of similar
import -- establishing the due existence, composition and scope of such
aggrupation. Otherwise, how would Comelec know who it was dealing with, and
whether these parties are qualified and capable of delivering the products and
services being offered for bidding?[32]
In the instant case, no such instrument was submitted to Comelec during the
bidding process. This fact can be conclusively ascertained by scrutinizing the two-
inch thick Eligibility Requirements file submitted by Comelec last October 9, 2003, in
partial compliance with this Courts instructions given during the Oral Argument. This
file purports to replicate the eligibility documents originally submitted to Comelec by
MPEI allegedly on behalf of MPC, in connection with the bidding conducted in March
2003. Included in the file are the incorporation papers and financial statements of the
members of the supposed consortium and certain certificates, licenses and permits
issued to them.
However, there is no sign whatsoever of any joint venture agreement,
consortium agreement, memorandum of agreement, or business plan executed
among the members of the purported consortium.
The only logical conclusion is that no such agreement was ever submitted to the
Comelec for its consideration, as part of the bidding process.
It thus follows that, prior the award of the Contract, there was no documentary or
other basis for Comelec to conclude that a consortium had actually been formed
amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT.[33] Neither
was there anything to indicate the exact relationships between and among these
firms; their diverse roles, undertakings and prestations, if any, relative to the
prosecution of the project, the extent of their respective investments (if any) in the
supposed consortium or in the project; and the precise nature and extent of their
respective liabilities with respect to the contract being offered for bidding. And apart
from the self-serving letter of March 7, 2003, there was not even any indication that
MPEI was the lead company duly authorized to act on behalf of the others.
So, it necessarily follows that, during the bidding process, Comelec had no basis
at all for determining that the alleged consortium really existed and was eligible and
qualified; and that the arrangements among the members were satisfactory and
sufficient to ensure delivery on the Contract and to protect the governments interest.
Notwithstanding such deficiencies, Comelec still deemed the consortium eligible
to participate in the bidding, proceeded to open its Second Envelope, and eventually
awarded the bid to it, even though -- per the Comelecs own RFP -- the BAC should
have declared the MPC ineligible to bid and returned the Second (Bid) Envelope
unopened.
Inasmuch as Comelec should not have considered MPEI et al. as comprising a
consortium or joint venture, it should not have allowed them to avail themselves of the
provision in Section 5.4 (b) (i) of the IRR for RA 6957 (the Build-Operate-Transfer
Law), as amended by RA 7718. This provision states in part that a joint
venture/consortium proponent shall be evaluated based on the individual or collective
experience of the member-firms of the joint venture or consortium and of the
contractor(s) that it has engaged for the project. Parenthetically, respondents have
uniformly argued that the said IRR of RA 6957, as amended, have suppletory
application to the instant case.
Hence, had the proponent MPEI been evaluated based solely on its own
experience, financial and operational track record or lack thereof, it would surely not
have qualified and would have been immediately considered ineligible to bid, as
respondents readily admit.
At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily
failing to observe its own rules, policies and guidelines with respect to the bidding
process, thereby negating a fair, honest and competitive bidding.
Commissioners Not
Aware of Consortium
In this regard, the Court is beguiled by the statements of Commissioner
Florentino Tuason Jr., given in open court during the Oral Argument last October 7,
2003. The good commissioner affirmed that he was aware, of his own personal
knowledge, that there had indeed been a written agreement among the consortium
members,[34]although it was an internal matter among them, [35] and of the fact that it
would be presented by counsel for private respondent.[36]
However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice
Jose C. Vitug, Commissioner Tuason in effect admitted that, while he was the
commissioner-in-charge of Comelecs Legal Department, he had never seen, even up
to that late date, the agreement he spoke of.[37] Under further questioning, he was
likewise unable to provide any information regarding the amounts invested into the
project by several members of the claimed consortium. [38] A short while later, he
admitted that the Commission had not taken a look at the agreement (if any).[39]
He tried to justify his position by claiming that he was not a member of the
BAC. Neither was he the commissioner-in-charge of the Phase II Modernization
project (the automated election system); but that, in any case, the BAC and the
Phase II Modernization Project Team did look into the aspect of the composition of
the consortium.
It seems to the Court, though, that even if the BAC or the Phase II Team had
taken charge of evaluating the eligibility, qualifications and credentials of the
consortium-bidder, still, in all probability, the former would have referred the task to
Commissioner Tuason, head of Comelecs Legal Department. That task was the
appreciation and evaluation of the legal effects and consequences of the terms,
conditions, stipulations and covenants contained in any joint venture agreement,
consortium agreement or a similar document -- assuming of course that any of these
was available at the time. The fact that Commissioner Tuason was barely aware of
the situation bespeaks the complete absence of such document, or the utter failure or
neglect of the Comelec to examine it -- assuming it was available at all -- at the time
the award was made on April 15, 2003.
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 In any event, the Court notes for the record that Commissioner Tuason basically
contradicted his statements in open court about there being one written agreement
among all the consortium members, when he subsequently referred [40] to the four (4)
Memoranda of Agreement (MOAs) executed by them.[41]
At this juncture, one might ask: What, then, if there are four MOAs instead of
one or none at all? Isnt it enough that there are these corporations coming together to
carry out the automation project? Isnt it true, as respondent aver, that nowhere in the
RFP issued by Comelec is it required that the members of the joint venture execute a
single written agreement to prove the existence of a joint venture. Indeed, the
intention to be jointly and severally liable may be evidenced not only by a single joint
venture agreement, but also by supplementary documents executed by the parties
signifying such intention. What then is the big deal?
The problem is not that there are four agreements instead of only one. The
problem is that Comelec never bothered to check. It never based its decision on
documents or other proof that would concretely establish the existence of the claimed
consortium or joint venture or agglomeration. It relied merely on the self-serving
representation in an uncorroborated letter signed by only one individual, claiming that
his company represented a consortium of several different corporations. It concluded
forthwith that a consortium indeed existed, composed of such and such members,
and thereafter declared that the entity was eligible to bid.
True, copies of financial statements and incorporation papers of the alleged
consortium members were submitted. But these papers did not establish the
existence of a consortium, as they could have been provided by the companies
concerned for purposes other than to prove that they were part of a consortium or
joint venture. For instance, the papers may have been intended to show that those
companies were each qualified to be a sub-contractor (and nothing more) in a major
project. Those documents did not by themselves support the assumption that a
consortium or joint venture existed among the companies.
In brief, despite the absence of competent proof as to the existence and
eligibility of the alleged consortium (MPC), its capacity to deliver on the Contract, and
the members joint and several liability therefor, Comelec nevertheless assumed that
such consortium existed and was eligible. It then went ahead and considered the bid
of MPC, to which the Contract was eventually awarded, in gross violation of the
formers own bidding rules and procedures contained in its RFP. Therein lies
Comelecs grave abuse of discretion.
Sufficiency of the
Four Agreements
Instead of one multilateral agreement executed by, and effective and binding on,
all the five consortium members -- as earlier claimed by Commissioner Tuason in
open court -- it turns out that what was actually executed were four (4) separate and
distinct bilateral Agreements.[42] Obviously, Comelec was furnished copies of these
Agreements only after the bidding process had been terminated, as these were not
included in the Eligibility Documents. These Agreements are as follows:
A Memorandum of Agreement between MPEI and SK C&C
A Memorandum of Agreement between MPEI and WeSolv
A Teaming Agreement between MPEI and Election.com Ltd.
A Teaming Agreement between MPEI and ePLDT.
In sum, each of the four different and separate bilateral Agreements is valid and
binding only between MPEI and the other contracting party, leaving the other
consortium members total strangers thereto. Under this setup, MPEI
dealt separately with each of the members, and the latter (WeSolv, SK C&C,
Election.com, and ePLDT) in turn had nothing to do with one another, each dealing
only with MPEI.
Respondents assert that these four Agreements were sufficient for the purpose
of enabling the corporations to still qualify (even at that late stage) as a consortium or
joint venture, since the first two Agreements had allegedly set forth the joint and
several undertakings among the parties, whereas the latter two clarified the parties
respective roles with regard to the Project, with MPEI being the independent
contractor and Election.com and ePLDT the subcontractors.
Additionally, the use of the phrase particular contract in the Comelecs Request
for Proposal (RFP), in connection with the joint and several liabilities of companies in
a joint venture, is taken by them to mean that all the members of the joint venture
need not be solidarily liable for the entire project or joint venture, because it is
sufficient that the lead company and the member in charge of a particular contract or
aspect of the joint venture agree to be solidarily liable.
At this point, it must be stressed most vigorously that the submission of the four
bilateral Agreements to Comelec after the end of the bidding process did nothing to
eliminate the grave abuse of discretion it had already committed on April 15, 2003.
Deficiencies Have
Not Been Cured
In any event, it is also claimed that the automation Contract awarded by
Comelec incorporates all documents executed by the consortium members, even if
these documents are not referred to therein. The basis of this assertion appears to be
the passages from Section 1.4 of the Contract, which is reproduced as follows:
All Contract Documents shall form part of the Contract even if they or any one of them is not
referred to or mentioned in the Contract as forming a part thereof. Each of the Contract
Documents shall be mutually complementary and explanatory of each other such that what is
noted in one although not shown in the other shall be considered contained in all, and what is
required by any one shall be as binding as if required by all, unless one item is a correction of
the other.
The intent of the Contract Documents is the proper, satisfactory and timely execution and
completion of the Project, in accordance with the Contract Documents. Consequently, all
items necessary for the proper and timely execution and completion of the Project shall be
deemed included in the Contract.
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 Thus, it is argued that whatever perceived deficiencies there were in the
supplementary contracts -- those entered into by MPEI and the other members of the
consortium as regards their joint and several undertakings -- have been cured. Better
still, such deficiencies have supposedly been prevented from arising as a result of the
above-quoted provisions, from which it can be immediately established that each of
the members of MPC assumes the same joint and several liability as the other
members.
The foregoing argument is unpersuasive. First, the contract being referred to,
entitled The Automated Counting and Canvassing Project Contract, is between
Comelec and MPEI, not the alleged consortium, MPC. To repeat, it is MPEI -- not
MPC -- that is a party to the Contract. Nowhere in that Contract is there any mention
of a consortium or joint venture, of members thereof, much less of joint and several
liability. Supposedly executed sometime in May 2003,[43] the Contract bears a
notarization date of June 30, 2003, and contains the signature of Willy U. Yu signing
as president of MPEI (not for and on behalf of MPC), along with that of the Comelec
chair. It provides in Section 3.2 that MPEI (not MPC) is to supply the Equipment and
perform the Services under the Contract, in accordance with the appendices thereof;
nothing whatsoever is said about any consortium or joint venture or partnership.
Second, the portions of Section 1.4 of the Contract reproduced above
do not have the effect of curing (much less preventing) deficiencies in the bilateral
agreements entered into by MPEI with the other members of the consortium, with
respect to their joint and several liabilities. The term Contract Documents, as used in
the quoted passages of Section 1.4, has a well-defined meaning and actually refers
only to the following documents:
The Contract itself along with its appendices
The Request for Proposal (also known as Terms of Reference) issued
by the Comelec, including the Tender Inquiries and Bid Bulletins
The Tender Proposal submitted by MPEI
In other words, the term Contract Documents cannot be understood as referring
to or including the MOAs and the Teaming Agreements entered into by MPEI with SK
C&C, WeSolv, Election.com and ePLDT. This much is very clear and admits of no
debate. The attempt to use the provisions of Section 1.4 to shore up the MOAs and
the Teaming Agreements is simply unwarranted.
Third and last, we fail to see how respondents can arrive at the conclusion that,
from the above-quoted provisions, it can be immediately established that each of the
members of MPC assumes the same joint and several liability as the other
members. Earlier, respondents claimed exactly the opposite -- that the two MOAs
(between MPEI and SK C&C, and between MPEI and WeSolv) had set forth the joint
and several undertakings among the parties; whereas the two Teaming
Agreements clarified the parties respective roles with regard to the Project, with MPEI
being the independent contractor and Election.com and ePLDT the subcontractors.
Obviously, given the differences in their relationships, their respective liabilities
cannot be the same. Precisely, the very clear terms and stipulations contained in the
MOAs and the Teaming Agreements -- entered into by MPEI with SK C&C, WeSolv,
Election.com and ePLDT -- negate the idea that these members are on a par with one
another and are, as such, assuming the same joint and several liability.
Moreover, respondents have earlier seized upon the use of the term particular
contract in the Comelecs Request for Proposal (RFP), in order to argue that all the
members of the joint venture did not need to be solidarily liable for the entire
project or joint venture. It was sufficient that the lead company and the member in
charge of a particular contract or aspect of the joint venture would agree to be
solidarily liable. The glaring lack of consistency leaves us at a loss. Are respondents
trying to establish the same joint and solidary liability among all the members or not?
Enforcement of
Liabilities Problematic
Next, it is also maintained that the automation Contract between Comelec and
the MPEI confirms the solidary undertaking of the lead company and the consortium
member concerned for each particular Contract, inasmuch as the position of MPEI
and anyone else performing the services contemplated under the Contract is
described therein as that of an independent contractor.
The Court does not see, however, how this conclusion was arrived at. In the first
place, the contractual provision being relied upon by respondents is Article 14,
Independent Contractors, which states: Nothing contained herein shall be construed
as establishing or creating between the COMELEC and MEGA the relationship of
employee and employer or principal and agent, it being understood that the position
of MEGA and of anyone performing the Services contemplated under this Contract, is
that of an independent contractor.
Obviously, the intent behind the provision was simply to avoid the creation of an
employer-employee or a principal-agent relationship and the complications that it
would produce. Hence, the Article states that the role or position of MPEI, or anyone
else performing on its behalf, is that of an independent contractor. It is obvious to the
Court that respondents are stretching matters too far when they claim that, because
of this provision, the Contract in effect confirms the solidary undertaking of the lead
company and the consortium member concerned for the particular phase of the
project. This assertion is an absolute non sequitur.
Enforcement of Liabilities
Under the Civil Code Not Possible
In any event, it is claimed that Comelec may still enforce the liability of the
consortium members under the Civil Code provisions on partnership, reasoning that
MPEI et al. represented themselves as partners and members of MPC for purposes
of bidding for the Project. They are, therefore, liable to the Comelec to the extent that
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the latter relied upon such representation. Their liability as partners is solidary with
respect to everything chargeable to the partnership under certain conditions.
The Court has two points to make with respect to this argument. First, it must be
recalled that SK C&C, WeSolv, Election.com and ePLDT never represented
themselves as partners and members of MPC, whether for purposes of bidding or for
something else. It was MPEI alone that represented them to be members of a
consortium it supposedly headed. Thus, its acts may not necessarily be held against
the other members.
Second, this argument of the OSG in its Memorandum[44] might possibly apply in
the absence of a joint venture agreement or some other writing that discloses the
relationship of the members with one another. But precisely, this case does not deal
with a situation in which there is nothing in writing to serve as reference, leaving
Comelec to rely on mere representations and therefore justifying a falling back on the
rules on partnership. For, again, the terms and stipulations of the MOAs entered into
by MPEI with SK C&C and WeSolv, as well as the Teaming Agreements of MPEI with
Election.com and ePLDT (copies of which have been furnished the Comelec) are very
clear with respect to the extent and the limitations of the firms respective liabilities.
In the case of WeSolv and SK C&C, their MOAs state that their liabilities, while
joint and several with MPEI, are limited only to the particular areas of work wherein
their services are engaged or their products utilized. As for Election.com and ePLDT,
their separate Teaming Agreements specifically ascribe to them the role of
subcontractor vis--vis MPEI as contractor and, based on the terms of their particular
agreements, neither Election.com nor ePLDT is, with MPEI, jointly and severally
liable to Comelec.[45] It follows then that in the instant case, there is no justification for
anyone, much less Comelec, to resort to the rules on partnership and partners
liabilities.
Eligibility of a Consortium
Based on the Collective
Qualifications of Its Members
Respondents declare that, for purposes of assessing the eligibility of the bidder,
the members of MPC should be evaluated on a collective basis. Therefore, they
contend, the failure of MPEI to submit financial statements (on account of its recent
incorporation) should not by itself disqualify MPC, since the other members of the
consortium could meet the criteria set out in the RFP.
Thus, according to respondents, the collective nature of the undertaking of the
members of MPC, their contribution of assets and sharing of risks, and the community
of their interest in the performance of the Contract lead to these reasonable
conclusions: (1) that their collective qualifications should be the basis for evaluating
their eligibility; (2) that the sheer enormity of the project renders it improbable to
expect any single entity to be able to comply with all the eligibility requirements and
undertake the project by itself; and (3) that, as argued by the OSG, the RFP allows
bids from manufacturers, suppliers and/or distributors that have formed themselves
into a joint venture, in recognition of the virtual impossibility of a single entitys ability
to respond to the Invitation to Bid.
Additionally, argues the Comelec, the Implementing Rules and Regulations of
RA 6957 (the Build-Operate-Transfer Law) as amended by RA 7718 would be
applicable, as proponents of BOT projects usually form joint ventures or
consortiums. Under the IRR, a joint venture/consortium proponent shall be evaluated
based on the individual or the collective experience of the member-firms of the joint
venture/consortium and of the contractors the proponent has engaged for the project.
Unfortunately, this argument seems to assume that the collective nature of the
undertaking of the members of MPC, their contribution of assets and sharing of risks,
and the community of their interest in the performance of the Contract entitle MPC to
be treated as a joint venture or consortium; and to be evaluated accordingly on the
basis of the members collective qualifications when, in fact, the evidence before the
Court suggest otherwise.
This Court in Kilosbayan v. Guingona[46] defined joint venture as an association
of persons or companies jointly undertaking some commercial enterprise; generally,
all contribute assets and share risks. It requires a community of interest in the
performance of the subject matter, a right to direct and govern the policy in
connection therewith, and [a] duty, which may be altered by agreement to share both
in profit and losses.
Going back to the instant case, it should be recalled that the automation
Contract with Comelec was not executed by the consortium MPC -- or by MPEI for
and on behalf of MPC -- but by MPEI, period. The said Contract contains no mention
whatsoever of any consortium or members thereof. This fact alone seems to
contradict all the suppositions about a joint undertaking that would normally apply to a
joint venture or consortium: that it is a commercial enterprise involving a community of
interest, a sharing of risks, profits and losses, and so on.
Now let us consider the four bilateral Agreements, starting with the
Memorandum of Agreement between MPEI and WeSolv Open Computing, Inc., dated
March 5, 2003. The body of the MOA consists of just seven (7) short paragraphs that
would easily fit in one page. It reads as follows:
1. The parties agree to cooperate in successfully implementing the Project in the substance and
form as may be most beneficial to both parties and other subcontractors involved in the
Project.
2. Mega Pacific shall be responsible for any contract negotiations and signing with the
COMELEC and, subject to the latters approval, agrees to give WeSolv an opportunity to be
present at meetings with the COMELEC concerning WeSolvs portion of the Project.
3. WeSolv shall be jointly and severally liable with Mega Pacific only for the particular
products and/or services supplied by the former for the Project.
4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise
agreed upon by the parties.
5. The parties undertake to do all acts and such other things incidental to, necessary or
desirable or the attainment of the objectives and purposes of this Agreement.
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6. In the event that the parties fail to agree on the terms and conditions of the supply of the
products and services including but not limited to the scope of the products and services to be
supplied and payment terms, WeSolv shall cease to be bound by its obligations stated in the
aforementioned paragraphs.
7. Any dispute arising from this Agreement shall be settled amicably by the parties whenever
possible. Should the parties be unable to do so, the parties hereby agree to settle their dispute
through arbitration in accordance with the existing laws of the Republic of the Philippines.
(Underscoring supplied.)
Even shorter is the Memorandum of Agreement between MPEI and SK C&C Co.
Ltd., dated March 9, 2003, the body of which consists of only six (6) paragraphs,
which we quote:
1. All parties agree to cooperate in achieving the Consortiums objective of successfully
implementing the Project in the substance and form as may be most beneficial to the
Consortium members and in accordance w/ the demand of the RFP.
2. Mega Pacific shall have full powers and authority to represent the Consortium with the
Comelec, and to enter and sign, for and in behalf of its members any and all agreement/s
which maybe required in the implementation of the Project.
3. Each of the individual members of the Consortium shall be jointly and severally liable with
the Lead Firm for the particular products and/or services supplied by such individual member
for the project, in accordance with their respective undertaking or sphere of responsibility.
4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise
agreed upon by the parties.
5. The parties undertake to do all acts and such other things incidental to, necessary or
desirable for the attainment of the objectives and purposes of this Agreement.
6. Any dispute arising from this Agreement shall be settled amicably by the parties whenever
possible. Should the parties be unable to do so, the parties hereby agree to settle their dispute
through arbitration in accordance with the existing laws of the Republic of the Philippines.
(Underscoring supplied.)
It will be noted that the two Agreements quoted above are very similar in
wording. Neither of them contains any specifics or details as to the exact nature and
scope of the parties respective undertakings, performances and deliverables under
the Agreement with respect to the automation project. Likewise, the two Agreements
are quite bereft of pesos-and-centavos data as to the amount of investments each
party contributes, its respective share in the revenues and/or profit from the Contract
with Comelec, and so forth -- all of which are normal for agreements of this
nature. Yet, according to public and private respondents, the participation of MPEI,
WeSolv and SK C&C comprises fully 90 percent of the entire undertaking with respect
to the election automation project, which is worth about P1.3 billion.
As for Election.com and ePLDT, the separate Teaming Agreements they entered
into with MPEI for the remaining 10 percent of the entire project undertaking are
ironically much longer and more detailed than the MOAs discussed earlier. Although
specifically ascribing to them the role of subcontractor vis--vis MPEI as contractor,
these Agreements are, however, completely devoid of any pricing data or payment
terms. Even the appended Schedules supposedly containing prices of goods and
services are shorn of any price data. Again, as mentioned earlier, based on the terms
of their particular Agreements, neither Election.com nor ePLDT -- with MPEI -- is
jointly and severally liable to Comelec.
It is difficult to imagine how these bare Agreements -- especially the first two --
could be implemented in practice; and how a dispute between the parties or a claim
by Comelec against them, for instance, could be resolved without lengthy and
debilitating litigations. Absent any clear-cut statement as to the exact nature and
scope of the parties respective undertakings, commitments, deliverables and
covenants, one party or another can easily dodge its obligation and deny or contest
its liability under the Agreement; or claim that it is the other party that should have
delivered but failed to
2
1. Does the machine have an accuracy rating of at least 99.995 percent
At COLD environmental condition
At NORMAL environmental conditions
At HARSH environmental conditions
2. Accurately records and reports the date and time of the start and end of counting of ballots per precinct?
3. Prints election returns without any loss of date during generation of such reports?
4. Uninterruptible back-up power system, that will engage immediately to allow operation of at least 10 minutes after outage, power surge or abnormal electrical occurrences?
5. Machine reads two-sided ballots in one pass?
6. Machine can detect previously counted ballots and prevent previously counted ballots from being counted more than once?
7. Stores results of counted votes by precinct in external (removable) storage device?
8. Data stored in external media is encrypted?
9. Physical key or similar device allows, limits, or restricts operation of the machine?
10. CPU speed is at least 400mHz?
11. Port to allow use of dot-matrix printers?
12. Generates printouts of the election returns in a format specified by the COMELEC?
Generates printouts
In format specified by COMELEC
13. Prints election returns without any loss of data during generation of such report?
14. Generates an audit trail of the counting machine, both hard copy and soft copy?
Hard copy
Soft copy
15. Does the City/Municipal Canvassing System consolidate results from all precincts within it using the encrypted soft copy of the data generated by the counting machine and stored on the removable data storage device?
16. Does the City/Municipal Canvassing System consolidate results from all precincts within it using the encrypted soft copy of the data generated by the counting machine and transmitted through an electronic transmission media?
17. Does the system output a Zero City/Municipal Canvass Report, which is printed on election day prior to the conduct of the actual canvass operation, that shows that all totals for all the votes for all the candidates and other information, are indeed zero or null?
18. Does the system consolidate results from all precincts in the city/municipality using the data storage device coming from the counting machine?
234
 19. Is the machine 100% accurate?

20. Is the Program able to detect previously downloaded precinct results and prevent these from being inputted again into the System?
21. The System is able to print the specified reports and the audit trail without any loss of data during generation of the above-mentioned reports?
Prints specified reports
Audit Trail

22. Can the result of the city/municipal consolidation be stored in a data storage device?

23. Does the system consolidate results from all precincts in the provincial/district/ national using the data storage device from different levels of consolidation?

24. Is the system 100% accurate?

25. Is the Program able to detect previously downloaded precinct results and prevent these from being inputted again into the System?

26. The System is able to print the specified reports and the audit trail without any loss of data during generation of the abovementioned reports?

Prints specified reports

Audit Trail

27. Can the results of the provincial/district/national consolidation be stored in a data storage device?

Likewise, in the absence of definite indicators as to the amount of investments deemed it necessary for MPC members to comply with Section 5.4 (a) (iii) of the IRR
to be contributed by each party, disbursements for expenses, the parties respective for RA 6957 as amended.
shares in the profits and the like, it seems to the Court that this situation could readily
give rise to all kinds of misunderstandings and disagreements over money matters. According to the aforementioned provision, if the project proponent is a joint
venture or consortium, the members or participants thereof are required to submit a
Under such a scenario, it will be extremely difficult for Comelec to enforce the sworn statement that, if awarded the contract, they shall bind themselves to be jointly,
supposed joint and several liabilities of the members of the consortium. The Court is severally and solidarily liable for the project proponents obligations thereunder. This
not even mentioning the possibility of a situation arising from a failure of WeSolv and provision was supposed to mirror Section 5 of RA 6957, as amended, which states: In
MPEI to agree on the scope, the terms and the conditions for the supply of the all cases, a consortium that participates in a bid must present proof that the members
products and services under the Agreement. In that situation, by virtue of paragraph 6 of the consortium have bound themselves jointly and severally to assume
of its MOA, WeSolv would perforce cease to be bound by its obligations -- including responsibility for any project. The withdrawal of any member of the consortium prior
its joint and solidary liability with MPEI under the MOA -- and could forthwith to the implementation of the project could be a ground for the cancellation of the
disengage from the project. Effectively, WeSolv could at any time unilaterally exit from contract.
its MOA with MPEI by simply failing to agree. Where would that outcome leave MPEI
and Comelec? The Court has certainly not seen any joint and several undertaking by the MPC
members that even approximates the tenor of that which is described above. We fail
To the Court, this strange and beguiling arrangement of MPEI with the other to see why respondents should invoke the IRR if it is for their benefit, but refuse to
companies does not qualify them to be treated as a consortium or joint venture, at comply with it otherwise.
least of the type that government agencies like the Comelec should be dealing
with. With more reason is it unable to agree to the proposal to evaluate the members
of MPC on a collective basis.
B.
In any event, the MPC members claim to be a joint venture/consortium; and DOST Technical Tests Flunked by the
respondents have consistently been arguing that the IRR for RA 6957, as amended, Automated Counting Machines
should be applied to the instant case in order to allow a collective evaluation of
consortium members. Surprisingly, considering these facts, respondents have not

235
 Let us now move to the second subtopic, which deals with the substantive
issue: the ACMs failure to pass the tests of the Department of Science and
Technology (DOST).
After respondent consortium and the other bidder, TIM, had submitted their
respective bids on March 10, 2003, the Comelecs BAC -- through its Technical
Working Group (TWG) and the DOST -- evaluated their technical
proposals. Requirements that were highly technical in nature and that required the
use of certain equipment in the evaluation process were referred to the DOST for
testing. The Department reported thus:
TEST RESULTS MATRIX[47]
[Technical Evaluation of Automated Counting Machine]
According to respondents, it was only after the TWG and the DOST had
conducted their separate tests and submitted their respective reports that the BAC,
on the basis of these reports formulated its comments/recommendations on the bids
of the consortium and TIM.
The BAC, in its Report dated April 21, 2003, recommended that the Phase II
project involving the acquisition of automated counting machines be awarded to
MPEI. It said:
After incisive analysis of the technical reports of the DOST and the Technical Working Group
for Phase II Automated Counting Machine, the BAC considers adaptability to advances in
modern technology to ensure an effective and efficient method, as well as the security and
integrity of the system.
The results of the evaluation conducted by the TWG and that of the DOST (14 April 2003
report), would show the apparent advantage of Mega-Pacific over the other competitor, TIM.
The BAC further noted that both Mega-Pacific and TIM obtained some failed marks in the
technical evaluation. In general, the failed marks of Total Information Management as
enumerated above affect the counting machine itself which are material in nature, constituting
non-compliance to the RFP. On the other hand, the failed marks of Mega-Pacific are mere
formalities on certain documentary requirements which the BAC may waive as clearly
indicated in the Invitation to Bid.
In the DOST test, TIM obtained 12 failed marks and mostly attributed to the counting machine
itself as stated earlier. These are requirements of the RFP and therefore the BAC cannot
disregard the same.
Mega-Pacific failed in 8 items however these are mostly on the software which can be
corrected by reprogramming the software and therefore can be readily corrected.
The BAC verbally inquired from DOST on the status of the retest of the counting machines of
the TIM and was informed that the report will be forthcoming after the holy week. The BAC
was informed that the retest is on a different parameters theyre being two different machines
being tested. One purposely to test if previously read ballots will be read again and the other
for the other features such as two sided ballots.
The said machine and the software therefore may not be considered the same machine and
program as submitted in the Technical proposal and therefore may be considered an
enhancement of the original proposal.
Advance information relayed to the BAC as of 1:40 PM of 15 April 2003 by Executive
Director Ronaldo T. Viloria of DOST is that the result of the test in the two counting machines
of TIM contains substantial errors that may lead to the failure of these machines based on the
specific items of the RFP that DOST has to certify.
OPENING OF FINANCIAL BIDS
The BAC on 15 April 2003, after notifying the concerned bidders opened the financial bids in
their presence and the results were as follows:
Mega-Pacific:
Option 1 Outright purchase: Bid Price of Php1,248,949,088.00
Option 2 Lease option:
70% Down payment of cost of hardware or Php642,755,757.07
Remainder payable over 50 months or a total of Php642,755,757.07
Discount rate of 15% p.a. or 1.2532% per month.
Total Number of Automated Counting Machine 1,769 ACMs (Nationwide)
TIM:
Total Bid Price Php1,297,860,560.00
Total Number of Automated Counting Machine 2,272 ACMs (Mindanao and NCR
only)
Premises considered, it appears that the bid of Mega Pacific is the lowest calculated
responsive bid, and therefore, the Bids and Awards Committee (BAC) recommends that the
Phase II project re Automated Counting Machine be awarded to Mega Pacific eSolutions, Inc.
[48]
The BAC, however, also stated on page 4 of its Report: Based on the 14 April
2003 report (Table 6) of the DOST, it appears that both Mega-Pacific and TIM (Total
Information Management Corporation) failed to meet some of the
requirements. Below is a comparative presentation of the requirements wherein
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Mega-Pacific or TIM or both of them failed: x x x. What followed was a list of key
requirements, referring to technical requirements, and an indication of which of the
two bidders had failed to meet them.
Failure to Meet the
Required Accuracy Rating
The first of the key requirements was that the counting machines were to have
an accuracy rating of at least 99.9995 percent. The BAC Report indicates that both
Mega Pacific and TIM failed to meet this standard.
The key requirement of accuracy rating happens to be part and parcel of the
Comelecs Request for Proposal (RFP). The RFP, on page 26, even states that the
ballot counting machines and ballot counting software must have an accuracy rating
of 99.9995% (not merely 99.995%) or better as certified by a reliable independent
testing agency.
When questioned on this matter during the Oral Argument, Commissioner Borra
tried to wash his hands by claiming that the required accuracy rating of 99.9995
percent had been set by a private sector group in tandem with Comelec. He added
that the Commission had merely adopted the accuracy rating as part of the groups
recommended bid requirements, which it had not bothered to amend even after being
advised by DOST that such standard was unachievable. This excuse, however, does
not in any way lessen Comelecs responsibility to adhere to its own published bidding
rules, as well as to see to it that the consortium indeed meets the accuracy
standard.Whichever accuracy rating is the right standard -- whether 99.995 or
99.9995 percent -- the fact remains that the machines of the so-called consortium
failed to even reach the lesser of the two. On this basis alone, it ought to have been
disqualified and its bid rejected outright.
At this point, the Court stresses that the essence of public bidding is violated by
the practice of requiring very high standards or unrealistic specifications that cannot
be met -- like the 99.9995 percent accuracy rating in this case -- only to water them
down after the bid has been award. Such scheme, which discourages the entry of
prospective bona fide bidders, is in fact a sure indication of fraud in the bidding,
designed to eliminate fair competition. Certainly, if no bidder meets the mandatory
requirements, standards or specifications, then no award should be made and a failed
bidding declared.
Failure of Software to Detect
Previously Downloaded Data
Furthermore, on page 6 of the BAC Report, it appears that the consortium as
well as TIM failed to meet another key requirement -- for the counting machines
software program to be able to detect previously downloaded precinct results
and to prevent these from being entered again into the counting machine. This
same deficiency on the part of both bidders reappears on page 7 of the BAC Report,
as a result of the recurrence of their failure to meet the said key requirement.
That the ability to detect previously downloaded data at different canvassing or
consolidation levels is deemed of utmost importance can be seen from the fact that it
is repeated three times in the RFP. On page 30 thereof, we find the requirement that
the city/municipal canvassing system software must be able to detect previously
downloaded precinct results and prevent these from being inputted again into the
system. Again, on page 32 of the RFP, we read that the provincial/district canvassing
system software must be able to detect previously downloaded city/municipal results
and prevent these from being inputted again into the system. And once more, on
page 35 of the RFP, we find the requirement that the national canvassing system
software must be able to detect previously downloaded provincial/district results and
prevent these from being inputted again into the system.
Once again, though, Comelec chose to ignore this crucial deficiency, which
should have been a cause for the gravest concern. Come May 2004, unscrupulous
persons may take advantage of and exploit such deficiency by repeatedly
downloading and feeding into the computers results favorable to a particular
candidate or candidates. We are thus confronted with the grim prospect of
election fraud on a massive scale by means of just a few key strokes. The
marvels and woes of the electronic age!
Inability to Print
the Audit Trail
But that grim prospect is not all. The BAC Report, on pages 6 and 7, indicate
that the ACMs of both bidders were unable to print the audit trail without any loss of
data. In the case of MPC, the audit trail system was not yet incorporated into its
ACMs.
This particular deficiency is significant, not only to this bidding but to the cause
of free and credible elections. The purpose of requiring audit trails is to enable
Comelec to trace and verify the identities of the ACM operators responsible for data
entry and downloading, as well as the times when the various data were downloaded
into the canvassing system, in order to forestall fraud and to identify the perpetrators.
Thus, the RFP on page 27 states that the ballot counting machines and ballot
counting software must print an audit trail of all machine operations for documentation
and verification purposes. Furthermore, the audit trail must be stored on the internal
storage device and be available on demand for future printing and verifying. On
pages 30-31, the RFP also requires that the city/municipal canvassing
system software be able to print an audit trail of the canvassing operations, including
therein such data as the date and time the canvassing program was started, the log-
in of the authorized users (the identity of the machine operators), the date and time
the canvass data were downloaded into the canvassing system, and so on and so
forth. On page 33 of the RFP, we find the same audit trail requirement with respect to
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the provincial/districtcanvassing system software; and again on pages 35-36 thereof,
the same audit trail requirement with respect to the national canvassing
system software.
That this requirement for printing audit trails is not to be lightly brushed aside by
the BAC or Comelec itself as a mere formality or technicality can be readily gleaned
from the provisions of Section 7 of RA 8436, which authorizes the Commission to use
an automated system for elections.
The said provision which respondents have quoted several times, provides that
ACMs are to possess certain features divided into two classes: those that the statute
itself considers mandatory and other features or capabilities that the law deems
optional. Among those considered mandatory are provisions for audit trails! Section 7
reads as follows: The System shall contain the following features: (a) use of
appropriate ballots; (b) stand-alone machine which can count votes and an
automated system which can consolidate the results immediately; (c) with
provisions for audit trails; (d) minimum human intervention; and (e) adequate
safeguard/security measures.(Italics and emphases supplied.)
In brief, respondents cannot deny that the provision requiring audit trails is
indeed mandatory, considering the wording of Section 7 of RA 8436. Neither can
Respondent Comelec deny that it has relied on the BAC Report, which indicates that
the machines or the software was deficient in that respect. And yet, the Commission
simply disregarded this shortcoming and awarded the Contract to private respondent,
thereby violating the very law it was supposed to implement.
C.
Inadequacy of Post Facto
Remedial Measures
Respondents argue that the deficiencies relating to the detection of previously
downloaded data, as well as provisions for audit trails, are mere shortcomings or
minor deficiencies in software or programming, which can be rectified. Perhaps
Comelec simply relied upon the BAC Report, which states on page 8 thereof
that Mega Pacific failed in 8 items[;] however these are mostly on the software which
can be corrected by re-programming x x x and therefore can be readily corrected.
The undersigned ponentes questions, some of which were addressed to
Commissioner Borra during the Oral Argument, remain unanswered to this day. First
of all, who made the determination that the eight fail marks of Mega Pacific were on
account of the software -- was it DOST or TWG? How can we be sure these failures
were not the results of machine defects? How was it determined that the software
could actually be re-programmed and thereby rectified? Did a qualif ied technical
expert read and anal yze t he source code [ 4 9 ] for the programs and conclude
that these could be saved and remedied? (Such determination cannot be done by any
other means save by the examination and analysis of the source code.)
Who was this qualified technical expert? When did he carry out the study? Did
he prepare a written report on his findings? Or did the Comelec just make a wild
guess?It does not follow that all defects in software programs can be rectified, and
the programs saved. In the information technology sector, it is common knowledge
that there are many badly written programs, with significant programming errors
written into them; hence it does not make economic sense to try to correct the
programs; instead, programmers simply abandon them and just start from
scratch. Theres no telling if any of these programs is unrectifiable, unless a qualified
programmer reads the source code.
And if indeed a qualified expert reviewed the source code, did he also determine
how much work would be needed to rectify the programs? And how much time and
money would be spent for that effort? Who would carry out the work? After the
rectification process, who would ascertain and how would it be ascertained that the
programs have indeed been properly rectified, and that they would work properly
thereafter? And of course, the most important question to ask: could the rectification
be done in time for the elections in 2004?
Clearly, none of the respondents bothered to think the matter through. Comelec
simply took the word of the BAC as gospel truth, without even bothering to inquire
from DOST whether it was true that the deficiencies noted could possibly be
remedied by re-programming the software. Apparently, Comelec did not care about
the software, but focused only on purchasing the machines.
What really adds to the Courts dismay is the admission made by Commissioner
Borra during the Oral Argument that the software currently being used by Comelec
was merely the demo version, inasmuch as the final version that would actually be
used in the elections was still being developed and had not yet been finalized.
It is not clear when the final version of the software would be ready for testing
and deployment. It seems to the Court that Comelec is just keeping its fingers
crossed and hoping the final product would work. Is there a Plan B in case it does
not? Who knows? But all these software programs are part and parcel of the bidding
and the Contract awarded to the Consortium. Why is it that the machines are already
being brought in and paid for, when there is as yet no way of knowing if the final
version of the software would be able to run them properly, as well as canvass and
consolidate the results in the manner required?
The counting machines, as well as the canvassing system, will never work
properly without the correct software programs. There is an old adage that is still valid
to this day: Garbage in, garbage out. No matter how powerful, advanced and
sophisticated the computers and the servers are, if the software being utilized is
defective or has been compromised, the results will be no better than garbage. And to
think that what is at stake here is the 2004 national elections -- the very basis of our
democratic life.
Correction of Defects?
To their Memorandum, public respondents proudly appended 19 Certifications
issued by DOST declaring that some 285 counting machines had been tested and
had passed the acceptance testing conducted by the Department on October 8-18,
2003. Among those tested were some machines that had failed previous tests, but
had undergone adjustments and thus passed re-testing.
Unfortunately, the Certifications from DOST fail to divulge in what manner and
by what standards or criteria the condition, performance and/or readiness of the
machines were re-evaluated and re-appraised and thereafter given the passing
mark. Apart from that fact, the remedial efforts of respondents were, not surprisingly,
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apparently focused again on the machines -- the hardware. Nothing was said or done
about the software -- the deficiencies as to detection and prevention of downloading
and entering previously downloaded data, as well as the capability to print an audit
trail. No matter how many times the machines were tested and re-tested, if nothing
was done about the programming defects and deficiencies, the same danger of
massive electoral fraud remains. As anyone who has a modicum of knowledge of
computers would say, Thats elementary!
And only last December 5, 2003, an Inq7.net news report quoted the Comelec
chair as saying that the new automated poll system would be used nationwide in May
2004, even as the software for the system remained unfinished. It also reported that a
certain Titus Manuel of the Philippine Computer Society, which was helping Comelec
test the hardware and software, said that the software for the counting still had to be
submitted on December 15, while the software for the canvassing was due in early
January.
Even as Comelec continues making payments for the ACMs, we keep asking
ourselves: who is going to ensure that the software would be tested and would work
properly?
At any rate, the re-testing of the machines and/or the 100 percent testing of all
machines (testing of every single unit) would not serve to eradicate the grave abuse
of discretion already committed by Comelec when it awarded the Contract on April 15,
2003, despite the obvious and admitted flaws in the bidding process, the failure of the
winning bidder to qualify, and the inability of the ACMs and the intended software to
meet the bid requirements and rules.
Comelecs Latest
Assurances Are
Unpersuasive
Even the latest pleadings filed by Comelec do not serve to allay our
apprehensions. They merely affirm and compound the serious violations of law and
gravely abusive acts it has committed. Let us examine them.
The Resolution issued by this Court on December 9, 2003 required respondents
to inform it as to the number of ACMs delivered and paid for, as well as the total
payment made to date for the purchase thereof. They were likewise instructed to
submit a certification from the DOST attesting to the number of ACMs tested, the
number found to be defective; and whether the reprogrammed software has been
tested and found to have complied with the requirements under Republic Act No.
8436.[50]
In its Partial Compliance and Manifestation dated December 29, 2003, Comelec
informed the Court that 1,991 ACMs had already been delivered to the Commission
as of that date. It further certified that it had already paid the supplier the sum
of P849,167,697.41, which corresponded to 1,973 ACM units that had passed the
acceptance testing procedures conducted by the MIRDC-DOST [51] and which had
therefore been accepted by the poll body.
In the same submission, for the very first time, Comelec also disclosed to the
Court the following:
The Automated Counting and Canvassing Project involves not only the manufacturing of the
ACM hardware but also the development of three (3) types of software, which are intended for
use in the following:
1. Evaluation of Technical Bids
2. Testing and Acceptance Procedures
3. Election Day Use.
Purchase of the First Type of
Software Without Evaluation
In other words, the first type of software was to be developed solely for the
purpose of enabling the evaluation of the bidders technical bid. Comelec explained
thus: In addition to the presentation of the ACM hardware, the bidders were required
to develop a base software program that will enable the ACM to function
properly. Since the software program utilized during the evaluation of bids is not the
actual software program to be employed on election day, there being two (2) other
types of software program that will still have to be developed and thoroughly tested
prior to actual election day use, defects in the base software that can be readily
corrected by reprogramming are considered minor in nature, and may therefore be
waived.
In short, Comelec claims that it evaluated the bids and made the decision to
award the Contract to the winning bidder partly on the basis of the operation of the
ACMs running a base software. That software was therefore nothing but a sample or
demo software, which would not be the actual one that would be used on election
day.Keeping in mind that the Contract involves the acquisition of not just the ACMs or
the hardware, but also the software that would run them, it is now even clearer that
the Contract was awarded without Comelec having seen, much less evaluated,
the final product -- the software that would finally be utilized come election day. (Not
even the near-final product, for that matter).
What then was the point of conducting the bidding, when the software that was
the subject of the Contract was still to be created and could conceivably undergo
innumerable changes before being considered as being in final form? And that is not
all!
No Explanation for Lapses
in the Second Type of Software
The second phase, allegedly involving the second type of software, is simply
denominated Testing and Acceptance Procedures. As best as we can construe,
Comelec is claiming that this second type of software is also to be developed and
delivered by the supplier in connection with the testing and acceptance phase of the
acquisition process. The previous pleadings, though -- including the DOST reports
submitted to this Court -- have not heretofore mentioned any statement, allegation or
representation to the effect that a particular set of software was to be developed
239
and/or delivered by the supplier in connection with the testing and acceptance of
delivered ACMs.
What the records do show is that the imported ACMs were subjected to the
testing and acceptance process conducted by the DOST. Since the initial batch
delivered included a high percentage of machines that had failed the tests, Comelec
asked the DOST to conduct a 100 percent testing; that is, to test every single one of
the ACMs delivered. Among the machines tested on October 8 to 18, 2003, were
some units that had failed previous tests but had subsequently been re-tested and
had passed. To repeat, however, until now, there has never been any mention of a
second set or type of software pertaining to the testing and acceptance process.
In any event, apart from making that misplaced and uncorroborated claim,
Comelec in the same submission also professes (in response to the concerns
expressed by this Court) that the reprogrammed software has been tested and
found to have complied with the requirements of RA 8436. It reasoned
thus: Since the software program is an inherent element in the automated counting
system, the certification issued by the MIRDC-DOST that one thousand nine hundred
seventy-three (1,973) units passed the acceptance test procedures is an official
recognition by the MIRDC-DOST that the software component of the automated
election system, which has been reprogrammed to comply with the provisions of
Republic Act No. 8436 as prescribed in the Ad Hoc Technical Evaluation Committees
ACM Testing and Acceptance Manual, has passed the MIRDC-DOST tests.
The facts do not support this sweeping statement of Comelec. A scrutiny of the
MIRDC-DOST letter dated December 15, 2003, [52] which it relied upon, does not
justify its grand conclusion. For claritys sake, we quote in full the letter-certification, as
follows:
15 December 2003
HON. RESURRECCION Z. BORRA
Commissioner-in-Charge
Phase II, Modernization Project
Commission on Elections
Intramuros, Manila
Attention: Atty. Jose M. Tolentino, Jr.
Project Director
Dear Commissioner Borra:
We are pleased to submit 11 DOST Test Certifications representing 11 lots and covering 158
units of automated counting machines (ACMs) that we have tested from 02-12 December
2003.
To date, we have tested all the 1,991 units of ACMs, broken down as follow: (sic)
1st batch - 30 units 4th batch - 438 units
2nd batch - 288 units 5th batch - 438 units
3rd batch - 414 units 6th batch - 383 units
It should be noted that a total of 18 units have failed the test. Out of these 18 units, only one
(1) unit has failed the retest.
Thank you and we hope you will find everything in order.
Very truly yours,
ROLANDO T. VILORIA, CESO III
Executive Director cum
Chairman, DOST-Technical Evaluation Committee
Even a cursory glance at the foregoing letter shows that it is completely bereft of
anything that would remotely support Comelecs contention that the software
component of the automated election system x x x has been reprogrammed to
comply with RA 8436, and has passed the MIRDC-DOST tests. There is no mention
at all of any software reprogramming. If the MIRDC-DOST had indeed undertaken the
supposed reprogramming and the process turned out to be successful, that agency
would have proudly trumpeted its singular achievement.
How Comelec came to believe that such reprogramming had been undertaken
is unclear. In any event, the Commission is not forthright and candid with the factual
details. If reprogramming has been done, who performed it and when? What exactly
did the process involve? How can we be assured that it was properly performed?
Since the facts attendant to the alleged reprogramming are still shrouded in mystery,
the Court cannot give any weight to Comelecs bare allegations.
The fact that a total of 1,973 of the machines has ultimately passed the MIRDC-
DOST tests does not by itself serve as an endorsement of the soundness of the
software program, much less as a proof that it has been reprogrammed. In the first
place, nothing on record shows that the tests and re-tests conducted on the machines
were intended to address the serious deficiencies noted earlier. As a matter of fact,
the MIRDC-DOST letter does not even indicate what kinds of tests or re-tests were
conducted, their exact nature and scope, and the specific objectives thereof. [53] The
absence of relevant supporting documents, combined with the utter vagueness of the
letter, certainly fails to inspire belief or to justify the expansive confidence displayed
by Comelec. In any event, it goes without saying that remedial measures such as the
alleged reprogramming cannot in any way mitigate the grave abuse of discretion
already committed as early as April 15, 2003.
Rationale of Public Bidding Negated
by the Third Type of Software
Respondent Comelec tries to assuage this Courts anxiety in these words: The
reprogrammed software that has already passed the requirements of Republic Act
No. 8436 during the MIRDC-DOST testing and acceptance procedures will require
further customization since the following additional elements, among other things, will
have to be considered before the final software can be used on election day: 1. Final
Certified List of Candidates x x x 2. Project of Precincts x x x 3. Official Ballot Design
and Security Features x x x 4. Encryption, digital certificates and digital signatures x x
x. The certified list of candidates for national elective positions will be finalized on or
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before 23 January 2004 while the final list of projects of precincts will be prepared
also on the same date. Once all the above elements are incorporated in the software
program, the Test Certification Group created by the Ad Hoc Technical Evaluation
Committee will conduct meticulous testing of the final software before the same can
be used on election day. In addition to the testing to be conducted by said Test
Certification Group, the Comelec will conduct mock elections in selected areas
nationwide not only for purposes of public information but also to further test the final
election day program. Public respondent Comelec, therefore, requests that it be given
up to 16 February 2004 to comply with this requirement.
The foregoing passage shows the imprudent approach adopted by Comelec in
the bidding and acquisition process. The Commission says that before the software
can be utilized on election day, it will require customization through addition of data --
like the list of candidates, project of precincts, and so on. And inasmuch as such data
will become available only in January 2004 anyway, there is therefore no perceived
need on Comelecs part to rush the supplier into producing the final (or near-final)
version of the software before that time. In any case, Comelec argues that the
software needed for the electoral exercise can be continuously developed, tested,
adjusted and perfected, practically all the way up to election day, at the same time
that the Commission is undertaking all the other distinct and diverse activities
pertinent to the elections.
Given such a frame of mind, it is no wonder that Comelec paid little attention to
the counting and canvassing software during the entire bidding process, which took
place in February-March 2003. Granted that the software was defective, could not
detect and prevent the re-use of previously downloaded data or produce the audit trail
-- aside from its other shortcomings -- nevertheless, all those deficiencies could still
be corrected down the road. At any rate, the software used for bidding purposes
would not be the same one that will be used on election day, so why pay any attention
to its defects? Or to the Comelecs own bidding rules for that matter?
Clearly, such jumbled ratiocinations completely negate the rationale underlying
the bidding process mandated by law.
At the very outset, the Court has explained that Comelec flagrantly violated the
public policy on public biddings (1) by allowing MPC/MPEI to participate in the bidding
even though it was not qualified to do so; and (2) by eventually awarding the Contract
to MPC/MPEI. Now, with the latest explanation given by Comelec, it is clear that the
Commission further desecrated the law on public bidding by permitting the winning
bidder to change and alter the subject of the Contract (the software), in effect allowing
a substantive amendment without public bidding.
This stance is contrary to settled jurisprudence requiring the strict application of
pertinent rules, regulations and guidelines for public bidding for the purpose
of placing each bidder, actual or potential, on the same footing. The essence of public
bidding is, after all, an opportunity for fair competition, and a fair basis for the precise
comparison of bids. In common parlance, public bidding aims to level the playing
field. That means each bidder must bid under the same conditions; and be subject to
the same guidelines, requirements and limitations, so that the best offer or lowest bid
may be determined, all other things being equal.
Thus, it is contrary to the very concept of public bidding to permit a variance
between the conditions under which bids are invited and those under which proposals
are submitted and approved; or, as in this case, the conditions under which the bid is
won and those under which the awarded Contract will be complied with. The
substantive amendment of the contract bidded out, without any public bidding
-- after the bidding process had been concluded -- is violative of the public policy on
public biddings, as well as the spirit and intent of RA 8436. The whole point in going
through the public bidding exercise was completely lost. The very rationale of public
bidding was totally subverted by the Commission.
From another perspective, the Comelec approach also fails to make
sense. Granted that, before election day, the software would still have to be
customized to each precinct, municipality, city, district, and so on, there still was
nothing at all to prevent Comelec from requiring prospective suppliers/bidders to
produce, at the very start of the bidding process, the next-to-final versions of the
software (the best software the suppliers had) -- pre-tested and ready to be
customized to the final list of candidates and project of precincts, among others, and
ready to be deployed thereafter. The satisfaction of such requirement would probably
have provided far better bases for evaluation and selection, as between suppliers,
than the so-called demo software.
Respondents contend that the bidding suppliers counting machines were
previously used in at least one political exercise with no less than 20 million voters. If
so, it stands to reason that the software used in that past electoral exercise would
probably still be available and, in all likelihood, could have been adopted for use in
this instance. Paying for machines and software of that category (already tried and
proven in actual elections and ready to be adopted for use) would definitely make
more sense than paying the same hundreds of millions of pesos for demo software
and empty promises of usable programs in the future.
But there is still another gut-level reason why the approach taken by Comelec is
reprehensible. It rides on the perilous assumption that nothing would go wrong; and
that, come election day, the Commission and the supplier would have developed,
adjusted and re-programmed the software to the point where the automated system
could function as envisioned. But what if such optimistic projection does not
materialize? What if, despite all their herculean efforts, the software now being
hurriedly developed and tested for the automated system performs dismally and
inaccurately or, worse, is hacked and/or manipulated?[54] What then will we do with all
the machines and defective software already paid for in the amount of P849 million of
our tax money? Even more important, what will happen to our country in case of
failure of the automation?
The Court cannot grant the plea of Comelec that it be given until February 16,
2004 to be able to submit a certification relative to the additional elements of the
software that will be customized, because for us to do so would unnecessarily delay
the resolution of this case and would just give the poll body an unwarranted excuse to
postpone the 2004 elections. On the other hand, because such certification will not
cure the gravely abusive actions complained of by petitioners, it will be utterly
useless.
Is this Court being overly pessimistic and perhaps even engaging in
speculation? Hardly. Rather, the Court holds that Comelec should not have gambled
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on the unrealistic optimism that the suppliers software development efforts would turn Furthermore, Comelec and its officials concerned must bear full responsibility for
out well. The Commission should have adopted a much more prudent and judicious the failed bidding and award, and held accountable for the electoral mess wrought by
approach to ensure the delivery of tried and tested software, and readied alternative their grave abuse of discretion in the performance of their functions. The State, of
courses of action in case of failure. Considering that the nations future is at stake course, is not bound by the mistakes and illegalities of its agents and servants.
here, it should have done no less.
True, our country needs to transcend our slow, manual and archaic electoral
process. But before it can do so, it must first have a diligent and competent electoral
agency that can properly and prudently implement a well-conceived automated
Epilogue election system.
At bottom, before the country can hope to have a speedy and fraud-free
automated election, it must first be able to procure the proper computerized hardware
Once again, the Court finds itself at the crossroads of our nations history. At
and software legally, based on a transparent and valid system of public bidding. As in
stake in this controversy is not just the business of a computer supplier, or a
any democratic system, the ultimate goal of automating elections must be achieved
questionable proclamation by Comelec of one or more public officials. Neither is it
by a legal, valid and above-board process of acquiring the necessary tools and skills
about whether this country should switch from the manual to the automated system of
therefor. Though the Philippines needs an automated electoral process, it cannot
counting and canvassing votes. At its core is the ability and capacity of the
accept just any system shoved into its bosom through improper and illegal
Commission on Elections to perform properly, legally and prudently its legal mandate
methods. As the saying goes, the end never justifies the means. Penumbral
to implement the transition from manual to automated elections.
contracting will not produce enlightened results.
Unfortunately, Comelec has failed to measure up to this historic task. As stated
WHEREFORE, the Petition is GRANTED. The Court hereby
at the start of this Decision, Comelec has not merely gravely abused its discretion in
declares NULL and VOID Comelec Resolution No. 6074 awarding the contract for
awarding the Contract for the automation of the counting and canvassing of the
Phase II of the CAES to Mega Pacific Consortium (MPC). Also declared null and void
ballots. It has also put at grave risk the holding of credible and peaceful elections by
is the subject Contract executed between Comelec and Mega Pacific eSolutions
shoddily accepting electronic hardware and software that admittedly failed to pass
(MPEI).[55] Comelec is further ORDERED to refrain from implementing any other
legally mandated technical requirements. Inadequate as they are, the remedies it
contract or agreement entered into with regard to this project.
proffers post facto do not cure the grave abuse of discretion it already committed (1)
on April 15, 2003, when it illegally made the award; and (2) sometime in May 2003 Let a copy of this Decision be furnished the Office of the Ombudsman which
when it executed the Contract for the purchase of defective machines and non- shall determine the criminal liability, if any, of the public officials (and conspiring
existent software from a non-eligible bidder. private individuals, if any) involved in the subject Resolution and Contract. Let the
Office of the Solicitor General also take measures to protect the government and
For these reasons, the Court finds it totally unacceptable and unconscionable to
vindicate public interest from the ill effects of the illegal disbursements of public funds
place its imprimatur on this void and illegal transaction that seriously endangers the
made by reason of the void Resolution and Contract.
breakdown of our electoral system. For this Court to cop-out and to close its eyes to
these illegal transactions, while convenient, would be to abandon its constitutional SO ORDERED.
duty of safeguarding public interest.
As a necessary consequence of such nullity and illegality, the purchase of the
machines and all appurtenances thereto including the still-to-be-produced (or in
Comelecs words, to be reprogrammed) software, as well as all the payments made
therefor, have no basis whatsoever in law. The public funds expended pursuant to the
void Resolution and Contract must therefore be recovered from the payees and/or
from the persons who made possible the illegal disbursements, without prejudice to
possible criminal prosecutions against them.

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