Admin Law IV

7/28/2019 Admin Law IV

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-50444 August 31, 1987

ANTIPOLO REALTY CORPORATION, petitioner,vs.THE NATIONAL HOUSING AUTHORITY, HON. G.V. TOBIAS, in his capacity as GeneralManager of the National Housing Authority, THE HON. JACOBO C. CLAVE, in hiscapacity as Presidential Executive Assistant and VIRGILIO A. YUSON, respondents.

FELICIANO, J.:

By virtue of a Contract to Sell dated 18 August 1970, Jose Hernando acquired prospective andbeneficial ownership over Lot. No. 15, Block IV of the Ponderosa Heights Subdivision in

Antipolo, Rizal, from the petitioner Antipolo Realty Corporation.

On 28 August 1974, Mr. Hernando transferred his rights over Lot No. 15 to private respondentVirgilio Yuson. The transfer was embodied in a Deed of Assignment and Substitution of Obligor(Delegacion), executed with the consent of Antipolo Realty, in which Mr. Yuson assumed theperformance of the vendee's obligations under the original contract, including payment of hispredecessor's installments in arrears. However, for failure of Antipolo Realty to develop thesubdivision project in accordance with its undertaking under Clause 17 of the Contract to Sell,Mr. Yuson paid only the arrearages pertaining to the period up to, and including, the month of

August 1972 and stopped all monthly installment payments falling due thereafter Clause 17reads:

Clause 17. SUBDIVISION BEAUTIFICATION. To insure the beauty of thesubdivision in line with the modern trend of urban development, the SELLERhereby obligates itself to provide the subdivision with:

a) Concrete curbs and gutters

b) Underground drainage system

c) Asphalt paved roads

d) Independent water system

e) Electrical installation with concrete posts.

f) Landscaping and concrete sidewall

g) Developed park or amphi-theatre


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h) 24-hour security guard service.

These improvements shall be complete within a period of two (2) years from dateof this contract. Failure by the SELLER shall permit the BUYER to suspend hismonthly installments without any penalties or interest charges until such time thatsuch improvements shall have been completed. 1

On 14 October 1976, the president of Antipolo Realty sent a notice to private respondent Yusonadvising that the required improvements in the subdivision had already been completed, andrequesting resumption of payment of the monthly installments on Lot No. 15. For his part, Mr.Yuson replied that he would conform with the request as soon as he was able to verify the truthof the representation in the notice.

In a second letter dated 27 November 1976, Antipolo Realty reiterated its request that Mr.Yuson resume payment of his monthly installments, citing the decision rendered by the NationalHousing Authority (NHA) on 25 October 1976 in Case No. 252 (entitled "Jose B. Viado Jr.,complainant vs. Conrado S. Reyes, respondent") declaring Antipolo Realty to have"substantially complied with its commitment to the lot buyers pursuant to the Contract to Sellexecuted by and between the lot buyers and the respondent." In addition, a formal demand wasmade for full and immediate payment of the amount of P16,994.73, representing installmentswhich, Antipolo Realty alleged, had accrued during the period while the improvements werebeing completed i.e., between September 1972 and October 1976.

Mr. Yuson refused to pay the September 1972-October 1976 monthly installments but agreed topay the post October 1976 installments. Antipolo Realty responded by rescinding the Contractto Sell, and claiming the forfeiture of all installment payments previously made by Mr. Yuson.

Aggrieved by the rescission of the Contract to Sell, Mr. Yuson brought his dispute with AntipoloRealty before public respondent NHA through a letter-complaint dated 10 May 1977 whichcomplaint was docketed in NHA as Case No. 2123.

Antipolo Realty filed a Motion to Dismiss which was heard on 2 September 1977. AntipoloRealty, without presenting any evidence, moved for the consolidation of Case No. 2123 withseveral other cases filed against it by other subdivision lot buyers, then pending before theNHA. In an Order issued on 7 February 1978, the NHA denied the motion to dismiss andscheduled Case No. 2123 for hearing.

After hearing, the NHA rendered a decision on 9 March 1978 ordering the reinstatement of theContract to Sell under the following conditions:

l) Antipolo Realty Corporation shall sent [sic] to Virgilio Yuzon a statement of

account for the monthly amortizations from November 1976 to the present;

m) No penalty interest shall be charged for the period from November 1976 tothe date of the statement of account; and

n) Virgilio Yuzon shall be given sixty (60) days to pay the arrears shown in thestatement of account. 2


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Antipolo Realty filed a Motion for Reconsideration asserting: (a) that it had been denied dueprocess of law since it had not been served with notice of the scheduled hearing; and (b) thatthe jurisdiction to hear and decide Mr. Yuson's complaint was lodged in the regular courts, not inthe NHA, since that complaint involved the interpretation and application of the Contract to Sell.

The motion for reconsideration was denied on 28 June 1978 by respondent NHA General

Manager G.V. Tobias, who sustained the jurisdiction of the NHA to hear and decide the Yusoncomplaint. He also found that Antipolo Realty had in fact been served with notice of the date ofthe hearing, but that its counsel had failed to attend the hearing. 3 The case was submitted fordecision, and eventually decided, solely on the evidence presented by the complainant.

On 2 October 1978, Antipolo Realty came to this Court with a Petition for certiorari andProhibition with Writ of Preliminary Injunction, which was docketed as G.R. No. L-49051. Oncemore, the jurisdiction of the NHA was assailed. Petitioner further asserted that, under Clause 7of the Contract to Sell, it could validly terminate its agreement with Mr. Yuson and, as aconsequence thereof, retain all the prior installment payments made by the latter. 4

This Court denied certiorari in a minute resolution issued on 11 December 1978, "withoutprejudice to petitioner's pursuing the administrative remedy." 5 A motion for reconsideration wasdenied on 29 January 1979.

Thereafter, petitioner interposed an appeal from the NHA decision with the Office of thePresident which, on 9 March 1979, dismissed the same through public respondent PresidentialExecutive Assistant Jacobo C. Clave. 6

In the present petition, Antipolo Realty again asserts that, in hearing the complaint of privaterespondent Yuson and in ordering the reinstatement of the Contract to Sell between the parties,the NHA had not only acted on a matter beyond its competence, but had also, in effect,assumed the performance of judicial or quasi-judicial functions which the NHA was notauthorized to perform.

We find the petitioner's arguments lacking in merit.

It is by now commonplace learning that many administrative agencies exercise and performadjudicatory powers and functions, though to a limited extent only. Limited delegation of judicialor quasi-judicial authority to administrative agencies (e.g., the Securities and ExchangeCommission and the National Labor Relations Commission) is well recognized in our

jurisdiction, 7basically because the need for special competence and experience has beenrecognized as essential in the resolution of questions of complex or specialized character andbecause of a companion recognition that the dockets of our regular courts have remainedcrowded and clogged. In Spouses Jose Abejo and Aurora Abejo, et al. vs. Hon. Rafael dela

Cruz, etc., et al.,

8

the Court, through Mr. Chief Justice Teehankee, said:

In the fifties, the Court taking cognizance of the move to vest jurisdiction inadministrative commissions and boards the power to resolve specializeddisputes in the field of labor (as in corporations, public transportation and publicutilities) ruled that Congress in requiring the Industrial Court's intervention in theresolution of labor management controversies likely to cause strikes or lockoutsmeant such jurisdiction to be exclusive, although it did not so expressly state inthe law. The Court held that under the "sense-making and expeditious doctrine of


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primary jurisdiction . . . the courts cannot or will not determine a controversyinvolving a question which is within the jurisdiction of an administrative tribunalwhere the question demands the exercise of sound administrative discretionrequiring the special knowledge, experience, and services of the administrativetribunal to determine technical and intricate matters of fact, and a uniformity ofruling is essential to comply with the purposes of the regulatory statute

administered"(Pambujan Sur United Mine Workers v. Samar Mining Co., Inc., 94Phil, 932, 941 [1954]).

In this era of clogged court dockets, the need for specialized administrativeboards or commissions with the special knowledge, experience and capability tohear and determine promptly disputes on technical matters or essentially factualmatters, subject to judicial review in case of grave abuse of discretion hasbecome well nigh indispensable. Thus, in 1984, the Court noted that 'betweenthe power lodged in an administrative body and a court, the unmistakeable trendhas been to refer it to the former, "Increasingly, this Court has been committed tothe view that unless the law speaks clearly and unequivocably, the choice shouldfall on fan administrative agency]" ' (NFL v. Eisma, 127 SCRA 419, 428, citing

precedents). The Court in the earlier case of Ebon vs. De Guzman (113 SCRA52, 56 [1982]), noted that the lawmaking authority, in restoring to the laborarbiters and the NLRC their jurisdiction to award all kinds of damages in laborcases, as against the previous P.D. amendment splitting their jurisdiction with theregular courts, "evidently, . . . had second thoughts about depriving the Labor

Arbiters and the NLRC of the jurisdiction to award damages in labor casesbecause that setup would mean duplicity of suits, splitting the cause of actionand possible conflicting findings and conclusions by two tribunals on one and thesame claim."

In an even more recent case, Tropical Homes, Inc. vs. National Housing Authority, et al., 9Mr.Justice Gutierrez, speaking for the Court, observed that:

There is no question that a statute may vest exclusive original jurisdiction in anadministrative agency over certain disputes and controversies falling within theagency's special expertise. The very definition of an administrative agencyincludes its being vested with quasi-judicial powers. The ever increasing varietyof powers and functions given to administrative agencies recognizes the need forthe active intervention of administrative agencies in matters calling for technicalknowledge and speed in countless controversies which cannot possibly behandled by regular courts.

In general the quantum of judicial or quasi-judicial powers which an administrative agency mayexercise is defined in the enabling act of such agency. In other words, the extent to which anadministrative entity may exercise such powers depends largely, if not wholly, on the provisionsof the statute creating or empowering such agency. 10 In the exercise of such powers, theagency concerned must commonly interpret and apply contracts and determine the rights ofprivate parties under such contracts. One thrust of the multiplication of administrative agenciesis that the interpretation of contracts and the determination of private rights thereunder is nolonger a uniquely judicial function, exercisable only by our regular courts.


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Thus, the extent to which the NHA has been vested with quasi-judicial authority must bedetermined by referring to the terms of Presidential Decree No. 957, known as "The Subdivisionand Condominium Buyers' Decree." 11Section 3 of this statute provides as follows:

National Housing Authority. The National Housing Authority shall haveexclusive jurisdiction to regulate the real estate trade and business in accordance

with the provisions of this decree (emphasis supplied)

The need for and therefore the scope of the regulatory authority thus lodged in the NHA areindicated in the second and third preambular paragraphs of the statute which provide:

WHEREAS, numerous reports reveal that many real estate subdivision owners,developers, operators, and/or sellers have reneged on their representations andobligations to provide and maintain properly subdivision roads, drainage,sewerage, water systems lighting systems and other similar basicrequirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling andfraudulent manipulations perpetrated by unscrupulous subdivision andcondominium sellers and operators, such as failure to deliver titles to the buyersor titles free from liens and encumbrances, and to pay real estate taxes, andfraudulent sales of the same subdivision lots to different innocent purchasers forvalue . (emphasis supplied)

Presidential Decree No. 1344 12 clarified and spelled out the quasi-judicial dimensions of thegrant of regulatory authority to the NHA in the following quite specific terms:

SECTION 1. In the exercise of its functions to regulate the real estate trade andbusiness and in addition to its powers provided for in Presidential Decree No.

957, the National Housing Authority shall have exclusive jurisdiction to hear anddecide cases of the following nature:

A. Unsound real estate business practices:

B. Claims involving refund and any other claims filed by subdivision lot orcondominium unit buyer against the project owner, developer, dealer, broker orsalesman; and

C. Cases involving specific performance of contractual and statutory obligationsfiled by buyers of subdivision lots or condominium units against the owner,developer, dealer, broker or salesman.(emphasis supplied.)

The substantive provisions being applied and enforced by the NHA in the instant case are foundin Section 23 of Presidential Decree No. 957 which reads:

Sec. 23. Non-Forfeiture of Payments. No installment payment made by abuyer in a subdivision or condominium project for the lot or unit he contracted tobuy shall be forfeited in favor of the owner or developer when the buyer, afterdue notice to the owner or developer, desists from further payment due to thefailure of the owner or developer to develop the subdivision or condominium


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project according to the approved plans and within the time limit for complyingwith the same. Such buyer may, at his option, be reimbursed the total amountpaid including amortization and interests but excluding delinquency interests,with interest thereon at the legal rate. (emphasis supplied.)

Having failed to comply with its contractual obligation to complete certain specified

improvements in the subdivision within the specified period of two years from the date of theexecution of the Contract to Sell, petitioner was not entitled to exercise its options under Clause7 of the Contract. Hence, petitioner could neither rescind the Contract to Sell nor treat theinstallment payments made by the private respondent as forfeited in its favor. Indeed, under thegeneral Civil Law, 13 in view of petitioner's breach of its contract with private respondent, it isthe latter who is vested with the option either to rescind the contract and receive reimbursementof an installment payments (with legal interest) made for the purchase of the subdivision lot inquestion, or to suspend payment of further purchase installments until such time as thepetitioner had fulfilled its obligations to the buyer. The NHA was therefore correct in holding thatprivate respondent's prior installment payments could not be forfeited in favor of petitioner.

Neither did the NHA commit any abuse, let alone a grave abuse of discretion or act in excess of

its jurisdiction when it ordered the reinstatement of the Contract to Sell between the parties.Such reinstatement is no more than a logical consequence of the NHA's correct ruling, justnoted, that the petitioner was not entitled to rescind the Contract to Sell. There is, in any case,no question that under Presidential Decree No. 957, the NHA was legally empowered todetermine and protect the rights of contracting parties under the law administered by it andunder the respective agreements, as well as to ensure that their obligations thereunder arefaithfully performed.

We turn to petitioner's assertion that it had been denied the right to due process. This assertionlacks substance. The record shows that a copy of the order denying the Motion to Dismiss andscheduling the hearing of the complaint for the morning of 6 March 1978, was duly served oncounsel for petitioner, as evidenced by the annotation appearing at the bottom of said copy

indicating that such service had been effected. 14 But even if it be assumed, arguendo, thatsuch notice had not been served on the petitioner, nevertheless the latter was not deprived ofdue process, for what the fundamental law abhors is not the absence of previous notice butrather the absolute lack of opportunity to be heard. 15 In the instant case, petitioner was givenample opportunity to present its side and to be heard on a motion for reconsideration as well,and not just on a motion to dismiss; the claim of denial of due process must hence sound evenmore hollow. 16

We turn finally to the question of the amount of P16,994.73 which petitioner insists had accruedduring the period from September 1972 to October 1976, when private respondent hadsuspended payment of his monthly installments on his chosen subdivision lot. The NHA in its 9March 1978 resolution ruled that the regular monthly installments under the Contract to Sell didnot accrue during the September 1972 October 1976 period:

[R]espondent allowed the complainant to suspend payment of his monthlyinstallments until the improvements in the subdivision shall have beencompleted. Respondent informed complainant on November 1976 that theimprovements have been completed. Monthly installments during the period ofsuspension of payment did not become due and demandable Neither did theyaccrue Such must be the case, otherwise, there is no sense in suspending


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payments. If the suspension is lifted the debtor shall resume payments but neverdid he incur any arrears.

Such being the case, the demand of respondent for complainant to pay thearrears due during the period of suspension of payment is null andvoid. Consequently, the notice of cancellation based on the refusal to pay the s

that were not due and demandable is also null and void. 17

The NHA resolution is probably too terse and in need of certification and amplification. The NHAcorrectly held that no installment payments should be considered as having accrued during theperiod of suspension of payments. Clearly, the critical issue is what happens to the installmentpayments which would have accrued and fallen due during the period of suspension had nodefault on the part of the petitioner intervened. To our mind, the NHA resolution is mostappropriately read as directing that the original period of payment in the Contract to Sell mustbe deemed extended by a period of time equal to the period of suspension (i.e., by four (4)years and two (2) months) during which extended time (tacked on to the original contract

period) private respondent buyer must continue to pay the monthly installment payments untilthe entire original contract price shall have been paid. We think that such is the intent of the

NHA resolution which directed that "[i]f the suspension is lifted, the debtor shall resumepayments" and that such is the most equitable and just reading that may be given to the NHAresolution. To permit Antipolo Realty to collect the disputed amount in a lump sum after it haddefaulted on its obligations to its lot buyers, would tend to defeat the purpose of theauthorization (under Sec. 23 of Presidential Decree No. 957,supra) to lot buyers to suspendinstallment payments. As the NHA resolution pointed out, [s]uch must be the case, otherwise,there is no sense in suspending payments." Upon the other hand, to condone the entire amountthat would have become due would be an expressively harsh penalty upon the petitioner andwould result in the unjust enrichment of the private respondent at the expense of the petitioner.It should be recalled that the latter had already fulfilled, albeit tardily, its obligations to its lotbuyers under their Contracts to Sell. At the same time, the lot buyer should not be regarded asdelinquent and as such charged penalty interest. The suspension of installment payments was

attributable to the petitioner, not the private respondent. The tacking on of the period ofsuspension to the end of the original period precisely prevents default on the part of the lotbuyer. In the words of the NHA resolution, "never would [the buyer] incur any arrears."

WHEREFORE, the Petition for certiorari is DISMISSED. The NHA decision appealed from ishereby AFFIRMED and clarified as providing for the lengthening of the original contract periodfor payment of installments under the Contract to Sell by four (4) years and two (2) months,during which extended time private respondent shall continue to pay the regular monthlyinstallment payments until the entire original contract price shall have been paid. Nopronouncement as to costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Footnotes


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1 Rollo, pp. 26-29, Annex "D" of Petition.

2 Rollo, p. 20, Annex "A" of Petition.

3 Ibid, pp. 21-22, Annex "B" of Petition.

4 Clause 7 provides: "In case the BUYER fails to satisfy any monthlyinstallments, or any other payments herein agreed upon, he is granted a monthof grace within which to make the retarded payment, it is understood, however,that should the month of grace herein granted to the BUYER expire, without thepayments corresponding to both months having been satisfied, an interest of12% per annum will be charged on the amounts he should have paid; it isunderstood further, that should a period of 60 days elapse, to begin from theexpiration of the month of grace herein mentioned, and the BUYER has not paidall the amounts he should have paid, with the corresponding interest, up to thatdate, the SELLER has the right to declare this contract cancelled, ex parte, andof no effect, and as consequence thereof, the SELLER may dispose of the parcelor parcels of land covered by this contract, without notice to the BUYER, in favorof other persons, as if this contract had never been entered into. In case of suchcancellation of this contract, all the amounts paid in accordance with thisagreement, together with all the improvements made on the premises, shall beconsidered as rents and charges paid for the use and occupation of the above-mentioned premises, and as payment for the damages suffered by failure of theBUYER to fulfill his part of this agreement, and the BUYER hereby renounces allhis right to demand or reclaim the return of the same and obliges himself topeacefully and immediately vacate the premises and deliver the same to theSELLER without delay.

5 Rollo of G.R. No. 49051, p. 63.

6 Rollo, pp. 23-25, Annex "C" of Petition.

7 See, e.g., National Federation of Labor v. Eisma, 127 SCRA 419 (1984) andPhilex Mining Corporation v. Reyes, 118 SCRA 602 (1982).

8 G.R. No. L-63558, promulgated 19 May 1987; underscoring supplied.

9 G.R. No. L-48672, promulgated 31 July 1987; underscoring supplied.

10 See, in this connection, DMRC Enterprises v. Este del Sol Mountain Reserve,Inc., 132 SCRA 293 (1984); Union Glass and Container Corporation v. Securities

and Exchange Commission, 126 SCRA 31 (1983); and Philex Mining Corporationv. Reyes, supra.

11 Promulgated on 12 July 1976.

12 Promulgated on 2 April 1978.

13 Articles 1191 and 1169, Civil Code.


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14 Rollo of G.R. No. 49051, p. 58; Annex "A" of Comment.

15 Manuel v. Villena, 37 SCRA 745 (1971) and Asprec v. Itchon, 16 SCRA 921(1966).

16 See, BLTB Co. v. Cadiao, 22 SCRA 987 (1968).

17 Rollo, p. 20; underscoring supplied.


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Manila

SECOND DIVISION

A.C. No. 4634 September 24, 1997

JESUS CABARRUS, JR., complainant,vs.JOSE ANTONIO S. BERNAS, respondent.

TORRES, JR., J.:

On August 30, 1996, Mr. Jesus Cabarrus, Jr. filed an administrative complaint for disbarmentagainst Atty. Jose Antonio Bernas for alleged violations of Article 172 of the Revised PenalCode and Code of Professional Responsibility. In his complaint-affidavit 1 dated August 12,1996, complainant alleged as follows:

A. That on April 16, 1996, respondent Ramon B. Pascual, Jr., subscribed underoath before Marie Lourdes T. Sia Bernas, a notary public in Makati City, wife oflawyer Jose Antonio Bernas, a verification and certification of non-forumshopping which was appended to a complaint for reconveyance of property anddamages, denominated as Civil Case No. 65646, filed before the Regional TrialCourt in National Capital Region, RTC, which case was raffled to RTC Branch

159 in Pasig City. A photocopy of said complaint is hereto attached and markedas Annexex (sic) A, A-1, A-3, A-4, A-5 and A-6;

B. That as basis for the instant complaint for falsification of public document, I amhereto quoting verbatim, the test (sic) of Annex A-6, the verification andcertification of non-forum shopping which states:

Ramon B. Pascual, Jr., under oath, depose and states:

He is the plaintiff in this case, and certify that he cause the preparation of theforegoing pleading, the content of which are true to his personal knowledgeand that he has not commenced any other action or proceeding involving the

same issues in any court, including the Supreme Court, the Court of Appeals, orany other tribunal or agency. If he should learn that a similar action of (sic)proceeding has been filed or is pending before the Supreme Court or any otherTribunal agency, he undertake to report to (sic) that fact within Five (5) days fromnotice to this notice (sic) to this Honorable Court. Emphasis supplied.

C. That the cause of action relied upon by the respondent in Civil Case No.65646 is fraud, facilitated by forgery as gleaned from paragraphs 15, 16, and 22;


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D. That contrary to the tenor, import and meanoing (sic) of the allegation under 1-B of the instant complaint, respondent and his counsel Jose Antonio Bernascaused the preparation and filing of a criminal complaint for falsification of apublic document on April 11, 1996, (three days before the filing of the aforecitedCivil Case) at the AOED of the National Bureau of Investigation if (sic) Taff (sic)

Ave., a xerox copy of said complaint is hereto attached and marked as Annex

"B".

D-1. That as stated in Annex "B", the gravaman of the affidavit complaint of therespondent is forgery, the same legal issue in Civil Case No. 65646;

D-2. That as early as August 14, 1995, respondent counsel, Jose Antonio Bernasfiled a written complaint at the NBI for the same cause of action which wasreiterated in another letter submitting to the NBI standard specimen signaturesdated October 1995, copies of said letter complaint are hereto attached andmarked as Annexes (sic) "C".

E. That respondent Ramon B. Pascual, Jr., on the basis of Annexes A, B, C, D,inclusive of submarkings knowingly subverted and perverted the truth when hefalsify certified (sic) and verified under oath in the verification and certification ofnon-forum shopping, that:

He has not commenced any other action or proceeding involvingthe same issues in any court, including the Supreme Court, theCourt of Appeals, or any other Tribunal or agency." Whereverification-certification was placed under oath and wasconveniently notarized by the wife of the counsel of respondent inboth cases at Branch 159 of the RTC in Pasig and at the NBI, anagency within the ambis (sic) and purview of the circulus (sic) ofthe Supreme Court prohibiting forum shopping.

F. That Jose Antonio Bernas, the counsel on record of the respondents in CivilCase No. 65646 is the same lawyer who instigated a criminal complaint at theNBI for forgery and respondents themselves conspired and confabulated witheach other in facilitating and insuring the open, blatant and deliberate violation of

Art. 172 of the Revised Penal Code which states:

Art. 172. Falsification by private individual and use of falsifieddocuments. The penalty ofprision correccionalin its mediumand maximum periods and a fine of not more than P5,000 pesosshall be imposed upon:

1. Any private individual who shall commit any of the falsificationsenumerated in the next preceding article in any public or officialdocument or letter of exchanged (sic) or any other kind ofcommercial document; and

2. Any person who, to the damage of a third party, or with theintent to cause such damage, shall in any private document


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commit any of the acts of falsification enumerated in the nextpreceding article.

Any person who shall knowingly introduce in evidence in anyjudicial proceeding or to the damage of another or who, with theintent to cause such damage, shall use any of the false

documents embraced in the next preceding article, or in any of theforegoing subdivisions of this article, shall be punished by thepenalty next lower in degree.

G. That Atty. Jose Antonio Bernas should be disbarred for having instigated,abetted and facilitated the perversion and subversion of truth in the saidverification and certification of non-forum shopping. Contrary to Canon 1, Rule1.01, 1.02, Canon 3, 3.01, Canon 10 of the Code of Professional Responsibilityfor Lawyers, the pertinent provisions of which are herein below quoted and acopy of said code is hereto attached and marked as Annex "E";

CANON 1. A. LAWYER SHALL UPHOLD THE CONSTITUTION,OBEY THE LAWS OF THE LAND PROMOTE RESPECT FORLAW AND LEGAL PROCESSES.

Rule 1.01 A lawyer shall not engage in unlawful,dishonest, immoral or decietful (sic) conduct.

Rule 1.02 A lawyer shall not counsel or abetactivities simed (sic) at defiance of the law or atlessening confidence in the legal system.

CANON 3. A. LAWYER IN MAKING KNOWN HIS LEGAL

SERVICES SHALL USE ONLY TRUE, HONEST, FAIR,DIGNIFIED AND OBJECTIVE INFORMATION OF (sic)STATEMENT OF FACTS.

Rule 3.01 A lawyer shall not use or permit theuse of any false, fraudulent, misleading, deceptive,undignified, self-laudatory or unfair statement orclaim regarding his qualified (sic) or legal services.

CANON 10. A LAWYER OWES CANDOR, FAIRNESS ANDGOOD FAITH TO THE COURT.

In his Comment,2

respondent Jose Antonio Bernas avers that he has not committed forumshopping because the criminal action is not an action that involves the same issue as those in acivil action and both suits can exist without constituting forum shopping so long as the civilaspect has not been prosecuted in the criminal case. He emphasized that forum shopping onlyexists when identical reliefs are issued by the same parties in multiple fora.

In his Supplemental Comment, 3 respondent further contends that neither he or his clientPascual has commenced any criminal action. Pascual merely requested the NBI to assist in theinvestigation or prosecution, and left it to the NBI to determine whether the filing of an


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endorsement to the prosecutor, who would determine probable cause, would be appropriate. Itwas only upon request of the NBI that he assisted Ramon Pascual in drafting an affidavit-complaint for falsification of public documents against complainant. Likewise, respondent bycounsel reiterates that the letter transmitted to the NBI cannot constitute an action or proceedingbecause the NBI's functions are merely investigatory and informational in nature. NBI has noprosecutorial functions or quasi-judical powers and is incapable of granting relief or remedy. The

NBI cannot be an agency contemplated by the circular.

The core issue to be resolved here is whether respondent Atty. Bernas transgressed CircularNo. 28-91, Revised Circular No. 28-91, and Administrative Circular No. 04 - 94 on forumshopping.

After a careful scrutiny of the records, we find the administrative complaint bereft of merit andshould be dismissed.

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a partyseeks a favorable opinion (other than by appeal orcertiorari) in another. Therefore, a party to acase resorts to forum shopping because "by filing another petition involving the same essentialfacts and circumstances, . . . , respondents approached two different fora in order to increasetheir chances of obtaining a favorable decision or action. 4 In this case, there is no forumshopping to speak of. Atty. Bernas, as counsel of Mr. Pascual, Jr., merely requested theassistance of the NBI to investigate the alleged fraud and forgery committed by Mr. JesusCabarrus. 5 The filing of a civil case for reconveyance and damages before the Regional TrialCourt of Pasig City does not preclude respondent to institute a criminal action. The rule allowsthe filing of a civil case independently with the criminal case without violating the circulars onforum shopping. It is scarcely necessary to add that Circular No. 28-91 must be so interpretedand applied as to achieve the purposes projected by the Supreme Court when it promulgatedthat Circular. Circular No. 28-91 was designed to serve as an instrument to promote andfacilitate the orderly administration of justice and should not be interpreted with such absoluteliteralness as to subvert its own ultimate and legitimate objective or the goal of all rules of

procedure which is to achieve substantial justice as expeditiously as possible. 6

Adjunct to this, Act No. 157 7, specifically section 1 hereof provides, viz:

Sec. 1. There is hereby created a Bureau of Investigation under the Departmentof Justice which shall have the following functions:

(a) To undertake investigation of crimes and other offenses against the laws ofthe Philippines, upon its initiative and as public interest may require;

(b) To render assistance, whenever properly requested in the investigation or

detection of crimes and other offenses;

(c) To act as a national clearing house of criminal and other informations for thebenefit and use of all prosecuting and law-enforcement entities of the Philippines,identification records of all persons without criminal convictions, records ofidentifying marks, characteristics, and ownership or possession of all firearms aswell as of test bullets fired therefrom;


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(d) To give technical aidto all prosecuting and law-enforcement officers andentities of the Government as well as the courts that may request its services;

(e) To extend its services, whenever properly requested in the investigation ofcases of administrative or civil nature in which the Government is interested;

(f) To undertake the instruction and trainingof representative number of city andmunicipal peace officers at the request of their respective superiors alongeffective methods of crime investigation and detection in order to insure greaterefficiency in the discharge of their duties;

(g) To establish and maintain an up-to-date scientific crime laboratory and toconduct researches in furtherance of scientific knowledge in criminalinvestigation;

(h) To perform such other related functions as the Secretary of Justice mayassign from time to time.

Explicitly, the functions of the National Bureau of Investigations are merely investigatory andinformational in nature. It has no judicial or quasi-judicial powers and is incapable of grantingany relief to a party. It cannot even determine probable cause. It is an investigative agencywhose findings are merely recommendatory. It undertakes investigation of crimes upon its owninitiative and as public welfare may require. It renders assistance when requested in theinvestigation or detection of crimes which precisely what Atty. Bernas sought in order toprosecute those persons responsible for defrauding his client.

The courts, tribunals 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 it by R.A. 157, the NBI is notperforming judicial or quasi-judicial functions. The NBI cannot therefore be among those forumscontemplated by the Circular that can entertain an action or proceeding, or even grant any relief,declaratory or otherwise.

WHEREFORE, premises considered, the instant complaint is hereby DISMISSED.

SO ORDERED.

Regalado and Puno, JJ., concur.

Mendoza, J., is on leave.


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Manila

THIRD DIVISION

G.R. No. 161811 April 12, 2006

THE CITY OF BAGUIO, MAURICIO DOMOGAN, and ORLANDO GENOVE, Petitioners,vs.FRANCISCO NIO, JOSEFINA NIO, EMMANUEL NIO, and EURLIEOCAMPO, Respondents.

D E C I S I O N

CARPIO MORALES, J.:

The Bureau of Lands awarded on May 13, 1966 to Narcisa A. Placino (Narcisa) a parcel of landidentified as Lot No. 10 (the lot) located at Saint Anthony Road, Dominican-Mirador Barangay,Baguio City.

Francisco Nio (Nio), one of the herein respondents, who has been occupying the lot,contested the award by filing a Petition Protest on December 23, 1975 before the Bureau ofLands.

The Director of Lands dismissed the Petition Protest by Order of November 11, 1976.

Nio appealed the dismissal all the way to the Supreme Court but he did not succeed.

The decision of the Director of Lands dated November 11, 1976 having become final andexecutory,1the then-Executive Director of the Department of Environment and NaturalResources-Cordillera Autonomous Region (DENR-CAR), on petition of Narcisa, issued anOrder of Execution dated February 1, 1993 directing the Community Environment and NaturalResources Office (CENRO) Officer to enforce the decision "by ordering Petitioner Nio andthose acting in his behalf to refrain from continuously occupying the area and remove whateverimprovements they may have introduced thereto."2

Attempts to enforce the Order of Execution failed, prompting Narcisa to file a complaint forejectment before the Baguio City Municipal Trial Court in Cities (MTCC). The MTCC dismissedNarcisas complaint, however, by Order3of August 7, 1996.

Narcisas counsel, Atty. Edilberto Claravall (Atty. Claravall), later petitioned the DENR-CAR forthe issuance of a Special Order authorizing the City Sheriff of Baguio, the City Police Station,and the Demolition Team of the City Government to demolish or remove the improvements onthe lot introduced by Nio. The DENR-CAR denied the petition, citing lack of jurisdiction overthe City Sheriff of Baguio, the City Police Station, and the Demolition Team of the CityGovernment. The DENR-CAR also invoked Section 14 (now Section 10 (d)) of Rule 39 of theRules of Court.4
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Atty. Claravall thereupon moved to have the Order of Execution previously issued by the DENR-CAR amended, which was granted. As amended, the Order of Execution addressed to theCENRO Officer read:

WHEREFORE, pursuant to the provisions of Section 1844 of the Revised Administrative Codeas amended by Act No. 3077, you are hereby enjoined to enforce the aforementioned order,

with the assistance upon request of the City Sheriff of Baguio City, the Demolition Team ofBaguio City and the Baguio City Police Station, by Ordering Petitioner Nio and those acting inhis behalf to refrain from continuously occupying the area and remove whateverimprovements they may have introduced thereto.

x x x x

SO ORDERED.5 (Emphasis and underscoring supplied)

The DENR-CENRO, together with the Demolition Team of Baguio City and the Baguio Citypolice, desisted, however, in their earlier attempt to enforce the Amended Order of Execution. 6

On July 16, 1997, the Demolition Team of Baguio City headed by Engineer Orlando Genoveand the Baguio City Police, on orders of then Baguio City Police Officer-In-Charge (OIC) DonatoBacquian, started demolishing the houses of Nio and his herein co-respondents. 7

The demolition was, however, temporarily stopped upon the instructions of DENR-CENR OfficerGuillermo Fianza, who later advised Nio that the DENR-CENRO would implement the

Amended Order of Execution on August 4, 1997.8

Nio and his wife Josefina Nio thereupon filed a Petition9 for Certiorari and Prohibition withPrayer for Temporary Restraining Order before the Regional Trial Court (RTC) of Baguio Cityagainst Guillermo Fianza, Teofilo Olimpo of the DENR-CENRO, Mayor Mauricio Domogan

(hereafter petitioner), Atty. Claravall, Engr. Orlando Genove (hereafter petitioner), RolandoAngara, and Police Officer Donato Bacquian challenging the Amended Order of Executionissued by the DENR-CENRO.1avvphil.net

The Nio spouses later filed an Amended Petition10 by impleading Emmanuel Nio and EurlieOcampo as therein co-petitioners and the City of Baguio (hereafter petitioner) and Narcisa astherein additional respondents, and further praying for damages.

Branch 6 of the Baguio RTC dismissed the petition of Nio et al. (hereafter respondents) for lackof merit.11Respondents Motion for Reconsideration12 having been denied, they filed a Petitionfor Review13 under Rule 42 of the Rules before the Court of Appeals.

By Decision14 of December 11, 2002, the Court of Appeals granted the Petition for Review,holding that Sec. 10(d) of Rule 39 of the Rules reading:

SEC. 10. Execution of judgments for specific act.

x x x x
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(d) Removal of improvements on property subject of execution. When the property subject ofthe execution contains improvements constructed or planted by the judgment obligor or hisagent, the officer shall not destroy, demolish or remove said improvements except upon specialorder of the court, issued upon motion of the judgment obligee after due hearing and after theformer has failed to remove the same within a reasonable time fixed by the court. (Underscoringsupplied)

applies.

Thus disposed the appellate court:

WHEREFORE, the instant appeal is hereby GRANTED and the Orders dated September 24,1997 and November 23, 1998 are hereby SET ASIDE. Public respondent City Mayor MauricioDomogan thru the Demolition Team and City Engineers Office are hereby ordered to cease anddesist from enforcing the amended order of executionissued by Oscar N. Hamada, RegionalExecutive Director of the Department of Environmental and Natural Resources, concerning thedemolition or removal of the structures made by petitioners until private respondent applied for aspecial order abovementioned with the proper court.1avvphil.net

SO ORDERED.15 (Underscoring supplied)

Respondents filed before the appellate court an Ex-Parte Motion for Reconsideration16 onJanuary 9, 2003, alleging that some of the reliefs they prayed for in their petition were leftunacted upon.17 Petitioners too filed a Motion for Reconsideration18 on January 28, 2003, raisingthe following grounds:

1. THE HONORABLE COURT FAILED TO CONSIDER THAT THE CITY MAYOR HASTHE POWER TO ORDER THE DEMOLITION OF ILLEGALLY-BUILT STRUCTURES;

2. THE HONORABLE COURT GRAVELY ERRED IN GIVING DUE COURSE TO THEPETITION FOR REVIEW;

3. THE HONORABLE COURT MISAPPLIED SEC. 10 (d), RULE 39 of the RULES OFCOURT.19(Underscoring supplied)

In support of the first ground, petitioners raised before the appellate court, in their Motion forReconsideration, for the first time, the power of the City Mayor to validly order the demolition ofa structure constructed without a building permit pursuant to Sec. 455(b) 3(vi) of the LocalGovernment Code of 1991 in relation to the National Building Code of the Philippines.

Alleging that respondents built their house without the required entry and building permits,

petitioners argued that the City Mayor may order the demolition of a house without a specialcourt order.20

The Court of Appeals denied both parties motions for reconsideration by Resolution 21 ofDecember 17, 2003.

Hence, the present petition of the City of Baguio, Mayor Domogan (now a Congressman), andOrlando Genove, faulting the appellate court:
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1. . . . IN RULING THAT A SPECIAL COURT ORDER IS NEEDED FOR THEDEMOLITION OF RESPONDENTS STRUCTURES;

2. . . . IN APPLYING SEC. 10(d) RULE 39 OF THE RULES OF COURT IN THIS CASE;

3. . . . IN ENTERTAINING RESPONDENTS PETITION FOR REVIEW.22

The petition fails.

While it is noted that respondents appeal to the Court of Appeals was erroneously broughtunder Rule 42 of the Rules of Court, instead of under Rule 41, the RTC having rendered thequestioned decision in the exercise of its original, not appellate, jurisdiction, this Court overlooksthe error in view of the merits of respondents case.23

Petitioners contention that the enforcement of the Amended Order of Execution does not needa hearing and court order which Sec. 10(d) of Rule 39 of the Rules of Court requires does notlie. That an administrative agency which is clothed with quasi-judicial functions issued the

Amended Order of Execution is of no moment, since the requirement in Sec. 10 (d) of Rule 39of the Rules of Court echoes the constitutional provision that "no person shall be deprived oflife, liberty or property without due process of law, nor shall any person be denied the equalprotection of the laws."24

Antipolo Realty Corporation v. National Housing Authorityteaches:

In general, the quantum of judicial or quasi-judicial powers which an administrative agency mayexercise is defined in the enabling act of such agency. In other words, the extent to which anadministrative entity may exercise such powers depends largely, if not wholly, on the provisionsof the statute creating or empowering such agency.25(Underscoring supplied)

There is, however, no explicit provision granting the Bureau of Lands (now the LandManagement Bureau) or the DENR (which exercises control over the Land ManagementBureau) the authority to issue an order of demolition26 which the Amended Order ofExecution, in substance, is.

Indeed,

[w]hile the jurisdiction of the Bureau of Lands is confined to the determination of the respectiverights of rival claimants to public lands or to cases which involve the disposition of publiclands, the power to determine who has the actual, physical possession or occupation orthe better right of possession over public lands remains with the courts.

The rationale is evident. The Bureau of Lands does not have the wherewithal to police publiclands. Neither does it have the means to prevent disorders or breaches of peace among theoccupants. Its power is clearly limited to disposition and alienation and while it may decidedisputes over possession, this is but in aid of making the proper awards. The ultimate power toresolve conflicts of possession is recognized to be within the legal competence of thecivil courts and its purpose is to extend protection to the actual possessors andoccupants with a view to quell social unrest.27 (Emphasis added)
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Consequently, this Court held:28

x x x the power to order the sheriff to remove improvements and turn over thepossession of the land to the party adjudged entitled thereto, belongs only to the courtsof justice and not to the Bureau of Lands.29 (Emphasis and underscoring supplied)

In fine, it is the court sheriff which is empowered to remove improvements introduced byrespondents on, and turn over possession of, the lot to Narcisa.

Petitioners invocation of the City Mayors authority under Sec. 455(b) 3(vi) of the LocalGovernment Code to order the demolition or removal of an illegally constructed house, building,or structure within the period prescribed by law or ordinance and their allegation thatrespondents structures were constructed without building permits30were not raised before thetrial court. Petitioners having, for the first time, invoked said section of the Local GovernmentCode and respondents lack of building entry permits in their Motion for Reconsideration of theCourt of Appeals decision, it was correctly denied of merit ,31 it being settled that matters,theories or arguments not brought out in the proceedings below will ordinarily not be consideredby a reviewing court as they cannot be raised for the first time on appeal.32

WHEREFORE, the petition is DISMISSED. The questioned Decision and Resolution of theCourt of Appeals areAFFIRMED.

No pronouncement as to costs.

SO ORDERED.

CONCHITA CARPIO MORALESAssociate Justice
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EN BANC

G.R. No. 162070 October 19, 2005

DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY JOSE MARI B.PONCE (OIC),Petitionervs.DELIA T. SUTTON, ELLA T. SUTTON-SOLIMAN and HARRY T. SUTTON, Respondents.

D E C I S I O N

PUNO, J.:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision

and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004,respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null andvoid for being violative of the Constitution.

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has beendevoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the thenexisting agrarian reform program of the government, respondents made a voluntary offer to sell(VOS)1 their landholdings to petitioner DAR to avail of certain incentives under the law.

On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as theComprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coveragefarms used for raising livestock, poultry and swine.

On December 4, 1990, in an en bancdecision in the case ofLuz Farms v. Secretary ofDAR,2this Court ruled that lands devoted to livestock and poultry-raising are not included in thedefinition of agricultural land. Hence, we declared as unconstitutional certain provisions of theCARL insofar as they included livestock farms in the coverage of agrarian reform.

In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request towithdraw their VOS as their landholding was devoted exclusively to cattle-raising and thusexempted from the coverage of the CARL.3

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspectedrespondents land and found that it was devoted solely to cattle-raising and breeding. He

recommended to the DAR Secretary that it be exempted from the coverage of the CARL.

On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS andrequested the return of the supporting papers they submitted in connection therewith. 4 Petitionerignored their request.

On December 27, 1993, DAR issued A.O. No. 9, series of 1993,5 which provided that onlyportions of private agricultural lands used for the raising of livestock, poultry and swine as of
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June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of landto be excluded, the A.O. fixed the following retention limits, viz: 1:1 animal-land ratio (i.e., 1hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded fromthe operations of the CARL.

On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider asfinal and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entirelandholding is exempted from the CARL.6

On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order7 partiallygranting the application of respondents for exemption from the coverage of CARL. Applying theretention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares ofrespondents land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure.Petitioner ordered the rest of respondents landholding to be segregated and placed underCompulsory Acquisition.

Respondents moved for reconsideration. They contend that their entire landholding should beexempted as it is devoted exclusively to cattle-raising. Their motion was denied.8They filed anotice of appeal9with the Office of the President assailing: (1) the reasonableness and validityof DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock indetermining the land area qualified for exclusion from the CARL, and (2) the constitutionality ofDAR A.O. No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising landsexcluded from the coverage of agrarian reform.

On October 9, 2001, the Office of the President affirmed the impugned Order of petitionerDAR.10It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case asthe A.O. provided the guidelines to determine whether a certain parcel of land is being used forcattle-raising. However, the issue on the constitutionality of the assailed A.O. was left forthe determination of the courts as the sole arbiters of such issue.

On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9,s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission to excludelivestock farms from the land reform program of the government. The dispositive portion reads:

WHEREFORE, premises considered, DAR Administrative Order No. 09, Series of 1993 ishereby DECLARED null and void. The assailed order of the Office of the President dated 09October 2001 in so far as it affirmed the Department of Agrarian Reforms ruling that petitionerslandholding is covered by the agrarian reform program of the governmentis REVERSED and SET ASIDE.

SO ORDERED.

11

Hence, this petition.

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

Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it issuedDAR A.O. No. 9 to limit the area of livestock farm that may be retained by a landowner pursuant
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to its mandate to place all public and private agricultural lands under the coverage of agrarianreform. Petitioner also contends that the A.O. seeks to remedy reports that some unscrupulouslandowners have converted their agricultural farms to livestock farms in order to evade theircoverage in the agrarian reform program.

Petitioners arguments fail to impress.

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

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

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

Clearly, petitionerDAR has no power to regulate livestock farms which have beenexempted by the Constitution from the coverage of agrarian reform. It has exceeded itspower in issuing the assailed A.O.

The subsequent case ofNatalia Realty, Inc. v. DAR16reiterated our ruling in the LuzFarms case. In Natalia Realty, the Court heldthat industrial, commercial and residential landsare not covered by the CARL.17 We stressed anew that while Section 4 of R.A. No. 6657provides that the CARL shall cover all public and private agricultural lands,the term"agricultural land" does not include lands classified as mineral, forest, residential,commercial or industrial. Thus, in Natalia Realty, even portions of the Antipolo Hills
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Subdivision, which are arable yetstill undeveloped, could not be considered as agriculturallands subject to agrarian reform as these lots were already classified as residential lands.

A similar logical deduction should be followed in the case at bar. Lands devoted to raising oflivestock, poultry and swine have been classified as industrial, not agricultural, lands and thusexempt from agrarian reform. Petitioner DAR argues that, in issuing the impugned A.O., it was

seeking to address the reports it has received that some unscrupulous landowners have beenconverting their agricultural lands to livestock farms to avoid their coverage by the agrarianreform. Again, we find neither merit nor logic in this contention. The undesirable scenariowhich petitioner seeks to prevent with the issuance of the A.O. clearly does not apply inthis case.Respondents family acquired their landholdings as early as 1948. They have longbeen in the business of breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the Philippines.18Petitioner DAR does not dispute this fact. Indeed, there isno evidence on record that respondents have just recently engaged in or converted to thebusiness of breeding cattle after the enactment of the CARL that may lead one to suspect thatrespondents intended to evade its coverage. It must be stressed that what the CARL prohibits istheconversion of agricultural landsfor non-agricultural purposes after the effectivity of theCARL. There has been no change of business interest in the case of respondents.

Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute byCongress without substantial change is an implied legislative approval and adoption of theprevious law. On the other hand, by making a new law, Congress seeks to supersede an earlierone.19 In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No.788120 which amended certain provisions of the CARL. Specifically, the new law changed thedefinition of the terms "agricultural activity" and "commercial farming" by dropping fromits coverage lands that are devoted to commercial livestock, poultry and swine-raising.21With this significant modification, Congress clearly sought to align theprovisions of our agrarian laws with the intent of the 1987 Constitutional Commission toexclude livestock farms from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with the provisionsof the Constitution. They cannot amend or extend the Constitution. To be valid, they mustconform to and be consistent with the Constitution. In case of conflict between an administrativeorder and the provisions of the Constitution, the latter prevails. 22 The assailed A.O. of petitionerDAR was properly stricken down as unconstitutional as it enlarges the coverage of agrarianreform beyond the scope intended by the 1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and Resolution of theCourt of Appeals, dated September 19, 2003 and February 4, 2004, respectively, are

AFFIRMED. No pronouncement as to costs.

SO ORDERED.

REYNATO S. PUNO
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Manila

SECOND DIVISION

G.R. Nos. L-32370 & 32767 April 20, 1983

SIERRA MADRE TRUST, petitioner,vs.HONORABLE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, DIRECTOROF MINES, JUSAN TRUST MINING COMPANY, and J & S PARTNERSHIP, respondents.

Lobruga Rondoz & Cardenas Law Offices for petitioner.

Fortunato de Leon for respondents.

ABAD SANTOS, J.:

This is a petition to review a decision of the Secretary of Agriculture and Natural Resourcesdated July 8, 1970, in DANR Cases Numbered 3502 and 3502-A. The decision affirmed adecision of the Director of Mines dated November 6, 1969.

The appeal was made pursuant to Sec. 61 of the Mining Law (C.A. No. 137, as amended) whichprovides: "... Findings of facts in the decision or order of the Director of Mines when affirmed bythe Secretary of Agriculture and Natural Resources shall be final and conclusive, and theaggrieved party or parties desiring to appeal from such decision or order shall file in the

Supreme Court a petition for review wherein only questions of law may be raised."

The factual background is given in the brief of the petitioner-appellant which has not beencontradicted by the respondents-appellees and is as follows:

On July 26, 1962, the Sierra Madre Trust filed with the Bureau of Mines anAdverse Claim against LLA No. V-7872 (Amd) of the Jusan Trust MiningCompany over six (6) lode mineral claims, viz.: (1) Finland 2, (2) Finland 3, (3)Finland 5, (4) Finland 6, (5) Finland 8 and (6) Finland 9, all registered onDecember 11, 1964 with the office of the Mining Recorder of Nueva Vizcaya, andall situated in Sitio Maghanay, Barrio Abaca Municipality of Dupax, Province ofNueva Vizcaya.

The adverse claim alleged that the aforementioned six (6) lode minerals claimscovered by LLA No. V-7872 (Amd) encroached and overlapped the eleven (11)lode mineral claims of the herein petitioner Sierra Madre Trust, viz., (1) A-12, (2)H-12, (3) JC-11, (4) W-11, (5) JN-11, (6)WM-11, (7) F-10, (8) A-9, (9) N-9, (10)W-8, and (11) JN-8, all situated in Sitio Taduan Barrio of Abaca, Municipality ofDupax, Province of Nueva Vizcaya, and duly registered with the office of theMining Recorder at Bayombong, Nueva Vizcaya on May 14, 1965.


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The adverse claim prayed for an order or decision declaring the above-mentioned six (6) lode mineral claims of respondent Jusan Trust MiningCompany, null, void, and illegal; and denying lode lease application LLA No. V-7872 over said claims. Further, the adverse claimant prayed for such other reliefsand remedies available in the premises.

This adverse claim was docketed in the Bureau of Mines as Mines AdministrativeCase No. V-404, and on appeal to the Department of Agriculture and NaturalResources as DANR Case No. 3502.

Likewise, on the same date July 26, 1966, the same Sierra Madre Trust filed withthe Bureau of Mines an Adverse Claim against LLA No. V-9028 of the J & SPartnership over six (6) lode mineral claims viz.: (1) A-19, (2) A-20, (3) A-24, (4)

A-25, (5) A-29, and (6) A-30, all registered on March 30, 1965 and amendedAugust 5, 1965, with the office of the Mining Recorder of Nueva Vizcaya, andsituated in Sitio Gatid, Barrio of Abaca Municipality of Dupax, Province of NuevaVizcaya.

The adverse claim alleged that the aforementioned six (6) lode mineral claimcovered by LLA No. V-9028, encroached and overlapped the thirteen (13) lodemineral claims of herein petitioner Sierra Madre Trust, viz.: (1) Wm-14, (2) F-14,(3) A-13, (4) H-12 (5) Jc-12, (6) W-12, (7) Jn-11, (8) Wm-11, (9) F-11, (10) Wm-11, (11) F-11; (12) H-9 and (13) Jc-9, all situated in Sitio Taduan, Barrio of AbacaMunicipality of Dupax, Province of Nueva Vizcaya and duly registered with theoffice of the Mining Recorder at Bayombong, Nueva Vizcaya, on May 14,1965.

The adverse claim prayed for an order or decision declaring the above-mentioned six (6) claims of respondent J & S Partnership, null void, and illegal;and denying lode lease application LLA No. V-9028 over the said claims. Further,the adverse claimant prayed for such other reliefs and remedies available in thepremises.

This adverse claim was docketed in the Bureau of Mines as Mines AdministrativeCase No. V-404, and on appeal to the Department of Agriculture and NaturalResources as DANR Case No. 3502A.

These two (2) adverse claims, MAC Nos. V-403 and V-404 were jointly heard inthe Bureau of Mines, and also jointly considered in the appeal in the Departmentof Agriculture and Natural Resources.

The dispositive portion of the decision rendered by the Director of Mines reads:

IN VIEW OF THE FOREGOING, this Office believes and so holds that therespondents have the preferential right over their "Finland-2", "Finland- 3","Finland-5", "Finland-6", "Finland-8", "Finland-9", "A-19", "A-20", "A-24", "A-25","A-29" and "A-30" mining claims. Accordingly, the protests (adverse claims) filedby protestant Sierra Madre Trust should be, as hereby they are, DISMISSED.

And that of the Secretary of Agriculture and Natural Resources reads:


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IN THE LIGHT OF ALL THE FOREGOING, the appeal interposed by theappellant, Sierra Madre Trust is hereby dismissed and the decision of theDirector of Mines dated November 6, 1969, affirmed. "

The adverse claims of Sierra Madre Trust against Jusan Trust Mining Company and J and SPartnership were based on the allegation that the lode lease applications (LLA) of the latter

"encroached and overlapped" the former's mineral claims, However, acting on the adverseclaims, the Director of Mines found that, "By sheer force of evidence, this Office is constrainedto believe that there exists no conflict or overlapping between the protestant's and respondents'mining claims. " And this finding was affirmed by the Secretary of Agriculture and NaturalResources thus: "Anent the first allegation, this Office finds that the Director of Mines did not errwhen he found that the twelve (12) claims of respondents Jusan Trust Mining Company and J &S Partnership did not encroach and overlap the eighteen (18) lode mineral claims of theappellant Sierra Madre Trust. For this fact has been incotrovertibly proven by the recordsappertaining to the case."

It should be noted that according to the Director of Mines in his decision, "during the interveningperiod from the 31st day after the discovery [by the respondents] to the date of location nobody

else located the area covered thereby. ... the protestant [petitioner herein] did not establish anyintervening right as it is our findings that their mining claims do not overlap respondents' miningclaims."

After the Secretary of Agriculture and Natural Resources had affirmed the factual findings of theDirector of Mines to the effect that there was no overlapping of claims and which findings werefinal and conclusive, Sierra Madre Trust should have kept its peace for obviously it suffered nomaterial injury and had no pecuniary interest to protect. But it was obstinate and raised this legalquestion before Us: "May there be a valid location of mining claims after the lapse of thirty (30)days from date of discovery, in contravention to the mandatory provision of Section 33 of theNew Mining Law (Com. Act No. 137, as amended)?" It also raised ancillary questions.

We see no reason why We have to answer the questions in this petition considering that there isno justiciable issue between the parties. The officers of the Executive Department tasked withadministering the Mining Law have found that there is neither encroachment nor overlapping inrespect of the claims involved. Accordingly, whatever may be the answers to the questions willnot materially serve the interests of the petitioner. In closing it is useful to remind litigation proneindividuals that the interpretation by officers of laws which are entrusted to their administration isentitled to great respect.' In his decision, the Secretary of Agriculture and Natural Resourcessaid: "This Office is in conformity with the findings of the Director of Mines that the mining claimsof the appellees were validly located, surveyed and registered."

Finally, the petitioner also asks: "May an association and/or partnership registered with theMining Recorder of a province, but not registered with the Securities and ExchangeCommission, be vested with juridical personality to enable it to locate and then lease miningclaims from the government?" Suffice it to state that this question was not raised before theDirector of Mines and the Secretary of Agriculture and Natural Resources. There is also nothingin the record to indicate whether or not the appellees are registered with the Securities andExchange Commission. For these reasons, even assuming that there is a justiciable issuebetween the parties, this question cannot be passed upon.


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WHEREFORE, the petition for review is hereby dismissed for lack of merit. Costs against thepetitioner.

SO ORDERED.

Makasiar (Chairman), Concepcion Jr., Guerrero, De Castro and Escolin JJ., concur.

Aquino, J., is on leave.

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