THIRD DIVISION

[G.R. No. 116033. February 26, 1997]

ALFREDO L. AZARCON, petitioner, vs. SANDIGANBAYAN, PEOPLE OF THE PHILIPPINES and JOSE C. BATAUSA, respondents.

D E C I S I O NPANGANIBAN, J.:

Does the Sandiganbayan have jurisdiction over a private individual who is charged with malversation of public funds as a principal after the said individual had been designated by the Bureau of Internal Revenue as a custodian of distrained property? Did such accused become a public officer and therefore subject to the graft court’s jurisdiction as a consequence of such designation by the BIR?

These are the main questions in the instant petition for review of respondent Sandiganbayan’s Decisioni in Criminal Case No. 14260 promulgated on March 8, 1994, convicting petitioner of malversation of public funds and property, and Resolution ii dated June 20, 1994, denying his motion for new trial or reconsideration thereof.

The Facts

Petitioner Alfredo Azarcon owned and operated an earth-moving business, hauling “dirt and ore.”iii His services were contracted by the Paper Industries Corporation of the Philippines (PICOP) at its concession in Mangagoy, Surigao del Sur. Occasionally, he engaged the services of sub-contractors like Jaime Ancla whose trucks were left at the former’s premises.iv From this set of circumstances arose the present controversy.

“x x x It appears that on May 25, 1983, a Warrant of Distraint of Personal Property was issued by the Main Office of the Bureau of Internal Revenue (BIR) addressed to the Regional Director (Jose Batausa) or his authorized representative of Revenue Region 10, Butuan City commanding the latter to distraint the goods, chattels or effects and other personal property of Jaime Ancla, a sub-contractor of accused Azarcon and, a delinquent taxpayer. The Warrant of Garnishment was issued to accused Alfredo Azarcon ordering him to transfer, surrender, transmit and/or remit to BIR the property in his possession

owned by taxpayer Ancla. The Warrant of Garnishment was received by accused Azarcon on June 17, 1985.”v

Petitioner Azarcon, in signing the “Receipt for Goods, Articles, and Things Seized Under Authority of the National Internal Revenue,” assumed the undertakings specified in the receipt the contents of which are reproduced as follows:

“(I), the undersigned, hereby acknowledge to have received from Amadeo V. San Diego, an Internal Revenue Officer, Bureau of Internal Revenue of the Philippines, the following described goods, articles, and things:

Kind of property

--- Isuzu dump truck

Motor number

--- E120-229598

Chassis No.

--- SPZU50-1772440

Number of CXL

--- 6

Color --- Blue

Owned By

--- Mr. Jaime Ancla

the same having been this day seized and left in (my) possession pending investigation by the Commissioner of Internal Revenue or his duly authorized representative. (I) further promise that (I) will faithfully keep, preserve, and, to the best of (my) ability, protect said goods, articles, and things seized from defacement, demarcation, leakage, loss, or destruction in any manner; that (I) will neither alter nor remove, nor permit others to alter or remove or dispose of the same in any manner without the express authority of the Commissioner of Internal Revenue; and that (I) will produce and deliver all of said goods, articles, and things upon the order of any court of the Philippines, or upon demand of the Commissioner of Internal Revenue or any authorized officer or agent of the Bureau of Internal Revenue.”vi

Subsequently, Alfredo Azarcon wrote a letter dated November 21, 1985 to the BIR’s Regional Director for Revenue Region 10 B, Butuan City stating that

“x x x while I have made representations to retain possession of the property and signed a receipt of the same, it appears now that Mr. Jaime Ancla intends to cease his operations with us. This is evidenced by the fact that sometime in August, 1985 he surreptitiously withdrew his equipment from my custody. x x x In this connection, may I therefore formally inform you that it is my desire to immediately relinquish whatever responsibilities I have over the above-mentioned property by virtue of the receipt I have signed. This cancellation shall take effect immediately. x x x .”vii

Incidentally, the petitioner reported the taking of the truck to the security manager of PICOP, Mr. Delfin Panelo, and requested him to prevent this truck from being taken out of the PICOP concession. By the time the order to bar the truck’s exit was given, however, it was too late.viii

Regional Director Batausa responded in a letter dated May 27, 1986, to wit:

“An analysis of the documents executed by you reveals that while you are (sic) in possession of the dump truck owned by JAIME ANCLA, you voluntarily assumed the liabilities of safekeeping and preserving the unit in behalf of the Bureau of Internal Revenue. This is clearly indicated in the provisions of the Warrant of Garnishment which you have signed, obliged and committed to surrender and transfer to this office. Your failure therefore, to observe said provisions does not relieve you of your responsibility.”ix

Thereafter, the Sandiganbayan found that

“On 11 June 1986, Mrs. Marilyn T. Calo, Revenue Document Processor of Revenue Region 10 B, Butuan City, sent a progress report to the Chief of the Collection Branch of the surreptitious taking of the dump truck and that Ancla was renting out the truck to a certain contractor by the name of Oscar Cueva at PICOP (Paper Industries Corporation of the Philippines, the same company which engaged petitioner’s earth moving services), Mangagoy, Surigao del Sur. She also suggested that if the report were true, a warrant of garnishment be reissued against Mr. Cueva for whatever amount of rental is due from Ancla until such time as the latter’s tax liabilities shall be deemed satisfied. x x x However, instead of doing so, Director Batausa filed a letter-complaint against the (herein Petitioner) and Ancla on 22 January 1988, or after more than one year had elapsed from the time of Mrs. Calo’s report.”x

Provincial Fiscal Pretextato Montenegro “forwarded the records of the complaint x x x to the Office of the Tanodbayan” on May 18, 1988. He was deputized Tanodbayan prosecutor and granted authority to conduct preliminary investigation on August 22, 1988, in a letter by Special Prosecutor Raul Gonzales approved by Ombudsman (Tanodbayan) Conrado Vasquez.xi

Along with his co-accused Jaime Ancla, petitioner Azarcon was charged before the Sandiganbayan with the crime of malversation of public funds or property under Article 217 in relation to Article 222 of the Revised Penal Code (RPC) in the following Informationxiifiled on January 12, 1990, by Special Prosecution Officer Victor Pascual:

“That on or about June 17, 1985, in the Municipality of Bislig, Province of Surigao del Sur, Philippines, and within the jurisdiction of this Honorable Court, accused Alfredo L. Azarcon, a private individual but who, in his capacity as depository/administrator of property seized or deposited by the Bureau of Internal Revenue, having voluntarily offered himself to act as custodian of one Isuzu Dumptruck (sic) with Motor No. E120-22958, Chasis No. SPZU 50-1772440, and number CXL-6 and was authorized to be such under the authority of the Bureau of Internal Revenue, has become a responsible and accountable officer and said motor vehicle having been seized from Jaime C. Ancla in satisfaction of his tax liability in the total sum of EIGHTY THOUSAND EIGHT HUNDRED THIRTY ONE PESOS and 59/100 (P80,831.59) became a public property and the value thereof as public fund, with grave abuse of confidence and conspiring and confederating with said Jaime C. Ancla, likewise, a private individual, did then and

there wilfully, (sic) unlawfully and feloniously misappropriate, misapply and convert to his personal use and benefit the aforementioned motor vehicle or the value thereof in the aforestated amount, by then and there allowing accused Jaime C. Ancla to remove, retrieve, withdraw and tow away the said Isuzu Dumptruck (sic) with the authority, consent and knowledge of the Bureau of Internal Revenue, Butuan City, to the damage and prejudice of the government in the amount of P80,831.59 in a form of unsatisfied tax liability.

CONTRARY TO LAW.”

The petitioner filed a motion for reinvestigation before the Sandiganbayan on May 14, 1991, alleging that: (1) the petitioner never appeared in the preliminary investigation; and (2) the petitioner was not a public officer, hence a doubt exists as to why he was being charged with malversation under Article 217 of the Revised Penal Code.xiii The Sandiganbayan granted the motion for reinvestigation on May 22, 1991. xiv

After the reinvestigation, Special Prosecution Officer Roger Berbano, Sr., recommended the “withdrawal of the information”xv but was “overruled by the Ombudsman.”xvi

A motion to dismiss was filed by petitioner on March 25, 1992 on the ground that the Sandiganbayan did not have jurisdiction over the person of the petitioner since he was not a public officer.xvii On May 18, 1992, the Sandiganbayan denied the motion.xviii

When the prosecution finished presenting its evidence, the petitioner then filed a motion for leave to file demurrer to evidence which was denied on November 16, 1992, “for being without merit.”xix The petitioner then commenced and finished presenting his evidence on February 15, 1993.

The Respondent Court’s Decision

On March 8, 1994, respondent Sandiganbayanxx rendered a Decision,xxi the dispositive portion of which reads:

“WHEREFORE, the Court finds accused Alfredo Azarcon y Leva GUILTY beyond reasonable doubt as principal of Malversation of Public Funds defined and penalized under Article 217 in relation to Article 222 of the Revised Penal Code and, applying the Indeterminate Sentence Law, and in view of the mitigating circumstance of voluntary surrender, the Court hereby sentences the accused to suffer the penalty of imprisonment ranging from TEN (10) YEARS and ONE (1) DAY of prision mayor in its maximum period to SEVENTEEN (17) YEARS, FOUR (4) MONTHS and ONE (1) DAY of Reclusion Temporal. To indemnify the Bureau of Internal Revenue the amount of P80,831.59; to pay a fine in the same amount without subsidiary imprisonment in case of insolvency; to suffer special perpetual disqualification; and, to pay the costs.

Considering that accused Jaime Ancla has not yet been brought within the jurisdiction of this Court up to this date, let this case be archived as against him without prejudice to its revival in the event of his arrest or voluntary submission to the jurisdiction of this Court.

SO ORDERED.”

Petitioner, through new counsel,xxii filed a motion for new trial or reconsideration on

March 23, 1994, which was denied by the Sandiganbayan in its Resolution xxiii dated December 2, 1994.

Hence, this petition.

The Issues

The petitioner submits the following reasons for the reversal of the Sandiganbayan’s assailed Decision and Resolution:

“I. The Sandiganbayan does not have jurisdiction over crimes committed solely by private individuals.

II. In any event, even assuming arguendo that the appointment of a private individual as a custodian or a depositary of distrained property is sufficient to convert such individual into a public officer, the petitioner cannot still be considered a public officer because:

[A]

There is no provision in the National Internal Revenue Code which authorizes the Bureau of Internal Revenue to constitute private individuals as depositaries of distrained properties.

[B]

His appointment as a depositary was not by virtue of a direct provision of law, or by election or by appointment by a competent authority.

III. No proof was presented during trial to prove that the distrained vehicle was actually owned by the accused Jaime Ancla; consequently, the government’s right to the subject property has not been established.

IV. The procedure provided for in the National Internal Revenue Code concerning the disposition of distrained property was not followed by the B.I.R., hence the distraint of personal property belonging to Jaime C. Ancla and found allegedly to be in the possession of the petitioner is therefore invalid.

V. The B.I.R. has only itself to blame for not promptly selling the distrained property of accused Jaime C. Ancla in order to realize the amount of back taxes owed by Jaime C. Ancla to the Bureau.”xxiv

In fine, the fundamental issue is whether the Sandiganbayan had jurisdiction over the subject matter of the controversy. Corollary to this is the question of whether petitioner can be considered a public officer by reason of his being designated by the Bureau of Internal Revenue as a depositary of distrained property.

The Court’s Ruling

The petition is meritorious.

Jurisdiction of the Sandiganbayan

It is hornbook doctrine that in order “(to) ascertain whether a court has jurisdiction or not, the provisions of the law should be inquired into.” xxv Furthermore, “the jurisdiction of the court must appear clearly from the statute law or it will not be held to exist. It cannot be presumed or implied.”xxvi And for this purpose in criminal cases, “the jurisdiction of a court is determined by the law at the time of commencement of the action.”xxvii

In this case, the action was instituted with the filing of this information on January 12, 1990; hence, the applicable statutory provisions are those of P.D. No. 1606, as amended by P.D. No. 1861 on March 23, 1983, but prior to their amendment by R.A. No. 7975 on May 16, 1995. At that time, Section 4 of P.D. No. 1606 provided that:

“SEC. 4. Jurisdiction. -- The Sandiganbayan shall exercise:

(a) Exclusive original jurisdiction in all cases involving:

(1) Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the Revised Penal Code;

(2) Other offenses or felonies committed by public officers and employees in relation to their office, including those employed in government-owned or controlled corporations, whether simple or complexed with other crimes, where the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or a fine of P6,000.00: PROVIDED, HOWEVER, that offenses or felonies mentioned in this paragraph where the penalty prescribed by law does not exceed prision correccional or imprisonment for six (6) years or a fine of P6,000.00 shall be tried by the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court.

x x x x x x x x x

In case private individuals are charged as co-principals, accomplices or accessories with the public officers or employees, including those employed in government-owned or controlled corporations, they shall be tried jointly with said public officers and employees.

x x x x x x x x x.”

The foregoing provisions unequivocally specify the only instances when the Sandiganbayan will have jurisdiction over a private individual, i.e. when the complaint charges the private individual either as a co-principal, accomplice or accessory of a public officer or employee who has been charged with a crime within its jurisdiction.

Azarcon: A Public Officer or A Private Individual?

The Information does not charge petitioner Azarcon of being a co-principal, accomplice or accessory to a public officer committing an offense under the Sandiganbayan’s jurisdiction. Thus, unless petitioner be proven a public officer, the Sandiganbayan will have no jurisdiction over the crime charged. Article 203 of the RPC determines who are public officers:

“Who are public officers. -- For the purpose of applying the provisions of this and the preceding titles of the book, any person who, by direct provision of the law, popular election, popular election or appointment by competent authority, shall take part in the performance of public functions in the Government of the Philippine Islands, or shall perform in said Government or in any of its branches public duties as an employee, agent, or subordinate official, of any rank or classes, shall be deemed to be a public officer.”

Thus,

“(to) be a public officer, one must be --

(1) Taking part in the performance of public functions in the government, or

Performing in said Government or any of its branches public duties as an employee, agent, or subordinate official, of any rank or class; and

(2) That his authority to take part in the performance of public functions or to perform public duties must be --

a. by direct provision of the law, or

b. by popular election, or

c. by appointment by competent authority.”xxviii

Granting arguendo that the petitioner, in signing the receipt for the truck constructively distrained by the BIR, commenced to take part in an activity constituting public functions, he obviously may not be deemed authorized by popular election. The next logical query is whether petitioner’s designation by the BIR as a custodian of distrained property qualifies as appointment by direct provision of law, or by competent authority.xxix We answer in the negative.

The Solicitor General contends that the BIR, in effecting constructive distraint over the truck allegedly owned by Jaime Ancla, and in requiring the petitioner Alfredo Azarcon who was in possession thereof to sign a pro forma receipt for it, effectively “designated” petitioner a depositary and, hence, citing U.S. vs. Rastrollo,xxx a public officer.xxxi This is based on the theory that

“(t)he power to designate a private person who has actual possession of a distrained property as a depository of distrained property is necessarily implied in the BIR’s power to place the property of a delinquent tax payer (sic) in distraint as provided for under Sections 206, 207 and 208 (formerly Sections 303, 304 and 305) of the National Internal Revenue Code, (NIRC) x x x.”xxxii

We disagree. The case of U.S. vs. Rastrollo is not applicable to the case before us simply because the facts therein are not identical, similar or analogous to those obtaining here. While the cited case involved a judicial deposit of the proceeds of the

sale of attached property in the hands of the debtor, the case at bench dealt with the BIR’s administrative act of effecting constructive distraint over alleged property of taxpayer Ancla in relation to his back taxes, property which was received by petitioner Azarcon. In the cited case, it was clearly within the scope of that court’s jurisdiction and judicial power to constitute the judicial deposit and give “the depositary a character equivalent to that of a public official.”xxxiii However, in the instant case, while the BIR had authority to require petitioner Azarcon to sign a receipt for the distrained truck, the NIRC did not grant it power to appoint Azarcon a public officer.

It is axiomatic in our constitutional framework, which mandates a limited government, that its branches and administrative agencies exercise only that power delegated to them as “defined either in the Constitution or in legislation or in both.” xxxiv

Thus, although the “appointing power is the exclusive prerogative of the President, x x x”xxxv the quantum of powers possessed by an administrative agency forming part of the executive branch will still be limited to that “conferred expressly or by necessary or fair implication” in its enabling act. Hence, “(a)n administrative officer, it has been held, has only such powers as are expressly granted to him and those necessarily implied in the exercise thereof.”xxxvi Corollarily, implied powers “are those which are necessarily included in, and are therefore of lesser degree than the power granted. It cannot extend to other matters not embraced therein, nor are not incidental thereto.” xxxvii For to so extend the statutory grant of power “would be an encroachment on powers expressly lodged in Congress by our Constitution.”xxxviii It is true that Sec. 206 of the NIRC, as pointed out by the prosecution, authorizes the BIR to effect a constructive distraint by requiring “any person” to preserve a distrained property, thus:

“x x x x x x x x x

The constructive distraint of personal property shall be effected by requiring the taxpayer or any person having possession or control of such property to sign a receipt covering the property distrained and obligate himself to preserve the same intact and unaltered and not to dispose of the same in any manner whatever without the express authority of the Commissioner.

x x x x x x x x x”

However, we find no provision in the NIRC constituting such person a public officer by reason of such requirement. The BIR’s power authorizing a private individual to act as a depositary cannot be stretched to include the power to appoint him as a public officer. The prosecution argues that “Article 222 of the Revised Penal Code x x x defines the individuals covered by the term ‘officers’ under Article 217 xxxix x x x” of the same Code.xl And accordingly, since Azarcon became “a depository of the truck seized by the BIR” he also became a public officer who can be prosecuted under Article 217 x x x.”xli

The Court is not persuaded. Article 222 of the RPC reads:

“Officers included in the preceding provisions. -- The provisions of this chapter shall apply to private individuals who, in any capacity whatever, have charge of any insular, provincial or municipal funds, revenues, or property and to any administrator or depository of funds or property attached, seized or deposited by public authority, even if such property belongs to a private individual.”

“Legislative intent is determined principally from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice.” xlii This is particularly observed in the interpretation of penal statutes which “must be construed with such strictness as to carefully safeguard the rights of the defendant x x x.” xliii The language of the foregoing provision is clear. A private individual who has in his charge any of the public funds or property enumerated therein and commits any of the acts defined in any of the provisions of Chapter Four, Title Seven of the RPC, should likewise be penalized with the same penalty meted to erring public officers. Nowhere in this provision is it expressed or implied that a private individual falling under said Article 222 is to be deemed a public officer.

After a thorough review of the case at bench, the Court thus finds petitioner Alfredo Azarcon and his co-accused Jaime Ancla to be both private individuals erroneously charged before and convicted by Respondent Sandiganbayan which had no jurisdiction over them. The Sandiganbayan’s taking cognizance of this case is of no moment since “(j)urisdiction cannot be conferred by x x x erroneous belief of the court that it had jurisdiction.”xliv As aptly and correctly stated by the petitioner in his memorandum:

“From the foregoing discussion, it is evident that the petitioner did not cease to be a private individual when he agreed to act as depositary of the garnished dump truck. Therefore, when the information charged him and Jaime Ancla before the Sandiganbayan for malversation of public funds or property, the prosecution was in fact charging two private individuals without any public officer being similarly charged as a co-conspirator. Consequently, the Sandiganbayan had no jurisdiction over the controversy and therefore all the proceedings taken below as well as the Decision rendered by Respondent Sandiganbayan, are null and void for lack of jurisdiction.”xlv

WHEREFORE, the questioned Resolution and Decision of the Sandiganbayan are hereby SET ASIDE and declared NULL and VOID for lack of jurisdiction. No costs.

SO ORDERED. Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

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vii

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xAzarcon vs. Sandiganbayan Post under case digests, Political Law at Thursday, March 01, 2012 Posted by Schizophrenic Mind Facts: Petitioner Alfredo Azarcon owned and operated an earth-moving business, hauling dirt and ore. His services were contracted by PICOP. Occasionally, he engaged the services of sub-contractors like Jaime Ancla whose trucks were left at the former’s premises.

On May 25, 1983, a Warrant of Distraint of Personal Property was issued by BIR commanding one of its Regional Directors to distraint the goods, chattels or effects and other personal property of Jaime Ancla, a sub-contractor of accused Azarcon and a delinquent taxpayer. A Warrant of Garnishment was issued to and subsequently signed by accused Azarcon ordering him to transfer, surrender, transmit and/or remit to BIR the property in his possession owned by Ancla. Azarcon then volunteered himself to act as custodian of the truck owned by Ancla.

After some time, Azarcon wrote a letter to the Reg. Dir of BIR stating that while he had made representations to retain possession of the property of Ancla, he thereby relinquishes whatever responsibility he had over the said property since Ancla surreptitiously withdrew his equipment from him. In his reply, the BIR Reg. Dir. said that Azarcon’s failure to comply with the provisions of the warrant did not relieve him from his responsibility.

Along with his co-accused, Azarcon was charged before the Sandiganbayan with the crime of malversation of public funds or property. On March 8, 1994, the Sandiganbayan rendered a Decision sentencing the accused to suffer the penalty of imprisonment ranging from 10 yrs and 1 day of prision mayor in its maximum period to 17 yrs, 4 mos and 1 day of reclusion temporal. Petitioner filed a motion for new trial which was subsequently denied by Sandiganbayan. Hence, this petition.

Issue: Whether or not Sandiganbayan has jurisdiction over a private individual designated by BIR as a custodian of distrained property.

Held: SC held that the Sandiganbayan’s decision was null and void for lack of jurisdiction.

Sec. 4 of PD 1606 provides for the jurisdiction of the Sandiganbayan. It was specified therein that the only instances when the Sandiganbayan will have jurisdiction over a private individual is when the complaint charges the private individual either as a co-principal, accomplice or accessory of a public officer or employee who has been charged with a crime within its jurisdiction.

The Information does no charge petitioner Azarcon of becoming a co-principal, accomplice or accessory to a public officer committing an offense under the Sandiganbayan’s jurisdiction. Thus, unless the petitioner be proven a public officer, Sandiganbayan will have no jurisdiction over the crime charged.

Art. 203 of the RPC determines who public officers are. Granting that the petitioner, in signing the receipt for the truck constructively distrained by the BIR, commenced to take part in an activity constituting public functions, he obviously may not be deemed authorized by popular election. Neither was he appointed by direct provision of law nor by competent authority. While BIR had authority to require Azarcon to sign a receipt for the distrained truck, the National Internal Revenue Code did not grant it power to appoint Azarcon a public officer. The BIR’s power authorizing a private individual to act as a depositary cannot be stretched to include the power to appoint him as a public officer. Thus, Azarcon is not a public officer. "Contested case"

means any proceeding, including licensing, in which the legal rights, duties or privileges asserted by specific parties as required by the Constitution or by law are to be determined after hearing.

Due process in administrative proceedings - G.R. No. 170512 G.R. No. 170512

"x x x.

Ledesma v. Court of Appeals[35] elaborates on the well established doctrine of due process in administrative proceedings as follows: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 one’s side, or an opportunity to seek a reconsideration of the action or ruling complained of.[36]

Moreover, Department of Health v. Camposano[37] restates the guidelines laid down in Ang Tibay v. Court of Industrial Relations[38] that due process in administrative proceedings requires compliance with the following cardinal principles: (1) the respondents’ right to a hearing, which includes the right to present one’s case and submit supporting evidence, must be observed; (2) the tribunal must consider the evidence presented; (3) the decision must have some basis to support itself; (4) there must be substantial evidence; (5) the decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected; (6) in arriving at a decision, the tribunal must have acted on its own consideration of the law and the facts of the controversy and must not have simply accepted the views of a subordinate; and (7) the decision must be rendered in such manner that respondents would know the reasons for it and the various issues involved.[39]

In the present case, the fifth requirement stated above was not complied with. Reyes was not properly apprised of the evidence offered against him, which were eventually made the bases of petitioner’s decision that found him guilty of grave misconduct. To recall, after the affidavit of Acero was filed with the Office of the Ombudsman-Mindanao, the respondents therein, i.e., Reyes and Peñaloza, were ordered to submit their counter-affidavits in order to discuss the charges lodged against them. While Peñaloza acknowledged in his counter-affidavit his participation in the illicit transaction complained of, he pointed to Reyes as the main culprit. Peñaloza thereafter submitted the affidavits of Amper and Valdehueza as witnesses who would substantiate his accusations. However, the records reveal that only the Office of the Ombudsman-Mindanao and Acero

were furnished copies of the said affidavits.[40] Thus, Reyes was able to respond only to the affidavit of Acero. It would appear that Reyes had no idea that Peñaloza, a co-respondent in the administrative case, would point an accusing finger at him and even supply the inculpatory evidence to prove his guilt. The said affidavits were made known to Reyes only after the rendition of the petitioner’s Decision dated September 24, 2001.The fact that Reyes was able to assail the adverse decision of the petitioner via a Motion for Reconsideration Cum Motion to Set the Case for Preliminary Conference did not cure the violation of his right to due process in this case. Reyes filed the said motion precisely to raise the issue of the violation of his right to due process. There is nothing on record to show that Reyes was furnished with, or had otherwise received, a copy of the affidavits of Peñaloza, Amper and Valdehueza, whether before or after the Decision dated September 24, 2001 was issued. Thus, it cannot be said that Reyes had a fair opportunity to squarely and intelligently answer the accusations therein or to offer any rebuttal evidence thereto. It is true that, in the past, this Court has held that the right to due process of a respondent in an administrative case was not violated if he was able to file a motion for reconsideration to refute the evidence against him. However, the instant case should be differentiated from Ruivivar v. Office of the Ombudsman,[41] which likewise involved the issue of administrative due process. In the said case, Ruivivar was found administratively liable for discourtesy in the course of her official functions and was meted the penalty of reprimand. In her motion for reconsideration, Ruivivar argued that she was deprived of due process because she was not furnished copies of the affidavits of complainant’s witnesses. Thereafter, the Ombudsman ordered that Ruivivar be furnished with copies of the affidavits of the witnesses, with the directive for her to file any pleading that she may deem appropriate. As Ruivivar still opted not to controvert the affidavits that were belatedly provided to her, the Ombudsman ruled that her right to due process was not violated and her administrative liability was upheld. The Court affirmed the ruling of the Ombudsman, declaring that “the law can no longer help one who had been who had been given ample opportunity to be heard but who did not take full advantage of the proffered chance.”[42]

In the instant case, petitioner plainly disregarded Reyes’ protestations without giving him a similar opportunity, as in Ruivivar, to be belatedly furnished copies of the affidavits of Peñaloza, Amper and Valdehueza to enable him to refute the same. As it were, petitioner rendered its Decision dated September 24, 2001 on the basis of evidence that were not disclosed to Reyes. This the Court cannot sanction. A judgment in an administrative case that imposes the extreme penalty of dismissal must not only be based on substantial evidence but also rendered with due regard to the rights of the parties to due process.x x x."

xi

xiiAdministrative due process Due process of law in administrative cases is not identical with "judicial process" for a trial in court is not always essential to due process. While a day in court is a matter of right in judicial proceedings, it is otherwise in administrative proceedings since they rest upon different principles. The due process clause guarantees no particular form of procedure and its requirements are not technical. Thus, in certain proceedings of administrative character, the right to a notice or hearing are not essential to due process of law. The constitutional requirement of due process is met by a fair hearing before a regularly established administrative agency or tribunal. It is not essential that hearings be had before the making of a determination if thereafter, there is available trial and tribunal before which all objections and defenses to the making of such determination may be raised and considered. One adequate hearing is all that due process requires.

The requisites of administrative due process are the following:

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

2. The tribunal must consider the evidence presented.

3. The decision must have something to support itself.

4. The evidence must be substantial.

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

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

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

EXECUTIVE ORDER NO. 292 INSTITUTING THE "ADMINISTRATIVE CODE OF 1987"

July 25, 1987

 

BOOK VII  

ADMINISTRATIVE PROCEDURE  

Chapter 1 GENERAL PROVISIONS

      Sec. 1. Scope. - This Book shall be applicable to all agencies as defined in the next succeeding section, except the Congress, the Judiciary, the Constitutional Commissions, military establishments in all matters relating exclusively to Armed Forces personnel, the Board of Pardons and Parole, and state universities and colleges.chanrobles virtual law library

Chapter 2 RULES AND REGULATIONS

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

Chapter 3 ADJUDICATION

      Sec. 10. Compromise and Arbitration. - To expedite administrative proceedings involving conflicting rights or claims and obviate expensive litigations, every agency shall, in the public interest, encourage amicable settlement, comprise and arbitration.

Chapter 4 ADMINISTRATIVE APPEAL INCONTESTED CASES

      Sec. 19. Appeal. - Unless otherwise provided by law or executive order, an appeal form a final decision of the agency may be taken to the Department head.

FINAL PROVISIONS       Sec. 27. Repealing Clause. - All laws, decrees, orders, rules and regulations, or portions thereof, inconsistent with this Code are hereby repealed or modified accordingly.

Forum shopping

is considered a serious offense which can be made by a complainant. The law in the Philippines explicitly prohibits the filing of more than one case for the same cause of action in any forum or court of law. The prohibition is done so that the courts will not be clogged by complaints of people who may file more than one complaint in an effort to gain a favorable decision in any of the numerous cases filed.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-25133             September 28, 1968

S/SGT. JOSE SANTIAGO, petitioner-appellant, vs.LT. COL. CELSO ALIKPALA, ET AL., respondents-appellees.

Floro A. Sarmiento and Noe Maines for petitioner-appellant.Cuadrato Palma and the Office of the Solicitor General for respondents-appellees.

 

FERNANDO, J.:

The validity of a court-martial proceeding was challenged in the lower court on due process grounds to show lack of jurisdiction. Petitioner, a sergeant in the Philippine Army and the accused in a court-martial proceeding, through a writ of certiorari and prohibition, filed on April 17, 1963, with the lower court, sought to restrain respondents, the officers, constituting the court-martial, that was then in the process of trying petitioner for alleged violation of two provisions of the Articles of War, from continuing with the proceedings on the ground of its being without jurisdiction. There was likewise a plea for a restraining order, during the pendency of his petition, but it was unsuccessful.

No response, either way, was deemed necessary by the then Presiding Judge of the lower court, now Justice Nicasio Yatco of the Court of Appeals, as petitioner had, in the meanwhile, been convicted by the court-martial. The lower court verdict, rendered on September 16, 1963, was one of dismissal, as in its opinion, "this case had already become moot and academic ... ."

An appeal was taken to us, the same due process objections being raised. We think that the question before us is of such import and significance that an easy avoidance through the technicality of the "moot and academic" approach hardly recommends itself. For reasons to be more fully set forth, we find that such court-martial was not lawfully convened, and, consequently, devoid of jurisdiction. Accordingly, we reverse the lower court.

There was a stipulation of facts submitted to the lower court on July 10, 1963, to the following effect: "That the arraignment of the petitioner on December 17, 1962 was for the purpose of avoiding prescription pursuant to Article of War 38 of one of the offenses with which the accused is charged since, as charged, same was allegedly committed on or about December 18, 1960; That prior to the said arraignment, no written summons or subpoena was issued addressed to the petitioner or his counsel, informing them of said arraignment; That instead of said written summons or subpoena Col. Eladio Samson, Constabulary Staff Judge Advocate called up First Sergeant Manuel Soriano at the Headquarters II Philippine Constabulary Zone, Camp Vicente Lim, Canlubang, Laguna on December 16, 1962 by telephone with instructions to send the petitioner to HPC, Camp Crame, Quezon City, under escort, for arraignment and only for arraignment; That upon arrival in HPC, the petitioner was directed to proceed to the PC Officer's Clubhouse, where a General Court-Martial composed of the respondents, created to try the case of 'People vs. Capt. Egmidio Jose, for violation of Articles of War 96 and 97', pursuant to paragraph 10, Special Order No. 14, Headquarters Philippine Constabulary, dated 18 July 1962, ..., was to resume, as scheduled, the trial of 'People vs. Pfc. Numeriano Ohagan, for violation of Articles of War 64, 85, and 97'; That it was only at the time (December 17, 1962) that petitioner learned that he will be arraigned for alleged violation of Articles of War 85 and 97, after being informed by one of the respondents, Capt. Cuadrato Palma as Trial Judge Advocate why he was there; That prior to that arraignment on December 17, 1962 there was no special order published by the Headquarters Philippine Constabulary creating or directing the General Court-Martial composed of the respondents to arraign and try the case against the petitioner, there however was already an existing court trying another case; That the respondents relied on the first indorsement of the Acting Adjutant General, HPC, Camp Crame, Quezon City, dated December 14, 1962 and addressed to the Trial Judge Advocate of the General Court-martial ... directing the said Trial Judge Advocate to refer the case against petitioner to the above-mentioned court, ...; That the above paragraph 10, Special Order No. 14 dated 18 July

1962, does not contain the phrase 'and such other cases which may be referred to it,' but however said orders were amended only on 8 January 1963, to include such phrase, ... ." 1

It was further stipulated that petitioner's counsel did object to his arraignment asserting that a general court-martial then convened was without jurisdiction, as there was no special order designating respondents to compose a general court-martial for the purpose of trying petitioner, as petitioner was not furnished a copy of the charge sheet prior to his arraignment as required in the Manual for Court-Martial, except on the very day thereof, and as there was no written summons or subpoena served on either the petitioner, as accused, or the counsel. Respondents, acting as the general court-martial, overruled the above objections, and the Trial Judge Advocate was then ordered to proceed to read the charges and specifications against petitioner over the vigorous objections of counsel. It was shown, likewise, in the stipulation of facts, that the case, having been postponed to February 21, 1963, petitioner's counsel had in the meanwhile complained to the Chief of Constabulary against the proceedings on the ground of its nullity, and sought to have respondents restrained from continuing with the trial of petitioner due to such lack of jurisdiction but the Chief of Constabulary ruled that he could not act on such complaint until the records of the trial were forwarded to him for review. With such a ruling, and with the denial of two other motions by petitioner upon the court-martial being convened anew on February 21, 1963, one to invalidate his arraignment on December 17, 1962, and the other to quash the complaint based on the denial of due process and lack of jurisdiction, the present petition for certiorari and prohibition was filed with the lower court. 2

As above noted, the lower court dismissed the petition due to its belief that, petitioner having been convicted in the meanwhile, there being no restraining order, the matter had become moot and academic. As was set forth earlier, we differ, the alleged lack of jurisdiction being too serious a matter to be thus summarily ignored.

The firm insistence on the part of petitioner that the general court-martial lacks jurisdiction on due process grounds, cannot escape notice. The basic objection was the absence of a special order "designating respondents to compose a general court-martial to convene and try the case of petitioner; ... ." It was expressly stipulated that the respondents were convened to try the case of a certain Capt. Egmidio Jose and not that filed against petitioner. As a matter of fact, the opening paragraph of the stipulation of facts made clear that he was arraigned on December 17, 1962 by respondents as a general court-martial appointed precisely to try the above Capt. Jose solely "for the purpose of avoiding prescription pursuant to Article of War 38 of one of the offenses with which the accused is charged ... ."

Is such a departure from what the law and regulations 3 prescribe offensive to the due process clause? If it were, then petitioner should be sustained in his plea for a writ of certiorari and prohibition, as clearly the denial of the constitutional right would oust respondents of jurisdiction, even on the assumption that they were vested with it originally. Our decisions to that effect are impressive for their unanimity.

In Harden v. The Director of Prisons, 4 Justice Tuason, speaking for the Court, explicitly announced that "deprivation of any fundamental or constitutional rights" justify a proceeding for habeas corpus on the ground of lack of jurisdiction. Abriol v. Homeres 5 is even more categorical. In that case, the action of a lower court, denying the accused the opportunity to present proof for his defense, his motion for dismissal failing, was held by this Court as a deprivation of his right to due process. As was made clear by the opinion of Justice Ozaeta: "No court of justice under our system of government has the power to deprive him of that right. If the accused does not waive his right to be heard but on the contrary — as in the instant case — invokes the right, and the court denies it to him, that court no longer has jurisdiction to proceed; it has no power to sentence the accused without hearing him in his defense; and the sentence thus pronounced is void and may be collaterally attacked in a habeas corpus proceeding." 6

A recent decision rendered barely a month ago, in Chavez v. Court of Appeals, 7 is even more in point. Here, again, habeas corpus was relied upon by petitioner whose constitutional rights were not respected, but, in addition, the special civil actions of certiorari and mandamus were likewise availed of, in view of such consequent lack of jurisdiction. The stress though in the opinion of Justice Sanchez was on habeas corpus. Thus: "The course which petitioner takes is correct. Habeas corpus is a high prerogative writ. It is traditionally considered as an exceptional remedy to release a person whose liberty is illegally restrained such as when the accused's constitutional rights are disregarded. Such defect results in the absence or loss of jurisdiction and

therefore invalidates the trial and the consequent conviction of the accused whose fundamental right was violated. That void judgment of conviction may be challenged by collateral attack, which precisely is the function of habeas corpus. This writ may issue even if another remedy which is less effective may be availed of by the defendant."

The due process concept rightfully referred to as "a vital and living force in our jurisprudence" calls for respect and deference, otherwise the governmental action taken suffers from a fatal infirmity. As was so aptly expressed by the then Justice, now Chief Justice, Concepcion: "... acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding." 8

The crucial question, then, is whether such failure to comply with the dictates of the applicable law insofar as convening a valid court martial is concerned, amounts to a denial of due process. We hold that it does. There is such a denial not only under the broad standard which delimits the scope and reach of the due process requirement, but also under one of the specific elements of procedural due process.

It is to be admitted that there is no controlling and precise definition of due process which, at the most furnishes a standard to which governmental action should conform in order to impress with the stamp of validity any deprivation of life, liberty or property. A recent decision of this Court, in Ermita-Malate Hotel v. Mayor of Manila 9

treated the matter thus: "It is responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due process requirement, official action, to paraphrase Cardozo, must not outrun the bounds of reason and result in sheer oppression. Due process is thus hostile to any official action marred by lack of reasonableness. Correctly has it been identified as freedom from arbitrariness. It is the embodiment of the sporting idea of fair play. It exacts fealty 'to those strivings for justice' and judges the act of officialdom of whatever branch 'in the light of reason drawn from considerations of fairness that reflect [democratic] traditions of legal and political thought.'"

Nor is such a reliance on the broad reach of due process the sole ground on which the lack of jurisdiction of the court-martial convened in this case could be predicated. Recently, stress was laid anew by us on the first requirement of procedural due process, namely, the existence of the court or tribunal clothed with judicial, or quasi-judicial, power to hear and determine the matter before it. 10 This is a requirement that goes back to Banco Español-Filipino v. Palanca, a decision rendered half a century ago. 11

There is the express admission in the statement of facts that respondents, as a court-martial, were not convened to try petitioner but someone else, the action taken against petitioner being induced solely by a desire to avoid the effects of prescription; it would follow then that the absence of a competent court or tribunal is most marked and undeniable. Such a denial of due process is therefore fatal to its assumed authority to try petitioner. The writ of certiorari and prohibition should have been granted and the lower court, to repeat, ought not to have dismissed his petition summarily.

The significance of such insistence on a faithful compliance with the regular procedure of convening court-martials in accordance with law cannot be over-emphasized. As was pointed out by Justice Tuason in Ruffy v. The Chief of Staff, Philippine Army: 12 "Courts-martial are agencies of executive character, and one of the authorities for the ordering of courts-martial has been held to be attached to the constitutional functions of the President as Commander-in-Chief, independently of legislation. (Winthrop's Military Law and Precedents, 2d Edition, p. 49.) Unlike courts of law, they are not a portion of the judiciary." Further on, his opinion continues: "Not belonging to the judicial branch of the government, it follows that courts-martial must pertain to the executive department; and they are in fact simply instrumentalities of the executive power, provided by Congress for the President as Commander-in-Chief, to aid him in properly commanding the army and navy and enforcing discipline therein, and utilized under his orders or those of his authorized military representatives." 13

It is even more indispensable, therefore, that such quasi-judicial agencies, clothed with the solemn responsibility of depriving members of the Armed Forces of their liberties, even of their lives, as a matter of fact, should be held all the more strictly bound to manifest fidelity to the fundamental concept of fairness and the avoidance of arbitrariness for which due process stands as a living vital principle. If it were otherwise, then, abuses, even if not intended, might creep in, and the safeguards so carefully thrown about the freedom of an individual, ignored or

disregarded. Against such an eventuality, the vigilance of the judiciary furnishes a shield. That is one of its grave responsibilities. Such a trust must be lived up to; such a task cannot be left undone.

WHEREFORE, the order of respondent Court of September 6, 1963, dismissing the petition for certiorari and prohibition is reversed, and the writ of certiorari and prohibition granted, annulling the proceedings as well as the decision rendered by respondents as a court-martial and perpetually restraining them from taking any further action on the matter. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Sanchez, Angeles and Capistrano, JJ., concur.Dizon and Zaldivar, JJ., are on leave.

Separate Opinions

CASTRO, J., concurring:

My concurrence in the decision of this Court in the able pen of Mr. Justice Fernando is unqualified.

Nonetheless, I feel compelled to express my views on certain disturbing facets of this case which to my mind not merely indicate a censurabe denial of due process, but as well pointedly exposes, from the perspective of military law, tradition and usage, the intrinsic nullity of the proceedings had by the general court-martial in question.

The history and development of courts-martial as tribunals for the enforcement of discipline in bodies of military character 1 underscore several time-honored tenets: a court-martial is an instrumentality of the executive power, to aid the President as commander-in-chief in properly commanding and controlling the armed forces and enforcing discipline therein; it has only such powers as are expressly vested in it by statute or as may be derived from military usage; it is a creature of orders; as a purely executive agency designed for military uses, it is brought into being by a military order; it is transient in its duration; it has no fixed place of session, nor permanent office or clerk, no inherent power to issue a judicial mandate; its judgment is in quintessence simply a recommendation until approved by the proper revisory commander; its competency cannot be expanded by implication; and no intendment in favor of its acts can be made where their legality does not indubitably appear. 2

The original concept of a court-martial in British Law, even with American and Philippine statutory accretions, remains fundamentally the same today, with few modifications of consequence.

Why a court-martial is essentially transient in nature, and is as a rule appointed to try a single case, is not difficult to comprehend.

Firstly, in a military organization, every officer thereof belongs to a particular branch of services and is for that reason assigned to a position which calls for the discharge, in a continuing manner and for a period which is denominated tour of duty, of duties pertaining to his specialization or branch of service. Thus an ordnance officer is assigned to ordnance work, a field artillery officer to field artillery duties, a finance officer to duties involving money and finances, a quartermaster officer to duties involving supplies and other aspects of logistics, and so forth. Although generic military duty perforce embraces occasional membership in courts-martial, it does not envision such membership as a continuing assignment of long duration.

Secondly, the court-martial, as its history and development demonstrate, is a blend of the jury system and the one-judge (non-jury) judicial system. In common law jurisdictions, an accused is tried by his peers. In one-judge (non-jury) jurisdictions, the accused is tried by a lone judicial arbiter. In a court-martial trial, the entire panel of officers who constitute the court-martial is judge and jury.1awphîl.nèt

Thirdly, by virtue of military law, tradition and usage, a court-martial is constituted to try a particular case (or several cases involving the same accused). After completion of the trial and resolution of necessary post-trial incidents, the court is dissolved, and the members thereof return to and resume their respective normal assignments. Even the law member of a court-martial (who rules on questions of law and admissibility of

evidence and advises the other members on court procedure and the legal intricacies of trial), rejoins his regular office or unit (although he may thereafter again be appointed law member of a subsequent general court-martial, or an ordinary member of another general court-martial, or even president of still another general court-martial).

In sum, a court-martial is not a continuing permanent tribunal.

Thus it is that, in the Armed Forces of the Philippines, the general rule has commanded undiminished respect that a court-martial is appointed to try only a single case, or several cases pertaining to a single individual. There is of course no legal impediment to empowering a court-martial, in the same order creating it, to try more than one case, but such creations are the exception and quite infrequent. And even if "roving" or "semi-permanent" courts-martial were the rule in our Armed Forces, which I do not concede, the general court-martial in the case at bar was not one such.

It is undisputed — as in fact it is stipulated by the parties — that the general court-martial in question was constituted to try Captain Egmidio Jose. Nothing in the phraseology of the order that created it authorized it to try the petitioner staff-sergeant Santiago. It could not therefore proceed in any manner, which we can view as properly coming within the periphery of its limited powers, with respect to the charge against Santiago.When it arraigned Santiago on December 17, 1962, it was absolutely without legal power to do so, and the arraignment was a futile ceremony, as meaningless as it was inefficacious.

Undeniably the record shows that the order creating the court-martial to try Captain Egmidio Jose was belatedly amended on January 8, 1963 by the addition of the phrase, "and such other cases that may be referred to it." But this afterthought could not, in law, serve to invest with validity an act that was ab initio a nullity. And it is of no moment that petitioner was thereafter arraigned anew, assuming arguendo that he was. The proceedings would have been palpably objectionable on the patent ground that the offense imputed to the petitioner which was committed on December 18, 1960 was already time-barred on December 18, 1962, pursuant to the provisions of Article of War 38 of Commonwealth Act 408, as amended.

As I see it, the arraignment of the petitioner by the general court-martial constituted to try Captain Egmidio Jose was a desperate measure resorted to remedy a desperate situation — solely to interrupt the running of the prescriptive period provided by Article of War 38. This action was not only completely devoid of any semblance of legality; it likewise conclusively evinces gross negligence on the part of the military. Why nothing was done toward the creation of a court-martial to try Santiago within the two years following the commission of the crime is not explained by the record, and I venture the opinion that there can be no satisfactory explanation therefor. The military authorities allowed that long period to lapse without any assiduous effort at bringing the petitioner to the forum of a duly constituted general court-martial. This should never come to pass in the Armed Forces where disciplinary measures of whatever specie or character, by law and tradition and usage, should be swiftly administered. For, the officer of average military learning knows or should be cognizant of the proliferation in the Articles of War of provisions designed to insure speedy trial of accused persons.1awphîl.nèt

Because an accused charged with a serious offense such as that in the case at bar — unlawful disposition of ten carbines belonging to the Government — is ordinarily placed in arrest and is not entitled to bail, time is of the essence as undue delay would obviously be prejudicial to the accused. The Articles of War (Commonwealth Act 408 as amended by Rep. Act 242) and implementing military manuals and regulations explicitly enjoin that the report of investigation, if practicable, be completed within 48 hours, that the investigator forthwith make the proper recommendation as to the disposition of the case, and that the officer exercising general court-martial jurisdiction over the accused act on the report of the investigator with deliberate speed. As a matter of fact, Article of War 71 explicitly commands that when a person subject to military law is placed in arrest or confinement immediate steps be taken to try him or to dismiss the charge; that when a person is held for trial by general court-martial his commanding officer, within eight days after the accused is arrested or confined, forward the charges to the officer exercising general court-martial jurisdiction and furnish the accused a copy of such charges; and that if the same be not practicable, he report to superior authority the reasons for the delay. The same Article of War poises the threat of punishment (as a court-martial may direct) over any officer responsible for unnecessary delay "in investigating or carrying the case to final conclusion."

The record propels me to the conclusion that everything that the military authorities did or neglected to do with respect to the case of the petitioner was contrary to all the imperatives of military law, tradition and usage.

In fine, it is my considered view that at the time the petitioner was arraigned, there was no court-martial validly in existence that could legally take cognizance of the charge against him. At best, the general court-martial in question, vis-a-vis the petitioner, was disembodied if not innominate, with neither shape nor substance.

 

xiii

xiv

xv

xvi

xvii

xviiiVI. Adjudicatory Powers A. Quasi-judicial power and quasi-judicial body, defined

Smart Communications vs NTC G.R. No. 151908 12 August 2003

Facts: Petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation filed against the National Telecommunications Commission, an action for declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular). Petitioners allege that the NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular is oppressive, confiscatory and violative of the constitutional prohibition against deprivation of property without due process of law; that the Circular will result in the impairment of the viability of the prepaid cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards; and that the requirements of identification of prepaid card buyers and call balance announcement are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio.

Issue :WON the RTC has jurisdiction over the case

Held: Petitions are granted. The issuance by the NTC of Memorandum Circular No. 13- 6-2000 and its Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As such, petitioners were justified in invoking the judicial power of the Regional Trial Court to assail the constitutionality and validity of the said issuances. What is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.25 This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments.26 Judicialx power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. Not to be confused with the quasi-legislative or rule-making

power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the

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performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.

Santiago, Jr. vs Bautista 32 SCRA 188

Facts: The appellant was a grade 6 pupil in a certain public elementary school. As the school year was then about to end, the "Committee On the Rating Of Students For Honor" was constituted by the teachers concerned at said school for the purpose of selecting the "honor students" of its graduating class. With the school Principal, as chairman, and the members of the committee deliberated and finally adjudged Socorro Medina, Patricia Liñgat and Teodoro C. Santiago, Jr. as first, second and third honors, respectively. The school's graduation exercises were thereafter set for May 21, 1965; but three days before that date, the "third placer" Teodoro Santiago, Jr., represented by his mother, and with his father as counsel, sought the invalidation of the "ranking of honor students" thus made, by instituting the above-mentioned civil case in the Court of First Instance of Cotabato, committee members along with the District Supervisor and the Academic Supervisor of the place.

Issue: WON the committee committed grave abuse of discretion

Held: "'NO GRAVE ABUSE OF DISCRETION” "Allegations relating to the alleged 'grave abuse of discretion' on the part of teachers refer to errors, mistakes, or irregularities rather than to the real grave abuse of discretion that would amount to lack of jurisdiction. Mere commission of errors in the exercise of jurisdiction may not be corrected by means of certiorari.

WHAT ARE JUDICIAL OR QUASI JUDICIAL ACTS? It is difficult, if not impossible, precisely to define what are judicial or quasi judicial acts, and there is considerable conflict in the decisions in regard thereto, in connection with the law as to the right to a writ of certiorari. it is clear, however, that it is the nature of the act to be performed, rather than of the office, board, or body which performs it, that determines whether or not it is the discharge of a judicial or quasi-judicial function. It is not essential that the proceedings should be strictly and technically judicial, in the sense in which that word is used when applied to courts of justice, but it is sufficient if they are quasi judicial. It is enough if the officers act judicially in making their decision, whatever may be their public character.

The precise line of demarkation between what are judicial and what are administrative or ministerial functions is often difficult to determine. The exercise of judicial functions may involve the performance of legislative or administrative duties, and the performance of administrative or ministerial duties, may, in a measure, involve the exercise of judicial functions. It may be said generally that the exercise of judicial functions is to determine what the law

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is, and what the legal rights of parties are, with respect to a matter in controversy; and whenever an officer is clothed with that authority, and undertakes to determine those questions, he acts judicially.

Filipinas Shell Petroleum Corp. VS. Oil Industry Commission 145 SCRA 433 Facts: Respondent Manuel B. Yap is a gasoline dealer by virtue of a "Sublease and Dealer Agreement" entered into with petitioner Pilipinas Shell Petroleum Corporation (hereinafter known as Shell) originally in the year 1965 and superseded in the year 1969. The latter was filed and

registered with the OIC.

While petitioner Shell complied with its contractual commitments, Manuel B. Yap defaulted in his obligations upon failure to pay for his purchases of gasoline and other petroleum products. Petitioner Shell sent demand letters to respondent Manuel B. Yap who continued to ignore these demands letters forcing petitioner Shell to exercise its contractual rights to terminate the contract. Petitioner Shell sent respondent Yap the required 90-day written notice to terminate their contract as provided for by Sec. 5 of their "Sublease and Dealer Agreement."

Despite the pendency of the controversy before the ordinary civil courts, OIC persisted in asserting jurisdiction over it by rendering a decision stating it has jurisdiction to pass upon the alleged contractual right of petitioner to declare Yap's contract terminated. The OIC negated the existence of such right because the stipulation is an "unfair and onerous trade practice." Respondent OIC also allowed respondent Yap reasonable time from receipt of the decision within which to pay his judgment debt to petitioner as adjudged in a Civil Case. Petitioner Shell moved for a reconsideration but respondent OIC denied it.

Issue: WON Respondent OIC has jurisdiction to hear and decide contractual disputes between a gasoline dealer and an oil company.

Held: the OIC has no jurisdiction. The contentions of petitioner are well-founded. A detailed reading of the entire OIC Act will reveal that there is no express provision conferring upon respondent OIC the power to hear and decide contractual disputes between a gasoline dealer and an oil company. It is of course a well-settled principle of administrative law that unless expressly empowered, administrative agencies like respondent OIC, are bereft of quasi-judicial powers.

As We declared in Miller vs. Mardo, et al (2 SCRA 898): " . . . It may be conceded that the Legislature may confer on administrative boards or bodies quasi-judicial powers involving the exercise of judgment and discretion, as incident to the performance of administrative functions, but in so doing, the legislature must state its intention in express terms that would leave no doubt, as even such quasi- judicial prerogatives must be limited, if they are to be valid, only to those incidental to,

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or in connection with, the performance of administrative duties which do not amount to conferment of jurisdiction over a matter exclusively vested in the courts."

B. Distinguished from judicial power

Carino vs CHR 204 SCRA 483

Facts: 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 amass 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. 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. "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. An investigation committee was consequently formed to hear the charges in accordance with P.D. 807."

Issue: WON the Commission on Human Rights has jurisdiction, adjudicatory powers over, or the power to try and decide, or hear and determine, certain specific type of cases, like alleged human rights violation involving civil or political rights.

Held: The Court declares the Commission on Human Rights to have no such power. 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. But it cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial bodies do. "x x 'It may be said generally that the exercise of judicial functions is to determine what the law is, and what the legal rights of parties are, with respect to a matter in controversy; and whenever an officer is clothed with that authority, and undertakes to determine those questions, he acts judicially.'x x."

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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

Luzon Development Bank vs Association of LDB Employees 249 SCRA 162

Facts: From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:

Issue: WON the company has violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on promotion.

Held: It is to be noted that the Jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the National Labor Relations Commission (NLRC) for that matter. The state of our present law relating to voluntary arbitration provides that "(t)he award or decision of the Voluntary Arbitrator x x x shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties," while the "(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders." Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator. What’s the ruling?

C. Distinguished from administrative function

Presidential Anti-Dollar Salting Task Force vs CA 171 SCRA 348

Facts: 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. PADS issued search warrants against certain companies.

Issue: WON the PADS is a quasi-judicial body issue search warrants under the 1973 Constitution?

Held: the court ruled that PADS was not granted by law to issue a warrant of arrest. 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 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

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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, it is tasked alone by the Decree to handle the prosecution of such activities, but nothing more.

Cojuangco vs PCGG 190 SCRA 226

Facts: President Corazon C. Aquino directed the Solicitor General to prosecute all persons involved in the misuse of coconut levy funds. Pursuant to the above directive the Solicitor General created a task force to conduct a thorough study of the possible involvement of all persons in the anomalous use of coconut levy funds. Upon the creation of the PCGG under EO. 1 issued by President Aquino, the PCGG was charged with the task of assisting the President not only in the recovery of illgotten wealth or unexplained wealth accumulated by the former President, his immediate family, relatives, subordinates and close associates but also in the investigation of such cases of graft and corruption as the President may assign to the Commission from time to time and to prevent a repetition of the same in the future. Petitioner alleges that the PCGG may not conduct a preliminary investigation of the complaints filed by the Solicitor General without violating petitioner's rights to due process and equal protection of the law, and that the PCGG has no right to conduct such preliminary investigation.

Issue: WON the Presidential Commission on Good Government (PCGG) has the power to conduct a preliminary investigation of the anti-graft and corruption cases filed by the Solicitor General against Eduardo Cojuangco, Jr. and other respondents for the alleged misuse of coconut levy funds.

Held: the court ruled in the negative. Considering that the PCGG, like the courts, is vested with the authority to grant provisional remedies of (1) sequestration, (2) freezing assets, and (3) provisional takeover, it is indispensable that, as in the case of attachment and receivership, there exists a prima facie factual foundation, at least, for the sequestration order, freeze order or takeover order, an adequate and fair opportunity to contest it and endeavor to cause its negation or nullification. Both are assured under the foregoing executive orders and the rules and regulations promulgated by the PCGG. The general power of investigation vested in the PCGG may be divided into two stages. The first stage of investigation which is called the criminal investigation stage is the fact finding inquiring which is usually conducted by the law enforcement agents whereby they gather evidence and interview witnesses after which they assess the evidence and if they find sufficient basis, file the complaint for the purpose of preliminary investigation. The second stage is the preliminary investigation stage of the said complaint. It is at this stage, as above discussed, where it is ascertained if there is sufficient evidence to bring a person to trial. It is in such instances that we say one cannot be "a prosecutor and judge at the same time." Having gathered the evidence and filed the complaint as a law enforcer, he cannot be expected to handle with impartiality the preliminary investigation of his own complaint, this time as a public prosecutor.

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The Court holds that a just and fair administration of justice can be promoted if the PCGG would be prohibited from conducting the preliminary investigation of the complaints subject of this petition and the petition for intervention and that the records of the same should be forwarded to the Ombudsman, who as an independent constitutional officer has primary jurisdiction over cases of this nature, to conduct such preliminary investigation and take appropriate action.

Sideco vs Sarenas, 41 Phil. 80

Facts: Two parties, Crispulo Sideco on the one hand, and Leocadio Sarenas and Rufino Sarenas on the other hand, claim the exclusive right to the use of the waters flowing through the estero for irrigation purposes. The claim of Sideco goes

back to 1885 when the predecessor in interest of his father constructed a dam in these waters; the use of the dam was afterwards interrupted by outside causes such as imprisonment and war, but again reasserted in 1911, 1915, and 1916. Exactly what the two Sarenas' contention is not quite clear on the facts before us. However, it appears that they made application to the Director of Public Works, only to meet with the opposition of Sideco, and that the Director of Public Works, with the approval of the Secretary of Commerce and Communications, granted the two Sarenas the right, in preference to all other persons, to use the waters of the estero Bangad. Sideco then took the proceedings to the Court of First Instance of Nueva Ecija. After trial, judgment was entered, dismissing the complaint and the appeal of Sideco and confirming the decision of the administrative authorities, with the costs against the plaintiff. The further appeal of Sideco to this court, while conceding the correctness of the findings of the trial court, squarely challenges its judgment.

Issue: WON the Director of public works has jurisdiction over the case?

Held: Administrative machinery for the settlement of disputes as to the use of waters is provided by the Irrigation Act, as amended. Controversies must be submitted to the Secretary of Commerce and Communications through the Director of Public Works. The "decision" of the Secretary thereon is final "unless appeal therefrom be taken to the proper court within. thirty days after the date of the notification of the parties of said decision. In case of such appeal the court having jurisdiction shall try the controversy de novo." (See. 4.) A more extensive method is also provided, somewhat akin to our cadastral system, which makes it the duty of the Director of Public Works to make a technical examination of streams and to prepare a list of priorities. In the performance of this work, the Director of Public Works or any official especially authorized by him, may examine witnesses under oath, and can issue for this purpose subpoenas and subpoenas duces tecum. (Secs. 8, 41.) Certificates signed by the Secretary of Commerce and Communications are then granted each appropriator. (Secs. 9, 18.) "Appeal" lies from the "decision" of the Director of Public Works, as approved by the Secretary of Commerce and Communications, to the Court of First Instance of the province in which the property is situated. Such action must be brought within ninety days of the date of the publication of the approved list of priorities. (Sec. 10.) DECISION OF DIRECTOR OF PUBLIC WORKS AS PART OF JUDICIAL RECORD.-The decision of the Director of Public Works, affirmed by the Secretary of

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Commerce and Communications, containing as it does the technical findings of officers especially qualified in irrigation engineering, should invariably be made a part of the judicial record because (1) the determination of these officials would be most useful to the courts, and (2) the exact date of the decision is of moment since it decides whether the appeal was taken in time.

Ocampo vs US 234 US 91

D. Distinguished from legislative power or rule-making

Lupangco vs CA 160 SCRA 848

Facts: Professional Regulation Commission (PRC) issued Resolution No. 105 as part of its "Additional Instructions to Examinees to all those applying for admission to take the licensure examinations in accountancy. The resolution embodied the following pertinent provisions: "No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive any hand-out, review material, or any tip from any school, college or university, or any review center or the like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similar institutions during the three days immediately preceding every examination day including the examination day. Any examinee violating this instruction shall be subject to the sanctions. Petitioners, all reviewees preparing to take the licensure examinations in accountancy filed in their own behalf and in behalf of all others similarly situated like them, with the RTC a complaint for injunction with a prayer for the issuance of a writ of preliminary injunction against respondent PRC to restrain the latter from enforcing the above- mentioned resolution and to declare the same unconstitutional.

Issue: WON the Resolution is unconstitutional

Held: The Resolution is null and void. The enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days-when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself-would be like uprooting the tree to get ride of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. These are all within the powers of the respondent commission as provided for in Presidential Decree No. 223. But by all means the right and freedom of the examinees to avail of all legitimate means to prepare for the examinations should not be curtailed.

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E. Rationale for vesting administrative agencies with quasi-judicial power

C.T. Torres Enterprises, Inc. vs Hibionada 191 SCRA 268

Facts : The petitioner as agent of private respondent Pleasantville Development Corporation sold a subdivision lot on installment to private respondent Efren Diongon. The installment payments having been completed, Diongon demanded the delivery of the certificate of title to the subject land. When neither the petitioner nor Pleasantville complied, he filed a complaint against them for specific performance and damages in the Regional Trial Court of Negros Occidental. The case was set for initial hearing. It was then that C.T. Torres Enterprises filed a motion to dismiss for lack of jurisdiction, contending that the competent body to hear and decide the case was the Housing and Land Use Regulatory Board. The motion to dismiss was denied by the court contending that it had jurisdiction over the matter.

Issue : WON the trial court have jurisdiction over the case.

Ratio : P.D. No. 957, promulgated July 12, 1976 and otherwise known as "The Subdivision and Condominium Buyers' Protective Decree," provides that the National Housing Authority shall have exclusive authority to regulate the real estate trade and business.

P.D. No. 1344, which was promulgated April 2, 1978, and empowered the National Housing Authority to issue writs of execution in the enforcement of its decisions under P.D. No. 957, specified the quasi-judicial jurisdiction of the agency as follows:

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

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

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, dealer, broker or salesman.

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This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modem world.

F. Scope of quasi-judicial powers of an administrative agency

GSIS vs CSC 202 SCRA 799

Facts : The Government Service Insurance System (GSIS) dismissed six (6) employees as being "notoriously undesirable," they having allegedly been found to be connected with irregularities in the canvass of supplies and materials. Five of these six dismissed employees appealed to the Merit Systems Board. The Board found the dismissals to be illegal because affected without formal charges having been filed or an opportunity given to the employees to answer, and ordered the remand of the cases to the GSIS for appropriate disciplinary proceedings. The GSIS appealed to the Civil Service Commission. By Resolution, the Commission ruled that the dismissal of all five was indeed illegal. GSIS appealed to the SC and affirmed the decision of the CSC with a modification that it eliminated the payment of back salaries until the outcome of the investigation and reinstatement of only 3 employees since the other two had died. The heirs of the deceased sought execution of the order from the CSC which was granted. GSIS opposed and came to the SC on certiorari contending that the CSC does not have any power to execute its resolution or judgment.

Issue : WON the CSC had powers to execute its resolution or judgment.

Ratio : The Civil Service Commission, like the Commission on Elections and the Commission on Audit, is a constitutional commission invested by the Constitution and relevant laws not only with authority to administer the civil service, but also with quasi-judicial powers. It has the authority to hear and decide administrative disciplinary cases instituted directly with it or brought to it on appeal.

The Civil Service Commission promulgated Resolution No. 89-779 adopting, approving and putting into effect simplified rules of procedure on administrative disciplinary and protest cases, pursuant to the authority granted by the constitutional and statutory provisions. The provisions are analogous and entirely consistent with the duty or responsibility reposed in the Chairman by PD 807, subject to policies and resolutions adopted by the Commission. In light of all the foregoing constitutional and statutory provisions, it would appear absurd to deny to the Civil Service Commission the power or authority to enforce or order execution of its decisions, resolutions or orders which, it should

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be stressed, it has been exercising through the years. It would seem quite obvious that the authority to decide cases is inutile unless accompanied by the authority to see that what has been decided is carried out. Hence, the grant to a tribunal or agency of adjudicatory power, or the authority to hear and adjudge cases, should normally and logically be deemed to include the grant of authority to enforce or execute the judgments it thus renders, unless the law otherwise provides.

Death, however, has already sealed that outcome, foreclosing the initiation of disciplinary administrative proceedings, or the continuation of any then pending, against the deceased employees. Whatever may be said of the binding force of the Resolution of July 4, 1988 so far as, to all intents and purposes, it makes exoneration in the administrative proceedings a condition precedent to payment of back salaries, it cannot exact an impossible performance or decree a useless exercise.

Angara vs Electoral Commission 63 Phil 139

Facts : This is an original action instituted in this court by the petitioner, Jose A. Angara, for the issuance of a writ of prohibition to restrain and prohibit the Electoral Commission, one of the respondents, from taking further cognizance of the protest filed by Pedro Ynsua, another respondent, against the election of said petitioner as member of the National Assembly for the first assembly district of the Province of Tayabas. Petitioner challenges the jurisdiction of the Electoral

Commission.

Issue : WON Electoral Commission acted without or in excess of its jurisdiction in assuming to take cognizance of the protest filed against the election of the herein petitioner notwithstanding the previous confirmation of such election by resolution of the National Assembly?

Ratio : The creation of the Electoral Commission carried with it ex necesitate rei the power regulative in character to limit the time within which protests intrusted to its cognizance should be filed. It is a settled rule of construction that where a general power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred (Cooley, Constitutional Limitations, eighth ed., vol. I, pp. 138, 139). In the absence of any further constitutional provision relating to the procedure to be followed in filing protests before the Electoral Commission, therefore, the incidental power to promulgate such rules necessary for the proper exercise of its exclusive powers to judge all contests relating to the election, returns and qualifications of members of the National Assembly, must be deemed by necessary implication to have been lodged also in the Electoral Commission.

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Provident Tree Farms vs Batario, Jr. 231 SCRA 463

Facts : PETITIONER PROVIDENT TREE FARMS, INC. (PTFI), is a Philippine corporation engaged in industrial tree planting. It grows gubas trees in its plantations in Agusan and Mindoro which it supplies to a local match manufacturer solely for production of matches. In consonance with the state policy to encourage qualified persons to engage in industrial tree plantation, Sec. 36, par. (1), of the Revised Forestry Code 1 confers on entities like PTFI a set of incentives among which is a qualified ban against importation of wood and "wood-derivated" products. Private respondent A. J. International Corporation (AJIC) imported four (4) containers of matches from Indonesia, which the Bureau of Customs, and two (2) more containers of matches from Singapore. Upon request of PTFI, Secretary Fulgencio S. Factoran, Jr., of the Department of Natural Resources and Environment issued a certification that "there are enough available softwood supply in the Philippines for the match industry at reasonable price." PTFI then filed with the Regional Court of Manila a complaint for injunction and damages with prayer for a temporary restraining order against respondents Commissioner of Customs and AJIC to enjoin the latter from importing matches and "wood-derivative" products, and the Collector of Customs from allowing and releasing the importations. AJIC moved to dismiss the case asseverating that the enforcement of the import ban under Sec. 36, par. (1), of the Revised Forestry Code is within the exclusive realm of the Bureau of Customs, and direct recourse of petitioner to the Regional Trial Court to compel the Commissioner of Customs to enforce the ban is devoid of any legal basis.

Issue : WON the RTC has jurisdiction over the case.

Ruling : PTFI's correspondence with the Bureau of Customs contesting the legality of match importations may already take the nature of an administrative proceeding the pendency of which would preclude the court from interfering with it under the doctrine of primary jurisdiction.

Under the sense-making and expeditious doctrine of primary jurisdiction . . . the courts cannot or will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered.

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In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or essentially factual

matters, subject to judicial review in case of grave abuse of discretion, has become well nigh indispensable . . .

Tejada v. Homestead Property Corporation 178 SCRA 164

Facts : Private respondent Taclin V. Bañez offered to sell to petitioner Enriqueto F. Tejada a 200 square meter lot owned by respondent corporation. Private respondent suggested that petitioner pay a reservation fee of P20,000.00, which would form part of the consideration in case they reach a final agreement of sale and which amount was to be returned to the petitioner should the parties fail to reach an agreement. After paying the reservation fee, the respondent corporation changed the terms of monthly amortization which resulted in the demand of the petitioner for the return of his reservation fee. Respondent refused to return the same and petitioner brought suit with the RTC for a collection of sum of money. Respondents herein filed a motion to dismiss contesting the jurisdiction of the RTC to hear the case. The same was denied and respondents appealed to the CA who decided in their favor. Petitioner argues that inasmuch as there is no perfected contract of sale between the parties, the claim for recovery of the reservation fee properly falls within the jurisdiction of the regular courts and not that of the HSRC.

Issue : WON the RTC had jurisdiction over the recovery of reservation fee.

Ratio : The RTC has no jurisdiction. Under Presidential Decree No. 1344, the NHA has exclusive jurisdiction to hear and decide claims involving refund and other claims filed by a subdivision lot or condominium unit buyer against the project owner, etc. There is no such qualification in said provision of law that makes a distinction between a perfected sale and one that has yet to be perfected. The word "buyer" in the law should be understood to be anyone who purchases anything for money. Under the circumstances of this case, one who offers to buy is as much a buyer as one who buys by virtue of a perfected contract of sale. Said powers have since been transferred to the HLRB.

Moreover, upon the promulgation of Executive Order No. 90, it is therein provided that the HLRB has exclusive jurisdiction over claims involving refund filed against project owners, developers, and dealers, among others.

When an administrative agency or body is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within the jurisdiction of said administrative agency or

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body. Split jurisdiction is not favored. Since in this case the action for refund of reservation fee arose from a proposed purchase of a subdivision lot obviously the HLRB has exclusive jurisdiction over the case.

Cariño vs. CHR 204 SCRA 483

Ruling : 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 a strike 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.

G. Classification of adjudicatory powers

2. Directing powers. Illustrated by the corrective powers of public utility commissions, powers of assessment under the revenue laws, reparations under public utility laws and awards under; 3. Enabling powers. The grant or denial of permit or authorization; 1. Dispensing powers. The authority to exempt from or relax a general prohibition, or authority to relieve from affirmative duty. The licensing power sets or assumes a standard, while the dispensing power sanctions a deviation from a standard;

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2. Summary powers. To designate administrative power to apply compulsion or force against person or property to effectuate a legal purpose without a judicial warrant to authorize such action; 3. Equitable powers. An administrative tribunal having power to determine the law upon a particular state of facts has the right to and must consider and make proper application of the rules of equity.

VII. The Power to Issue Subpoena

Carmelo vs Ramos 6 SCRA 836

Facts :

Issue :

Ruling :

Section 13 Book VII 1987 Admin. Code

Caamic vs Galaon 237 SCRA 390

Facts : Respondent MTC judge issued a subpoena against Caamic which required her to appear before his sala under the penalty of law. Caamic was surprised for she was not aware of any case filed against her. When she appeared at the date, time and place stated in the subpoena, she was berated by the respondent and demanded 8K from her. Said amount was the amount of the life insurance policy of one Edgardo Sandagan. Said subpoena was issued upon request by Generosa Sandagan who sought the help of respondent because she could not get a share of the proceeds of the life insurance policy of her dead husband whose beneficiary was Caamic.

Issue : Propriety of the subpoena issued by the respondent judge.

Ruling : Respondent should have known or ought to know that under Section 1, Rule 23 of the Rules of Court, a subpoena "is a process directed to a person requiring him to attend and to testify at the hearing or the trial of an action, or at any investigation conducted under the laws of the Philippines, or for taking of his deposition." Although the subpoena he caused to be issued purports to be in a form for criminal cases pending in his court, it was not, in fact, issued in connection with a criminal case or for any other pending case in his court nor for any investigation he was competent to conduct pursuant to law or by direction of

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this Court. It was designated for a specific purpose, viz., administrative conference. That purpose was, in no way connected with or related to some of his administrative duties because he knew from the beginning that it was for a confrontation with the complainant as solicited by Generosa. Sandagan for the latter to get a share in the death benefits of Edgardo Sandagan which was received by the complainant. Generosa had not filed any action in respondent's court for

her claim; neither is there any case in respondent's court concerning such death benefits. What Generosa wanted was for respondent to act as mediator or conciliator to arrive at a possible compromise with the complainant, which was, obviously, non-official and absolutely a private matter. Not being then directly or remotely related to his official functions and duties, accommodating the request and using his official functions and office in connection therewith was, by any yardstick, improper.

In a suit for unfair competition, it is only through the issuance of the questioned "subpoena duces tecum " that the complaining party is afforded his full rights of redress.

Universal Rubber Products vs CA 130 SCRA 104

Facts : Private respondents herein sued herein petitioner for unfair competition in the lower court. During the trial and after the presentation of some of private respondents’ witnesses, they requested the court for a subpoena duces tecum as regards to the books of herein petitioner. Petitioner moved to quash the subpoena on the ground that it can only be regarded as a “fishing bill” to discover evidence against herein petitioner and that such is not applicable in a case for unfair competition. The trial court denied the same.

Issue : WON the issuance of a subpoena duces tecum is proper in a case for unfair competition.

Ratio : A case for unfair competition is actually a case for injunction and damages. As a general rule, on obtaining an injunction for infringement of a trademark, complainant is entitled to an accounting and recovery of defendant's profits on the goods sold under that mark, as incident to, and a part of, his property right, and this rule applies in cases of unfair competition. In such case, the infringer or unfair trader is required in equity to account for and yield up his gains on a principle analogous to that which charges as trustee with the profits acquired by the wrongful use of the property of the cestui que trust, and defendant's profits are regarded as an equitable measure of the compensation plaintiff should receive for the past harm suffered by him.

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in order to entitle a parry to the issuance of a "subpoena duces tecum, " it must appear. by clear and unequivocal proof, that the book or document sought to be produced contains evidence relevant and material to the issue before the court, and that the precise book, paper or document containing such evidence has been so designated or described that it may be identified. A "subpoena duces tecum" once issued by the court may be quashed upon motion if the issuance therof is unreasonable and oppressive, or the relevancy of the books. documents or things does not appear, or if the persons in whose behalf the subpoena is issued fails to advance the reasonable cost of production thereof.

In the instant case in determining whether the books subject to the subpoena duces tecum are relevant and reasonable in relation to the complaint of private respondent for unfair competition.

Masangcay vs COMELEC 6 SCRA 27

Facts : Masangcay was the provincial treasurer of Aklan who was charged with several others for CONTEMPT by the COMELEC when it opened 3 boxes without the presence of the persons and/or parties indicated in its Resolution. After appearing and showing cause why they should not be punished for contempt, the COMELEC sentenced Masangcay for imprisonment and imposing a fine. Masangcay filed a petition for review with the SC.

Issue : WON the COMELEC may punish Masangcay for contempt for his acts.

Ruling : When the Commission exercises a ministerial function it cannot exercise the power to punish for contempt because such power is inherently judicial in nature. 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.

The Commission on Elections has not only the duty to enforce and administer all laws relative 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, we said, the Commission, although it cannot be classified as 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 of law come under its jurisdiction.

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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.

The exercise of this power has always been regarded as a necessary incident and attribute of courts. Its exercise by administrative bodies has been invariably limited to making effective the power to elicit testimony. And the exercise of that power by an administrative body in furtherance of its administrative function has been held invalid.

VIII. The Power To Punish For Contempt

People v. Mendoza 92 Phil 570

Camelo v. Ramos 116 Phil 1152

IX. Power to impose penalties

Scoty’s Department Store v. Micaller 99 Phil 762

Facts: Nena Micaller was employed as a salesgirl in the Scoty's Department Store situated at 615 Escolta, Manila. This store was owned and operated by Yu Ki Lam, Richard Yang, Yu Si Kiao and Helen Yang. Pursuant to section 5(b) of the Industrial Peace Act, Nena Micaller filed charges of unfair labor practice against her above employers alleging that she was dismissed by them because of her membership in the National Labor Union and that, prior to her separation, said employers had been questioning their employees regarding their membership in said union and had interfered with their right to organize under the law.

The employers denied the charge. They claimed that the complainant was dismissed from the service because of her misconduct and serious disrespect to the management and her co employees so much so that several criminal charges were filed against her with the city fiscal of Manila who, after investigation, filed the corresponding information’s against her and the same are now pending trial in court. The Court of industrial relation ruled in favor of Nina Micaller and impose fine against the petitioner.

Issue: WON the Court of Industrial Relations has jurisdiction to impose the penalties prescribed in section 25 of Republic Act No. 875.

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Ruling: This is against the due process guaranteed by our Constitution. It may be contended that this gap may be subserved by requiring the Court of Industrial Relations to observe strictly the rules applicable to criminal cases to meet the requirements of the Constitution, but this would be tantamount to amending the law which is not within the province of the judicial branch of our Government.

In conclusion, our considered opinion is that the power to impose the penalties provided for in section 25 of Republic Act No. 875 is lodged in ordinary courts, and not in the Court of Industrial Relations, notwithstanding the definition of the word "Court" contained in section 2 (a) of said Act. Hence, the decision of the industrial court in so far as it imposes a fine

of P100 upon petitioners is illegal and should be nullified.

The procedure laid down by law to be observed by the Court of Industrial Relations in dealing with unfair labor practice cases negates those constitutional guarantees to the accused. And this is so because, among other things, the law provides that "the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Act that the Court (of Industrial Relations) and its members and Hearing Examiners shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law, or procedure." It is likewise enjoined that "the Court shall not be bound solely by the evidence presented during the hearing but may avail itself of all other means such as (but not limited to) ocular inspections and questioning of well-informed persons which results must be made a part of the record". All-this means that an accused may be tried without the right "to meet the witnesses face to face" and may be convicted merely on preponderance of evidence and not beyond reasonable doubt.

CAB v. PAL 63 SCRA 524

X. Power in deportation and citizenship cases

Lao Gi v. Court of Appeals 180 SCRA 756

ADMINISTRATIVE PROCEEDINGS

I. Jurisdiction

A. Definition

People vs Mariano 71 SCRA 600

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Facts: The Accused was convicted of the crime of abused of chastity. He filed an appealed contending that he married the victim therefore his criminal liability should be extinguished. The Attorney-General entered an opposition to said petition wherein, after discussing the scope of article 448 of the Penal Code and Act No. 1773 of the Philippine Legislature amending said article, he concluded that the marriage of the accused with the offended party cannot extinguish his liability as perpetrator of the crime of abuse against chastity.

Issue: Whether or not section 2 of Act No. 1773 includes the crime of abuse against chastity among those cases in which criminal liability is extinguished by the marriage of the accused with the offended party.

Ruling: The intention of our Legislature in enacting said Act No. 1773 was that the marriage of the accused or convict with the offended party should extinguish the criminal liability in the cases of seduction, abduction and rape and those involving offenses included in said crimes, such as frustrated or attempted seduction, abduction or rape. This is clear and logical. If the liability for a crime is extinguished in the graver cases, it must be extinguished, and for a stronger reason, in the lesser crimes. Now then, if the crime of abuse against chastity is not denominated rape, it is only for the lack of the intention to lie, both crimes being identical in every other respect, though of different degrees of gravity. We therefore conclude that the crime of abuse against chastity is included in the crime of rape mentioned in section 2 of Act No. 1773 and, consequently, the marriage of the accused with the offended party in the present case has extinguished his criminal liability.

B. Extent of jurisdiction of administrative agencies performing quasi- judicial acts Chin vs LBP 201 SCRA 190

Taule vs Santos 200 SCRA 512

Facts: The Federation of Associations of Barangay Councils (FABC) of Catanduanes decided to hold the election of katipunan despite the absence of five (5) of its members, the Provincial Treasurer and the Provincial Election Supervisor walked out. The President elect - Ruperto Taule Vice-President- Allan Aquino Secretary- Vicente Avila Treasurer- Fidel Jacob Auditor- Leo Sales. Respondent Leandro L Verceles, Governor of Catanduanes sent a letter to respondent Luis T. Santos, the Secretary of Local Government,** protesting the election of the officers of the FABC and seeking its mullification in view of several flagrant irregularities in the manner it was conducted. Respondent

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Secretary issued a resolution nullifying the election of the officers of the FABC in Catanduanes held on June 18, 1989 and ordering a new one to be conducted as early as possible to be presided by the Regional Director of Region V of the Department of Local Government.

Petitioner filed a motion for reconsideration of the resolution but it was denied by respondent Secretary. In the petition for certiorari before Us, petitioner seeks the reversal of the resolutions of respondent for being null and void.

Issue: Whether or not the respondent Secretary has jurisdiction to entertain an election protest involving the election of the officers of the Federation of Association of Barangay Councils, Assuming that the respondent Secretary has jurisdiction over the election protest, whether or not he committed grave abuse of discretion amounting to lack of jurisdiction in nullifying the election?

Ruling: The Secretary of Local Government is not vested with jurisdiction to entertain any protest involving the election of officers of the FABC. There is no question that he is vested with the power to promulgate rules and regulations as set forth in Section 222 of the Local Government Code. "(3) Promulgate rules and regulations necessary to carry out department objectives, policies, functions, plans, programs and projects;"

It is a well-settled principle of administrative law that unless expressly empowered, administrative agencies are bereft of judicial powers. The jurisdiction of administrative authorities is dependent entirely upon the provisions of the statutes reposing power in them; they cannot confer it upon themselves. Such jurisdiction is essential to give validity to their determinations."

There is neither a statutory nor constitutional provision expressly or even by necessary implication conferring upon the Secretary of Local Government the power to assume jurisdiction over an election protect involving officers of the katipunan ng mga barangay. Construing the constitutional limitation on the power of general supervision of the President over local governments, We hold that respondent Secretary has no authority to pass upon the validity or regularity of the election of the officers of the katipunan. To allow respondent Secretary to do so will give him more power than the law or the Constitution grants. It will in effect give him control over local government officials for it will permit him to interfere in a purely democratic and non- partisan activity aimed at strengthening the barangay as the basic component of local governments so that the ultimate goal of fullest autonomy may be achieved.

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I. Procedure to be followed

Sections 1 and 2.1 Book VII, 1987 Administrative Code

A. Source of authority to promulgate rules of procedure

Section 5.5, Article VIII, Constitution

Angara vs Electoral Commission 63 Phil 139

Facts: That in the elections of September 17, 1935, the petitioner, Jose A. Angara won. The provincial board of canvassers, proclaimed the petitioner as member- elect of the National Assembly for the said district, for having received the most number of votes, the petitioner took his oath of office. Respondent Pedro Ynsua filed before the Electoral Commission a "Motion of Protest" against the election of the herein petitioner, Jose A. Angara, and praying, among other things, that said respondent be declared elected member of the National Assembly for the first district of Tayabas, or that the election of said position be nullified.

Issue: WON the said Electoral Commission acted without or in excess of its jurisdiction in assuming to take cognizance of the protest filed against the election of the herein petitioner notwithstanding the previous confirmation of such election by resolution of the National Assembly?

Ruling: The grant of power to the Electoral Commission to judge all contests relating to the election, returns and qualifications of members of the National Assembly, is intended to be as complete and unimpaired as if it had remained originally in the legislature. The express lodging of that power in the Electoral Commission is an implied denial of the exercise of that power by the National Assembly. And this is as effective a restriction upon the legislative power as an express prohibition in the Constitution. If we concede the power claimed in behalf of the National Assembly that said body may regulate the proceedings of the Electoral Commission and cut off the power of the commission to lay down the period within which protests should be filed, the grant of power to the commission would be ineffective.

The creation of the Electoral Commission carried with it ex necesitate rei the power regulative in character to limit the time within which protests intrusted to its cognizance should be filed. It is a settled rule of construction that where a general power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also included. The incidental power to promulgate such rules necessary for the proper exercise of its exclusive power to judge all contests relating to the election, returns and

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qualifications of members of the National Assembly, must be deemed by necessary implication to have been lodged also in the Electoral Commission.

B. Limitations on the power to promulgate rules of procedure

First Lepanto Ceramics vs CA 231 SCRA 30 –lourdes

C. Technical rules not applicable

Kanlaon Construction Enterprises vs NLRC 279 SCRA 337

Facts: This is a labor case involving Kanlaon for illegal termination of employment of publics respondents. The arbitration’s decision is appealed to the NLRC. Public respondents in their appeal questioned the validity of the NLRC’s decision on the ground that the NLRC erroneously, patently and unreasonably interpreted the principle that the NLRC and its Arbitration Branch are not strictly bound by the rules of evidence. In brief, it was alleged that the the decision is void for the following reasons: (1) there was no valid service of summons; (2) Engineers Estacio and Dulatre and Atty. Abundiente had no authority to appear and represent petitioner at the hearings before the arbiters and on appeal to respondent Commission; (3) the decisions of the arbiters and respondent Commission are based on unsubstantiated and self-serving evidence and were rendered in violation of petitioner's right to due process.

Issue: WON publics respondents’ claim is tenable.

Held: The labor arbiters and the NLRC must not, at the expense of due process, be the first to arbitrarily disregard specific provisions of the Rules which are precisely intended to assist the parties in obtaining the just, expeditious and inexpensive settlement of labor disputes. The decision of the National Labor Relations Commission, Fifth Division, is annulled and set

aside and the case is remanded to the Regional Arbitration Branch, Iligan City for further proceedings.

Ang Tibay vs CIR 69 Phil 635

Ruling: 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 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 this Court to carry into effect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations

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may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justiciable cases coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character.

Police Commission vs Lood 127 SCRA 757

Facts: Petitioner Police Commission seeks the setting aside of the decision of the defunct Court of First Instance (respondent court) of Rizal, Branch VI, which declared null and void its decision in Administrative Case No. 48 dismissing private respondent Simplicio C. Ibea and instead ordered then Municipal Mayor Braulio Sto. Domingo of San Juan, Rizal to reinstate said respondent to his former position as policeman of the same municipality with back salaries from the date of his suspension up to the date of his actual reinstatement.

Petitioner contends that the lower court erred in holding that respondent Simplicio C. Ibea was deprived of due process of law because the Police Commission decided Administrative Case No. 48 even without stenographic notes taken of the proceedings of the case.

Ruling: Respondent court's ruling against petitioner's decision as falling short of the legal requirements of due process, because it decided the subject administrative case without stenographic notes (which were not taken by the Board of Investigators) of the proceedings of the case, was in error. Rep. Act No. 4864 does not provide that the Board of Investigators shall be a "board of record," and as such it does not provide for office personnel such as clerks and stenographers who may be employed to take note of the proceedings of the board. The proceeding provided for is merely administrative and summary in character, in line with the principle that "administrative rules of procedure should be construed liberally in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive determination of their respective claims and defenses." The formalities usually attendant in court hearings need not be present in an administrative investigation, provided that the parties are heard and gven the opportunity to adduce their respective evidence.

D. Justiciable controversy and forum shopping

SEC vs CA 246 SCRA 738

Facts: The petition before this Court relates to the exercise by the SEC of its powers in a case involving a stockbroker (CUALOPING) and a stock transfer agency (FIDELITY). The Commission has brought the case to this Court in the instant petition for review on certiorari, contending that the appellate court erred in setting aside the decision of the SEC which had (a) ordered the replacement of the certificates of stock of Philex and (b) imposed fines on both FIDELITY and

CUALOPING.

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Held: The Securities and Exchange Commission ("SEC") has both regulatory and adjudicative functions. Under its regulatory responsibilities, the SEC may pass upon applications for, or may suspend or revoke (after due notice and hearing), certificates of registration of corporations, partnerships and associations (excluding cooperatives, homeowners' associations, and labor unions); compel legal and regulatory compliances; conduct inspections; and impose fines or other penalties for violations of the Revised Securities Act, as well as implementing rules and directives of the SEC, such as may be warranted. The SEC decision which orders the two stock transfer agencies to "jointly replace the subject shares and for FIDELITY to cause the transfer thereof in the names of the buyers" clearly calls for an exercise of SEC's adjudicative jurisdiction. The stockholders who have been deprived of their certificates of stock or the persons to whom the forged certificates have ultimately been transferred by the supposed indorsee thereof are yet to initiate, if minded, an appropriate adversarial action. A justiciable controversy such as can occasion an exercise of SEC's exclusive jurisdiction would require an assertion of a right by a proper party against another who, in turn, contests it. The proper parties that can bring the controversy and can cause an exercise by the SEC of its original and exclusive jurisdiction would be all or any of those who are adversely affected by the transfer of the pilfered certificates of stock. Any peremptory judgment by the SEC, without such proceedings having initiated, would be precipitat.

The question on the legal propriety of the imposition by the SEC of a P50,000 fine on each of FIDELITY and CUALOPING, is an entirely different matter. This time, it is the regulatory power of the SEC which is involved. When, on appeal to the Court of Appeals, the latter set aside the fines imposed by they the SEC, the latter, in its instant petition, can no longer be deemed just a nominal party but a real party in interest sufficient to pursuant appeals to this Court. Section 2.5 Book VII 1987 Admin Code Santiago, Jr. vs Bautista 32 SCRA 188 Villanueva vs Adre 172 SCRA 876 Chemphil Export & Import Corp. vs CA 251 SCRA 257 First Phil. Int’l Bank vs CA 252 SCRA 259 R. Transport Corp. vs Laguesma 227 SCRA 826 Galongco vs CA 283 SCRA 493 E. Institution of proceedings; acquisition of jurisdiction Section 5, Rule 7 1997 Rules of Civil Procedure Santos vs NLRC 254 SCRA 675 Matanguihand vs Tengo, 272 SCRA 704 F. Pre-trial conference; default Section 10 Book VII 1987 Admin. Code Auyong vs CTA 59 SCRA 110 G. Hearing Secretary of Justice vs Lantion 322 SCRA 160 Section 11.1 Book VII 1987 Admin. Code

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Medenilla vs CSC 194 SCRA 278 Simpao vs CSC 191 SCRA 396 Alejandro vs CA 191 SCRA 700

H. Evidence Section 12.3 Book VII 1987 Admin Code State Prosecutor vs Muro 236 SCRA 505 1. Proof beyond reasonable doubt People vs Bacalzo 195 SCRA 557 2. Clear and convincing evidence Black’s Law Dictionary 5th ed. P. 227 3. Preponderance of evidence New Testament Church of God vs CA 246 SCRA 266 4. Substantial evidence Velasquez vs Nery 211 SCRA 28 Malonzo ns COMELEC 269 SCRA 380 I. Decision Section 2.8, 14 Book VII 1987 Admin Code Marcelino vs Cruz 121 SCRA 51 Romualdez-Marcos vs COMELEC 248 SCRA 300 1. Form of decision Mangca vs COMELEC 112 SCRA 273 Malinao vs Reyes 255 SCRA 616 Sections 2.13 and 2.12 Book VII 1987 Admin Code 2. Publication of decisions Section 16.1.2 Book VII 1987 Admin Code 3. Finality, promulgation and notice of decision Section 15 Book VII 1987 Admin Code Robert Dollar Company vs Tuvera 123 SCRA 354 Lindo vs COMELEC 194 SCRA 25 Jamil vs COMELEC 283 SCRA 349 Section 14 Book VII 1987 Admin Code Zoleta vs Drilon 166 SCRA 548 4. Collegiate decision, requirement to be valid Mison vs COA 187 SCRA 445 Aquino-Sarmiento vs Morato 203 SCRA 515 5. Finality of decisions Section 15 Chapter III Book VII Admin Code of 1987 Administrative Order No. 18 Section 7 Uy vs COA 328 SCRA 607 Camarines Norte Electric Cooperative vs Torres 286 SCRA 666 6. Application of the doctrine of res judicata Republic vs Neri 213 SCRA 812 Brillantes v Castro 99 Phil 497 Ipekdjian Merchandising vs CTA, L-15430, 30 Sept. 1963

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Teodoro vs Carague 206 SCRA 429 J. Administrative appeal in contested cases Section 19, 20, 21, 22 Book VII 1987 Admin Code Mendez vs CSC 204 SCRA 965 PCIB vs CA 229 SCRA 560 Diamonon vs DOLE 327 SCRA 283 De Leon vs Heirs of Gregorio Reyes 155 SCRA 584 Vda de Pineda vs Pena 187 SCRA 22 Reyes vs Zamora 90 SCRA 92 Section 23 Book VII 1987 Admin Code Zambales Chromite Mining Co. v. Court of Appeals 94 SCRA 261 Ysmael v. Dep Exec Sec 190 SCRA 673 K. Execution Divinagracia vs CFI 3 SCRA 775 GSIS vs CSC 202 SCRA 799 Vital-Gozon vs CA 212 SCRA 235 II. Due process of law in administrative adjudication A. Substantive and procedural due process, defined Santiago vs Alikpala 25 SCRA 356 Secretary of Justice vs Lantion 322 SCRA 160 Albert vs CFI of Manila 23 SCRA 948 B. Cardinal primary requirements of due process Ang Tibay vs CIR 69 Phil 635 Fabella vs CA 282 SCRA 256 Air Manila vs Balatbat 38 SCRA 489 C. Necessity for notice and hearing Philippine Movie Pictures Wokers’ Association vs Premiere Productions, Inc., G.R. No. L-5621, 25 March 1953 Mabuhay Textile Mills vs Ongpin 141 SCRA 437 Go vs NAPOLCOM 271 SCRA 447 D. Cold neutrality of a judge Zamboanga Chromite Mining Co. vs CA 94 SCRA 261 E. Prior notice and hearing, essential elements of procedural due process Villa vs Lazaro 189 SCRA 34 RCA Communications vs PLDT 110 Phil 420 Section 11 Book VII 1987 Admin Code Bolastig vs Sandiganbayan 235 SCRA 103 F. Notice and hearing, when dispensed with 1. Where there is an urgent need for immediate action, like the summary abatement of a nuisance per se, the preventive suspension of public servant facing administrative charges; Central Bank vs CA 220 SCRA 536 Estate of Gregoria Francisco vs CA 199 SCRA 595

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Sitchon vs Aquino 98 Phil 458 2. Where there is tentativeness of administrative action; 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; Lastimosa vs Vasquez 243 SCRA 497 3. Where the twin rights have previously been offered but the right to exercise them had not been claimed. Asprec vs Itchon 16 SCRA 921 Banco Filipino vs Central Bank 204 SCRA 767 G. Notice and hearing in rate-fixing Vigan Electric Light vs PSC 10 SCRA 46 H. Motion for reconsideration as a cure Medenilla vs CSC 194 SCRA 278 i. Right to counsel, not a due process requirement Lumiqued vs Exevea 282 SCRA 125 III. Doctrine of Primary Jurisdiction A. Definition and objective Industrial Enterprises vs CA, 184 SCRA 426 Smart Communications vs NTC G.R. No. 151908 12 August 2003 B. Distinguished from the doctrine of exhaustion of administrative remedies Felizardo vs CA 233 SCRA 220 C. Effect of doctrine Villaflor vs CA 280 SCRA 327 Machete vs CA 250 SCRA 176 Director of Lands vs CA 194 SCRA 224 Provident Tree Farms vs Batario 231 SCRA 463 Philippine Veterans Bank vs CA 322 SCRA 139 D. When doctrine does not apply Lagua vs Cusi 160 SCRA 260 IV. Doctrine of exhaustion of administrative remedies A. Definition and purpose Rosales vs CA 165 SCRA 344 Gonzales vs Secretary of Education 5 SCRA 657 Carale vs Abarintos 269 SCRA 132 B. Effect of failure to exhaust remedies De los Santos vs Limbaga 4 SCRA 224 Republic vs Sandiganbayan 255 SCRA 438 Factora, Jr. vs CA 320 SCRA 530 C. When applied Ang Tuan Kai vs Import Control Commission L-4427, 21 April 1952 D. Exceptions to the doctrine

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Sunville Timber Products vs Abad 206 SCRA 482 Gonzales vs Hechanova, 60 OG 802 Paat vs CA 266 SCRA 167 Corpus vs Cuaderno L-17860 30 March 1962 Smart Communications vs NTC G.R. No. 151908 12 August 2003 Marinduque Iron Mines v. Sec. of Public Works 8 SCRA 179 Bueno vs Patanao 9 SCRA 794 Continental Marble Corp. vs NLRC 161 SCRA 151 Kilusang Bayan vs Dominguez 205 SCRA 92 Almine vs CA 177 SCRA 796 Tapales vs President of UP 7 SCRA 553 Quintos v. National Stud Farm 54 SCRA 210 Soto v. Jareno 144 SCRA 116 Sunga v. NLRC 173 SCRA 338 Sabello v. DECS 100 SCRA 623 Montes v. Civil Service Board of Appeals 101 Phil 490

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xxivRepublic of the Philippines

SUPREME COURTManila

EN BANC

G.R. No. L-19180            October 31, 1963

NATIONAL DEVELOPMENT COMPANY, ET AL., petitioners-appellees, vs.THE COLLECTOR OF CUSTOMS OF MANILA, respondent-appellant.

Ross, Selph and Carrascoso for petitioners-appellees.Office of the Solicitor General for respondent-appellant.

BAUTISTA ANGELO, J.:

The National Development Company which is engaged in the shipping business under the name of "Philippine National Lines" is the owner of steamship "S.S. Doña Nati" whose local agent in Manila is A. V. Rocha. On August 4, 1960, the Collector of Customs sent a notice to C.F. Sharp & Company as alleged operator of the vessel informing it that said vessel was apprehended and found to have committed a violation of the customs laws and regulations in that it carried an unmanifested cargo consisting of one RCA Victor TV set 21" in violation of Section 2521 of the Tariff and Customs Code. Inserted in said notice is a note of the following tenor: "The above article was being carried away by Dr. Basilio de Leon y Mendez, official doctor of M/S "Doña Nati" who readily admitted ownership of the same." C.F. Sharp & Company was given 48 hours to show cause why no administrative fine should be imposed upon it for said violation.

C.F. Sharp & Company, not being the agent or operator of the vessel, referred the notice to A. V. Rocha, the agent and operator thereof, who on August 8, 1960, answered the notice stating, among other things, that the television set referred to therein was not a cargo of the vessel and, therefore, was not required by law to be manifested. Rocha stated further: "If this explanation is not sufficient, we request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to sustain the charge and to present evidence in its defense."

The Collector of Customs replied to Rocha on August 9, 1960 stating that the television set in question was a cargo on board the vessel and that he does not find his explanation satisfactory enough to exempt the vessel from liability for violating Section 2521 of the Tariff and Customs Code. In said letter, the collector imposed a fine of P5,000.00 on the vessel and ordered payment thereof within 48 hours with a threat that he will deny clearance to said vessel and will issue a warrant of seizure and detention against it if the fine is not paid.

And considering that the Collector of Customs has exceeded his jurisdiction or committed a grave abuse of discretion in imposing the fine of P5,000.00 on the vessel without the benefit of an investigation or hearing as requested by A. V. Rocha, the National Development Company, as owner of the vessel, as well as A. V. Rocha as agent and operator thereof, filed the instant special civil action of certiorari with preliminary injunction before the Court of First Instance of Manila against the official abovementioned. The court, finding the petition for injunction sufficient in form and substance, issued ex parte the writ prayed for upon the filing of a bond in the amount of P5,00.00.

Respondent set up the following special defenses: (1) the court a quo has no jurisdiction to act on matters arising from violations of the Customs Law, but the Court of Tax Appeals; (2) assuming that it has, petitioners have not exhausted all available administrative remedies, one of which is to appeal to the Commissioner of Customs; (3) the requirements of administrative due process have already been complied with in that the written notice given by respondent to petitioner Rocha clearly specified the nature of the violation complained of and that the defense set up by Rocha constitute merely a legal issue which does not require further investigation; and (4) the investigation conducted by the customs authorities showed that the television set in question was unloaded by the ship's doctor without going thru the custom house as required by law and was not declared either in the ship's manifest or in the crew declaration list.

On the basis of the stipulation of facts submitted by the parties, the court a quo rendered decision setting aside the ruling of respondent which imposes a fine of P5,000.00 on the vessel Doña Nati payable within 48 hours from receipt thereof. The court stated that said ruling appears to be unjust and arbitrary because the party affected has not been accorded the investigation it requested from the Collector of Customs.

Respondent interposed the present appeal.

When the customs authorities found that the vessel Doña Nati carried on board an unmanifested cargo consisting of one RCA Victor TV set 21" in violation of Section 2521 of the Tariff and Customs Code, respondent sent a written notice to C. F. Sharp & Company, believing it to be the operator or agent of the vessel, and when the latter referred the notice to A. V. Rocha, the real operator of the vessel, for such step as he may deem necessary to be taken the latter answered the letter stating that the television set was not cargo and so was not required by law to be manifested, and he added to his answer the following: "If this explanation is not sufficient, we request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to sustain the charge and to present evidence in its defense. "Respondent, however, replied to this letter saying that said television was a cargo within the meaning of the law and so he does not find his explanation satisfactory and then and there imposed on the vessel a fine of P5,00.00. Respondent even went further. He ordered that said fine be paid within 48 hours from receipt with a threat that the vessel would be denied clearance and a warrant of seizure would be issued if the fine will not be paid. Considering this to be a grave abuse of discretion, petitioners commenced the present action for certiorari before the court a quo.

We find this action proper for it really appears that petitioner Rocha was not given an opportunity to prove that the television set complained of is not a cargo that needs to be manifested as required by Section 2521 of the Tariff and Customs Code. Under said section, in order that an imported article or merchandise may be considered a cargo that should be manifested it is first necessary that it be so established for the reason that there are other effects that a vessel may carry that are excluded from the requirement of the law, among which are the personal effects of the members of the crew. The fact that the set in question was claimed by the customs authorities not to be within the exception does not automatically make the vessel liable. It is still necessary that the vessel, its owner or

operator, be given a chance to show otherwise. This is precisely what petitioner Rocha has requested in his letter. Not only was he denied this chance, but respondent collector immediately imposed upon the vessel the huge fine of P5,000.00. This is a denial of the elementary rule of due process.

True it is that the proceedings before the Collector of Customs insofar as the determination of any act or irregularity that may involve a violation of any customs law or regulation is concerned, or of any act arising under the Tariff and Customs Code, are not judicial in character, but merely administrative, where the rules of procedure are generally disregarded, but even in the administrative proceedings due process should be observed because that is a right enshrined in our Constitution. The right to due process is not merely statutory. It is a constitutional right. Indeed, our Constitution provides that "No person shall be deprived of life, liberty, or property without due process of law", which clause epitomize the principle of justice which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. That this principle applies with equal force to administrative proceedings was well elaborated upon by this Court in the Ang Tibay case as follows:

... 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 justiciable case coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character.

... There are cardinal primary rights which must be respected even in proceedings of this character. 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. 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. While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. No only must there be some evidence to support a finding or conclusion, but the evidence must be substantial. 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. 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. 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 reason for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. (Ang Tibay, et al. v. The Court of Industrial Relations, et al., 40 O.G., No. 11, Supp. p. 29).

There is, therefore, no point in the contention that the court a quo has no jurisdiction over the present case because what is here involved is not whether the imposition of the fine by the Collector of Customs on the operator of the ship is correct or not but whether he acted properly in imposing said fine without first giving the operator an opportunity to be heard. Here we said that he acted improvidently and so the action taken against him is in accordance with Rule 67 of our Rules of Court.

Another point raised is that petitioners have brought this action prematurely for they have not yet exhausted all the administrative remedies available to them, one of which is to appeal the ruling to the Commissioner of Customs. This may be true, but such step we do not consider a plain, speedy or adequate remedy in the ordinary course of law as would prevent petitioners from taking the present action, for it is undisputed that respondent collector has acted in utter disregard of the principle of due process.

WHEREFORE, the decision appealed from is affirmed. No costs.

Bengzon, C.J., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.

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xxxiTHIRD DIVISION

[G.R. No. 110379. November 28, 1997]

HON. ARMAND FABELLA, in his capacity as SECRETARY OF THE DEPARTMENT OF EDUCATION, CULTURE AND SPORTS; DR. NILO ROSAS, in his capacity as REGIONAL DIRECTOR, DECS-NCR; DR. BIENVENIDO ICASIANO, in his capacity as the SUPERINTENDENT OF THE QUEZON CITY SCHOOLS and DIVISION; ALMA BELLA O. BAUTISTA, AURORA C. VALENZUELA and TERESITA V. DIMAGMALIW, petitioners, vs. THE COURT OF APPEALS, ROSARITO A. SEPTIMO, ERLINDA B. DE LEON, CLARISSA T. DIMAANO, WILFREDO N. BACANI, MARINA R. VIVAR, VICTORIA S. UBALDO, JENNIE L. DOGWE, NORMA L. RONGCALES, EDITA C. SEPTIMO, TERESITA E. EVANGELISTA, CATALINA R. FRAGANTE, REBECCA D. BAGDOG, MARILYNNA C. KU, MARISSA M. SAMSON, HENEDINA B.CARILLO, NICASIO C. BRAVO, RUTH F. LACANILAO, MIRASOL C. BALIGOD, FELISA S. VILLACRUEL, MA. VIOLETA ELIZABETH Y. HERNANDEZ, ANTONIO C. OCAMPO, ADRIANO S. VALENCIA and ELEUTERIO S. VARGAS, respondents.

D E C I S I O N

PANGANIBAN, J.:

Due process of law requires notice and hearing. Hearing, on the other hand, presupposes a competent and impartial tribunal. The right to be heard and, ultimately, the right to due process of law lose meaning in the absence of an independent, competent and impartial tribunal.

Statement of the Case

This principium is explained by this Court as it resolves this petition for review on certiorari assailing the May 21, 1993 Decision of the Court of Appeals in CA-G.R. SP No. 29107 which affirmed the trial court’s decision, as follows:

“WHEREFORE, the decision appealed from is AFFIRMED and the appeal is DISMISSED.

The Hon. Armand Fabella is hereby ORDERED substituted as respondent-appellant in place of former Secretary Isidro Cariño and henceforth this fact should be reflected in the title of this case.

SO ORDERED.”

The Antecedent Facts

The facts, as found by Respondent Court, are as follows:

“On September 17, 1990, then DECS Secretary Cariño issued a return-to-work order to all public school teachers who had participated in talk-outs and strikes on various dates during the period September 26, 1990 to October 18, 1990. The mass action had been staged to demand payment of 13th month differentials, clothing allowances and passage of a debt-cap bill in Congress, among other things.

On October 18, 1990, Secretary Cariño filed administrative cases against herein petitioner-appellees, who are teachers of the Mandaluyong High School. The charge sheets required petitioner-appellees to explain in writing why they should not be punished for having taken part in the mass action in violation of civil service laws and regulations, to wit:

1. grave misconduct;

2. gross neglect of duty;

3. gross violation of Civil Service Law and rules on reasonable office regulations;

4. refusal to perform official duty;

5. conduct prejudicial to the best interest of the service;

6. absence without leave (AWOL)

At the same time, Secretary Cariño ordered petitioner-appellee to be placed under preventive suspension.

The charges were subsequently amended by DECS-NCR Regional Director Nilo Rosas on November 7, 1990 to include the specific dates when petitioner-appellees allegedly took part in the strike.

Administrative hearings started on December 20, 1990. Petitioner-appellees’ counsel objected to the procedure adopted by the committee and demanded that he be furnished a copy of the guidelines adopted by the committee for the investigation and imposition of penalties. As he received no response from the committee, counsel walked out. Later, however, counsel, was able to obtain a copy of the guidelines.

On April 10, 1991, the teachers filed a an injunctive suit (Civil Case No. 60675) with the Regional Trial Court in Quezon City, charging the committee appointed by Secretary Cariño with fraud and deceit and praying that it be stopped from further investigating them and from rendering any decision in the administrative case. However, the trial court denied them a restraining order.

They then amended their complaint and made it one for certiorari and mandamus. They alleged that the investigating committee was acting with grave abuse of discretion because its guidelines for investigation place the burden of proof on them by requiring them to prove their innocence instead of requiring Secretary Cariño and his staff to adduce evidence to prove the charges against the teachers.

On May 30, 1991, petitioner-appellee Adriano S. Valencia of the Ramon Magsaysay High School filed a motion to intervene, alleging that he was in the same situation as petitioners since he had likewise been charged and preventively suspended by respondent-appellant Cariño for the same grounds as the other petitioner-appellees and made to shoulder the burden of proving his innocence under the committee’s guidelines. The trial court granted his motion on June 3, 1991 and allowed him to intervene.

On June 11, 1991, the Solicitor General answered the petitioner for certiorari and mandamus in behalf of respondent DECS Secretary. In the main he contended that, in accordance with the doctrine of primary resort, the trial court should not interfere in the administrative proceedings.

The Solicitor General also asked the trial court to reconsider its order of June 3, 1991, allowing petitioner-appellee Adriano S. Valencia to intervene in the case.

Meanwhile, the DECS investigating committee rendered a decision on August 6, 1991, finding the petitioner-appellees guilty, as charged and ordering their immediate dismissal.

On August 15, 1991, the trial court dismissed the petition for certiorari and mandamus for lack of merit. Petitioner-appellees moved for a reconsideration, but their motion was denied on September 11, 1991.

The teachers then filed a petition for certiorari with the Supreme Court which, on February 18, 1992, issued a resolution en banc declaring void the trial court’s order of dismissal and reinstating petitioner-appellees’ action, even as it ordered the latter’s reinstatement pending decision of their case.

Accordingly, on March 25, 1992, the trial court set the case for hearing. June 8, 1992, it issued a pre-trial order which reads:

“As prayed for by Solicitor Bernard Hernandez, let this case be set for pre-trial conference on June 17, 1992 at 1:30 p.m., so as to expedite the proceedings hereof. In which case, DECS Secretary Isidro Cariño, as the principal respondent, is hereby ordered to PERSONALLY APPEAR before this Court on said date and time, with a warning that should he fail to show up on said date, the Court will declare him as IN DEFAULT. Stated otherwise, for the said Pre-Trial Conference, the Court will not recognize any representative of his.”

By agreement of the parties, the trial conference was reset on June 26, 1992. However, Secretary Cariño failed to appear in court on the date set. It was explained that he had to attend a conference in Maragondon, Cavite. Instead, he was represented by Atty. Reno Capinpin, while the other respondents were represented by Atty. Jocelyn Pili. But the court just the same declared them as in default. The Solicitor General moved for a reconsideration, reiterating that Cariño could not personally come on June 26, 1992 because of prior commitment in Cavite. It was pointed out that Cariño was represented by Atty. Reno Capinpin, while the other respondents were represented by Atty. Jocelyn Pili, both of the DECS-NCR and that both had special powers of attorney. But the Solicitor General’s motion for reconsideration was denied by the trial court. In its order of July

15, 1992, the court stated:

“The “Motion For Reconsideration” dated July 3, 1992 filed by the respondents thru counsel, is hereby DENIED for lack of merit. It appears too obvious that respondents simply did not want to comply with the lawful orders of the Court.

The respondents having lost their standing in Court, the “Manifestation and Motion,” dated July 3, 1992 filed by the Office of the Solicitor General is hereby DENIED due course.

SO ORDERED.”

On July 3, 1992, the Solicitor General informed the trial court that Cariño had ceased to be DECS Secretary and asked for his substitution. But the court failed to act on his motion.

The hearing of the case was thereafter conducted ex parte with only the teachers allowed to present their evidence.

On August 10, 1992, the trial court rendered a decision, in which it stated:

“The Court is in full accord with petitioners’ contention that Rep. Act No. 4670 otherwise known as the “Magna Carta for Public School Teachers” is the primary law that governs the conduct of investigation in administrative cases filed against public school teachers, with Pres. Decree No. 807 as its supplemental law. Respondents erred in believing and contending that Rep. Act. No. 4670 has already been superseded by the applicable provisions of Pres. Decree No. 807 and Exec. Order No. 292. Under the Rules of Statutory Construction, a special law, Rep. Act. No. 4670 in the case at bar, is not regarded as having been replaced by a general law, Pres. Decree No. 807, unless the intent to repeal or alter the same is manifest. A perusal of Pres. Decree No. 807 reveals no such intention exists, hence, Rep. Act No. 4670 stands. In the event that there is conflict between a special and a general law, the former shall prevail since it evidences the legislator’s intent more clearly than that of the general statute and must be taken as an exception to the General Act. The provision of Rep. Act No. 4670 therefore prevails over Pres. Decree No. 807 in the composition and selection of the members of the investigating committee. Consequently, the committee tasked to investigate the charges filed against petitioners was illegally constituted, their composition and appointment being violative of Sec. 9 of Rep. Act. No. 4670 hence all acts done by said body possess no legal color whatsoever.

Anent petitioners’ claim that their dismissal was effected without any formal investigation, the Court, after consideration of the circumstances surrounding the case, finds such claim meritorious. Although it cannot be gain said that respondents have a cause of action against the petitioner, the same is not sufficient reason to detract from the necessity of basic fair play. The manner of dismissal of the teachers is tainted with illegality. It is a dismissal without due process. While there was a semblance of investigation conducted by the respondents their intention to dismiss petitioners was already manifest when it adopted a procedure provided for by law, by shifting the burden of proof to the petitioners, knowing fully well that the teachers would boycott the proceedings thereby giving them cause to render judgment ex-parte.

The DISMISSAL therefore of the teachers is not justified, it being arbitrary and violative of the teacher’s right to due process. Due process must be observed in dismissing the teachers because it affects not only their position but also their means of livelihood.

WHEREFORE, premises considered, the present petition is hereby GRANTED and all the questioned orders/decisions of the respondents are hereby declared NULL and VOID and are hereby SET ASIDE.

The reinstatement of all the petitioners to their former positions without loss of seniority and promotional rights is hereby ORDERED.

The payment, if any, of all the petitioners’ back salaries, allowances, bonuses, and other benefits and emoluments which may have accrued to them during the entire period of their preventive suspension and/or dismissal from the service is hereby likewise ORDERED.

SO ORDERED.”

From this adverse decision of the trial court, former DECS Secretary Isidro Cariño filed an appeal with the Court of Appeals raising the following grounds:

“I. The trial court seriously erred in declaring appellants as in default.

II. The trial court seriously erred in not ordering the proper substitution of parties.

III. The trial court seriously erred in holding that R.A. No. 4670, otherwise known as ‘Magna Carta for Public School Teachers’, should govern the conduct of the investigations conducted.

IV. The trial court seriously erred in ruling that the dismissal of the teachers are without due process.”

As mentioned earlier, the Court of Appeals affirmed the RTC decision, holding in the main that private respondents were denied due process in the administrative proceedings instituted against them.

Hence, this petition for review.

The Issues

Before us, petitioners raise the following issues:

“I

Whether or not Respondent Court of Appeals committed grave abuse of discretion in holding in effect that private respondents were denied due process of law.

II

Whether or not Respondent Court of Appeals seriously erred and committed grave abuse of discretion in applying strictly the provision of R.A. No. 4670 in the composition of the investigating committee.

III

Whether or not Respondent Court of Appeals committed grave abuse of discretion in dismissing the appeal and in affirming the trial court’s decision.”

These issues, all closely related, boil down to a single question: whether private respondents were denied due process of law.

The Court’s Ruling

The petition is bereft of merit. We agree with the Court of Appeals that private respondents were denied due process of law.

Denial of Due Process

At the outset, we must stress that we are tasked only to determine whether or not due process of law was observed in the administrative proceedings against herein private respondents. We note the Solicitor General’s extensive disquisition that government employees do not have the right to strike. On this point, the Court, in the case of Bangalisan vs. Court of Appeals, has recently pronounced, through Mr. Justice Florenz D. Regalado:

“It is the settled rule in this jurisdiction that employees in the public service may not engage in strikes. While the Constitution recognizes the right of government employees to organize, they are prohibited from staging strikes, demonstrations mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of public services. The right of government employees to organize is limited only to the formation of unions or associations, without including the

right to strike.”

More recently, in Jacinto vs. Court of Appeals, the Court explained the schoolteachers’ right to peaceful assembly vis-a-vis their right to mass protest:

“Moreover, the petitioners here, except Merlinda Jacinto, were not penalized for the exercise of their right to assemble peacefully and to petition the government for a redress of grievances. Rather, the Civil Service Commission found them guilty of conduct prejudicial to the best interest of the service for having absented themselves without proper authority, from their schools during regular school days, in order to participate in the mass protest, their absence ineluctably resulting in the non-holding of classes and in the deprivation of students of education, for which they were responsible. Had petitioners availed themselves of their free time -- recess, after classes, weekends or holidays -- to dramatize their grievances and to dialogue with the proper authorities within the bounds of law, no one -- not the DECS, the CSC or even this Court -- could have held them liable for the valid exercise of their constitutionally guaranteed rights. As it was, the temporary stoppage of classes resulting from their activity necessarily disrupted public services, the very evil sought to be forestalled by the prohibition against strikes by government workers. Their act by its nature was enjoined by the Civil Service law, rules and regulations, for which they must, therefore, be made answerable.

In the present case, however, the issue is not whether the private respondents engaged in any prohibited activity which may warrant the imposition of disciplinary sanctions against them as a result of administrative proceedings. As already observed, the resolution of this case revolves around the question of due process of law, not on the right of government workers to strike. The issue is not whether private respondents may be punished for engaging in a prohibited action but whether, in the course of the investigation of the alleged proscribed activity, their right to due process has been violated. In short, before they can be investigated and meted out any penalty, due process must first be observed.

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

The legislature enacted a special law, RA 4670 known as the Magna Carta for Public School Teachers, which specifically covers administrative proceedings involving public schoolteachers. Section 9 of said law expressly provides that the committee to hear public schoolteachers’ administrative cases should be composed of the school superintendent of the division as chairman, a representative of the local or any existing provincial or national teachers’ organization and a supervisor of the division. The pertinent provisions of RA 4670 read:

“Sec. 8. Safeguards in Disciplinary Procedure. – Every teacher shall enjoy equitable safeguards at each stage of any disciplinary procedure and shall have:

a. the right to be informed, in writing, of the charges;

b. the right to full access to the evidence in the case;

c. the right to defend himself and to be defended by a representative of his choice and/or by his organization, adequate time being given to the teacher for the preparation of his defense; and

c. the right to appeal to clearly designated authorities. No publicity shall be given to any disciplinary action being taken against a teacher during the pendency of his case.

Sec. 9. Administrative Charges. – Administrative charges against a teacher shall be heard initially by a committee composed of the corresponding School Superintendent of the Division or a duly authorized representative who would at least have the rank of a division supervisor, where the teacher belongs, as chairman, a representative of the local or, in its absence, any existing provincial or national teacher’s organization and a supervisor of the Division, the last two to be designated by the Director of Public Schools. The committee shall submit its findings, and recommendations to the Director of Public Schools within thirty days from the termination of the hearings: Provided, however, That where the school superintendent is the complainant or an interested party, all the members of the committee

shall be appointed by the Secretary of Education.”

The foregoing provisions implement the Declaration of Policy of the statute; that is, to promote the “terms of employment and career prospects” of schoolteachers.

In the present case, the various committees formed by DECS to hear the administrative charges against private respondents did not include “a representative of the local or, in its absence, any existing provincial or national teacher’s organization” as required by Section 9 of RA 4670. Accordingly, these committees were deemed to have no competent jurisdiction. Thus, all proceedings undertaken by them were necessarily void. They could not provide any basis for the suspension or dismissal of private respondents. The inclusion of a representative of a teachers’ organization in these committees was indispensable to ensure an impartial tribunal. It was this requirement that would have given substance and meaning to the right to be heard. Indeed, in any proceeding, the essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard.

Petitioners argue that the DECS complied with Section 9 of RA 4670, because “all the teachers who were members of the various committees are members of either the Quezon City Secondary Teachers Federation or the Quezon City Elementary Teachers Federation” and are deemed to be the representatives of a teachers’ organization as required by Section 9 of RA 4670.

We disagree. Mere membership of said teachers in their respective teachers’ organizations does not ipso facto make them authorized representatives of such organizations as contemplated by Section 9 of RA 4670. Under this section, the teachers’ organization possesses the right to indicate its choice of representative to be included by the DECS in the investigating committee. Such right to designate cannot be usurped by the secretary of education or the director of public schools or their underlings. In the instant case, there is no dispute that none of the teachers appointed by the DECS as members of its investigating committee was ever designated or authorized by a teachers’ organization as its representative in said committee.

Contrary to petitioners’ asseverations, RA 4670 is applicable to this case. It has not been expressly repealed by the general law PD 807, which was enacted later, nor has it been shown to be inconsistent with the latter. It is a fundamental 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.” Thus, a subsequent general law does not repeal a prior special law, “unless the intent to repeal or alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the special law.”

The aforementioned Section 9 of RA 4670, therefore, reflects the legislative intent to impose a standard and a separate set of procedural requirements in connection with administrative proceedings involving public schoolteachers. Clearly, private respondents’ right to due process of law requires compliance with these requirements laid down by RA 4670. Verba legis non est recedendum.

Hence, Respondent Court of Appeals, through Mr. Justice Vicente V. Mendoza who is now a member of this Court, perceptively and correctly stated:

“Respondent-appellants argue that the Magna Carta has been superseded by the Civil Service Decree (P.D. No. 807) and that pursuant to the latter law the head of a department, like the DECS secretary, or a regional director, like the respondent-appellant Nilo Rosas, can file administrative charges against a subordinate, investigate him and take disciplinary action against him if warranted by his findings. Respondent-appellants cite in support of their argument the following provisions of the Civil Service Decree (P.D. No. 807):

Sec. 37. Disciplinary Jurisdiction. --

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Sec. 38,. Procedure in Administrative Cases Against Non-Presidential Appointees. -

a) Administrative Proceedings may be commenced against a subordinate officer or the employee by the head of department or officer of equivalent rank, or head of local government, or chiefs of agencies, or regional directors, or upon sworn, written complaint of any other persons.

There is really no repugnance between the Civil Service Decree and the Magna Carta for Public School Teachers. Although the Civil Service Decree gives the head of department or the regional director jurisdiction to investigate and decide disciplinary matters, the fact is that such power is exercised through committees. In cases involving public school teachers, the Magna Carta provides that the committee be constituted as follows:

Sec. 9. Administrative Charges. - Administrative charges against a teacher shall be heard initially by a committee composed of the corresponding School Superintendent of the Division or a duly authorized representative who would at least have the rank of a division supervisor, where the teacher belongs, as chairman, a representative of the local or, in its absence, any existing provincial or national teacher’s organization and a supervisor of the Division, the last two to be designated by the Director of Public Schools. The committee shall submit its findings, and recommendations to the Director of Public Schools within thirty days from the termination of the hearings: Provided, however, that where the school superintendent is the complainant or an interested party, all the members of the committee shall be appointed by the Secretary of Education.

Indeed, in the case at bar, neither the DECS [s]ecretary nor the DECS-NCR regional director personally conducted the investigation but entrusted it to a committee composed of a division supervisor, secondary and elementary school teachers, and consultants. But there was no representative of a teachers organization. This is a serious flaw in the composition of the committee because the provision for the representation of a teachers organization is intended by law for the protection of the rights of teachers facing administrative charges.

There is thus nothing in the Magna Carta that is in any way inconsistent with the Civil Service Decree insofar as procedures for investigation is concerned. To the contrary, the Civil Service Decree, [S]ec. 38(b) affirms the Magna Carta by providing that the respondent in an administrative case may ask for a “formal investigation,” which was what the teachers did in this case by questioning the absence of a representative of a teachers organization in the investigating committee.

The administrative committee considered the teachers to have waived their right to a hearing after the latter’s counsel walked out of the preliminary hearing. The committee should not have made such a ruling because the walk out was staged in protest against the procedures of the committee and its refusal to give the teachers’ counsel a copy of the guidelines. The committee concluded its investigation and ordered the dismissal of the teachers without giving the teachers the right to full access of the evidence against them and the opportunity to defend themselves. Its predisposition to find petitioner-appellees guilty of the charges was in fact noted by the Supreme Court when in its resolution in G.R. No. 101943 (Rosario Septimo v. Judge Martin Villarama, Jr.) it stated:

The facts and issues in this case are similar to the facts and issues in Hon. Isidro Cariño, et al. v. Hon. Carlos C. Ofilada, et al. G.R. No. 100206, August 22, 1961.

As in the Cariño v. Ofilada case, the officials of the Department of Culture and Education are predisposed to summarily hold the petitioners guilty of the charges against them. In fact, in this case Secretary Cariño, without awaiting formal administrative procedures and on the basis of reports and “implied admissions” found the petitioners guilty as charged and dismissed them from the service in separate decisions dated May 16, 1991 and August 6, 1991. The teachers went to court. The Court dismissed the case.”

Furthermore, this Court sees no valid reason to disregard the factual findings and conclusions of the Court of Appeals. It is not our function “to assess and evaluate all over again the evidence, testimonial and documentary, adduced by the parties particularly where, such as here, the findings of both the trial court and the appellate court coincide.”

It is as clear as day to us that the Court of Appeals committed no reversible error in affirming the trial court’s

decision setting aside the questioned orders of petitioners; and ordering the unqualified reinstatement of private respondents and the payment to them of salaries, allowances, bonuses and other benefits that accrued to their benefit during the entire duration of their suspension or dismissal. Because the administrative proceedings involved in this case are void, no delinquency or misconduct may be imputed to private respondents. Moreover, the suspension or dismissal meted on them is baseless. Private respondents should, as a consequence, be reinstated and awarded all monetary benefits that may have accrued to them during the period of their unjustified suspension or dismissal. This Court will never countenance a denial of the fundamental right to due process, which is a cornerstone of our legal system.

WHEREFORE, premises considered, the petition is hereby DENIED for its utter failure to show any reversible error on the part of the Court of Appeals. The assailed Decision is thus AFFIRMED.

SO ORDERED.

Narvasa, C.J., (Chairman), Romero, Melo, and Francisco, JJ., concur.

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 89687 September 26, 1990

MARIA B. LUPO, petitioner, vsADMINISTRATIVE ACTION BOARD (AAB) (Department of Transportation & Communications Republic of the Philippines) and JUSTICE ONOFRE A. VILLALUZ, respondents.

Baga, Castronuevo, Balitaan & Associates for petitioner.

 

PARAS, J.:

In this petition for prohibition, petitioner seeks the issuance of an order or writ of prohibition which would direct public respondents Administrative Action Board and Chairman Onofre A. Villaluz to permanently desist from assuming jurisdiction over Adm. Case No. AAB-034-88 until the same is finally disposed of by the Telecoms Office, Region V at Legaspi City and to refrain from issuing orders setting the aforecited case for hearing.

Petitioner substantially assails the Resolution dated September 30, 1988 of then Secretary Rainerio O. Reyes of the Department of Transportation and Communications which suspended her for one year and disqualified her for promotion for a period of one year and also, the Order of July 5, 1989 of Chairman Onofre A. Villaluz of the Administrative Action Board of said department which set Adm. Case No. AAB-034-88 for trial.

The prefatory facts are:

On November 5, 1987, Fructuoso B. Arroyo, OIC/CDO, Message Center and then CDO of Telecom Office stationed at Buhi, Camarines Sur, filed a complaint for Dishonesty Thru Falsification (Multiple) of Official Documents against Maria B. Lupo, herein petitioner, as Chief of Personnel Section, Telecom Office, Region V at Legaspi City. The complaint was based on the alleged exclusion of several names from the Certification (on the list of employees) submitted by petitioner in compliance with a Confidential Memorandum of Director Claro Morante.

The aforesaid complaint was actually triggered off by the inquiry of Ignacio B. Arroyo, brother of complainant Fructuoso B. Arroyo, into the alleged illegal termination of the former's niece, Nenita Arroyo Noceda, as a daily wage clerk at Buhi Telecom Exchange in Camarines Sur, in violation of a contract previously entered into between a certain Gloria D. Palermo, lot donor and former Bureau Director Ceferino S. Carreon, donee of the lot. The lot is located at Sta. Clara, Buhi on which the Telecom Office was to be constructed. This inquiry of Ignacio B. Arroyo was dismissed for lack of merit on September 16, 1987.

It appears that the basis for the complaint of Fructuoso Arroyo from whom Ignacio sought assistance was petitioner's exclusion of certain names of newly hired employees in Region V who appeared related to certain ranking officials of the region, for the purpose of keeping under wraps the appointment of said employees from Ignacio Arroyo who had previously complained of the alleged illegal termination of his niece Nenita A. Noceda. Petitioner had to falsify the list which she submitted in compliance with Regional Director Morante's Confidential Memorandum to the alleged prejudice of Noceda and for the purpose of protecting her future interest in the sense that those excluded (who should have been included) were close relatives of ranking officials of the Telecommunications Office of Region V. Telecom Investigator Florencio Calapano, acting on the unverified complaint of Fructuoso Arroyo, conducted an informal fact-finding inquiry and came out with a Memorandum recommending that petitioner be sternly warned that a repetition of a similar offense in the future would be dealt with more drastically and that the case should be considered closed.

Based solely on the aforesaid Memorandum, the Secretary of the Department of Transportation and Communications handed down a Resolution on September 30, 1988 finding petitioner "guilty as charged" and suspending her for one year and disqualify her for promotion for a period of one year. Petitioner moved for reconsideration of the resolution but the same was denied. She thus appealed the resolution and order of denial of the motion for reconsideration to the Civil Service Commission for review, anchoring her appeal on lack of due process in the proceedings.

On March 2, 1989 the Civil Service Commission, thru its Merit Systems Board, issued the Order setting aside the resolution of the Department of Transportation and Communications and remanding the case to the Telecom Office of Region V for further investigation to conform with the procedural requirements of due process.

Instead of complying with the above order, respondent Chairman Villaluz of the AAB issued the Order of July 5, 1989 setting the case for trial on August 3, 1989.

On August 2, 1989, petitioner filed a Manifestation and Motion informing respondent Villaluz that no formal charge had been instituted by the Telecommunications Office against her and respondents, therefore, had no jurisdiction over the case. Respondents denied said manifestation and motion for lack of merit in the Order of August 7, 1989 and again set the case for hearing on August 23, 1989.

Hence, this petition.

Petitioner avers that respondent AAB never acquired jurisdiction over Adm. Case No. AAB-034-88 because of the absence of a formal charge against her and that the proceedings conducted by Regional Investigator Florencio Calapano was a mere fact-finding inquiry.

Respondent Chairman of the AAB however, contends that the Order of the Merit Systems Board of the Civil Service Commission was rendered without lawful authority since petitioner's appeal to said Board was filed when the assailed resolution had already become final and executory; that the Board, not having acquired jurisdiction to entertain the appeal for having been filed beyond the reglementary period could not have legally rendered its decision in the said administrative case. Likewise, respondents claim that Regional Office No. V could no longer take cognizance of the case as per order of the Merit Systems Board for the reason that the decision had already become final and executory.

Complaints against employees, like petitioner herein, who belong to the Civil Service Career System are still governed by P.D. No. 807. This mandate of P.D. No. 807 has been recognized and implemented by respondent Administrative Action Board when it declared in Office Order No. 88-318 dated July 1, 1988 that the Board shall observe the pertinent civil service rules and policies designed to expedite action on cases referred to it. (Emphasis supplied)

The pertinent provisions of the aforecited Civil Service Law read as follows:

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 any department or agency or and decide the case or it may deputize 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.

(c) An investigation may be entrusted to regional director or similar officials who shall make the necessary report and recommendation to the chief of bureau or office or department within the period specified in Paragraph (d) of the following Section.

(d) An appeal shall not stop the decision from being executory, and in case the penalty is suspension or removal, the respondent shall be considered as having been under preventive suspension during the pendency of the appeal in the event he wins an appeal.

SEC. 38. Procedure in Administrative Cases Against Non-Presidential Appointees. — a) Administrative proceedings may be commenced against a subordinate officer or employee by the head of department or office of equivalent rank, or head of local government, or chiefs of agencies, or regional directors, or upon sworn, written complaint of any other persons.

(b) In the case of a complaint filed by any other persons, the complainant shall submit sworn statements covering his testimony and those of his witnesses together with his documentary evidence. If on the basis of such papers a prima facie case is found not to exist, the disciplining authority shall dismiss the case. If a prima facie case exist, he shall notify the respondent in writing, of the charges against the latter, to which shall be attached copies of the complaint, sworn statements and other documents submitted, and the respondent shall be allowed not less than seventy-two hours after receipt of the complaint to answer the charges in writing under oath, together with supporting sworn statements and documents, in which he shall indicate whether or not he elects a formal investigation if his answer is not considered satisfactory. If the answer is found satisfactory, the disciplining authority shall dismiss the case.

(c) Although a respondent does not request a formal investigation, one shall nevertheless be conducted when from the allegations of the complaint and the answer of the respondent, including the supporting documents, the merits of the case cannot be decided judiciously without conducting such an investigation. . . .

Petitioner's contentions appear meritorious.

It should be noted that under Section 37 (b) as aforequoted, the decisions of heads of departments become final only in cases where the penalty imposed is suspension for not more than thirty (30) days or fine in an amount not exceeding thirty (30) days' salary. In the case, therefore, of petitioner who had been made to suffer the penalty of suspension for one (1) year, such penalty should not have been implemented without the appeal to the Civil Service Commission for proper review.

Notably, paragraph (a) of the above Section explicitly provides that the Commission shall decide upon appeal all administrative disciplinary cases involving the imposition of a penalty of suspension for more than 30 days, or fine in an amount exceeding 30 days' salary. Clearly, the enforcement of the penalty imposed upon petitioner under the resolution of the Secretary of the Department of Transportation and Communications was premature.

From the very start, the basis upon which this case was investigated had been defective and irregular. For, the letter-complaint of Fructuoso Arroyo was not verified and yet, the same was haphazardly made the basis of the informal inquiry. It should be stressed that par. (a) of Sec. 38 mandates that administrative proceedings may be commenced against an employee by the head of the department or office of equivalent rank or upon sworn written complaint of any other person. It should also be noted that under paragraph (b) of said Section, a respondent is given the option to elect a formal investigation of the charge against him if his answer is not found satisfactory. In the case of petitioner, it appears that when her answer to the unverified complaint was found unsatisfactory, she was never given a chance to decide whether or not to submit herself to a formal investigation.

The Memorandum of Telecom Investigator Calapano to the Regional Director is merely recommendatory since it was only the outcome of a fact finding investigation based on the unverified complaint. Note that the informal investigation was only an inquiry into the alleged dishonest acts of petitioner in which case, the Memorandum could not be made as the basis for any final resolution of the case. The legal and proper procedure should have been for the Regional Director of Region V, the alter ego of the department secretary to initiate the formal complaint on the basis of the results of the inquiry of the Telecom Investigator. Instead of observing the mandatory rules on formal investigations as prescibed by PD No. 807, the DOTC Secretary cut corners and apparently railroaded this case by rendering the assailed resolution.

Even the Telecom Investigator did not know what he was doing. He exceeded his authority by imposing in the Memorandum a penalty in the form of a warning to petitioner. His job was limited to an inquiry into the facts and a determination on whether or not a prima facie case existed. His findings were merely preparatory to the filing of the necessary formal administrative case by the Regional Director.

It should be noted with alarm that the Telecom Director who was supposed to review the findings of the Telecom Investigator merely affixed his approval within the Memorandum (p. 7 of Memorandum), thus obviously indicating that he never reviewed the merits of the case.

It appears highly irregular that Asst. Secretary Sibal of the DOTC, in his letter dated August 2, 1989 to Chairman Villaluz of the Administrative Action Board, informed the latter that his Office did not file any administrative complaint against petitioner nor had it filed a formal charge against her for whatever administrative offense. Note that even with this letter, Chairman Villaluz proceeded to order the hearing of this case. This is a clear indication that for lack of coordination among the DOTC authorities and the Regional Office, the mandatory requirements of due process to which petitioner was entitled were irreverently ignored.

Thus, in the case of Jose Rizal College v. National Labor Relations Commission (G.R. No. 65482, December 1, 1987) this Court reiterated the "cardinal primary" requirements of due process in administrative proceedings and these are: (1) the right to a hearing which includes, the right to present one's case and submit evidence in support thereof; (2) the tribunal must consider the evidence presented; (3) the decision must have something to support itself, (4) the evidence must be substantial, and substantial evidence means such evidence as a reasonable mind must accept as adequate to support a conclusion; (5) the decision must be based on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected; (6) the tribunal or body or any of its judges must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate; (7) the board or body should in all controversial questions, render its decision in such manner that the parties to the proceeding can know the various issues involved, and the reason for the decision rendered. (Emphasis supplied)

Evidently, respondents denied petitioner her right to a formal and full-blown administrative proceedings which she never had.

WHEREFORE, the Resolution dated September 30, 1988 of the Secretary of the Department of Transportation and Communications and the proceedings before the Administrative Action Board are hereby declared NULL and VOID. The Secretary of the DOTC is hereby directed to restore to petitioner's record of service the period which she served under suspension and to delete from her personnel file the period within which she was disqualified for promotion.

SO ORDERED.

ADMINISTRATIVE LAW CASES DOCTRINE

PERALTA VS. CSC

When an administrative or executive agency renders an opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative interpretation of the law is at best advisory, for it is the courts that finally determine what the law means. It has also been held that interpretative regulations need not be published.

Javellana vs. DILG

As a matter of policy, this Court accords great respect to the decisions and/or actions of administrative authorities not only because of the doctrine of separation of powers but also for their presumed knowledgeability and expertise in the enforcement of laws and regulations entrusted to their jurisdiction.

Notice  and Hearing or Publication

Commissioner of Internal Revenue vs. CA, CTA, Fortune Tobacco

An administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance for it gives no real consequence more than what the law itself has already prescribed.  When, upon the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially adds to or increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law.

Commissioner of Customs vs. Hypermix Feeds

Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether the rule is within the delegated authority of the administrative agency; (ii) whether it is reasonable; and (iii) whether it was issued pursuant to proper procedure.  But the court is not free to substitute its judgment as to the desirability or wisdom of the rule for the legislative body, by its delegation of administrative judgment, has committed those questions to administrative judgments and not to judicial judgments.  In the case of an interpretative rule, the inquiry is not into the validity but into the correctness or propriety of the rule.   As a matter of power a court, when confronted with an interpretative rule, is free to (i) give the force of law to the rule; (ii) go to the opposite extreme and substitute its judgment; or (iii) give some intermediate degree of authoritative weight to the interpretative rule.

Considering that the questioned regulation would affect the substantive rights of respondent as explained above, it therefore follows that petitioners should have applied the pertinent provisions of Book VII, Chapter 2 of the Revised Administrative Code, to wit:

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

Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

VICTORIA MILLING vs. SSS

There is a distinction between an administrative rule or regulation and an administrative interpretation of a law whose enforcement is entrusted to an administrative body. When an administrative agency promulgates rules and regulations, it "makes" a new law with the force and effect of a valid law, while when it renders an opinion or gives a statement of policy, it merely interprets a pre-existing law. Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided in the law. A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means.

NFA VS. MASADA Security

The general rule is that construction of a statute by an administrative agency charged with the task of interpreting or applying the same is entitled to great weight and respect. The Court, however, is not bound to apply said rule where such executive interpretation, is clearly erroneous, or when there is no ambiguity in the law interpreted, or when the language of the words used is clear and plain, as in the case at bar. Besides, administrative interpretations are at best advisory for it is the Court that finally determines what the law means. Hence, the interpretation given by the labor agencies in the instant case which went as far as supplementing what is otherwise not stated in the law cannot bind this Court.

SGMC REALTY CORP. vs. Office of the President

Administrative rule or regulation, in order to be valid, must not contradict but conform to the provisions of the enabling law.

For it is axiomatic that administrative rules derive their validity from the statute that they are intended to implement. Any rule which is not consistent with statute itself is null and void.

Prospective or retroactive operation

CIR VS. AZUCENA

An administrative rule interpretive of a statute, and not declarative of certain rights and corresponding obligations, is given retroactive effect as of the date of the effectivity of the statute.

DADULO vs. CA

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

SAN MIGUEL VS. INCIONG

The Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more emphatic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay.

ASTURIAS VS. COMMISSIONER OF CUSTOM

Considering that the Bureau of Customs is the office charged with implementing and enforcing the provisions of our Tariff and Customs Code, the construction placed by it thereon should be given controlling weight.

          In applying the doctrine or principle of respect for administrative or practical construction , the courts often refer to several factors which may be regarded as bases of the principle, as factors leading the courts to give the principle controlling weight in particular instances, or as independent rules in themselves. These factors are the respect due the governmental agencies charged with administration, their competence, expertness, experience, and informed judgment and the fact that they frequently are the drafters of the law they interpret; that the agency is the one on which the legislature must rely to advise it as to the practical working out of the statute, and practical application of the statute presents the agency with unique opportunity and experiences for discovering deficiencies, inaccuracies, or improvements in the statute.

CARINO VS. CHR

The CHR has the power to investigate but not to adjudicate alleged human right violation.

Investigate – means to examine, inquire, explore.

Adjudicate – to resolve, rule, settle, decide.

Megaworld Globus Asia vs. DSM Construction

Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals.

NAPOCOR vs. LEASTO

Arbitral decision accord respect and finality by the Court

Exemption to the rule : 

1.       on the ground of promissory estoppels

2.       And involving a legal issue and not a factual finding.

LUPANGCO vs. CA

Quasi-judicial is defined as a term applied to the action, discretion, etc., of public administrative officers or bodies required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature. To expound thereon, quasi-judicial adjudication would mean a determination of rights, privileges and duties resulting in a decision or order which applies to a specific situation .  This does not cover rules and regulations of general applicability issued by the administrative body to implement its purely administrative policies and functions like Resolution No. 105 which was adopted by the respondent PRC as a measure to preserve the integrity of licensure examinations.

 JURISDICTION - the competence of an office or body to act on a given matter or decide a certain question.

CHIN vs. Land Bank of the Philippines

The court has no jurisdiction over the subject matter of the petition.

AZARCON vs. Sandiganbayan

The court has no jurisdiction over the person of Azarcon.

DUE PROCESS

SANTIAGO vs. Alikpala

First requirement of procedural due process, namely, the existence of the court or tribunal clothed with judicial, or quasi-judicial, power to hear and determine the matter before it.

There is the express admission in the statement of facts that respondents, as a court-martial, were not convened to try petitioner but someone else, the action taken against petitioner being induced solely by a desire to avoid the effects of prescription; it would follow then that the absence of a competent court or tribunal is most marked and undeniable. Such a denial of due process is therefore fatal to its assumed authority to try petitioner.

NDC vs. Collector of Customs

Even in admin proceeding due process must be observed.

We find this action proper for it really appears that petitioner Rocha was not given an opportunity to prove that the television set complained of is not a cargo that needs to be manifested as required by Section 2521 of the Tariff and Customs Code. Under said section, in order that an imported article or merchandise may be considered a cargo that should be manifested it is first necessary that it be so established for the reason that there are other effects that a vessel may carry that are excluded from the requirement of the law, among which are the personal effects of the members of the crew. The fact that the set in question was claimed by the customs authorities not to be within the exception does not automatically make the vessel liable. It is still necessary that the vessel, its owner or operator, be given a chance to show otherwise. This is precisely what petitioner Rocha has requested in his letter. Not only was he denied this chance, but respondent collector immediately imposed upon the vessel the huge fine of P5,000.00. This is a denial of the elementary rule of due process.

FABELLA vs. CA

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

In the present case,  the various committees formed by DECS to hear the administrative charges against private respondents did not include “a representative of the local or, in its absence, any existing provincial or national teacher’s organization” as required by Section 9 of RA 4670.   Accordingly, these committees were deemed to have no competent jurisdiction.  Thus, all proceedings undertaken by them were necessarily void.  They could not provide any basis for the suspension or dismissal of private respondents.  The inclusion of a representative of a teachers’ organization in these committees was indispensable to ensure an impartial tribunal .  It was this requirement that would have given substance and meaning to the right to be heard.  Indeed, in any proceeding, the essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard.

LUPO vs. Administrative Action Board

The requirements of due process in administrative proceedings and these are:

(1) the right to a hearing which includes, the right to present one's case and submit evidence in support thereof;

(2) the tribunal must consider the evidence presented;

(3) the decision must have something to support itself,

(4) the evidence must be substantial, and substantial evidence means such evidence as a reasonable mind must accept as adequate to support a conclusion;

(5) the decision must be based on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected;

(6) the tribunal or body or any of its judges must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate;

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

MADENILLA vs. CSC

No denial of due process.

"Due process of law implies the right of the person affected thereby to be present before the tribunal which pronounces judgment upon the question of life, liberty, and property in its most comprehensive sense; to be heard, by testimony or otherwise, and to have the right of controverting, by proof, every material fact which bears on the question of the light in the matter involved."

The essence of due process is the opportunity to be heard. The presence of a party is not always the cornerstone of due process. In the case at bar, any defect was cured by the filing of a motion for reconsideration.

KANLAON Construction vs. NLRC

 Gen. Rule : Only lawyers are allowed to appear before the labor arbiter

Exemption:

Non-lawyer member of the organization

Non-lawyer representing himself as party to the case

Member of the legal aid duly recognized by IBP or DOJ

Engineer Estacio can appear however his appearance on behalf of Kanlaon required written proof of authorization.  Absent this authority whatever statement and declaration made before the arbiter is not binding to the petitioner.

First LEPANTO vs. CA

Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and method of enforcing the right to appeal from decisions of the BOI are concerned. Appeals from decisions of the BOI, which by statute was previously allowed to be filed directly with the Supreme Court, should now be brought to the Court of Appeals.

Manuel vs. Villena

Technical rule of procedure are not strictly enforced and due process of law in the strict judicial sense is not indispensable. It is sufficient that substantive due process requirement of fairness and reasonableness be observed.

RES JUDICATA

Judge Basilla vs. Becamon

Applying the principle of res judicata or bar by prior judgment, the present administrative case becomes dismissible.

The Court held that applied the principle of res judicata or bar by prior judgment. Under the said doctrine, a matter that has been adjudicated by a court of competent jurisdiction must be deemed to have been finally and conclusively settled if it arises in any subsequent litigation between the same parties and for the same cause. It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand, or cause of action. Res judicata is based on the ground that the party to be affected, or some other with whom he is in privity, has litigated the same matter in the former action in a court of competent jurisdiction, and should not be permitted to litigate it again. This principle frees the parties from undergoing all over again the rigors of unnecessary suits and repetitious trials. At the same time, it prevents the clogging of court dockets. Equally important, res judicata stabilizes rights and promotes the rule of law.”

NHA vs. Almeida

In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial power—that which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative agency for the "formulation of a final order." This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature. However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branches—the legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."

Abelita vs. Doria

While the present case and the administrative case are based on the same essential facts and circumstances, the doctrine of res judicata will not apply.

There is no identity of causes of action in the cases.  While identity of causes of action is not required in the application of res judicata in the concept of conclusiveness of judgment, it is required that there must always be identity of parties in the first and second cases.  

For res judicata to apply, the following requisites must be present:

         (a) the former judgment or order must be final;

         (b) it must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case;

         (c) it must have been rendered by a court having jurisdiction over the subject matter and the parties; and

         (d) there must be, between the first and second actions, identity of parties, of subject matter, and of cause of action; this requisite is satisfied if the two actions are substantially between the same parties.

SEC vs. INTERPORT SERVICES

SEC retains jurisdiction to investigate

Section 53 of the Securities Regulations Code clearly provides that criminal complaints for violations of rules and regulations enforced or administered by the SEC shall be referred to the Department of Justice (DOJ) for preliminary investigation, while the SEC nevertheless retains limited investigatory powers. Additionally, the SEC may still impose the appropriate administrative sanctions under Section 54 of the aforementioned law.

SEC vs. GMA Network, Inc.

Rate-fixing is a legislative function which concededly has been delegated to the SEC by R.A. No. 3531 and other pertinent laws. The due process clause, however, permits the courts to determine whether the regulation issued by the SEC is reasonable and within the bounds of its rate-fixing authority and to strike it down when it arbitrarily infringes on a person’s right to property.

VIGAN ELECTRIC CO. vs. Public Service Commission

Partakes of the nature of a quasi-judicial function and that having been issued without previous notice and hearing said order is clearly violative of the due process clause, and, hence, null and void.

QJ – notice and hearing requirement.

DOCTRINE OF PRIMARY JURISDICTION

Bagonghasa vs. DAR

The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction was initially lodged with an administrative body of special competence. The doctrine of primary jurisdiction does not allow 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. The Office of the DAR Secretary is in a better position to resolve the particular issue of non-issuance of a notice of coverage.

NESTLE PHILIPPINES, INC. vs. UNIWIDE SALES

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

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

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

EXEMPTION to Doctrine of Primary Jurisdiction

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. COMMISSION ON AUDIT

The doctrine of primary jurisdiction would ordinarily preclude us from resolving the matter, which calls for a ruling to be first made by the Board.   It is the latter that is vested by law with exclusive and original jurisdiction to settle any dispute arising under RA 8291, as well as other matters related thereto.

However, both the GSIS and respondents have extensively discussed the merits of the case in their respective pleadings and did not confine their arguments to the issue of jurisdiction.  Respondents, in fact, submit that we should resolve the main issue on the ground that it is a purely legal question. Respondents further state that a remand of the case to the Board would merely result in unnecessary delay and needless expense for the parties.

GREGORIO VIGILAR SEC. of DPWH VS. ARNULFO AQUINO

There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The final decision on the matter rests not with them but with the courts of justice.

Geraldine Gaw Guy vs. The Board of Commissioners of the Bureau of immigration

Judicial intervention, however, should be granted in cases where the claim of citizenship is so substantial that there are reasonable grounds to believe that the claim is correct in deportation proceeding.

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES

NEW SUN VALLEY HOMEOWNERS' ASSOCIATION vs. SB BRGY. SUN VALLEY PARANAQUE

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. 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.

ARLIN OBIASCA VS. JEANE BASALLOTE

The doctrine of exhaustion of administrative remedies requires that, for reasons of law, comity and convenience, where the enabling statute indicates a procedure for administrative review and provides a system of administrative appeal or reconsideration, the courts will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum. In Orosa v. Roa, the Court ruled that if an appeal or remedy obtains or is available within the administrative machinery, this should be resorted to before resort can be made to the courts. While the doctrine of exhaustion of administrative remedies is subject to certain exceptions, these are not present in this case.

EXEMPTION

REPUBLIC vs. CARLITO LACAP

Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as:

(a) where there is estoppel on the part of the party invoking the doctrine;

(b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction;

 (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant;

(d) where the amount involved is relatively small so as to make the rule impractical and oppressive;

 (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;

(f) where judicial intervention is urgent;

(g) when its application may cause great and irreparable damage;

(h) where the controverted acts violate due process;

(i) when the issue of non-exhaustion of administrative remedies has been rendered moot;

(j) when there is no other plain, speedy and adequate remedy;

(k) when strong public interest is involved; and,

(l) in quo warranto proceedings. Exceptions (c) and (e) are applicable to the present case.

KHRISTINE REA REGINO VS. PANGASINAN COLLEGES OF SCIENCE AND TECHNOLOGY

Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it to allow her to take her final examinations; she was already enrolled in another educational institution. A reversal of the acts complained of would not adequately redress her grievances; under the circumstances, the consequences of respondents' acts could no longer be undone or rectified.

Second, exhaustion of administrative remedies is applicable when there is competence on the part of the administrative body to act upon the matter complained of. Administrative agencies are not courts; they are neither part of the judicial system, nor are they deemed judicial tribunals. Specifically, the CHED does not have the power to award damages. Hence, petitioner could not have commenced her case before the Commission.

Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is purely legal and well within the jurisdiction of the trial court. Petitioner's action for damages inevitably calls for the application and the interpretation of the Civil Code, a function that falls within the jurisdiction of the courts.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. 93868 February 19, 1991

ARDELIZA MEDENILLA, petitioner, vs.CIVIL SERVICE COMMISSION, AMPARO DELLOSA, ROSALINDA JURIA and MARITA BURDEOS, respondents.

 

GUTIERREZ, JR., J.:p

This is a petition seeking the annulment of the resolutions issued by the Civil Service Commission which disapproved the appointment of the petitioner to the position of Supervising Human Manpower Development Officer.

Petitioner Ardeliza Medenilla was a contractual employee of the Department of Public Works and Highways (DPWH) occupying the position of Public Relations Officer II.

In 1987, Medenilla was detailed as Technical Assistant in the Office of the Assistant Secretary for Administration and Manpower Management.

Pursuant to Executive Order No. 124 dated January 30, 1987, a reorganization ensued within the DPWH and all the positions therein were abolished. A revised staffing pattern together with the guidelines on the selection and placement of personnel was issued.

Included in the revised staffing pattern is the contested position of Supervising Human Resource Development Officer.

On January 2, 1989, the petitioner was appointed to the disputed position.

On January 27, 1989, respondents Amparo Dellosa, Rosalinda Juria and Marita Burdeos together with Matilde Angeles, Catalina Espinas, Alicia Nercelles and Ramon Racela, all of whom are employees in the Human Resource Training and Material Development Division, Administrative and Manpower Management Service of the DPWH, jointly lodged a protest before the DPWH task force on reorganization contesting the appointment of the petitioner to the position.

The protestants alleged that since they are next-in-rank employees, one of them should have been appointed to the said position.

On August 2, 1989, the task force on reorganization dismissed the protest. The dispositive portion of its decision reads as follows:

Premises considered, the Task Force on Reorganization Appeals finds the instant protest of Matilde Angeles, et al. without merit and hereby recommends to the Honorable Secretary that the appointment of Ardeliza Medenilla to the contested position of Supervising Human Resource Development Officer be upheld. (Rollo, p. 26)

Not satisfied, the private respondents appealed the decision to the Civil Service Commission. The Commission found:

On the onset, it appears that protestee Medenilla does not possess the required qualifications for the position. . . . Moreover, her eligibility is PD 907, being a cum laude graduate. Let it be considered appropriate only for appointment to "second level positions" which require the application of knowledge and skills within the appointee's field of study. (Rollo, p. 28-29)

xxx xxx xxx

Further, it also appears that Medenilla is a contractual employee assigned or detailed with the Office of the Assistant Secretary for Administrations and Manpower Management (the appointing authority) as Public Relations Officer II, while protestants are all permanent employee of the Division (Human Resources Planning) where the vancancy exist.

Indeed, RA 6656 does not preclude the appointment of contractuals to a new staffing pattern, however, in the presence and availability of qualified permanent next-in-rank employees in the organization, the latter has to be preferred, unless a contractual employee possesses superior qualifications that could justify her appointment. However, in this case, we see no superior qualifications or any special reasons for preferring Medenilla over the protestants. (Rollo, p. 29)

We find merit in the protest. While as earlier mentioned, the appointing authority is given the wide latitude of discretion, to sustain the appointment of Medenilla may give the appointing power unnecessary opportunities to act capriciously and thus thwart the natural and reasonable expectation of the officer next-in-rank to any vacant position, to be promoted to it As held in Millares v. Subido, G.R. No. L-23281, promulgated August 10, 1967, the Supreme Court held:

We, therefore, hold that in the event of there occurring a vacancy, the officer next-in-rank must, as far as practicable and as the appointing authority sees it in his best judgment and estimation, be promoted . . . and that it is only in cases of promotion, where an employee other than the ranking one is promoted, is the appointing power under duty to give "special reason or reasons" for his action . . . .

Again, the special reasons advanced by the appointing authority in this case is (sic) not enough. Considering further that appointee is not meeting the minimum qualification standards set by his own office, she could not be said to possess far superior qualification than those permanent next-in-rank employees of the Department. (Rollo, pp. 30-31)

Thus, on February 28, 1990, the Commission promulgated the assailed resolution, the dispositive portion of which reads:

WHEREFORE, foregoing premises considered, the Commission resolved to disapprove the promotional appointment of Ardeliza Medenilla to the position of Supervising Human Manpower Development Officer. Accordingly, the appointing authority may choose from among protestants Amparo Dellosa, Marita Burdeos and Rosalinda Juria who to promote to the said position. The Civil Service Field Office is directed to implement this resolution accordingly." (Rollo, p. 31)

The petitioner on March 23, 1990 filed a motion for reconsideration of the resolution. On May 30, 1990 a supplement to the Motion for Reconsideration was also filed. However, prior thereto, the Commission on May 23, 1990 denied the petitioner's motion for reconsideration. The pertinent portions of the denial are:

xxx xxx xxx

2. Experience of Medenilla

Medenilla alleges that the Commission failed to appreciate her 3 years and 8 months of experience directly relevant to Human Resource Development. Looking more deeply into her experience as reflected in her CS Form 212, we could not distinguish her experience directly relevant to the field of Human Resource Development. The certification of a certain Elvira H. Villania stated her duties in the Guthrie-Jensen Consultants, Inc. in her one (1) year and (7) months as Research and Publication Officer of working included "providing research assistance to our Management Consultants in drawing up performance appraisal system, merit promotion system and conducting development for our client-companies." Notwithstanding, assuming that her 1 year and 7 months experience in the company is relevant, yet, compared to the experience of the protestants in the field of Human Resource Development, said experience is obviously outweighed. There is no dispute that Medenilla has experience as a Researcher but said experience is basically on the field of journalism and information. (Rollo, p. 35)

xxx xxx xxx

4. Education background and eligibility of Medenilla.

. . . Notwithstanding, we are inclined to reconsider our position that the educational background is not relevant. AB may therefore be taken as a relevant degree for purposes of qualifying to the position. As such, her PD 907 eligibility may be considered appropriate." (Rollo, p. 37)

xxx xxx xxx

Granting for the sake of argument that the DPWH adhered to its rules relative to reorganization, is at this point, no longer material and controlling. What is now the issue is whether Medenilla indeed possesses superior qualifications over any of the protestants. (Rollo, p. 38)

xxx xxx xxx

The edge of 1.30% of Medenilla over Dellosa cannot be considered by this Commission significant enough to presume and declare that Medenilla possesses far superior qualifications over the protestant and to warrant the appointment of a contractual employee over a permanent employee of the Department. (Rollo, p. 39)

Hence, this petition.

The petitioner interposes the following grounds:

I

The resolutions were issued by the Respondent Commission, without giving notice to the petitioner of the existence of an appeal filed before the CSC, thereby denying the petitioner due process of law.

II

The Civil Service Commission committed grave abuse of discretion amounting to lack of jurisdiction in disapproving the appointment of the petitioner. Its function, is limited only to determine whether the appointee possesses the appropriate civil service eligibility and not whether another is more qualified than the petitioner.

Without giving due course to the petition, the Court on July 10, 1990, issued a temporary restraining order enjoining the Commission from implementing the assailed resolutions.

Anent the first ground, the petitioner contends that she was not notified by the Civil Service Commission of the existence of the appeal before it. The resolutions, therefore, were allegedly issued in violation of the petitioner's constitutionally guaranteed due process of law.

The public respondent, on the other hand, advances the argument that what due process abhors is not lack of previous notice but the absolute lack of opportunity to be heard. Since the petitioner filed a motion for reconsideration, she cannot now complain that she was deprived of due process.

The petitioner's first contention is without merit.

"Due process of law implies the right of the person affected thereby to be present before the tribunal which pronounces judgment upon the question of life, liberty, and property in its most comprehensive sense; to be heard, by testimony or otherwise, and to have the right of controverting, by proof, every material fact which bears on the question of the light in the matter involved." (Black's Law Dictionary, 4th Edition, p. 590)

The essence of due process is the opportunity to be heard. The presence of a party is not always the cornerstone of due process. (Asprec v. Itchon, 16 SCRA 921 [1966]; Auyong Hian v. Court of Tax Appeals, 59 SCRA 110 [1974]; Assistant Executive Secretary for Legal Affairs of the Office of the President of the Philippines v. Court of Appeals, G.R. No. 76761, January 9, 1989). What the law prohibits is not the absence of previous notice but the absolute absence thereof and lack of opportunity to be heard. (Tajonero v. Lamarosa, 110 SCRA 438 [1981])

In the case at bar, any defect was cured by the filing of a motion for reconsideration. (see De Leon v. Comelec, 129 SCRA 117 [1984])

The second contention of the petitioner alleges that the Commission acted with grave abuse of discretion in disapproving her appointment.

The public respondent views it otherwise. The Civil Service Commission asserts that being the Central Personnel Agency of the Government, it is the final arbiter on civil service matters.

The Commission alleges, that, pursuant to RA 6656, the Commission is authorized to act on appeals by aggrieved employees in the course of reorganization and, therefore, it has the power to reverse or modify any decision brought before it on appeal.

The petitioner's second contention is impressed with merit.

The qualification standards for the contested position are as follows:

EDUCATION EXPERIENCE CIVIL SERVICE

REQUIREMENT REQUIREMENT ELIGIBILITY

Bachelor's degree 2 years of Manpower-Youth

relevant to the job experience in Development

with at least human resource Officer

9 units in post development Manpower

Development

Officer

Relevant RA

1080

Relevant

Second Level

Eligibility

Career Service

(Professional)

First Grade

Supervisor

It is not disputed that the petitioner possesses the appropriate civil service eligibility and requisite educational background. The public respondent itself, in its resolution dated May 23, 1990, considered the petitioner's PD No. 907 eligibility appropriate for the position. (Rollo, p. 37)

The controversy then centers on the experience of the petitioner.

The Commission contends that the experience of Medenilla is basically in the field of journalism and not in Human Resource Development. The Commission also alleges that since the petitioner is merely a contractual employee, in the absence of superior qualifications, the private respondents must be preferred not only for the reason that they are permanent career service employees but most especially because they are next-in-rank to the disputed position.

In support of its argument, the Commission cited in the disputed resolution, the case of Millares v. Subido, 20 SCRA 954 where this Court held:

. . . A vacant position shall be filled by promotion of the ranking officer or employee. And only where, for special reason or reasons of which the affected officer or employee will be notified, this mode of recruitment on selection cannot be observed, that the position may be filled by transfer, or re-employment, or by getting from the certified list of appropriate eligibles, in that order.

Finally, the public respondent advances the view that, since the Revised Administrative Code of 1987 now provides that the Commission shall "take appropriate action on all appointment" its authority, therefore, is no longer limited to the mere approval or disapproval of appointments submitted to it.

A careful review of the records of the case, will reveal that the petitioner possesses the requisite experience for the contested position.

The petitioner, not only was a cum laude graduate from the University of the Philippines, she has also acquired plenty of experience in the field of Human Resource Development, to wit:

She was rated and ranked number one in the Trainor's Training Program (120 hours) conducted for the DPWH by the Phil-Tao, Inc., a private firm. Ms. Dellosa was ranked number 7, Mrs. Juria was ranked number 10; Mrs. Burdeos did not attend the seminar. This training program was undertaken to strengthen the capabilities of HRD personnel, and to make them more effective in the discharge of their functions.

She is a recipient of a special commendation, given by Executive Director Remedios I. Rikken of the National Commission in the Role of Filipino Woman, for her efficiency and exemplary performance as a facilitator in the conduct of the workshops during the Second Congress of Women in Government. (Letter of Ms. Rikken addressed to Sec. Estuar attached as ANNEX "B".).

She obtained in her on-going MBA studies at the De La Salle University, which she pursued as an entrance scholar, the highest grade of 4.0, equivalent to "Excellent" in 2 HRD related subjects –– Organizational Management –– which call for the integration of concepts with concrete experience.

She participated in the preparation and dissemination of the corporate planning processes installed and institutionalized in the DPWH. Corporate Planning was introduced by Secretary Fiorello R. Estuar and is now being implemented in all government offices as instructed by the President.

She conducted orientation/reorientation courses in DPWH Regional Offices on (a) Management By Objectives and Results Evaluation, the Performance Appraisal System, and (b) a specifically designed Performance Appraisal System for DPWH District Engineers and Division Chiefs, being officially used by the DPWH.

She participated in the conceptualizing and drafting of the Department Order on the DPWH Incentives and Awards System, set up in compliance with RA No. 6713." (Rollo, p. 63)

The public respondent failed to consider that the petitioner, in her one year and seven months experience with Guthrie-Jensen was engaged in research relating to performance appraisal systems and merit promotion systems which duties are all related to Human Resource Development.

Precisely, it was because of her experience with Guthrie-Jensen that the petitioner was detailed from January 1987 until December 1988 in the Office of the Assistant Secretary for Administration and Manpower Management, where she was asked to assist in human resource planning.

The rejoinder filed during the proceedings before the Commission, by the Assistant Secretary for Administrative and Manpower Management, Carolina Mangawang, is very revealing. The disputed position requires of the holder of the office, skills in human resource developmental planning, research and statistics. The petitioner possesses these skills in more than appropriate quantities.

The argument of the public respondent that the petitioner must possess superior qualifications in order to be preferred over the private respondents deserves no credit.

It can be readily seen that the petitioner possesses superior qualifications. As earlier stated, she is a cum laude graduate of the University of the Philippines. She was ranked No. 1 in the department wide training program handled by a private firm. Two of the respondents were ranked way below while a third did not even participate. She was commended for exemplary performance as facilitator during the Second Congress of Women in Government. She received the highest grades from De la Salle University in her MBA studies. She helped draft the human resource program for the entire DPWH. Inspire of her being a new employee, she was assigned to conduct seminars on Performance Appraisal Systems and on Management by Objectives and Results for the DPWH. She was precisely drafted from a private firm to assist in human resource planning for the DPWH. Her work is apparently highly satisfactory as the top administrators of the DPWH not only appointed her but have asked the respondent Commission to validate the appointment.

The respondents rely on Section 4 of R.A. 6656, which reads:

xxx xxx xxx

Sec. 4. Officers and employees holding permanent appointments shall be given preference for appointment to new positions in the approved staffing pattern comparable to their former positions or if there are not enough comparable positions, to position next lower in rank.

Undoubtedly, old employees should be considered first. But it does not necessarily follow that they should then automatically be appointed.

The preference given to permanent employees assumes that employees working in a Department for longer periods have gained not only superior skills but also greater dedication to the public service. This is not always true and the law, moreover, does not preclude the infusion of new blood, younger dynamism, or necessary talents into the government service. If, after considering all the current employees, the Department Secretary cannot find among them the person he needs to revive a moribund office or to upgrade second rate performance, there is nothing in the Civil Service Law to prevent him from reaching out to other Departments or to the private sector provided all his acts are bona fide for the best interest of the public service and the person chosen has the needed qualifications. In the present case, there is no indication that the petitioner was chosen for any other reason except to bring in a talented person with the necessary eligibilities and qualifications for important assignments in the Department.

The reason behind P.D. No. 907 (which grants civil service eligibility to college graduates with at least cum laude honors) of attracting honor graduates into the public service would be negated if they always have to start as Clerk I and wait for hundreds of deadwood above them to first go into retirement before they can hope for significant and fulfilling assignments.

The Commission's reliance on the dictum in Millares v. Subido, 20 SCRA 954 [19671 is misplaced. The ruling in Millares has already been superseded by later decisions. We have already held in cases subsequent to Millares that the next-in-rank rule is not absolute; it only applies in cases of promotion (see Pineda v. Claudio, 28 SCRA 34 [19691). And even in promotions, it can be disregarded for sound reasons made known to the next-in-rank. The appointing authority, under the Civil Service Law, is allowed to fill vacancies by promotion, transfer of present employees, reinstatement, reemployment, and appointment of outsiders who have appropriate civil service eligibility, not necessarily in that order. (see Pineda v. Claudio, supra; Luego v. Civil Service Commission, 143 SCRA 327 [1986]) There is no legal fiat that a vacancy must be filled only by promotion; the appointing authority is given wide discretion to fill a vacancy from among the several alternatives provided for by law.

In this case, the contested position was created in the course of reorganization. The position appears to be a new one. The applicability, therefore, of the next-in-rank rule does not come in clearly. Besides, as earlier stated, said rule is not absolute. There are valid exceptions.

Granting for the sake of argument that the case involves a promotional appointment, the next-in-rank rule must give way to the exigencies of the public service. The intent of the Civil Service Laws not merely to bestow upon permanent employees the advantage arising from their long employment but most specially, it is to foster a more efficient public service. Any other factor must, therefore, yield to the demand for an effective government, which necessarily entails the appointment of competent, qualified and proficient personnel. The deliberation of this Court in the case of Aguilar v. Nieva, Jr., 40 SCRA 113 [19711 is illuminating, to wit:

xxx xxx xxx

. . . It is not enough that an aspirant is qualified and eligible or that he is next-in-rank or in line for promotion, albeit by passive prescription. It is just necessary, in order for public administration to be dynamic and responsive to the needs of the times, that the local executive be allowed the choice of men of its confidence, provided they are qualified and eligible, who in his best estimation are possessed of the requisite reputation, integrity, knowledgeability, energy and judgment. (Emphasis supplied, p. 121)

The point raised by the public respondent that, pursuant to the Revised Administrative Code of 1987, it is authorized to revoke appointments, must necessarily fail.

We have already ruled on several occasions that when the appointee is qualified, the Civil Service Commission has no choice but to attest to the appointment. It is not within its prerogative to revoke an appointee on the ground that substituting its judgment for that of the appointing power, another person has better qualifications for the job.

Once the function is discharged, the participation of the Civil Service Commission in the appointment process ceases. The only purpose of attestation is to determine whether the appointee possesses the requisite civil service eligibility, no more than that is left for the Civil Service Commission to do. (see Luego v. CSC, 143 SCRA 327 [1986]; Central Bank of the Philippines v. CSC, 171 SCRA 744 [1989]; Secretary Oscar Orbos v. CSC, G.R. No. 92561, September 12, 1990; Gaspar v. CSC, G.R. No. 90799, October 18, 1990).

The rationale of this doctrine is that the power of appointment is essentially discretionary. The discretion to be granted to the appointing authority, if not plenary must at least be sufficient.

After all, not only is the appointing authority the officer primarily responsible for the administration of the office but he is also in the best position to determine who among the prospective appointees can efficiently discharge the functions of the position (see Villegas v. Subido, 30 SCRA 498 [1969]). As between the Commission which only looks into paper qualifications and the appointing authority who views not only the listed qualifications but also the prospective appointees themselves, the work to be accomplished, the objectives of the Department, etc., the Court sustains the Department Head.

WHEREFORE, the petition is hereby GRANTED. The resolutions issued by the Civil Service Commission dated February 28, 1990 and May 23, 1990 are SET ASIDE. The restraining order issued by this Court on July 10, 1990 is made permanent.

SO ORDERED.

SECOND DIVISION

[G.R. No. 126625. September 23, 1997]

KANLAON CONSTRUCTION ENTERPRISES CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, 5TH DIVISION, and BENJAMIN RELUYA, JR., EDGARDO GENAYAS, ERNESTO CANETE, PROTACIO ROSALES, NESTOR BENOYA, RODOLFO GONGOB, DARIO BINOYA, BENJAMIN BASMAYOR, ABELARDO SACURA, FLORENCIO SACURA, ISABELO MIRA, NEMESIO LACAR, JOSEPH CABIGKIS, RODRIGO CILLON, VIRGILIO QUIZON, GUARINO EVANGELISTA, ALEJANDRO GATA, BENEDICTO CALAGO, NILO

GATA, DIONISIO PERMACIO, JUANITO SALUD, ADOR RIMPO, FELIPE ORAEZ, JULIETO TEJADA, TEOTIMO LACIO, ONOFRE QUIZON, RUDY ALVAREZ, CRESENCIO FLORES, ALFREDO PERMACIO, CRESENCIO ALVIAR, HERNANI SURILA, DIOSDADO SOLON, CENON ALBURO, ZACARIAS ORTIZ, EUSEBIO BUSTILLO, GREGORIO BAGO, JERRY VARGAS, EDUARDO BUENO, PASCUAL HUDAYA, ROGELIO NIETES, and REYNALDO NIETES, respondents.

D E C I S I O NPUNO, J.:

In this petition for certiorari, petitioner Kanlaon Construction Enterprises Co., Inc. seeks to annul the decision of respondent National Labor Relations Commission, Fifth Division and remand the cases to the Arbitration Branch for a retrial on the merits.

Petitioner is a domestic corporation engaged in the construction business nationwide with principal office at No. 11 Yakan St., La Vista Subdivision, Quezon City. In 1988, petitioner was contracted by the National Steel Corporation to construct residential houses for its plant employees in Steeltown, Sta. Elena, Iligan City. Private respondents were hired by petitioner as laborers in the project and worked under the supervision of Engineers Paulino Estacio and Mario Dulatre. In 1989, the project neared its completion and petitioner started terminating the services of private respondents and its other employees.

In 1990, private respondents filed separate complaints against petitioner before Sub-Regional Arbitration Branch XII, Iligan City. Numbering forty-one (41) in all, they claimed that petitioner paid them wages below the minimum and sought payment of their salary differentials and thirteenth-month pay. Engineers Estacio and Dulatre were named co-respondents.

Some of the cases were assigned to Labor Arbiter Guardson A. Siao while the others were assigned to Labor Arbiter Nicodemus G. Palangan. Summonses and notices of preliminary conference were issued and served on the two engineers and petitioner through Engineer Estacio. The preliminary conferences before the labor arbiters were attended by Engineers Estacio and Dulatre and private respondents. At the conference of June 11, 1990 before Arbiter Siao, Engineer Estacio admitted petitioner's liability to private respondents and agreed to pay their wage differentials and thirteenth-month pay on June 19, 1990. As a result of this agreement, Engineer Estacio allegedly waived petitioner's right to file its position paper. Private respondents declared that they, too, were dispensing with their position papers and were adopting their complaints as their position paper.

On June 19, 1990, Engineer Estacio appeared but requested for another week to settle the claims. Labor Arbiter Siao denied this request. On June 21, 1990, Arbiter Siao issued an order granting the complaint and directing petitioner to pay private respondents' claims. Arbiter Siao held:

"x x x.

"Considering the length of time that has elapsed since these cases were filed, and what the complainants might think as to how this branch operates and/or conducts its proceedings

as they are now restless, this Arbiter has no other alternative or recourse but to order the respondent to pay the claims of the complainants, subject of course to the computation of the Fiscal Examiner II of this Branch pursuant to the oral manifestation of respondent. The Supreme Court ruled: 'Contracts though orally made are binding on the parties.' (Lao Sok v. Sabaysabay, 138 SCRA 134).

"Similarly, this Branch would present in passing that 'a court cannot decide a case without facts either admitted or agreed upon by the parties or proved by evidence.' (Yu Chin Piao v. Lim Tuaco, 33 Phil. 92; Benedicto v. Yulo, 26 Phil. 160),

"WHEREFORE, premises considered, the respondent is hereby ordered to pay the individual claims of the above-named complainants representing their wage differentials within ten (10) days from receipt of this Order.

"The Fiscal Examiner II of this Branch is likewise hereby ordered to compute the individual claims of the herein complainants.

"SO ORDERED."

On June 29, 1990, Arbiter Palangan issued a similar order, thus:

"When the above-entitled cases were called for hearing on June 19, 1990 at 10:00 a.m. respondent thru their representative manifested that they were willing to pay the claims of the complainants and promised to pay the same on June 28, 1990 at 10:30 a.m.

"However, when these cases were called purposely to materialize the promise of the respondent, the latter failed to appear without any valid reason.

"Considering therefore that the respondent has already admitted the claims of the complainants, we believe that the issues raised herein have become moot and academic.

"WHEREFORE, premises considered, the above-entitled cases are hereby ordered Closed and Terminated, however, the respondent is hereby ordered to pay the complainants their differential pay and 13th-month pay within a period of ten (10) days from receipt hereof based on the employment record on file with the respondent.

"SO ORDERED."

Petitioner appealed to respondent National Labor Relations Commission. It alleged that it was denied due process and that Engineers Estacio and Dulatre had no authority to represent and bind petitioner. Petitioner's appeal was filed by one Atty. Arthur Abundiente.

In a decision dated April 27, 1992, respondent Commission affirmed the orders of the Arbiters.

Petitioner interposed this petition alleging that the decision of respondent Commission was rendered without jurisdiction and in grave abuse of discretion. Petitioner claims that:

"I

"THE QUESTIONED DECISION RENDERED BY THE HONORABLE COMMISSION IS A NULLITY, IT HAVING BEEN ISSUED WITHOUT JURISDICTION;

II

"PUBLIC RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY ABUSED ITS DISCRETION IN ARBITRARILY, CAPRICIOUSLY AND WHIMSICALLY MAKING THE FOLLOWING CONCLUSIONS BASED NOT ON FACTS AND EVIDENCE BUT ON SPECULATION, SURMISE AND CONJECTURE:

A. Petitioner was deprived of the constitutional right to due process of law when it was adjudged by the NLRC liable without trial on the merits and without its knowledge;

B. The NLRC erroneously, patently and unreasonably interpreted the principle that the NLRC and its Arbitration Branch are not strictly bound by the rules of evidence;

C. There is no legal nor actual basis in the NLRC's ruling that petitioner is already in estoppel to disclaim the authority of its alleged representatives.

D. The NLRC committed manifest error in relying merely on private respondents unsubstantiated complaints to hold petitioner liable for damages."

In brief, petitioner alleges that the decisions of the labor arbiters and respondent Commission are void for the following reasons: (1) there was no valid service of summons; (2) Engineers Estacio and Dulatre and Atty. Abundiente had no authority to appear and represent petitioner at the hearings before the arbiters and on appeal to respondent Commission; (3) the decisions of the arbiters and respondent Commission are based on unsubstantiated and self-serving evidence and were rendered in violation of petitioner's right to due process.

Service of summons in cases filed before the labor arbiters is governed by Sections 4 and 5 of Rule IV of the New Rules of Procedure of the NLRC. They provide:

"Section 4. Service of Notices and Resolutions.-- (a) Notices or summons and copies of orders, resolutions or decisions shall be served on the parties to the case personally by the bailiff or duly authorized public officer within three (3) days from receipt thereof or by registered mail; Provided that where a party is represented by counsel or authorized representative, service shall be made on such counsel or authorized representative; provided further that in cases of decision and final awards, copies thereof shall be served on both the parties and their counsel; provided finally, that in case where the parties are so numerous, service shall be made on counsel and upon such number of complainants as may be practicable, which shall be considered substantial compliance with Article 224 (a) of the Labor Code, as amended.

"x x x.

"Section 5. Proof and completeness of service.-- The return is prima facie proof of the facts indicated therein. Service by registered mail is complete upon receipt by the addressee or his agent. x x x."

Under the NLRC Rules of Procedure, summons on the respondent shall be served personally or by registered mail on the party himself. If the party is represented by counsel or any other authorized representative or agent, summons shall be served on such person.

It has been established that petitioner is a private domestic corporation with principal address in Quezon City. The complaints against petitioner were filed in Iligan City and summonses therefore served on Engineer Estacio in Iligan City. The question now is whether Engineer Estacio was an agent and authorized representative of petitioner.

To determine the scope or meaning of the term "authorized representative" or "agent" of parties on whom summons may be served, the provisions of the Revised Rules of Court may be resorted to.

Under the Revised Rules of Court, service upon a private domestic corporation or

partnership must be made upon its officers, such as the president, manager, secretary, cashier, agent, or any of its directors. These persons are deemed so integrated with the corporation that they know their responsibilities and immediately discern what to do with any legal papers served on them.

In the case at bar, Engineer Estacio, assisted by Engineer Dulatre, managed and supervised the construction project. According to the Solicitor General and private respondents, Engineer Estacio attended to the project in Iligan City and supervised the work of the employees thereat. As manager, he had sufficient responsibility and discretion to realize the importance of the legal papers served on him and to relay the same to the president or other responsible officer of petitioner. Summons for petitioner was therefore validly served on him.

Engineer Estacio's appearance before the labor arbiters and his promise to settle the claims of private respondents is another matter.

The general rule is that only lawyers are allowed to appear before the labor arbiter and respondent Commission in cases before them. The Labor Code and the New Rules of Procedure of the NLRC, nonetheless, lists three (3) exceptions to the rule, viz:

"Section 6. Appearances.-- x x x.

"A non-lawyer may appear before the Commission or any Labor Arbiter only if:

"(a) he represents himself as party to the case;

"(b) he represents the organization or its members, provided that he shall be made to present written proof that he is properly authorized; or

"(c) he is a duly-accredited member of any legal aid office duly recognized by the Department of Justice or the Integrated Bar of the Philippines in cases referred thereto by the latter. x x x."

A non-lawyer may appear before the labor arbiters and the NLRC only if: (a) he represents himself as a party to the case; (b) he represents an organization or its members, with written authorization from them; or (c) he is a duly accredited member of any legal aid office duly recognized by the Department of Justice or the Integrated Bar of the Philippines in cases referred to by the latter.

Engineers Estacio and Dulatre were not lawyers. Neither were they duly-accredited members of a legal aid office. Their appearance before the labor arbiters in their capacity as parties to the cases was authorized under the first exception to the rule. However, their appearance on behalf of petitioner required written proof of authorization. It was incumbent upon the arbiters to ascertain this authority especially since both engineers were named co-respondents in the cases before the arbiters. Absent this authority, whatever statements and declarations Engineer Estacio made before the arbiters could not bind petitioner.

The appearance of Atty. Arthur Abundiente in the cases appealed to respondent Commission did not cure Engineer Estacio's representation. Atty. Abundiente, in the first place, had no authority to appear before the respondent Commission. The appellants' brief he filed was verified by him, not by petitioner. Moreover, respondent Commission did not delve into the merits of Atty. Abundiente's appeal and determine whether Engineer Estacio was duly authorized to make such promise. It dismissed the appeal on the ground that notices were served on petitioner and that the latter was estopped from denying its promise to

pay.

Nevertheless, even assuming that Engineer Estacio and Atty. Abundiente were authorized to appear as representatives of petitioner, they could bind the latter only in procedural matters before the arbiters and respondent Commission. Petitioner's liability arose from Engineer Estacio's alleged promise to pay. A promise to pay amounts to an offer to compromise and requires a special power of attorney or the express consent of petitioner. The authority to compromise cannot be lightly presumed and should be duly established by evidence. This is explicit from Section 7 of Rule III of the NLRC Rules of Procedure, viz:

"Section 7. Authority to bind party.-- Attorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure; but they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim."

The promise to pay allegedly made by Engineer Estacio was made at the preliminary conference and constituted an offer to settle the case amicably. The promise to pay could not be presumed to be a single unilateral act, contrary to the claim of the Solicitor General. A defendant's promise to pay and settle the plaintiff's claims ordinarily requires a reciprocal obligation from the plaintiff to withdraw the complaint and discharge the defendant from liability. In effect, the offer to pay was an offer to compromise the cases.

In civil cases, an offer to compromise is not an admission of any liability, and is not admissible in evidence against the offeror. If this rule were otherwise, no attempt to settle litigation could safely be made. Settlement of disputes by way of compromise is an accepted and desirable practice in courts of law and administrative tribunals. In fact, the Labor Code mandates the labor arbiter to exert all efforts to enable the parties to arrive at an amicable settlement of the dispute within his jurisdiction on or before the first hearing.

Clearly, respondent Commission gravely abused its discretion in affirming the decisions of the labor arbiters which were not only based on unauthorized representations, but were also made in violation of petitioner's right to due process.

Section 3 of Rule V of the NLRC Rules of Procedure provides:

"Section 3. Submission of Position Papers/Memorandum.-- Should the parties fail to agree upon an amicable settlement, in whole or in part, during the conferences, the Labor Arbiter shall issue an order stating therein the matters taken up and agreed upon during the conferences and directing the parties to simultaneously file their respective verified position papers.

"x x x."

After petitioner's alleged representative failed to pay the workers' claims as promised, Labor Arbiters Siao and Palangan did not order the parties to file their respective position papers. The arbiters forthwith rendered a decision on the merits without at least requiring private respondents to substantiate their complaints. The parties may have earlier waived their right to file position papers but petitioner's waiver was made by Engineer Estacio on the premise that petitioner shall have paid and settled the claims of private respondents at the scheduled conference. Since petitioner reneged on its "promise," there was a failure to settle the case amicably. This should have prompted the arbiters to order the parties to file their position papers.

Article 221 of the Labor Code mandates that in cases before labor arbiters and

respondent Commission, they "shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process." The rule that respondent Commission and the Labor Arbiters are not bound by technical rules of evidence and procedure should not be interpreted so as to dispense with the fundamental and essential right of due process. And this right is satisfied, at the very least, ' when the parties are given the opportunity to submit position papers. Labor Arbiters Siao and Palangan erred in dispensing with this requirement.

Indeed, the labor arbiters and the NLRC must not, at the expense of due process, be the first to arbitrarily disregard specific provisions of the Rules which are precisely intended to assist the parties in obtaining the just, expeditious and inexpensive settlement of labor disputes.

IN VIEW WHEREOF, the petition for certiorari is granted. The decision of the National Labor Relations Commission, Fifth Division, is annulled and set aside and the case is remanded to the Regional Arbitration Branch, Iligan City for further proceedings.

SO ORDERED

.Regalado, (Chairman), and Torres, Jr., JJ., concur.Mendoza, J., on official leave.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. 110571 October 7, 1994

FIRST LEPANTO CERAMICS, INC., petitioner, vs.THE COURT OF APPEALS and MARIWASA MANUFACTURING, INC., respondents.

Castillo, Laman. Tan & Pantaleon for petitioner.

De Borja, Medi, Aldea, Ata, Bello, Guevarra & Serapio for private respondent.

R E S O L U T I O N

MENDOZA, J.:

This is a motion for the reconsideration of the decision of the Second Division 1 sustaining the jurisdiction of the Court of Appeals over appeals from the decisions of the Board of Investments and, consequently, dismissing the petition for certiorari and prohibition filed by petitioner First Lepanto Ceramics, Inc. Because of the importance of the question raised, the Court en banc agreed to accept the matter for consideration.

Petitioner's contention is that Circular No. 1-91 cannot be deemed to have superseded art. 82 of the Omnibus Investments Code of 1987 (E.O.No. 226) because the Code, which President Aquino promulgated in the exercise of legislative authority, is in the nature of a substantive act of Congress defining the jurisdiction of courts pursuant to Art. VIII, § 2 of the Constitution, while the circular is a rule of procedure which this Court promulgated pursuant to its rule-making power under Art. VIII § 5(5). Petitioner questions the holding of the Second Division that although the right to appeal granted by art. 82 of the Code is a substantive right which cannot be modified by a rule of procedure, nonetheless, questions concerning where and in what manner the appeal can be brought are only matters of procedure which this Court has the power to regulate.

Even assuming that there is merit in petitioner's contention, however, the result reached in the main decision is nonetheless, correct from another point of view.

Judicial review of the decisions and final orders of the BOI was originally provided for in the Omnibus Investments Code of 1981 (P.D. No. 1789), 2

Art. 78 of which stated:

Art. 78. Judicial Relief . — All orders or decisions of the Board in cases involving the provisions of this Code shall immediately be executory. No appeal from the order or decision of the Board by the party adversely affected shall stay such order or decision: Provided, That all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or decision.

Art. 78 was thereafter amended by B.P. Blg. 129, 3 by granting in § 9 thereof exclusive appellate jurisdiction to the then Intermediate Appellate Court (now the Court of Appeals) over the decisions and final orders of quasi-judicial agencies. When the Omnibus Investments Code of 1987 (E.O. No. 226) was promulgated on July 17, 1987, the right to appeal from the decisions and final orders of the BOI to the Supreme Court was again granted. Thus, the present Code provides:

Art. 82. Judicial Relief . — All orders or decisions of the Board in cases involving the provisions of this Code shall immediately be executory. No appeal from the order or decision of the Board by the party adversely affected shall stay such order or decision: Provided, That all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or decision.

By then, however, the present Constitution had taken effect. 4 The Constitution now provides in Art. VI, § 30 that "No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in this Constitution without its advice and concurrence." This provision is intended to give the Supreme Court a measure of control over cases placed under its appellate jurisdiction. For the indiscriminate enactment of legislation enlarging its appellate jurisdiction can unnecessarily burden the Court and thereby undermine its essential function of expounding the law in its most profound national aspects.

Now, art. 82 of the 1987 Omnibus Investments Code, by providing for direct appeals to the Supreme Court from the decisions and final orders of the BOI, increases the appellate jurisdiction of this Court. Since it was enacted without the advice and concurrence of this Court, this provision never became effective, with the result that it can never be deemed to have amended BPBlg. 129, § 9. Consequently, the authority of the Court of Appeals to decide cases appealed to it from the BOI must be deemed to have been conferred by B.P.

Blg. 129, § 9, to be exercised by it in accordance with the procedure prescribed by Circular No. 1-91.

Indeed, there is no reason why decisions and final orders of the BOI must be directly appealed to this Court. As already noted in the main decision in this case, the purpose of § 9 of B.P. Blg. 129 is to provide uniform appeals to the Court of Appeals from the decisions and final orders of all quasi-judicial agencies, with the exception only of those issued under the Labor Code and those rendered by the Central Board of Assessment Appeals. It is, therefore, regrettable that in the adoption of the Omnibus Investments Code of 1987 the advice and concurrence of the Supreme Court, as required by the Constitution, had not been obtained in providing for the appeal of the decisions and final orders of the BOI directly to the Supreme Court.

WHEREFORE, the motion for reconsideration is DENIED.

SO ORDERED.

Manuel v VillenaFebruary 27, 1971 / Makalintal, J.

Facts: Manuel sought annulment of the decision of the Director of Forestry rejecting his application for a Tree

Farm Permit over a 20-hectare parcel of public land Main thrust of the complaint is that the admin decision sought to be set aside violated due process as

showed in these instances:

Manuel had been in continuous possession of the land in question since 1939 Being an ignorant farmer, he did not file Tree Farm application until 1954 Director of Forestry rejected the same because Villena had previously filed the same

application Manuel filed for 2 motions for reconsideration but were turned down Manuel appealed to Sec of Agriculture and Natural Resources but appeal was dismissed On MFR, Sec found that the investigation conducted by the director was not in accordance with

the rules and regulations of the bureau Sec ordered another investigation but before such was terminated, Sec dismissed the appeal In all these proceedings, Manuel was not formally represented by a counsel before the director

and secretary and there was no notice sent to him giving him the opportunity to hire a counsel Villena opposed complaint Court found Villena’s objection meritorious but allowed Manuel to file amended complaint within 10

days Villena moved to dismiss amended complaint on the ground that it did not cure the defects of the

original complaint Court ruled in favor of Villena and dismissed amended complaint Hence, this appeal

Issue:WON the decision of the Director of Public Forestry should be annulled

Held: NO The proceedings challenged here refer to the approval or denial of an application for a Tree Farm

Permit and under Sec 1838 of Revised Admin Code, this is within the jurisdiction of the Director of Forestry with the approval of Sec of Agriculture and Natural Resources

Thus, the power given to the Director of Forestry is admin in nature and as a rule, courts refuse to interfere with proceedings undertaken by admin bodies or officials in the excess of admin functions because such bodies are generally better equipped technically to decide admin questions and that non-legal factors, such as government policy on the matter, are usually involved in the decisions

Nevertheless, such admin power is still subject to limitations and the courts may review admin proceedings upon a showing that the director acted beyond jurisdiction or with grave abuse of discretion or that decision is vitiated with fraud/mistake.

Complaint involved here contends denial of due process, in that in all these proceedings, Manuel was not formally represented by a counsel before the director and secretary and there was no notice sent to him giving him the opportunity to hire a counsel

The cited circumstances do not necessarily constitute violation of due process or grave abuse of discretion

Sec 1838 of RAC does not require that investigation be in the nature of a court trial In deciding admin questions, admin bodies or officials generally enjoy wide discretion technical rules

not strictly enforced and due process of law in the strict judicial sense is dispensable Thus, it is sufficient that the substantive due process requirement of fairness and reasonableness be

observed

THIRD DIVISION

[A.M. No. MTJ-02-1404. December 14, 2004]

EXEC. JUDGE HENRY B. BASILLA, complainant, vs. JUDGE AMADO L. BECAMON, Clerk of Court LOLITA DELOS REYES and Junior Process Server EDDIE DELOS REYES, MCTC, Placer-Esperanza-Cawayan, Masbate, respondents.

R E S O L U T I O N

GARCIA, J.:

Under consideration is the sworn letter-complaint (with enclosures) dated December 6, 2000 filed with the Office of the Court Administrator by herein complainant, Executive Judge Henry B. Basilla, of the Regional Trial Court, Branch 49, Cataingan, Masbate against herein respondents, namely: Judge Amado L. Becamon of the Municipal Circuit Trial Court (MCTC) of Placer-Esperanza-Cawayan, Masbate; his clerk of court Lolita delos Reyes; and process server Eddie delos Reyes, charging them with gross neglect of duty and/or grave misconduct, gross ignorance of the law and violation of Canon 3 of the Code of Judicial Conduct on the part of respondent judge, relative to Civil Case No. 288 (MCTC Case No. 263-C), entitled Visitacion Mahusay vda. de Du vs. Benjamin Du, et al., an action for recovery of possession and ownership of land.

In an earlier administrative case filed by the same complainant against the three (3) herein respondents, priorly docketed as A.M. No. MTJ-02-1438, entitled Exec. Judge Henry B. Basilia vs. Judge Amado L. Becamon, Clerk of Court Lolita delos Reyes and Process Server Eddie delos Reyes, this Court, in an en banc Resolution promulgated on January 22, 2004 (420 SCRA 608), found respondent Judge Amado L. Becamon liable for gross ignorance of the law and procedure and imposed upon him a fine in the amount of P21,000, while his co-respondents therein, Lolita delos Reyes and Eddie delos Reyes, were found guilty of simple neglect of duty and were each fined in the amount equivalent to one month and one day of their respective salaries.

A close examination of A.M. No. MTJ-02-1438 and the present case, A.M. No. MTJ-02-1404, reveals that the latter case presents the same matter and raises the same issues as that of the earlier administrative case. Hereunder is our comparative study anent the complaint in both cases:

A.M. No. MTJ-02- 1438 arose from an Order dated April 5, 2000 issued by Executive Judge Henry B. Basilla dismissing the appeal in Civil Case No. 288 (MCTC Case No. 263-C) for being frivolous and filed out of time. In that same Order, Judge Basilla likewise required herein respondents to explain in writing why they should not be dealt with administratively. In full, said Order reads:

O R D E R

After considering the following facts in the record:

1. Judgment of the court a quo dated January 15, 1999 (mailed to counsels only on March 2, 1999) was received by defendants-appellants thru counsel on March 12, 1999 (p. 369, rec.);

2. Motion for reconsideration of the decision by defendants-appellants thru counsel was filed with the court a quo on March 15, 1999 by registered mail (p. 371, registry receipt, rec.);

3. Order of the court a quo dated May 7, 1999 denying the motion for reconsideration (p. 381, rec.);

4. Motion for execution of judgment dated September 9, 1999 filed with the court a quo on September 14, 1999 (rec.);

5. Order dated February 14, 2000 of the court a quo denying motion for execution of judgment and granting defendants fifteen (15) days to appeal (p. 400, rec.);

6. Notice of appeal filed with the court a quo on November 3, 1999 (p. 412, rec.);

7. Appeal fee paid after four (4) months on March 14, 2000 (p. 427, rec.); and

8. Order of the court a quo dated March 14, 2000 approving the appeal. (p. 429, rec.)

the court hereby resolved to dismiss the appeal for being filed out of time and frivolous.

The court has observed that:

1. Judge Amado L. Becamon, Mrs. Lolita delos Reyes and Mr. Eddie delos Reyes released the decision only after one month and a half (1 1/2) (p. 365, registry receipt, rec.) and the order dated May 7, 1999 denying the motion for reconsideration only after five (5) months (p. 381, registry receipt, rec.);

2. Judge Amado L. Becamon extended the period of appeal fixed by the Rules (p. 400, rec.);

3. The court still received the appeal fee on March 14, 2000 despite the lapse of the period of appeal (p. 427, rec.); and

4. Judge Amado L. Becamon still approved the appeal despite the lapse of the period of appeal (p. 429, rec.).

And, considering the gross irregularity in the record, Judge Amado L. Becamon, Mrs. Lolita delos Reyes, Clerk of Court II, and Eddie delos Reyes, Process Server, of the 4th MCTC of Placer-Cawayan-Esperanza, Masbate are hereby ordered to explain in writing within ten (10) days from notice why they should not be dealt with administratively for grave misconduct, ignorance of law and dishonesty.

Furnish a copy of this order to Honorable Court Administrator for his information.

So ordered.

On the other hand, the present case - A.M. No. MTJ-02-1404 - stemmed from a sworn letter-complaint of the same complainant against the very same respondents addressed to then Court Administrator Alfredo L. Benipayo. In said sworn letter-complaint, Judge Henry B. Basilla averred:

In compliance with your letter dated October 25, 2000, I, in my capacity as Executive Judge, after a careful study of the record in Civil Case No. 288 (MCTC Case No. 263-C) entitled “Visitacion Mahusay vda. de Du, Plaintiff vs. Benjamin Du, et al., Defendants for Recovery of Possession and Ownership of Land”, hereby formally charge administratively Judge Amado L. Becamon, Mrs. Lolita delos Reyes, Clerk of Court II and Mr. Eddie delos Reyes, Junior Process Server, of MCTC of Placer-Cawayan-Esperanza, Masbate, for Gross Neglect of Duty and/or Grave Misconduct, for Ignorance of Law and for violation of Canon 3 of the Code of Judicial Conduct of 1989 (specially for Judge Amado L. Becamon) --- committed by freezing and delaying the release of the decision and the order denying to reconsider it, for one and a half months and five months, respectively, and extending the period of appeal fixed by the rules, and for receiving the appeal fee and after which approving the appeal despite the time to do so had long elapsed.

Attached herewith are the following documents:

1.) Annex “A” – Order dated April 5, 2000;

2.) Annex “B” – Judgment of the court a quo dated January 15, 1999 (mailed to counsel only on March 2, 1999, p. 365, registry receipt, rec.) was received by defendants-

appellants thru counsel on March 12, 1999 (p. 369, rec.);

3.) Annex “C” – Motion for Reconsideration of the decision by defendants-appellants thru counsel was filed with the court a quo on March 15, 1999 by registered mail (p. 371, registry receipt, rec.);

4.) Annex “D” – Order of the court a quo dated May 7, 1999 denying the motion for reconsideration (p. 381, registry receipt, rec.);

5.) Annex “E” – Motion for execution of judgment dated September 9, 1999 filed with the court a quo on September 14, 1999 (rec.);

6.) Annex “F” – Order dated February 14, 2000 of the court a quo denying motion for execution of judgment and granting defendants fifteen (15) days to appeal (p. 400, rec.);

6.) Annex “G” – Notice of appeal filed with the court a quo on November 3, 1999 (p. 412, rec.);

8.) Annex “H” – Appeal fee paid after four (4) months on March 14, 2000 (p. 427, rec.);

9.) Annex “I” – Order of the court a quo dated March 14, 2000 approving the appeal (p. 429, rec.).

Clear it is from the above that both A.M. No. MTJ-02-1438 and the instant administrative case - A.M. No. MTJ-02-1404 - refer to the same subject matter, raise the same issues and involve the same parties.

Applying the principle of res judicata or bar by prior judgment, the present administrative case becomes dismissible. Section 47, Rule 39 of the Rules of Court enunciates the rule of res judicata or bar by prior judgment, thus:

SEC. 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

xxx xxx xxx

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors-in-interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity;

Under the said doctrine, a matter that has been adjudicated by a court of competent jurisdiction must be deemed to have been finally and conclusively settled if it arises in any subsequent litigation between the same parties and for the same cause. It provides that [a] final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand, or cause of action.

Res judicata is based on the ground that the party to be affected, or some other with whom he is in privity, has litigated the same matter in the former action in a court of competent jurisdiction, and should not be permitted to litigate it again.

This principle frees the parties from undergoing all over again the rigors of unnecessary suits and repetitious trials. At the same time, it prevents the clogging of court dockets. Equally important, res judicata stabilizes rights and promotes the rule of law.

The records reveal that the two (2) administrative cases stemmed from the same factual circumstances between the same parties. The earlier administrative case (A.M. No. MTJ-02-1438) which was already terminated in our en banc Resolution of January 22, 2004, arose when the OCA was furnished with a copy of the order dated April 5, 2000 issued by complainant Judge Henry B. Basilla. Complete record of MCTC Case No. 263-C was also transmitted to the said office, and, after evaluating the matter, Deputy Court Administrator Jose P. Perez, in his Report dated April 19, 2002, recommended that the same be re-docketed as a regular administrative matter, which recommendation was adopted by this Court in its Resolution of July 10, 2002, and accordingly had the matter docketed as A.M. No. MTJ-02-1438.

Meanwhile, on December 6, 2000, Executive Judge Henry B. Basilla, in compliance with then Court Administrator Alfredo L. Benipayo’s letter dated October 25, 2000, filed his sworn letter-complaint formally charging herein respondents for the same irregularities committed by them relative to the same MCTC Case No. 263-C. Later, in his January 16, 2002 Report, the incumbent Court Administrator, Presbitero J. Velasco, Jr., recommended the re-docketing of the present complaint as a regular administrative matter. And, in our Resolution dated February 27, 2002, we adopted said recommendation and thus docketed that very same letter-complaint as A.M. No. MTJ-02-1404. This explain why two (2) administrative cases, having identical subject matter, cause of action and involving the same parties existed.

WHEREFORE, the instant administrative complaint is DISMISSED for being a mere duplication of the complaint in A.M. No. MTJ-02-1438 which, to stress, was already resolved by this Court in its en banc Resolution promulgated on January 22, 2004 (420 SCRA 608).

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

Corona, J., on leave.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 162784             June 22, 2007

NATIONAL HOUSING AUTHORITY, petitioner, vs.SEGUNDA ALMEIDA, COURT OF APPEALS, and RTC of SAN PEDRO, LAGUNA, BR. 31, respondents.

D E C I S I O N

PUNO, C.J.:

This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority (NHA) against the Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and private respondent Segunda Almeida.

On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by the Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA by virtue of Presidential Decree No. 757.2 NHA as the successor agency of LTA is the petitioner in this case.

The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and left heirs.

Margarita Herrera passed away on October 27, 1971.3

On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a Deed of Self-Adjudication claiming that she is the only remaining relative, being the sole surviving daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita Herrera.

The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960, allegedly executed by Margarita Herrera. The pertinent portions of which are as follows:

SINUMPAANG SALAYSAY

SA SINO MAN KINAUUKULAN;

Akong si MARGARITA HERRERA, Filipina, may 83 taong gulang, balo, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayon ng San Vicente, San Pedro Laguna, sa ilalim ng panunumpa ay malaya at kusang loob kong isinasaysay at pinagtitibay itong mga sumusunod:

1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG (771) METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote 17, Bloke 55, at pag-aari ng Land Tenure Administration;

2. Na ang nasabing lote ay aking binibile, sa pamamagitan ng paghuhulog sa Land Tenure Administration, at noong ika 30 ng Julio, 1959, ang Kasunduang sa Pagbibile (AGREEMENT TO SELL No. 3787) ay ginawa at pinagtibay sa Lungsod ng Maynila, sa harap ng Notario Publico na si G. Jose C. Tolosa, at lumalabas sa kaniyang Libro Notarial bilang Documento No. 13, Pagina No. 4; Libro No. IV, Serie ng 1959;

3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na nasasabi sa unahan ay binabayaran ng kaniyang sariling cuarta sa Land Tenure Administration;

4. Na alang-alang sa nasasaysay sa unahan nito, sakaling ako'y bawian na ng Dios ng aking buhay, ang lupang nasasabi sa unahan ay aking ipinagkakaloob sa nasabi kong anak na FRANCISCA HERRERA, Filipina, nasa katamtamang gulang, kasal kay Macario Berroya, kasalukuyang naninirahan at tumatanggap ng sulat sa Nayong ng San Vicente, San Pedro Laguna, o sa kaniyang mga tagapagmana at;

5. Na HINIHILING KO sa sino man kinauukulan, na sakaling ako nga ay bawian na ng Dios ng aking buhay ay KILALANIN, IGALANG at PAGTIBAYIN ang nilalaman sa pangalan ng aking anak na si Francisca Herrera ang loteng nasasabi sa unahan.

SA KATUNAYAN NG LAHAT, ako ay nag-didiit ng hinlalaki ng kanan kong kamay sa ibaba nito at sa kaliwang gilid ng unang dahon, dito sa Lungsod ng Maynila, ngayong ika 7 ng Octubre, 1960.4

The said document was signed by two witnesses and notarized. The witnesses signed at the left-hand side of both pages of the document with the said document having 2 pages in total. Margarita Herrera placed her thumbmark5 above her name in the second page and at the left-hand margin of the first page of the document.

The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-Adjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now, Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263.6

On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) was rendered and the deed was declared null and void.7

During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed an application with the NHA to purchase the same lots submitting therewith a copy of the "Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz Herrera-Mercado, protested the application.

In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca Herrera, holding that:

From the evidence of the parties and the records of the lots in question, we gathered the following facts: the lots in question are portions of the lot awarded and sold to the late Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration; protestant is the daughter of the late Beatriz Herrera Mercado who was the sister of the protestee; protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant; protestant occupied the lots in question with the permission of the protestee; protestee is a resident of the Tunasan Homesite since birth; protestee was born on the lots in question; protestee left the place only after marriage but resided in a lot situated in the same Tunasan Homesite; her (protestee) son Roberto Herrera has been occupying the lots in question; he has been there even before the death of the late Margarita Herrera; on October 7, 1960, Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or transferred all her rights and interest over the lots in question in favor of the protestee; and protestee had paid the lots in question in full on March 8, 1966 with the defunct Land Tenure Administration.

This Office finds that protestee has a better preferential right to purchase the lots in question.9

Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was affirmed by the Office of the President in a Decision dated January 23, 1987.11

On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.12 The NHA executed several deeds of sale in favor of

the heirs of Francisca Herrera and titles were issued in their favor.13 Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to leave the premises that she was occupying.

Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA, private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of the heirs of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government Lot's Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31.

In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed properties, and re-raised the fact that Francisca Herrera's declaration of self-adjudication has been adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca Herrera alleged that the complaint was barred by laches and that the decision of the Office of the President was already final and executory.14 They also contended that the transfer of purchase of the subject lots is perfectly valid as the same was supported by a consideration and that Francisca Herrera paid for the property with the use of her own money.15 Further, they argued that plaintiff's occupation of the property was by mere tolerance and that they had been paying taxes thereon.16

The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989 reversed and held that the Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to real property within its jurisdiction."18 The case was then remanded for further proceedings on the merits.

A pre-trial was set after which trial ensued.

On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the NHA and the decision of the Office of the President awarding the subject lots in favor of Francisca Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title issued. Attorney's fees were also awarded to private respondent.

The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but a disposition of property which shall take effect upon death. It then held that the said document must first be submitted to probate before it can transfer property.

Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration which were both denied on July 21, 1998 for lack of merit. They both appealed to the Court of Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in a Resolution dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and for being filed seventy-nine (79) days late.

On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz:

There is no dispute that the right to repurchase the subject lots was awarded to Margarita Herrera in 1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay" on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a waiver or transfer of rights and interest over the subject lots in favor of Francisca Herrera. This Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay" of Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and grammatical sense that the document is a simple disposition of her estate to take effect after her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang Salaysay" to the defendant NHA or to Francisca Herrera for submission to the defendant NHA after the full payment of the purchase price of the lots or even prior thereto but she did not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and not an assignment of rights as what the NHA in its resolution would want to make it appear. The intention of Margarita Herrera was shared no less by Francisca Herrera who after the former's demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she is her sole and legal heir. It was only when said deed was questioned in court by the surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca Herrera filed an application to purchase the subject lots and presented the "Sinumpaang Salaysay" stating that it is a deed of assignment of rights.19

The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of Francisca Herrera. It upheld the trial court ruling that the "Sinumpaang Salaysay" was not an assignment of rights but one that involved disposition of property which shall take effect upon death. The issue of whether it was a valid will must first be determined by probate.

Petitioner NHA elevated the case to this Court.

Petitioner NHA raised the following issues:

A. WHETHER OR NOT THE RESOLUTION OF THE NHA AND THE DECISION OF THE OFFICE OF THE PRESIDENT HAVE ATTAINED FINALITY, AND IF SO, WHETHER OR NOT THE PRINCIPLE OF ADMINISTRATIVE RES JUDICATA BARS THE COURT FROM FURTHER DETERMINING WHO BETWEEN THE PARTIES HAS PREFERENTIAL RIGHTS FOR AWARD OVER THE SUBJECT LOTS;

B. WHETHER OR NOT THE COURT HAS JURISDICTION TO MAKE THE AWARD ON THE SUBJECT LOTS; AND

C. WHETHER OR NOT THE AWARD OF THE SUBJECT LOTS BY THE NHA IS ARBITRARY.

We rule for the respondents.

Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has been declared that whenever final adjudication of persons invested with power to decide on the property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a certiorari, such final adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence were already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions rendered by what are usually understood as courts without unreasonably circumscribing the scope thereof and that the more equitable attitude is to allow extension of the defense to decisions of bodies upon whom judicial powers have been conferred.

In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule prescribing that "administrative orders cannot be enforced in the courts in the absence of an express statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies.

In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial power—that which is held by the courts. Quasi-judicial power is defined as that power of adjudication of an administrative agency for the "formulation of a final order."22 This function applies to the actions, discretion and similar acts of public administrative officers or bodies who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.23 However, administrative agencies are not considered courts, in their strict sense. The doctrine of separation of powers reposes the three great powers into its three (3) branches—the legislative, the executive, and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered to "determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."24 Courts have an expanded role under the 1987 Constitution in the resolution of societal conflicts under the grave abuse clause of Article VIII which includes that duty to check whether the other branches of government committed an act that falls under the category of grave abuse of discretion amounting to lack or excess of jurisdiction.25

Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions, except those falling within the jurisdiction of the Supreme Court in accordance with the Constitution…"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards made by the NHA.

Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that the issue of the trial court's authority to hear and decide the instant case has already been settled in the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on August 20, 1989 as per entry of judgment dated October 10, 1989).28 We find no reason to disturb this ruling. Courts are duty-bound to put an end to controversies. The system of judicial review should not be misused and abused to evade the operation of a final and executory judgment.29 The appellate court's decision becomes the law of the case which must be adhered to by the parties by reason of policy.30

Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it considered the application for the purchase of lots. Petitioner argues that it was the daughter Francisca Herrera who filed her application on the subject lot;

that it considered the respective application and inquired whether she had all the qualifications and none of the disqualifications of a possible awardee. It is the position of the petitioner that private respondent possessed all the qualifications and none of the disqualifications for lot award and hence the award was not done arbitrarily.

The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not bind the NHA.31 That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then applying to purchase the same before it."32

We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have noted that the effectivity of the said document commences at the time of death of the author of the instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay…" Hence, in such period, all the interests of the person should cease to be hers and shall be in the possession of her estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides that:

Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.33

By considering the document, petitioner NHA should have noted that the original applicant has already passed away. Margarita Herrera passed away on October 27, 1971.34 The NHA issued its resolution35 on February 5, 1986. The NHA gave due course to the application made by Francisca Herrera without considering that the initial applicant's death would transfer all her property, rights and obligations to the estate including whatever interest she has or may have had over the disputed properties. To the extent of the interest that the original owner had over the property, the same should go to her estate. Margarita Herrera had an interest in the property and that interest should go to her estate upon her demise so as to be able to properly distribute them later to her heirs—in accordance with a will or by operation of law.

The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera had an existing Contract to Sell36 with NHA as the seller. Upon Margarita Herrera's demise, this Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both parties—Margarita Herrera and NHA. Obligations are transmissible.37 Margarita Herrera's obligation to pay became transmissible at the time of her death either by will or by operation of law.

If we sustain the position of the NHA that this document is not a will, then the interests of the decedent should transfer by virtue of an operation of law and not by virtue of a resolution by the NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property already initially paid for by the decedent. Such would be an act contrary to the law on succession and the law on sales and obligations.38

When the original buyer died, the NHA should have considered the estate of the decedent as the next "person"39 likely to stand in to fulfill the obligation to pay the rest of the purchase price. The opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the Deed of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the NHA that there are other heirs to the interests and properties of the decedent who may claim the property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in the award of the lots.

We need not delve into the validity of the will. The issue is for the probate court to determine. We affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall transpire upon the death of the instrument maker.41

IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby AFFIRMED.

No cost.

SO ORDERED.

Sandoval-Gutierrez, Corona, Azcuna, Garcia, JJ., concur.

FIRST DIVISION

JUDGE FELIMON ABELITA III, G.R. No. 170672 Petitioner,

Present:

PUNO, C.J., Chairperson, - versus - CARPIO,

CORONA, LEONARDO-DE CASTRO, and

BERSAMIN, JJ. P/SUPT. GERMAN B. DORIA Promulgated: and SPO3 CESAR RAMIREZ, Respondents. August 14, 2009x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CARPIO, J.:

The Case

Before the Court is a petition for review assailing the 10 July 2004 Decision and 18 October 2004 Order of the Regional Trial Court of Quezon City, Branch 217 (trial court), in Civil Case No. Q-98-33442 for Damages.

The Antecedent Facts

Judge Felimon Abelita III (petitioner) filed a complaint for Damages under Articles 32(4) and (9) of the Civil Code against P/Supt. German B. Doria (P/Supt. Doria) and SPO3 Cesar Ramirez (SPO3 Ramirez). Petitioner alleged in his complaint that on 24 March 1996, at around 12 noon, he and his wife were on their way to their house in Bagumbayan, Masbate, Masbate when P/Supt. Doria and SPO3 Ramirez (respondents), accompanied by 10 unidentified police officers, requested them to proceed to the Provincial PNP Headquarters at Camp Boni Serrano, Masbate, Masbate. Petitioner was suspicious of the request and told respondents that he would proceed to the PNP Headquarters after he had brought his wife home. Petitioner alleged that when he parked his car in front of their house, SPO3 Ramirez grabbed him, forcibly took the key to his Totoya Lite Ace van, barged into the vehicle, and conducted a search without a warrant. The search resulted to the seizure of a licensed shotgun. Petitioner presented the shotgun’s license to respondents. Thereafter, SPO3 Ramirez continued his search and then produced a .45 caliber pistol which he allegedly found inside the vehicle. Respondents arrested petitioner and detained him, without any appropriate charge, at the PNP special detention cell.

P/Supt. Doria alleged that his office received a telephone call from a relative of Rosa Sia about a shooting incident in Barangay Nursery. He dispatched a team headed by SPO3 Ramirez to investigate the incident. SPO3 Ramirez later reported that a certain William Sia was wounded while petitioner, who was implicated in the incident, and his wife just left the place of the incident. P/Supt. Doria looked for petitioner and when he found him, he informed him of the incident report. P/Supt. Doria requested petitioner to go with him to the police headquarters as he was reported to be involved in the incident. Petitioner agreed but suddenly sped up his vehicle and proceeded to his residence. P/Supt. Doria and his companions chased petitioner. Upon reaching petitioner’s residence, they caught up with petitioner as he was about to run towards his house. The police officers saw a gun in the front seat of the vehicle beside the driver’s seat as petitioner opened the door. They also saw a shotgun at the back of the driver’s seat. The police officers confiscated the firearms and arrested petitioner. P/Supt. Doria alleged that his men also arrested other persons who were identified to be with petitioner during the shooting incident. Petitioner was charged with illegal possession of firearms and frustrated murder. An administrative case was also filed against petitioner before this Court.

The Decision of the Trial Court

In its 10 July 2004 Decision, the trial court dismissed petitioner’s complaint.

The trial court found that petitioner was at the scene of the shooting incident in Barangay Nursery. The trial court ruled that the police officers who conducted the search were of the belief, based on reasonable grounds, that petitioner was involved in the incident and that the firearm used in the commission of the offense was in his possession. The trial court ruled that petitioner’s warrantless arrest and the warrantless seizure of the firearms were valid and legal. The trial court gave more credence to the testimonies of respondents who were presumed to have performed their duties in accordance with law. The trial court rejected petitioner’s claim of frame-up as weak and insufficient to overthrow the positive testimonies of the police officers who conducted the arrest and the incidental search. The trial court

concluded that petitioner’s claim for damages under Article 32 of the Civil Code is not warranted under the circumstances.

Petitioner filed a motion for reconsideration.

In its 18 October 2004 Order, the trial court denied the motion.

Hence, the petition before this Court.

The Issues

The issues in this case are the following:

Whether the warrantless arrest and warrantless search and seizure were illegal under Section 5, Rule 113 of the 1985 Rules on Criminal Procedure;

Whether respondents are civilly liable for damages under Articles 32(4) and (9) of the Civil Code; and

Whether the findings in the administrative case against petitioner are conclusive in this case.

The Ruling of this Court

The petition has no merit.

Application of Section 5, Rule 113 of the1985 Rules on Criminal Procedure

Petitioner alleges that his arrest and the search were unlawful under Section 5, Rule 113 of the 1985 Rules on Criminal Procedure. Petitioner alleges that for the warrantless arrest to be lawful, the arresting officer must have personal knowledge of facts that the person to be arrested has committed, is actually committing, or is attempting to commit an offense. Petitioner alleges that the alleged shooting incident was just relayed to the arresting officers, and thus they have no personal knowledge of facts as required by the Rules.

We do not agree.

Section 5, Rule 113 of the 1985 Rules on Criminal Procedure states:

Sec. 5. Arrest without warrant; when lawful. A peace officer or a private person may, without a warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense;

(b) When an offense has in fact just been committed and he has personal knowledge of facts indicating that the person to be arrested has committed it; and (c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place where he is serving final judgment or temporarily confined while his case is pending, or has escaped while being transferred from one confinement to another.

For the warrantless arrest under this Rule to be valid, two requisites must concur: (1) the offender has just committed an offense; and (2) the arresting peace officer or private person has personal knowledge of facts indicating that the person to be arrested has committed it.

Personal knowledge of facts must be based on probable cause, which means an actual belief or reasonable grounds of suspicion. The grounds of suspicion are reasonable when, in the absence of actual belief of the arresting officers, the suspicion that the person to be arrested is probably guilty of committing the offense is based on actual facts, i.e., supported by circumstances sufficiently strong in themselves to create the probable cause of guilt of the person to be arrested. A reasonable suspicion, therefore, must be founded on probable cause, coupled with good faith on the part of the peace officers making the arrest.

Section 5, Rule 113 of the 1985 Rules on Criminal Procedure does not require the arresting officers to personally witness the commission of the offense with their own eyes. In this case, P/Supt. Doria received a report about the alleged shooting incident. SPO3 Ramirez investigated the report and learned from witnesses that petitioner was involved in the incident. They were able to track down petitioner, but when invited to the police headquarters to shed light on the incident, petitioner initially agreed then sped up his vehicle, prompting the police authorities to give chase. Petitioner’s act of trying to get away, coupled with the incident report which they investigated, is enough to raise a reasonable suspicion on the part of the police authorities as to the existence of probable cause.

Plain View Doctrine

The seizure of the firearms was justified under the plain view doctrine.

Under the plain view doctrine, objects falling in the plain view of an officer who has a right to be in the position to have that view are subject to seizure and may be presented as evidence. The plain view doctrine applies when the following requisites concur: (1) the law enforcement officer in search of the evidence has a prior justification for an intrusion or is in a position from which he can view a particular area; (2) the discovery of the evidence in plain view is inadvertent; and (3) it is immediately apparent to the officer that the item he observes may be evidence of a crime, contraband or otherwise subject to seizure.

In this case, the police authorities were in the area because that was where they caught up with petitioner after the chase. They saw the firearms inside the vehicle when petitioner opened the door. Since a shooting incident just took place and it was reported that petitioner was involved in the incident, it was apparent to the police officers that the firearms may be evidence of a crime. Hence, they were justified in seizing the firearms.

Civil Liability Under Article 32 of the Civil Code

Petitioner alleges that respondents are civilly liable under paragraphs (4) and (9) of Article 32 of the Civil Code.

Paragraphs (4) and (9) of Article 32 of the Civil Code respectively state:

Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

x x x x

(4) Freedom from arbitrary or illegal detention;

x x x x

(9) The right to be secure in one’s person, house, papers, and effects against unreasonable searches and seizures;

x x x x

In this case, it was established that petitioner was lawfully arrested without a warrant and that firearms were validly seized from his possession. The trial court found that petitioner was charged with illegal possession of firearms and frustrated murder. We agree with the trial court in rejecting petitioner’s allegation that he was merely framed-up. We also agree with the trial court that respondents were presumed to be performing their duties in accordance with law. Hence, respondents should not be held civilly liable for their actions.

Res Judicata Does Not Apply

Respondents raise the defense of res judicata against petitioner’s claim for damages.

Res judicata has two aspects: bar by prior judgment and conclusiveness of judgment provided under Section 47(b) and (c), Rule 39, respectively, of the 1997 Rules of Civil Procedure which provide:

Sec. 47. Effect of judgments or final orders. The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

x x x

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.

Bar by prior judgment and conclusiveness of judgment differ as follows:

There is “bar by prior judgment” when, as between the first case where the judgment was rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to the second action. Otherwise put, the judgment or decree of the court of competent jurisdiction on the merits concludes the litigation between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action before the same or other tribunal.

But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. This is the concept of res judicata known as “conclusiveness of judgment.” Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not the claim, demand, purpose, or subject matter of the two actions is the same.

For res judicata to apply, the following requisites must be present:

(a) the former judgment or order must be final;(b) it must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or

stipulations submitted by the parties at the trial of the case;(c) it must have been rendered by a court having jurisdiction over the subject matter and the parties; and(d) there must be, between the first and second actions, identity of parties, of subject matter, and of cause of

action; this requisite is satisfied if the two actions are substantially between the same parties.

While the present case and the administrative case are based on the same essential facts and circumstances, the doctrine of res judicata will not apply. An administrative case deals with the administrative liability which may be incurred by the respondent for the commission of the acts complained of. The case before us deals with the civil liability for damages of the police authorities. There is no identity of causes of action in the cases. While identity of causes of action is not required in the application of res judicata in the concept of conclusiveness of judgment, it is required that there must always be identity of parties in the first and second cases.

There is no identity of parties between the present case and the administrative case. The administrative case was filed by Benjamin Sia Lao (Sia Lao) against petitioner. Sia Lao is not a party to this case. Respondents in the present case were not parties to the administrative case between Sia Lao and petitioner. In the present case, petitioner is the complainant against respondents. Hence, while res judicata is not a defense to petitioner’s complaint for damages,

respondents nevertheless cannot be held liable for damages as discussed above.

WHEREFORE, we DENY the petition. We AFFIRM the 10 July 2004 Decision and 18 October 2004 Order of the Regional Trial Court of Quezon City, Branch 217, in Civil Case No. Q-98-33442.

SO ORDERED.

SEC v. Interport Resources Corporation GR No. 135808 October 6, 2008 J. Chico-Nazario

Nature: Petition for review on certiorari, under Rule 45 of the Rules of Court, of a decision of the Court of Appeals

Doctrines: No implementing rules were needed to render effective Sections 8, 30, and 36 of the Revised Securities Act; nor was the PED Rules of Practice and Procedure invalid, prior to the enactment of the Securities Regulations Code, for failure to provide parties with the right to cross-examine the witnesses presented against them. Thus, the respondents maybe investigated by the appropriate authority under the proper rules of procedure of the Securities Regulations Code for violations of Sections 8, 30, and 36 of the Revised Securities Act.

Facts:

1) 6 Aug 1994 – Board of Directors of IRC approved a Memorandum of Agreement (MoA) with Ganda Holdings Berhad (GHB). a. Under the MoA, IRC acquired 100% or the entire capital stock of Ganda Energy Holdings, Inc. (GEHI), which would own and operate a 102 megawatt gas turbine power-generating barge. b. Also stipulated is that GEHI would assume a five-year power purchase contract with National Power Corp. At that time, GEHI’s power-generating barge was 97% complete and would go on-line by mid-Sept 1994. c. In exchange, IRC will issue to GHB 55% of the expanded capital stock of IRC (amounting to 40.88 billion shares – total par value of P488.44 million) d. On the side, IRC would acquire 67% of the entire capital stock of Philippine Racing Club, Inc. (PRCI). PRCI owns 25.724 hectares of real estate property in Makati. e. Under the Agreement, GHB, a member of the Westmont Group of Companies in Malaysia, shall extend or arrange a loan required to pay for the proposed acquisition by IRC of PRCI. 2) 8 Aug 1994 – IRC alleged that a press release announcing the approval of the agreement was sent through fax to Philippine Stock Exchange (PSE) and the SEC, but that the fax machine of SEC could not receive it. Upon the advice of SEC, IRC sent the press release on the morning of 9 Aug 1994. 3) SEC averred that it received reports that IRC failed to make timely public disclosures of its negotiations with GHB and that some of its directors heavily traded IRC shares utilizing this material insider information. 4) 16 Aug 1994 – SEC Chairman issued a directive requiring IRC to submit to SEC a copy of its aforesaid MoA with GHB and further directed all principal officers of IRC to appear at a hearing before the Brokers and Exchanges Dept (BED) of SEC to explain IRC’s

failure to immediately disclose the information as required by the Rules on Disclosure of Material Facts by Corporations Whose Securities are Listed in Any Stock Exchange or Registered/Licensed Under the Securities Act 5) IRC sent a letter to SEC, attaching copies of MoA and its directors appeared to explain IRC’s alleged failure to immediately disclose material information as required under the Rules on Disclosure of Material Facts. 6) 19 Sept 1994 – SEC Chairman issued an Order finding that IRC violated the Rules on Disclosure when it failed to make timely disclosure, and that some of the officers and directors of IRC entered into transactions involving IRC shares in violation of Sec 30, in relation to Sec 36 of the Revised Securities Act. 7) IRC filed an Omnibus Motion (later an Amended Omnibus Motion) alleging that SEC had no authority to investigate the subject matter, since under Sec 8 of PD 902-A, as amended by PD 1758, jurisdiction was conferred upon the Prosecution and Enforcement Dept (PED) of SEC 8) IRC also claimed that SEC violated their right to due process when it ordered that the respondents appear before SEC and show cause why no administrative, civil or criminal sanctions should be imposed on them, and thus, shifted the burden of proof to the respondents. They

filed a Motion for Continuance of Proceedings. 9) No formal hearings were conducted in connection with the Motions. 10)25 Jan 1995 – SEC issued an Omnibus Order: creating a special investigating panel to hear and decide the case in accordance with Rules of Practice and Procedure before the PED, SEC; to recall the show cause orders; and to deny the Motion for Continuance for lack of merit. 11) Respondents filed a petition before the CA questioning the Omnibus Orders and filed a Supplemental Motion wherein they prayed for the issuance of a writ of preliminary injunction. 12) 5 May 1995 – CA granted their motion and issued a writ of preliminary injunction, which effectively enjoined SEC from filing any criminal, civil or administrative case against the respondents. 13) 20 Aug 1998 – CA promulgated a Decision a. Determined that there were no implementing rules and regulations regarding disclosure, insider trading, or any of the provisions of the Revised Securities Acts which respondents allegedly violated. b. It found no statutory authority for SEC to initiate and file any suit for civil liability under Sec 8, 30 and 36 of the Revised Securities Act, thus, it ruled that no civil, criminal or administrative proceedings may possibly be held against the respondents without violating their rights to due process and equal protection. c. It further resolved that absent any implementing rules, the SEC cannot be allowed to quash the assailed Omnibus Orders d. Further decided that the Rules of Practice and Procedure before the PED did not comply with the statutory requirements contained in the Administrative Code of 1997. Section 9, Rule V of the Rules of Practice and Procedure before the PED affords a party the right to be present but without the right to cross-examine witnesses

2

presented against him, in violation of Sec 12(3), Chap 3, Book VII of the Administrative Code.

Issues: 1. Do sections 8, 30, and 36 of the Revised Securities Act require the enactment of implementing rules to make them binding and effective? No.

2. Does the right to cross-examination be demanded during investigative proceedings before the PED? No.

3. May a criminal case still be filed against the respondents despite the repeal of Sections 8, 30, and 36 of the Revised Securities Act? Yes.

4. Did SEC retain the jurisdiction to investigate violations of the Revised Securities Act, re-enacted in the Securities Regulations Code, despite the abolition of the PED? Yes.

5. Does the instant case prescribed already? No.

6. Is CA justified in denying SEC’s Motion for Leave to Quash SEC Omnibus Orders? Yes.

Ruling: The petition is impressed with merit.

* It should be noted that while the case was pending in SC, RA 8799 (Securities Regulation Code) took effect on 8 August 2000. Section 8 of PD 902-A, as amended, which created the PED, was already repealed as provided for in Sec 76 of Securities Regulation Code. Thus, under the new law, the PED has been abolished, and the Securities Regulation Code has taken the place of the Revised Securities Act.

On the merits:

1) Sections 8, 30, and 36 of the Revised Securities Act (RSA) do not require the enactment of implementing rules to make them binding and effective. • The mere absence of implementing rules cannot effectively

invalidate provisions of law, where a reasonable construction that will support the law may be given. • Absence of any constitutional or statutory infirmity, which may concern Secs 30 and 36 of RSA, the provisions are legal and binding. • Every law has in its favour the presumption of validity. Unless and until a specific provision of the law is declared invalid and unconstitutional, the same is valid and binding for all intents and purposes. • The Court does not discern any vagueness or ambiguity in Sec 30 and 36 of RSA o Sec 30 – Insider’s duty to disclose when trading Insiders are obligated to disclose material information to the other party or abstain from trading the shares of his corporation. This duty to disclose or abstain is based on two factors:

3

1. the existence of a relationship giving access, directly or indirectly, to information intended to be available only for a corporate purpose and not for the personal benefit of anyone 2. the inherent unfairness involved when a party takes advantage of such information knowing it is unavailable to those with whom he is dealing. The intent of the law is the protection of investors against fraud, committed when an insider, using secret information, takes advantage of an uninformed investor. In some cases, however, there may be valid corporate reasons for nondisclosure of material information. Where such reasons exist, an issuer’s decision not to make any public disclosures is not ordinarily considered as a violation of insider trading. At the same time, the undisclosed information should not be improperly used for non-corporate purposes, particularly to disadvantage other persons with whom an insider might transact, and therefore the insider must abstain from entering into transactions involving such securities. o Sec 36 – Directors, officers and principal stockholders A straightforward provision that imposes upon: 1. a beneficial owner of more than 10 percent of any class of any equity security or 2. a director or any officer of the issuer of such security the obligation to submit a statement indicating his or her ownership of the issuer’s securities and such changes in his or her ownership. • Sections 30 and 36 of the RSA were enacted to promote full disclosure in the securities market and prevent unscrupulous individuals, who by their positions obtain non-public information, from taking advantage of an uninformed public. • Sec 30 prevented the unfair use of non-public information in securities transactions, while Sec 36 allowed the Sec to monitor the transactions entered into by corporate officers and directors as regards the securities of their companies. • The lack of implementing rules cannot suspend the effectivity of these provisions.

2) The right to cross-examination is not absolute and cannot be demanded during investigative proceedings before the PED. • Sec 4, Rule 1 of the PED Rules of Practice and Procedure, categorically stated that the proceedings before the PED are summary in nature, not necessarily adhering to or following the technical rules of evidence obtaining in the courts of law • Rule V – Submission of documents, determination of necessity of hearing and disposition of case. o A formal hearing was not mandatory, it was within the discretion of the Hearing Officer whether there was a need for a formal hearing

4

o Since the holding of a hearing before the PED is discretionary, then the right to cross-examination could not have been demanded by either party. • Chapter 3, Book VII of the Administrative Code refers to “Adjudication” and does not affect the investigatory functions of the agencies. • The law creating PED empowers it to investigate violations of the rules and regulations promulgated by the SEC and to file and prosecute such cases. o It fails to mention any adjudicatory functions insofar as the PED is concerned. Thus, PED Rules of Practice need not comply with the provisions of the Administrative Code on adjudication. o The only powers which the

PED was likely to exercise over the respondents were investigative in nature • In proceedings before administrative or quasi-judicial bodies, such as NLRC and POEA, created under laws which authorize summary proceedings, decisions may be reached on the basis of position papers or other documentary evidence only. They are not bound by technical rules of procedure and evidence. It is enough that every litigant be given reasonable opportunity to appear and defend his right and to introduce relevant evidence in his favour, to comply with the due process requirements.

3) The Securities Regulation Code (SRC) did not repeal Sections 8, 30, and 36 of the Revised Securities Act since said provisions were re- enacted in the new law. • when the repealing law punishes the act previously penalized under the old law, the act committed before the re-enactment continues to be an offense and pending cases are not affected. o Sec 8 of RSA, which previously provided for the registration of securities and the information that needs to be included in the registration statements, was expanded under Sec 12 of the Securities Regulations Code. Further details of the information required to be disclosed by the registrant are explained. o Sec 30 of RSA has been re-enacted as Sec 27 of SRC, still penalizing an insider’s misuse of material and non-public information about the issuer, for the purpose of protecting public investors o Sec 23 of SRC was practically lifted from Sec 36 of RSA. • The legislature had not intended to deprive the courts of their authority to punish a person charged with violation of the old law that was repealed

4) The SEC retained the jurisdiction to investigate violations of the Revised Securities Act, re-enacted in the Securities Regulations Code, despite the abolition of the PED. • Sec 53 of SRC clearly provides that criminal complaints for violations of rules and regulations enforced or administered by SEC shall be referred to the DOJ for preliminary investigation, while the SEC nevertheless retains limited

5

investigatory powers. SEC may still impose the appropriate administrative sanctions under Sec 54.

5) The instant case has not yet prescribed. • Respondents point out that the prescription period applicable to offenses punished under special laws is 12 years. Since the offense was committed in 1994, they reasoned that prescription set in as early as 2006 and rendered this case moot. • It is an established doctrine that a preliminary investigation interrupts the prescription period. A preliminary investigation is essentially a determination whether an offense has been committed, and whether there is probable cause for the accused to have committed as offense. 6) The CA was justified in denying SEC’s Motion for Leave to Quash SEC Omnibus Orders dated 23 October 1995. • Since it found other issues that were more important than whether or not the PED was the proper body to investigate the matter, CA denied SEC’s motion for leave to quash SEC Omnibus Orders.

In all, the SC rules that no implementing rules were needed to render effective Sections 8, 30, and 36 of the Revised Securities Act; nor was the PED Rules of Practice and Procedure invalid, prior to the enactment of the Securities Regulations Code, for failure to provide parties with the right to cross-examine the witnesses presented against them. Thus, the respondents maybe investigated by the appropriate authority under the proper rules of procedure of the Securities Regulations Code for violations of Secs 8, 30, and 36 of the Revised Securities Act.

SC – petition granted

J. Tinga – concurring opinion • Manipulative devices and deceptive practices, including insider trading, throw a monkey wrench right into the heart of the securities industry – when someone trades in the market with unfair advantage in the form of highly valuable secret inside information, all other participants are defrauded.

J. Carpio – dissenting opinion • Proceedings referred to in Sec 2 of Act No. 3326 are judicial proceedings and not administrative proceedings. Contrary to the majority opinion’s claim that “a preliminary investigation interrupts the prescriptive period,“ only the institution of judicial proceedings can interrupt the running of the prescriptive period. The criminal charges may proceed separately and independently of the administrative proceedings.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-19850             January 30, 1964

VIGAN ELECTRIC LIGHT COMPANY, INC., petitioner, vs.THE PUBLIC SERVICE COMMISSION, respondent.

Raymundo A. Armovit for petitioner.Federico S. Arlos and P. H. del Pilar for respondent.

CONCEPCION, J.:

This is an original action for certiorari to annul an order of respondent Public Service Commission. Upon the filing of the petition and the submission and approval of the corresponding bond, we issued a writ of injunction restraining said respondent from enforcing the order complained of Republic Act No. 316, approved on June 19, 1948, granted petitioner Vigan Electric Light Company, Inc., a franchise to construct, maintain and operate an electric light, heat and/or power plant for the purpose of generating and distributing light, heat and/or power, for sale within the limits of several municipalities of the province of Ilocos Sur. Accordingly, petitioner secured from respondent on May 31, 1950, a certificate of public convenience to render electric light, heat and/or power services in said municipalities and to charge its customers and/or consumers the following rates:

FLAT RATE

1 — 20 watt bulb per month ............................................................ P2.30

1 — 25 watt bulb per month ............................................................ 3.00

1 — 40 watt bulb per month ............................................................ 4.50

1 — 50 watt bulb per month ............................................................ 5.50

1 — 60 watt bulb per month ............................................................ 6.50

1 — 75 watt bulb per month ............................................................ 7.50

1 — 80 watt bulb per month ............................................................ 8.00

1 — 100 watt bulb per month ............................................................ 9.00

1 — 150 watt bulb per month ............................................................ 13.00

1 — 200 watt bulb per month ............................................................ 17.00

METER RATE

For the first 15

For the first 15 Kw. hrs. ............................................................ P0.40

For the next 35 Kw. hrs. ............................................................ .30

For the next 50 Kw. hrs. ............................................................ .25

For all over 100 Kw. hrs. ............................................................ .20

Minimum Charge: P6.00 per month for connection of 200 watts or less; plus P0.01 per watt per month for connection in excess of 200 watts.

TEMPORARY RATE

P0.01 per watt per night.

On May 22, 1957, petitioner, acting with respondent's approval, entered into a contract for the purchase of electric power and energy from the National Power Corporation, for resale, in the course of the business of said petitioner, to its customers, to whom, in fact, petitioner resold said electric power and energy, in accordance with the above schedule of rates. About five (5) years later, or on January 16, 1962, respondent advised petitioner of a conference to be held on February 12, 1962 for the purpose of revising its authorized rates. Soon thereafter, petitioner received a letter of respondent informing the former of an alleged letter-petition of "Congressman Floro Crisologo and 107 alleged residents of Vigan Ilocos Sur", charging the following:

We also denounce the sale of TWO THOUSAND (2,000) ELECTRIC METERS in blackmarket by the Vigan Electric Light Company to Avegon Co., as anomalous and illegal. Said electric meters were imported from Japan by the Vigan Electric Light Company in behalf of the consumers of electric current from said electric company. The Vigan Electric Light Company has commercialized these privilege which property belong to the people.

We also report that the electric meters in Vigan used by the consumers had been installed in bad faith and they register excessive rates much more than the actual consumption.1äwphï1.ñët

and directing the petitioner to comment on these charges. In reply to said communications, petitioner's counsel wrote to respondent, on February 1, 1962, a letter asking that the conference scheduled for February 12 be postponed to March 12, and another letter stating inter alia:

In connection therewith, please be informed that my client, the Vigan Electric Light Co., Inc., has not had any dealing with the Avegon Co., Inc., relative to the 2,000 electric meter mentioned in the petition. Attached hereto as Annex "1" and made an integral part thereof is a certification to that effect by Avegon Co., Inc.

Furthermore, as counsel for Vigan Electric Light Co., Inc., I wish to inform this Honorable Commission that the charge that said company installed the electric meters in bad faith and that said meters registered excessive rates could have no valid basis because all of these meters have been inspected checked, tested and sealed by your office.

On March 15, 1962, petitioner received a communication form the General Auditing Office notifying him that one Mr. Cesar A. Damole had "been instructed to make an audit and examination of the books and other records of account" of said petitioner, "under the provisions of Commonwealth Act No. 325 and in accordance with the request of the Public Service Commission contained in its letter dated March 12, 1962", and directing petitioner to cooperate with said Mr. Damole "for the successful accomplishment of his work". Subsequently, respondent issued a subpoena duces tecum requiring petitioner to produce before the former, during a conference scheduled for April 10, 1962, certain books of account and financial statements specified in said process. On the date last mentioned petitioner moved to quash the subpoena duces tecum. The motion was not acted upon in said conference of April 10, 1962. However, it was then decided that the next conference be held on April 30, 1962, which was later postponed to May 21, 1962. When petitioner's representatives appeared before respondent, on the date last mentioned, they were advised by the latter that the scheduled conference had been cancelled, that the petition to quash the subpoena duces tecum had been granted, and that, on May 17, 1962, respondent had issued an order, from which we quote:

We now have the audit report of the General Auditing Office dated May 4, 1962, covering the operation of the Vigan Electric Light Co., Inc. in Vigan, Bantay and Cagayan, Ilocos Sur, for the period from January 1 to December 31, 1961. We find from the report that the total invested capital of the utility as of December 31, 1961, entitled to return amounted to P118,132.55, and its net operating income for rate purposes of P53,692.34 represents 45.45% of its invested capital; that in order to earn 12% per annum, the utility should have a computed revenue by rates of P182,012.78; and that since it realized an actual revenue by rates of P221,529.17, it had an excess revenue by rates of P39,516.39, which is 17.84% of the actual revenue by rates and 33.45% of the invested capital. In other words, the present rates of the Vigan Electric Light Co., Inc. may be reduced by 17.84%, or in round figure, by 18%.

Upon consideration of the foregoing, and finding that the Vigan Electric Light Co., Inc. is making a net operating profit in excess of the allowable return of 12% on its invested capital, we believe that it is in the public interest and in consonance with Section 3 of Republic Act No. 3043 that reduction of its rates to the extent of its excess revenue be put into effect immediately.

WHEREFORE, Vigan Electric Light Co., Inc. is hereby ordered to reduce the present meter rates for its electric service effective upon the billing for the month of June, 1962, to wit:

METER RATE — 24-HOUR SERVICE

For the first 15 kwh per month at P0.328 per kwh

For the next 35 kwh per month at P0.246 per kwh

For the next 50 kwh per month at P0.205 per kwh

For all over 100 kwh per month at P0.164 per kwh

Minimum Charge: P4.90 per month for connection of 200 was or less plus P0.01 per watt per month for connection in excess of 200 watts.

TEMPORARY LIGHTING

P0.01 per watt per night.Minimum Charge: P1.00

Billings to customers shall be made to the nearest multiple of five centavos. The above rates may be revised, modified or altered at anytime for any just cause and/or in the public service.

Soon later, or on June 25, 1962, petitioner herein instituted the present action for certiorari to annul said order of May 17, 1962, upon the ground that, since its Corporate inception in 1948, petitioner it "never was able to give and never made a single dividend declaration in favor of its stockholders" because its operation from 1949 to 1961 had resulted in an aggregate loss of P113,351.523; that in the conference above mentioned petitioner had called the attention of respondent to the fact that the latter had not furnished the former a "copy of the alleged letter-petition of Congressman Crisologo and others"; that respondent then expressed the view that there was no necessity of serving copy of said letter to petitioner, because respondent was merely holding informal conferences to ascertain whether petitioner would consent to the reduction of its rates; that petitioner objected to said reduction without a hearing, alleging that its rates could be reduced only if proven by evidence validly adduced to be excessive; that petitioner offered to introduce evidence to show the reasonableness of its aforementioned rates, and even the fairness of its increase; that petitioner was then assured that it would be furnished a copy of the aforementioned letter-petition and that a hearing would be held, if a reduction of its rates could not be agreed upon; that petitioner had not even been served a copy of the auditor's report upon which the order complained of is based; that such order had been issued without notice and hearing; and that, accordingly, petitioner had been denied due process.

In its answer respondent admitted some allegations of the complaint and denied other allegations thereof, particularly the conclusions drawn by petitioner. Likewise, respondent alleged that it granted petitioner's motion to quash the aforementioned subpoena duces tecum because the documents therein referred to had already been audited and examined by the General Auditing Office, the report on which was on file with said respondent; that the latter had directed that petitioner be served a copy of said report; and that, although this has not, as yet, been actually done, petitioner could have seen and examined said report had it really wanted to do so. By way of special defenses, respondent, moreover, alleged that the disputed order had been issued under its delegated legislative authority, the exercise of which does not require previous notice and hearing; and that petitioner had not sought a reconsideration of said order, and had, accordingly, failed to exhaust all administrative remedies.

In support of its first special defense respondent maintains that rate-fixing is a legislative function; that legislative or rule-making powers may constitutionally be exercised without previous notice of hearing; and that the decision in Ang Tibay vs. Court of Industrial Relations (69 Phil., 635) — in which we held that such notice and hearing are essential to the validity of a decision of the Public Service Commission — is not in point because, unlike the order complained of — which respondent claims to be legislative in nature — the Ang Tibay case referred to a proceeding involving the exercise of judicial functions.

At the outset, it should be noted, however, that, consistently with the principle of separation of powers, which underlies our constitutional system, legislative powers may not be delegated except to local governments, and only to matters purely of local concern (Rubi vs. Provincia Board, 39 Phil., 660; U.S. vs. Heinszen, 206 U.S. 370). However, Congress may delegate to administrative agencies of the government the power to supply the details in the execution or enforcement of a policy laid down by a which is complete in itself (Calalang vs. Williams, 70 Phil. 726; Pangasinan Trans. Co. vs. Public Service Commission, 70 Phil., 221; People vs. Rosenthal, 68 Phil., 328; People vs. Vera, 65 Phil., 56; Cruz vs. Youngberg, 56 Phil. 234; Alegre vs. Collector of Customs, 53 Phil., 394; U.S. vs. Ang Tang Ho 43 Phil., 1; Schechter vs. U.S., 295 U.S., 495 Mulford vs. Smith, 307 U.S., 38; Bowles vs. Willingham, 321 U.S., 503). Such law is not deemed complete unless it lays down a standard or pattern sufficiently fixed or determinate, or, at least, determinable without requiring another legislation, to guide the administrative body concerned in the performance of its duty to implement or enforce said Policy (People vs. Lim Ho, L-12091, January 28, 1960; Araneta vs. Gatmaitan, L-8895, April 30, 1957; Cervantes vs. Auditor General, L-4043, May 26, 1952; Philippine Association of Colleges vs. Secretary of Education, 51 Off. Gaz., 6230; People vs. Arnault, 48 Off. Gaz., 4805; Antamok Gold Fields vs. Court of Industrial Relations, 68 Phil., 340; U.S. vs. Barrias, 11

Phil., 327; Yakus vs. White, 321 U.S., 414; Ammann vs. Mallonce, 332 U.S., 245; U.S. vs. Rock Royal Corp. 307 U.S., 533; Mutual Film Corp. vs. Industrial Commission, 276 U.S., 230). Otherwise, there would be no reasonable means to ascertain whether or not said body has acted within the scope of its authority, and, as a consequence, the power of legislation would eventually be exercised by a branch of the Government other than that in which it is lodged by the Constitution, in violation, not only of the allocation of powers therein made, but, also, of the principle of separation of powers. Hence, Congress his not delegated, and cannot delegate legislative powers to the Public Service Commission.

Moreover, although the rule-making power and even the power to fix rates — when such rules and/or rates are meant to apply to all enterprises of a given kind throughout the Philippines — may partake of a legislative character, such is not the nature of the order complained of. Indeed, the same applies exclusively to petitioner herein. What is more, it is predicated upon the finding of fact — based upon a report submitted by the General Auditing Office — that petitioner is making a profit of more than 12% of its invested capital, which is denied by petitioner. Obviously, the latter is entitled to cross-examine the maker of said report, and to introduce evidence to disprove the contents thereof and/or explain or complement the same, as well as to refute the conclusion drawn therefrom by the respondent. In other words, in making said finding of fact, respondent performed a function partaking of a quasi-judicial character the valid exercise of which demands previous notice and hearing.

Indeed, sections 16(c) and 20 (a) of Commonwealth Act No. 146, explicitly require notice Indeed hearing. The pertinent parts thereof provide:

SEC. 16. The Commission shall have the power, upon proper notice and hearing in accordance with the rules and provision of this Act, subject to the limitations and exception mentioned and saving provisions to the contrary:

x x x           x x x           x x x

(c) To fix and determine individual or joint rates, tolls charges, classifications, or schedules thereof, as well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and followed thereafter by any public service: Provided, That the Commission may in its discretion approve rates proposed by public services provisionally and without necessity of any hearing; but it shall call a hearing thereof within thirty days thereafter, upon publication and notice to the concerns operating in the territory affected: Provided, further, That in case the public service equipment of an operator is use principally or secondarily for the promotion of a private business the net profits of said private business shall be considered in relation with the public service of such operator for the purpose of fixing the rates.

SEC. 20. Acts requiring the approval of the Commission. — Subject to established limitations and exception and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had —

(a) To adopt, establish, fix, impose, maintain, collect or carry into effect any individual or joint rates, commutation mileage or other special rate, toll, fare, charge, classification or itinerary. The Commission shall approve only those that are just and reasonable and not any that are unjustly discriminatory or unduly preferential, only upon reasonable notice to the public services and other parties concerned, giving them reasonable opportunity to be heard, ... . (Emphasis supplied.)

Since compliance with law must be presumed, it should be assumed that petitioner's current rates were fixed by respondent after proper notice and hearing. Hence, modification of such rates cannot be made, over petitioner's objection, without such notice and hearing, particularly considering that the factual basis of the action taken by respondent is assailed by petitioner. The rule applicable is set forth in the American Jurisprudence the following language:

Whether notice and a hearing in proceedings before a public service commission are necessary depends chiefly upon statutory or constitutional provisions applicable to such proceedings, which make notice and hearing, prerequisite to action by the commission, and upon the nature and object of such proceedings, that is, whether the proceedings, are, on the one hand, legislative and rule-making in character, or are, on the other hand, determinative and judicial or quasi-judicial, affecting the rights an property of private or specific persons. As a general rule, a public utility must be afforded some opportunity to be heard as to the propriety and reasonableness of rates fixed for its services by a public service commission.(43 Am. Jur. 716; Emphasis supplied.)

Wherefore, we hold that the determination of the issue involved in the order complained of partakes of the nature of a quasi-judicial function and that having been issued without previous notice and hearing said order is clearly violative of the due process clause, and, hence, null and void, so that a motion for reconsideration thereof is not an absolute prerequisite to the institution of the present action for certiorari (Ayson vs. Republic. 50 Off. Gaz., 5810). For this reason considering that said order was being made effective on June 1, 1962, or almost immediately after its issuance (on May 17, 1962), we find that petitioner was justified in commencing this proceedings without first filing said motion (Guerrero vs. Carbonell, L-7180, March 15, 1955).

WHEREFORE, the writ prayed for is granted and the preliminary injunction issued by this Court hereby made permanent. It is so ordered.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 164026             December 23, 2008

SECURITIES AND EXCHANGE COMMISSION, petitioner, vs.GMA NETWORK, INC., respondent.

D E C I S I O N

TINGA, J.:

Petitioner Securities and Exchange Commission (SEC) assails the Decision1 dated February 20, 2004 of the Court of Appeals in CA-G.R. SP No. 68163, which directed that SEC Memorandum Circular No. 1, Series of 1986 should be the basis for computing the filing fee relative to GMA Network, Inc.’s (GMA’s) application for the amendment of its articles of incorporation for purposes of extending its corporate term.

The undisputed facts as narrated by the appellate court are as follows:

On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for brevity), a domestic corporation, filed an application for collective approval of various amendments to its Articles of Incorporation and By-Laws with the respondent Securities and Exchange Commission, (SEC, for brevity). The amendments applied for include, among others, the change in the corporate name of petitioner from "Republic Broadcasting System, Inc." to "GMA Network, Inc." as well as the extension of the corporate term for another fifty (50) years from and after June 16, 2000.

Upon such filing, the petitioner had been assessed by the SEC’s Corporate and Legal Department a separate filing fee for the application for extension of corporate term equivalent to 1/10 of 1% of its authorized capital stock plus 20% thereof or an amount of P1,212,200.00.

On September 26, 1995, the petitioner informed the SEC of its intention to contest the legality and propriety of the said assessment. However, the petitioner requested the SEC to approve the other amendments being requested by the petitioner without being deemed to have withdrawn its application for extension of corporate term.

On October 20, 1995, the petitioner formally protested the assessment amounting to P1,212,200.00 for its application for extension of corporate term.

On February 20, 1996, the SEC approved the other amendments to the petitioner’s Articles of Incorporation, specifically Article 1 thereof referring to the corporate name of the petitioner as well as Article 2 thereof referring to the principal purpose for which the petitioner was formed.

On March 19, 1996, the petitioner requested for an official opinion/ruling from the SEC on the validity and propriety of the assessment for application for extension of its corporate term.

Consequently, the respondent SEC, through Associate Commissioner Fe Eloisa C. Gloria, on April 18, 1996, issued its ruling upholding the validity of the questioned assessment, the dispositive portion of which states:

"In light of the foregoing, we believe that the questioned assessment is in accordance with law. Accordingly, you are hereby required to comply with the required filing fee."

An appeal from the aforequoted ruling of the respondent SEC was subsequently taken by the petitioner on the ground that the assessment of filing fees for the petitioner’s application for extension of corporate term equivalent to 1/10 of 1% of the authorized capital stock plus 20% thereof is not in accordance with law.

On September 26, 2001, following three (3) motions for early resolution filed by the petitioner, the respondent SEC En Banc issued the assailed order dismissing the petitioner’s appeal, the dispositive portion of which provides as follows:

WHEREFORE, for lack of merit, the instant Appeal is hereby dismissed.

SO ORDERED.2

In its petition for review3 with the Court of Appeals, GMA argued that its application for the extension of its corporate term is akin to an amendment and not to a filing of new articles of incorporation. It further averred that SEC Memorandum Circular No. 2, Series of 1994, which the SEC used as basis for assessing P1,212,200.00 as filing fee for the extension of GMA’s corporate term, is not valid.

The appellate court agreed with the SEC’s submission that an extension of the corporate term is a grant of a fresh license for a corporation to act as a juridical being endowed with the powers expressly bestowed by the State. As such, it is not an ordinary amendment but is analogous to the filing of new articles of incorporation.

However, the Court of Appeals ruled that Memorandum Circular No. 2, Series of 1994 is legally invalid and ineffective for not having been published in accordance with law. The challenged memorandum circular, according to the appellate court, is not merely an internal or interpretative rule, but affects the public in general. Hence, its publication is required for its effectivity.

The appellate court denied reconsideration in a Resolution4 dated June 9, 2004.

In its Memorandum5 dated September 6, 2005, the SEC argues that it issued the questioned memorandum circular in the exercise of its delegated legislative power to fix fees and charges. The filing fees required by it are allegedly uniformly imposed on the transacting public and are essential to its supervisory and regulatory functions. The fees are not a form of penalty or sanction and, therefore, require no publication.

For its part, GMA points out in its Memorandum,6 dated September 23, 2005, that SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fees for amended articles of incorporation where the amendment consists of extending the term of corporate existence. The questioned circular, on the other hand, refers only to filing fees for articles of incorporation. Thus, GMA argues that the former circular, being the one that specifically treats of applications for the extension of corporate term, should apply to its case.

Assuming that Memorandum Circular No. 2, Series of 1994 is applicable, GMA avers that the latter did not take effect and cannot be the basis for the imposition of the fees stated therein for the reasons that it was neither filed with the University of the Philippines Law Center nor published either in the Official Gazette or in a newspaper of general circulation as required under existing laws.

It should be mentioned at the outset that the authority of the SEC to collect and receive fees as authorized by law is not in question.7 Its power to collect fees for examining and filing articles of incorporation and by-laws and amendments thereto, certificates of increase or decrease of the capital stock, among others, is recognized. Likewise established is its power under Sec. 7 of P.D. No. 902-A to recommend to the President the revision, alteration, amendment or adjustment of the charges which it is authorized to collect.

The subject of the present inquiry is not the authority of the SEC to collect and receive fees and charges, but rather the validity of its imposition on the basis of a memorandum circular which, the Court of Appeals held, is ineffective.

Republic Act No. 3531 (R.A. No. 3531) provides that where the amendment consists in extending the term of corporate existence, the SEC "shall be entitled to collect and receive for the filing of the amended articles of incorporation the same fees collectible under existing law as the filing of articles of incorporation."8 As is clearly the import of this law, the SEC shall be entitled to collect and receive the same fees it assesses and collects both for the filing of articles of incorporation and the filing of an amended articles of incorporation for purposes of extending the term of corporate existence.

The SEC, effectuating its mandate under the aforequoted law and other pertinent laws,9 issued SEC Memorandum Circular No. 1, Series of 1986, imposing the filing fee of 1/10 of 1% of the authorized capital stock but not less than P300.00 nor more than P100,000.00 for stock corporations, and 1/10 of 1% of the authorized capital stock but not less than P200.00 nor more than P100,000.00 for stock corporations without par value, for the filing of amended articles of incorporation where the amendment consists of extending the term of corporate existence.

Several years after, the SEC issued Memorandum Circular No. 2, Series of 1994, imposing new fees and charges and deleting the maximum filing fee set forth in SEC Circular No. 1, Series of 1986, such that the fee for the filing of articles of incorporation became 1/10 of 1% of the authorized capital stock plus 20% thereof but not less than P500.00.

A reading of the two circulars readily reveals that they indeed pertain to different matters, as GMA points out. SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fee for the amendment of articles of incorporation to extend corporate life, while Memorandum Circular No. 2, Series of 1994 pertains to the filing fee for articles of incorporation. Thus, as GMA argues, the former circular, being squarely applicable and, more importantly, being more favorable to it, should be followed.

What this proposition fails to consider, however, is the clear directive of R.A. No. 3531 to impose the same fees for the filing of articles of incorporation and the filing of amended articles of incorporation to reflect an extension of corporate term. R.A.

No. 3531 provides an unmistakable standard which should guide the SEC in fixing and imposing its rates and fees. If such mandate were the only consideration, the Court would have been inclined to rule that the SEC was correct in imposing the filing fees as outlined in the questioned memorandum circular, GMA’s argument notwithstanding.

However, we agree with the Court of Appeals that the questioned memorandum circular is invalid as it does not appear from the records that it has been published in the Official Gazette or in a newspaper of general circulation. Executive Order No. 200, which repealed Art. 2 of the Civil Code, provides that "laws shall take effect after fifteen days following the completion of their publication either in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided."

In Tañada v. Tuvera,10 the Court, expounding on the publication requirement, held:

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

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

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties.11

The questioned memorandum circular, furthermore, has not been filed with the Office of the National Administrative Register of the University of the Philippines Law Center as required in the Administrative Code of 1987.12

In Philsa International Placement and Services Corp. v. Secretary of Labor and Employment,13 Memorandum Circular No. 2, Series of 1983 of the Philippine Overseas Employment Administration, which provided for the schedule of placement and documentation fees for private employment agencies or authority holders, was struck down as it was not published or filed with the National Administrative Register.

The questioned memorandum circular, it should be emphasized, cannot be construed as simply interpretative of R.A. No. 3531. This administrative issuance is an implementation of the mandate of R.A.

No. 3531 and indubitably regulates and affects the public at large. It cannot, therefore, be considered a mere internal rule or regulation, nor an interpretation of the law, but a rule which must be declared ineffective as it was neither published nor filed with the Office of the National Administrative Register.

A related factor which precludes consideration of the questioned issuance as interpretative in nature merely is the fact the SEC’s assessment amounting to P1,212,200.00 is exceedingly unreasonable and amounts to an imposition. A filing fee, by legal definition, is that charged by a public official to accept a document for processing. The fee should be just, fair, and proportionate to the service for which the fee is being collected, in this case, the examination and verification of the documents submitted by GMA to warrant an extension of its corporate term.

Rate-fixing is a legislative function which concededly has been delegated to the SEC by R.A. No. 3531 and other pertinent laws. The due process clause, however, permits the courts to determine whether the regulation issued by the SEC is reasonable and within the bounds of its rate-fixing authority and to strike it down when it arbitrarily infringes on a person’s right to property.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 68163, dated February 20, 2004, and its Resolution, dated June 9, 2004, are AFFIRMED. No pronouncement as to costs.

SO ORDERED.

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