G.R. No. 86695. September 3, 1992.
* excludes any of these factors destroys the distinctive character of the system
MARIA ELENA MALAGA, doing business under the name B.E.
CONSTRUCTION; JOSIELEEN NAJARRO, doing business under the
name BEST BUILT CONSTRUCTION; JOSE N. OCCEA, doing
business under the name THE FIRM OF JOSE N. OCCEA; and the
ILOILO BUILDERS CORPORATION, petitioners, vs. MANUEL R.
PENACHOS, JR., ALFREDO MATANGGA, ENRICO TICAR AND
TERESITA VILLA-NUEVA, in their respective capacities as Chairman
and Members of the Pre-qualification Bids and Awards Committee
(PBAC)-BENIGNO PANISTANTE, in his capacity as President of Iloilo
State College of Fisheries, as well as in their respective personal
capacities; and HON. LODRIGIO L. LEBAQUIN, respondents.
Administrative Law; Government instrumentality, defined; Iloilo State
College of Fisheries is a government instrumentality; Applicability of P.D.
188.The 1987 Administrative Code defines a government instrumentality
as follows: Instrumentality refers to any agency of the National
Government, not integrated within the department framework, vested with
special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes regulatory agencies,
chartered institutions, and government-owned or controlled corporations.
(Sec. 2 (5) Introductory Provisions). The same Code describes a chartered
institution thus: Chartered institutionrefers to any agency organized or
operating under a special charter, and vested by law with functions relating
to specific constitutional policies or objectives. This term includes the state
universities and colleges, and the monetary authority of the state. (Sec. 2
(12) Introductory Provisions). It is clear from the above definitions that
ISCOF is a chartered institution and is therefore covered by P.D. 1818.
Government contracts; Public bidding requirement; Injunctions in cases
involving infrastructure projects.It is apparent that the present
controversy did not arise from the discretionary acts of the administrative
body nor does it involve merely technical matters.
What is involved here is non-compliance with the procedural rules on
bidding which required strict observance. The purpose of the rules
implementing P.D. 1594 is to secure competitive bidding and to prevent
favoritism, collusion and fraud in the award of these contracts to the
detriment of the public. This purpose was defeated by the irregularities
committed by PBAC. It has been held that the three principles in public
bidding are the offer to the public, an opportunity for competition and a
basis for exact comparison of bids. A regulation of the matter which
ADMINLAW CASES
and thwarts the purpose of its adoption.
Same; Same; Same.P.D. 1818 was not intended to shield from judicial
scrutiny irregularities committed by administrative agencies such as the
anomalies above described. Hence, the challenged restraining order was not
improperly issued by the respondent judge and the writ of preliminary
injunction should not have been denied. We note from Annex Q of the
private respondents memorandum, however, that the subject project has
already been 100% completed as to the Engineering Standard. This fait
accompli has made the petition for a writ of preliminary injunction moot
and academic.
Same; Same; Same; Liabilities of private respondents.It has been held in
a long line of cases that a contract granted without the competitive bidding
required by law is void, and the party to whom it is awarded cannot benefit
from it. It has not been shown that the irregularities committed by PBAC
were induced by or participated in by any of the contractors. Hence, liability
shall attach only to the private respondents for the prejudice sustained by
the petitioners as a result of the anomalies described above. Malagas vs.
Penachos, Jr., 213 SCRA 516, G.R. No. 86695 September 3, 1992
PETITION for review of the decision of the Regional Trial Court of Iloilo
City, Br. 25.
The facts are stated in the opinion of the Court.
Salas, Villareal & Velasco for petitioners.
Virgilio A. Sindico for respondents.
CRUZ, J.:
This controversy involves the extent and applicability of P.D. 1818, which
prohibits any court from issuing injunctions in cases involving
infrastructure projects of the government. Malagas vs. Penachos, Jr., 213
SCRA 516, G.R. No. 86695 September 3, 1992 The facts are not disputed.
The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-
qualification, Bids and Awards Committee (henceforth PBAC) caused the
publication in the November 25, 26, 28, 1988 issues of the Western Visayas
Daily an Invitation to Bid for the construction of a Micro Laboratory
Building at ISCOF. The notice announced that the last day for the
submission of pre-qualification requirements (PRE C-1)** was December
2, 1988, and that the bids would be received and opened on December 12,
1988, at 3 oclock in the afternoon.1
1
Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing
business under the name of B.E. Construction and Best Built Construction,
submitted their pre-qualification documents at two oclock in the afternoon
of December 2, 1988. Petitioner Jose Occea submitted his own PRE-C1 on
December 5, 1988. All three of them were not allowed to participate in the
bidding because their documents were considered late, having been
submitted after the cut-off time of ten oclock in the morning of December
2, 1988.
On December 12, 1988, the petitioners filed a complaint with the Regional
Trial Court of Iloilo against the chairman and members of PBAC in their
official and personal capacities. The plaintiffs claimed that although they
had submitted their PREC1 on time, the PBAC refused without just cause to
accept them. As a result, they were not included in the list of prequalified
bidders, could not secure the needed plans and other documents, and were
unable to participate in the scheduled bidding.
In their prayer, they sought the resetting of the December 12, 1988 bidding
and the acceptance of their PRE-C1 documents. They also asked that if the
bidding had already been conducted, the defendants be directed not to
award the project pending resolution of their complaint.
On the same date, Judge Lodrigio L. Lebaquin issued a restraining order
prohibiting PBAC from conducting the bidding and awarding the project.2
On December 16, 1988, the defendants filed a motion to lift the restraining
order on the ground that the Court was prohibited from issuing restraining
orders, preliminary injunctions and preliminary mandatory injunctions by
P.D. 1818.
The decree reads pertinently as follows:
Section 1. No Court in the Philippines shall have jurisdiction to issue any
restraining order, preliminary injunction, or preliminary mandatory
injunction in any case, dispute, or controversy involving an infrastructure
project, or a mining, fishery, forest or other natural resource development
project of the government, or any public utility operated by the government,
including among others public utilities for the transport of the goods or
commodities, stevedoring and arrastre contracts, to prohibit any person or
persons, entity or government official from proceeding with, or continuing
the execution or implementation of any such project, or the operation of
such public utility, or pursuing any lawful activity necessary for such
execution, implementation or operation.
The movants also contended that the question of the propriety of a
preliminary injunction had become moot and academic because the
restraining order was received late, at 2 oclock in the afternoon of
ADMINLAW CASES
December 12, 1988, after the bidding had been conducted and closed at
eleven thirty in the morning of that date.
In their opposition to the motion, the plaintiffs argued against the
applicability of P.D. 1818, pointing out that while ISCOF was a state
college, it had its own charter and separate existence and was not part of the
national government or of any local political subdivision. Even if P.D. 1818
were applicable, the prohibition presumed a valid and legal government
project, not one tainted with anomalies like the project at bar.
They also cited Filipinas Marble Corp. vs. IAC,3 where the Court allowed
the issuance of a writ of preliminary injunction despite a similar prohibition
found in P.D. 385. The Court therein stated that:
The government, however, is bound by basic principles of fairness and
decency under the due process clause of the Bill of Rights. P.D. 385 was
never meant to protect officials of government-lending institutions who take
over the management of a borrower corporation, lead that corporation to
bankruptcy through mismanagement or misappropriation of its funds, and
who, after ruining it, use the mandatory provisions of the decree to avoid
the consequences of their misdeeds (p. 188, italics supplied).
On January 2, 1989, the trial court lifted the restraining order and denied the
petition for preliminary injunction. It declared that the building sought to be
constructed at the ISCOF was an infrastructure project of the government
falling within the coverage of P.D. 1818. Even if it were not, the petition for
the issuance of a writ of preliminary injunction would still fail because the
sheriffs return showed that PBAC was served a copy of the restraining
order after the bidding sought to be restrained had already been held.
Furthermore, the members of the PBAC could not be restrained from
awarding the project because the authority to do so was lodged in the
President of the ISCOF, who was not a party to the case.4
In the petition now before us, it is reiterated that P.D. 1818 does not cover
the ISCOF because of its separate and distinct corporate personality. It is
also stressed again that the prohibition under P.D. 1818 could not apply to
the present controversy because the project was vitiated with irregularities,
to wit:
1. The invitation to bid as published fixed the deadline of submission of pre-
qualification document on December 2, 1988 without indicating any time,
yet after 10:00 oclock of the given date, the PBAC already refused to
accept petitioners documents.
2. The time and date of bidding was published as December 12, 1988 at
3:00 p.m. yet it was held at 10:00 oclock in the morning.
2
3. Private respondents, for the purpose of inviting bidders to participate,
issued a mimeographed Invitation to Bid form, which by law (P.D. 1594
and Implementing Rules, Exh. B-1) is to contain the particulars of the
project subject of bidding for the purposes of
(i) enabling bidders to make an intelligent and accurate bids;
(ii) for PBAC to have a uniform basis for evaluating the bids;
(iii) to prevent collusion between a bidder and the PBAC, by opening to all
the particulars of a project.
Additionally, the Invitation to Bid prepared by the respondents and the
Itemized Bill of Quantities therein were left blank.5 And although the
project in question was a Construction, the private respondents used an
Invitation to Bid form for Materials.6
The petitioners also point out that the validity of the writ of preliminary
injunction had not yet become moot and academic because even if the bids
had been opened before the restraining order was issued, the project itself
had not yet been awarded. The ISCOF president was not an indispensable
party because the signing of the award was merely a ministerial function
which he could perform only upon the recommendation of the Award
Committee. At any rate, the complaint had already been duly amended to
include him as a party defendant.
In their Comment, the private respondents maintain that since the members
of the board of trustees of the ISCOF are all government officials under
Section 7 of P.D. 1523 and since the operations and maintenance of the
ISCOF are provided for in the General Appropriations Law, it should be
considered a government institution whose infrastructure project is covered
by P.D. 1818.
Regarding the schedule for pre-qualification, the private respondents insist
that PBAC posted on the ISCOF bulletin board an announcement that the
deadline for the submission of pre-qualification documents was at 10
oclock of December 2, 1988, and the opening of bids would be held at 1
oclock in the afternoon of December 12, 1988. As of ten oclock in the
morning of December 2, 1988, B.E. construction and Best Built
construction had filed only their letters of intent. At two oclock in the
afternoon, B.E. and Best Built filed through their common representative,
Nenette Garuello, their pre-qualification documents which were admitted
but stamped submitted late. The petitioners were informed of their
disqualification on the same date, and the disqualification became final on
December 6, 1988. Having failed to take immediate action to compel PBAC
to pre-qualify them despite their notice of disqualification, they cannot now
ADMINLAW CASES
come to this Court to question the binding proper in which they had not
participated.
In the petitioners Reply, they raise as an additional irregularity the violation
of the rule that where the estimated project cost is from P1M to P5M, the
issuance of plans, specifications and proposal book forms should be made
thirty days before the date of bidding.7 They point out that these forms were
issued only on December 2, 1988, and not at the latest on November 12,
1988, the beginning of the 30-day period prior to the scheduled bidding.
In their Rejoinder, the private respondents aver that the documents of B.E.
and Best Built were received although filed late and were reviewed by the
Award Committee, which discovered that the contractors had expired
licenses. B.E.s temporary certificate of Renewal of Contractors License
was valid only until September 30, 1988, while Best Builts license was
valid only up to June 30, 1988.
The Court has considered the arguments of the parties in light of their
testimonial and documentary evidence and the applicable laws and
jurisprudence. It finds for the petitioners.
The 1987 Administrative Code defines a government instrumentality as
follows:
Instrumentality refers to any agency of the National Government, not
integrated within the department framework, vested with special functions
or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually
through a charter. This term includes regulatory agencies, chartered
institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions).
The same Code describes a chartered institution thus:
Chartered institutionrefers to any agency organized or operating under a
special charter, and vested by law with functions relating to specific
constitutional policies or objectives. This term includes the state universities
and colleges, and the monetary authority of the state. (Sec. 2 (12)
Introductory Provisions).
It is clear from the above definitions that ISCOF is a chartered institution
and is therefore covered by P.D. 1818.
There are also indications in its charter that ISCOF is a government
instrumentality. First, it was created in pursuance of the integrated fisheries
development policy of the State, a priority program of the government to
effect the socio-economic life of the nation. Second, the Treasurer of the
Republic of the Philippines shall also be the ex-officio Treasurer of the state
college with its accounts and expenses to be audited by the Commission on
3
Audit or its duly authorized representative. Third, heads of bureaus and
offices of the National Government are authorized to loan or transfer to it,
upon request of the president of the state college, such apparatus,
equipment, or supplies and even the services of such employees as can be
spared without serious detriment to public service. Lastly, an additional
amount of P1.5M had been appropriated out of the funds of the National
Treasury and it was also decreed in its charter that the funds and
maintenance of the state college would henceforth be included in the
General Appropriations Law.8
Nevertheless, it does not automatically follow that ISCOF is covered by the
prohibition in the said decree.
In the case of Datiles and Co. vs. Sucaldito,9 this Court interpreted a similar
prohibition contained in P.D. 605, the law after which P.D. 1818 was
patterned. It was there declared that the prohibition pertained to the issuance
of injunctions or restrain- ing orders by courts against administrative acts in
controversies involving facts or the exercise of discretion in technical cases.
The Court observed that to allow the courts to judge these matters would
disturb the smooth functioning of the administrative machinery. Justice
Teodoro Padilla made it clear, however, that on issues definitely outside of
this dimension and involving questions of law, courts could not be
prevented by P.D. No. 605 from exercising their power to restrain or
prohibit administrative acts.
We see no reason why the above ruling should not apply to P.D. 1818.
There are at least two irregularities committed by PBAC that justified
injunction of the bidding and the award of the project.
First, PBAC set deadlines for the filing of the PRE-C1 and the opening of
bids and then changed these deadlines without prior notice to prospective
participants.
Under the Rules Implementing P.D. 1594, prescribing policies and
guidelines for government infrastructure contracts, PBAC shall provide
prospective bidders with the Notice to Prequalification and other relevant
information regarding the proposed work. Prospective contractors shall be
required to file their ARC-Contractors Confidential Application for
Registration & Classifications & the PRE-C2 Confidential Pre-qualification
Statement for the Project (prior to the amendment of the rules, this was
referred to as PRE-C1) not later than the deadline set in the published
Invitation to Bid, after which date no PRE-C2 shall be submitted and
received. Invitations to Bid shall be advertised for at least three times within
a reasonable period but in no case less than two weeks in at least two
newspapers of general circulations.10
ADMINLAW CASES
PBAC advertised the pre-qualification deadline as December 2, 1988,
without stating the hour thereof, and announced that the opening of bids
would be at 3 oclock in the afternoon of December 12, 1988. This schedule
was changed and a notice of such change was merely posted at the ISCOF
bulletin board. The notice advanced the cut-off time for the submission of
prequalification documents to 10 oclock in the morning of December 2,
1988, and the opening of bids to 1 oclock in the afternoon of December 12,
1988.
The new schedule caused the pre-disqualification of the petitioners as
recorded in the minutes of the PBAC meeting held on December 6, 1988.
While it may be true that there were fourteen contractors who were pre-
qualified despite the change in schedule, this fact did not cure the defect of
the irregular notice. Notably, the petitioners were disqualified because they
failed to meet the new deadline and not because of their expired
licenses.***
We have held that where the law requires a previous advertisement before
government contracts can be awarded, noncompliance with the requirement
will, as a general rule, render the same void and of no effect.11 The fact that
an invitation for bids has been communicated to a number of possible
bidders is not necessarily sufficient to establish compliance with the
requirements of the law if it is shown that other possible bidders have not
been similarly notified.12
Second, PBAC was required to issue to pre-qualified applicants the plans,
specifications and proposal book forms for the project to be bid thirty days
before the date of bidding if the estimated project cost was between P1M
and P5M. PBAC has not denied that these forms were issued only on
December 2, 1988, or only ten days before the bidding scheduled for
December 12, 1988. At the very latest, PBAC should have issued them on
November 12, 1988, or 30 days before the scheduled bidding.
It is apparent that the present controversy did not arise from the
discretionary acts of the administrative body nor does it involve merely
technical matters. What is involved here is noncompliance with the
procedural rules on bidding which required strict observance. The purpose
of the rules implement- ing P.D. 1594 is to secure competitive bidding and
to prevent favoritism, collusion and fraud in the award of these contracts to
the detriment of the public. This purpose was defeated by the irregularities
committed by PBAC.
It has been held that the three principles in public bidding are the offer to
the public, an opportunity for competition and a basis for exact comparison
of bids. A regulation of the matter which excludes any of these factors
4
destroys the distinctive character of the system and thwarts the purpose of
its adoption.13
In the case at bar, it was the lack of proper notice regarding the pre-
qualification requirement and the bidding that caused the elimination of
petitioners B.E. and Best Built. It was not because of their expired licenses,
as private respondents now claim. Moreover, the plans and specifications
which are the contractors guide to an intelligent bid, were not issued on
time, thus defeating the guaranty that contractors be placed on equal footing
when they submit their bids. The purpose of competitive bidding is negated
if some contractors are informed ahead of their rivals of the plans and
specifications that are to be the subject of their bids.
P.D. 1818 was not intended to shield from judicial scrutiny irregularities
committed by administrative agencies such as the anomalies above
described. Hence, the challenged restraining order was not improperly
issued by the respondent judge and the writ of preliminary injunction should
not have been denied. We note from Annex Q of the private respondents
memorandum, however, that the subject project has already been 100%
completed as to the Engineering Standard. This fait accompli has made the
petition for a writ of preliminary injunction moot and academic.
We come now to the liabilities of the private respondents.
It has been held in a long line of cases that a contract granted without the
competitive bidding required by law is void, and the party to whom it is
awarded cannot benefit from it.14 It has not been shown that the
irregularities committed by PBAC were induced by or participated in by
any of the contractors. Hence, liability shall attach only to the private
respondents for the prejudice sustained by the petitioners as a result of the
anomalies described above.
As there is no evidence of the actual loss suffered by the petitioners,
compensatory damage may not be awarded to them. Moral damages do not
appear to be due either. Even so, the Court cannot close its eyes to the
evident bad faith that characterized the conduct of the private respondents,
including the irregularities in the announcement of the bidding and their
efforts to persuade the ISCOF president to award the project after two days
from receipt of the restraining order and before they moved to lift such
order. For such questionable acts, they are liable in nominal damages at
least in accordance with Article 2221 of the Civil Code, which states:
Art. 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant may be
vindicated or, recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
ADMINLAW CASES
These damages are to be assessed against the private respondents in the
amount of P10,000.00 each, to be paid separately for each of petitioners
B.E. Construction and Best Built Construction. The other petitioner, Occea
Builders, is not entitled to relief because it admittedly submitted its pre-
qualification documents on December 5, 1988, or three days after the
deadline.
WHEREFORE, judgment is hereby rendered: a) upholding the restraining
order dated December 12, 1988, as not covered by the prohibition in P.D.
1818; b) ordering the chairman and the members of the PBAC board of
trustees, namely, Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar,
and Teresita Villanueva, to each pay separately to petitioners Maria Elena
Malaga and Josieleen Najarro nominal damages of P10,000.00 each; and c)
removing the said chairman and members from the PBAC board of trustees,
or whoever among them is still incumbent therein, for their malfeasance in
office. Costs against PBAC.
Let a copy of this decision be sent to the Office of the Ombudsman.
SO ORDERED.
Grio-Aquino, Medialdea and Bellosillo, JJ., concur.
Note.Public works projects may be undertaken by administration or force
account or by negotiated contract only in exceptional cases, as provided in
Section 4 of Presidential Decree No. 1594, but the instant case does not fall
under any of those exceptional cases (Eslao vs. Commission on Audit, 195
SCRA 730).
o0o Malagas vs. Penachos, Jr., 213 SCRA 516, G.R. No. 86695
September 3, 1992
G.R. No. 166052. August 29, 2007.*
ANAK MINDANAO PARTY-LIST GROUP, as represented by Rep.
Mujiv S. Hataman, and MAMALO DESCENDANTS
ORGANIZATION, INC., as represented by its Chairman Romy Pardi,
petitioners, vs. THE EXECUTIVE SECRETARY, THE HON.
EDUARDO R. ERMITA, and THE SECRETARY OF
AGRARIAN/LAND REFORM, THE HON. RENE C. VILLA,
respondents.
Remedial Law; Constitutional Law; Words and Phrases; Parties; Locus
Standi; Locus standi or legal standing has been defined as a personal and
substantial interest in a case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged.
Locus standi or legal standing has been defined as a personal and
substantial interest in a case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged.
5
The gist of the question of standing is whether a party alleges such personal
stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
depends for illumination of difficult constitutional questions.
Same; Same; Same; Same; Same; A party who assails the constitutionality
of a statute must have a direct and personal interest; Requisites for a
Concerned Party to be Allowed to Raise a Constitutional Question.It has
been held that a party who assails the constitutionality of a statute must
have a direct and personal interest. It must show not only that the law or any
governmental act is invalid, but also that it sustained or is in immediate
danger of sustaining some direct injury as a result of its enforcement, and
not merely that it suffers thereby in some indefinite way. It must show that
it has been or is about to be denied some right or privilege to which it is
lawfully entitled or that it is about to be subjected to some burdens or
penalties by reason of the statute or act complained of. For a concerned
party to be allowed to raise a constitutional question, it must show that (1) it
has personally suffered some actual or threatened injury as a result of the
allegedly illegal conduct of the government, (2) the injury is fairly traceable
to the challenged action, and (3) the injury is likely to be redressed by a
favorable action.
Same; Same; Same; Same; Same; Mamalo Descendants Organization, Inc.s
(MDOIs) status as a peoples organization did not vest it with the legal in the President justifies an executive action to carry out reorganization
standing to assail the validity of the executive orders.Vague propositions
that the implementation of the assailed orders will work injustice and
violate the rights of its members cannot clothe MDOI with the requisite
standing. Neither would its status as a peoples organization vest it with deactivate the functions of a particular office.In establishing an executive
the legal standing to assail the validity of the executive orders.
Same; Same; Same; Same; Same; Requisites to be Accorded Standing on
the Ground of Transcendental Importance; The transcendental importance
of the issues raised must relate to the merits of the petition.MDOI raises
no issue of transcendental importance to justify a relaxation of the rule on
legal standing. To be accorded standing on the ground of transcendental
importance, Senate of the Philippines v. Ermita, 488 SCRA 1 (2006),
requires that the following elements must be established: (1) the public
character of the funds or other assets involved in the case, (2) the presence
of a clear case of disregard of a constitutional or statutory prohibition by the
public respondent agency or instrumentality of government, and (3) the lack
of any other party with a more direct and specific interest in raising the
questions being raised. The presence of these elements MDOI failed to
establish, much less allege. Francisco, Jr. v. Fernando, 507 SCRA 173
ADMINLAW CASES
(2006), more specifically declares that the transcendental importance of the
issues raised must relate to the merits of the petition.
Constitutional Law; Separation of Powers; The principle of separation of
powers presupposes mutual respect by and between the executive,
legislative and judicial departments of the government and calls for them to
be left alone to discharge their duties as they see fit.Under the principle of
separation of powers, Congress, the President, and the Judiciary may not
encroach on fields allocated to each of them. The legislature is generally
limited to the enactment of laws, the executive to the enforcement of laws,
and the judiciary to their interpretation and application to cases and
controversies. The principle presupposes mutual respect by and between the
executive, legislative and judicial departments of the government and calls
for them to be left alone to discharge their duties as they see fit.
Same; Same; The Constitution confers, by express provision, the power of
control over executive departments, bureaus and offices in the President
alone; The Constitutions express grant of the power of control in the
President justifies an executive action to carry out reorganization measures
under a broad authority of law.The Constitution confers, by express
provision, the power of control over executive departments, bureaus and
offices in the President alone. And it lays down a limitation on the
legislative power. The Constitutions express grant of the power of control
measures under a broad authority of law.
Same; Same; As far as bureaus, agencies or offices in the executive
department are concerned, the power of control may justify the President to
department, bureau or office, the legislature necessarily ordains an
executive agencys position in the scheme of administrative structure. Such
determination is primary, but subject to the Presidents continuing authority
to reorganize the administrative structure. As far as bureaus, agencies or
offices in the executive department are concerned, the power of control may
justify the President to deactivate the functions of a particular office. Or a
law may expressly grant the President the broad authority to carry out
reorganization measures. The Administrative Code of 1987 is one such law.
Same; Same; The President may transfer any agency under the Office of the
President to any other department or agency, subject to the policy in the
Executive Office and in order to achieve simplicity, economy and
efficiency.As thus provided by law, the President may transfer any
agency under the Office of the President to any other department or agency,
subject to the policy in the Executive Office and in order to achieve
6
simplicity, economy and efficiency. Gauged against these guidelines, the
challenged executive orders may not be said to have been issued with grave
abuse of discretion or in violation of the rule of law.
Statutes; A law has in its favor the presumption of constitutionality.A law
has in its favor the presumption of constitutionality. For it to be nullified, it
must be shown that there is a clear and unequivocal breach of the
Constitution. The ground for nullity must be clear and beyond reasonable
doubt. Any reasonable doubt should, following the universal rule of legal
hermeneutics, be resolved in favor of the constitutionality of a law. Anak
Mindanao Party-List Group vs. The Executive Secretary, 531 SCRA 583,
G.R. No. 166052 August 29, 2007
DECISION
CARPIO MORALES, J.:
Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo
Descendants Organization, Inc. (MDOI) assail the constitutionality of
Executive Order (E.O.) Nos. 364 and 379, both issued in 2004, via the
present Petition for Certiorari and Prohibition with prayer for injunctive
relief.
E.O. No. 364, which President Gloria Macapagal-Arroyo issued
on September 27, 2004, reads:
EXECUTIVE ORDER NO. 364
TRANSFORMING THE DEPARTMENT OF
AGRARIAN REFORM INTO THE DEPARTMENT OF
LAND REFORM
WHEREAS, one of the five reform packages of the
Arroyo administration is Social Justice and Basic [N]eeds;
WHEREAS, one of the five anti-poverty measures for
social justice is asset reform;
WHEREAS, asset reforms covers [sic] agrarian reform,
urban land reform, and ancestral domain reform;
ADMINLAW CASES
WHEREAS, urban land reform is a concern of the
Presidential Commission [for] the Urban Poor (PCUP)
and ancestral domain reform is a concern of the National
Commission on Indigenous Peoples (NCIP);
WHEREAS, another of the five reform packages of the
Arroyo administration is Anti-Corruption and Good
Government;
WHEREAS, one of the Good Government reforms of the
Arroyo administration is rationalizing the bureaucracy by
consolidating related functions into one department;
WHEREAS, under law and jurisprudence, the President of
the Philippines has broad powers to reorganize the offices
under her supervision and control;
NOW[,] THEREFORE[,] I, Gloria Macapagal-Arroyo, by
the powers vested in me as President of the Republic of
the Philippines, do hereby order:
SECTION 1. The Department of Agrarian Reform is
hereby transformed into the Department of Land
Reform. It shall be responsible for all land reform in the
country, including agrarian reform, urban land reform, and
ancestral domain reform.
SECTION 2. The PCUP is hereby placed under the
supervision and control of the Department of Land
Reform. The Chairman of the PCUP shall be ex-officio
Undersecretary of the Department of Land Reform
for Urban Land Reform.
SECTION 3. The NCIP is hereby placed under the
supervision and control of the Department of Land
Reform. The Chairman of the NCIP shall be ex-officio
Undersecretary of the Department of Land Reform for
Ancestral Domain Reform.
7
 SECTION 4. The PCUP and the NCIP shall have access to
the services provided by the Departments Finance,
Management and Administrative Office; Policy, Planning
and Legal Affairs Office, Field Operations and Support
Services Office, and all other offices of the Department of
Land Reform.
SECTION 5. All previous issuances that conflict with this
Executive Order are hereby repealed or modified
accordingly.
SECTION 6. This Executive Order takes effect
immediately. (Emphasis and underscoring supplied)
E.O. No. 379, which amended E.O. No. 364 a month later or
on October 26, 2004, reads:
EXECUTIVE ORDER NO. 379
AMENDING EXECUTIVE ORDER NO. 364
ENTITLED TRANSFORMING THE DEPARTMENT OF
AGRARIAN REFORM INTO THE DEPARTMENT OF
LAND REFORM
WHEREAS, Republic Act No. 8371 created the National
Commission on Indigenous Peoples;
WHEREAS, pursuant to the Administrative Code of 1987,
the President has the continuing authority to reorganize
the administrative structure of the National Government.
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, President of the Republic of the Philippines,
by virtue of the powers vested in me by the Constitution
and existing laws, do hereby order:
Section 1. Amending Section 3 of Executive Order No.
364. Section 3 of Executive Order No. 364,
dated September 27, 2004 shall now read as follows:
ADMINLAW CASES
Section 3. The National Commission on
Indigenous Peoples (NCIP) shall be
an attached agency of the Department of
Land Reform.
Section 2. Compensation. The Chairperson shall suffer no
diminution in rank and salary.
Section 3. Repealing Clause. All executive issuances,
rules and regulations or parts thereof which are
inconsistent with this Executive Order are hereby revoked,
amended or modified accordingly.
Section 4. Effectivity. This Executive Order shall take
effect immediately. (Emphasis and underscoring in the
original)
Petitioners contend that the two presidential issuances are unconstitutional
for violating:
- THE CONSTITUTIONAL PRINCIPLES OF
SEPARATION OF POWERS AND OF THE RULE
OF LAW[;]
- THE CONSTITUTIONAL SCHEME AND
POLICIES FOR AGRARIAN REFORM, URBAN
LAND REFORM, INDIGENOUS PEOPLES
RIGHTS AND ANCESTRAL DOMAIN[; AND]
- THE CONSTITUTIONAL RIGHT OF THE
PEOPLE AND THEIR ORGANIZATIONS TO
EFFECTIVE AND REASONABLE
PARTICIPATION IN DECISION-MAKING,
INCLUDING THROUGH ADEQUATE
CONSULTATION[.][1]
By Resolution of December 6, 2005, this Court gave due course to the
Petition and required the submission of memoranda, with which petitioners
and respondents complied on March 24, 2006 and April 11, 2006,
respectively.
8

The issue on the transformation of the Department of Agrarian Reform
(DAR) into the Department of Land Reform (DLR) became moot and
academic, however, the department having reverted to its former name by
virtue of E.O. No. 456[2] which was issued onAugust 23, 2005.
The Court is thus left with the sole issue of the legality of placing
the Presidential Commission[3] for the Urban Poor (PCUP) under the
supervision and control of the DAR, and the National Commission on
Indigenous Peoples (NCIP) under the DAR as an attached agency.
Before inquiring into the validity of the reorganization, petitioners locus
standi or legal standing, inter alia,[4] becomes a preliminary question.
The Office of the Solicitor General (OSG), on behalf of respondents,
concedes that AMIN[5] has the requisite legal standing to file this suit as
member[6] of Congress.
Petitioners find it impermissible for the Executive to intrude into the
domain of the Legislature. They posit that an act of the Executive which
injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress.
[7]
They add that to the extent that the powers of Congress are impaired, so
is the power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.[8]
Indeed, a member of the House of Representatives has standing to
maintain inviolate the prerogatives, powers and privileges vested by the
Constitution in his office.[9]
The OSG questions, however, the standing of MDOI, a registered peoples
organization of Teduray and Lambangian tribesfolk of (North) Upi and
South Upi in the province of Maguindanao.
As co-petitioner, MDOI alleges that it is concerned with the negative impact
of NCIPs becoming an attached agency of the DAR on the processing of
ancestral domain claims. It fears that transferring the NCIP to the DAR
would affect the processing of ancestral domain claims filed by its
members.
ADMINLAW CASES
Locus standi or legal standing has been defined as a personal and
substantial interest in a case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being
challenged. The gist of the question of standing is whether a party alleges
such personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which
the court depends for illumination of difficult constitutional questions.[10]
It has been held that a party who assails the constitutionality of a statute
must have a direct and personal interest. It must show not only that the law
or any governmental act is invalid, but also that it sustained or is in
immediate danger of sustaining some direct injury as a result of its
enforcement, and not merely that it suffers thereby in some indefinite
way. It must show that it has been or is about to be denied some right or
privilege to which it is lawfully entitled or that it is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.[11]
For a concerned party to be allowed to raise a constitutional question, it
must show that (1) it has personally suffered some actual or threatened
injury as a result of the allegedly illegal conduct of the government, (2) the
injury is fairly traceable to the challenged action, and (3) the injury is likely
to be redressed by a favorable action.[12]
An examination of MDOIs nebulous claims of negative impact and
probable setbacks[13] shows that they are too abstract to be considered
judicially cognizable. And the line of causation it proffers between the
challenged action and alleged injury is too attenuated.
Vague propositions that the implementation of the assailed orders
will work injustice and violate the rights of its members cannot clothe
MDOI with the requisite standing. Neither would its status as a peoples
organization vest it with the legal standing to assail the validity of the
executive orders.[14]
La Bugal-Blaan Tribal Association, Inc. v. Ramos,[15] which MDOI
cites in support of its claim to legal standing, is inapplicable as it is not
similarly situated with the therein petitioners who alleged personal and
substantial injury resulting from the mining activities permitted by the
assailed statute. And so is Cruz v. Secretary of Environment and Natural
Resources,[16] for the indigenous peoples leaders and organizations were not
9
the petitioners therein, who necessarily had to satisfy the locus
standirequirement, but were intervenors who sought and were allowed to be
impleaded, not to assail but to defend the constitutionality of the statute.
Moreover, MDOI raises no issue of transcendental importance to justify a
relaxation of the rule on legal standing. To be accorded standing on the
ground of transcendental importance, Senate of the Philippines v.
Ermita[17] requires that the following elements must be established: (1) the
public character of the funds or other assets involved in the case, (2) the
presence of a clear case of disregard of a constitutional or statutory
prohibition by the public respondent agency or instrumentality of
government, and (3) the lack of any other party with a more direct and
specific interest in raising the questions being raised. The presence of these
elements MDOI failed to establish, much less allege.
Francisco, Jr. v. Fernando[18] more specifically declares that the
transcendental importance of the issues raised must relate to the merits of
the petition.
This Court, not being a venue for the ventilation of generalized grievances,
must thus deny adjudication of the matters raised by MDOI.
Now, on AMINs position. AMIN charges the Executive Department with
transgression of the principle of separation of powers.
Under the principle of separation of powers, Congress, the
President, and the Judiciary may not encroach on fields allocated to each of
them. The legislature is generally limited to the enactment of laws, the
executive to the enforcement of laws, and the judiciary to their
interpretation and application to cases and controversies. The principle
presupposes mutual respect by and between the executive, legislative and
judicial departments of the government and calls for them to be left alone to
discharge their duties as they see fit.[19]
AMIN contends that since the DAR, PCUP and NCIP were created by
statutes,[20] they can only be transformed, merged or attached by statutes, not
by mere executive orders.
While AMIN concedes that the executive power is vested in the
President[21] who, as Chief Executive, holds the power of control of all the
ADMINLAW CASES
executive departments, bureaus, and offices,[22] it posits that this broad
power of control including the power to reorganize is qualified and limited,
for it cannot be exercised in a manner contrary to law, citing the
constitutional duty[23] of the President to ensure that the laws, including
those creating the agencies, be faithfully executed.
AMIN cites the naming of the PCUP as a presidential commission to be
clearly an extension of the President, and the creation of the NCIP as an
independent agency under the Office of the President.[24] It thus argues that
since the legislature had seen fit to create these agencies at separate times
and with distinct mandates, the President should respect that legislative
disposition.
In fine, AMIN contends that any reorganization of these
administrative agencies should be the subject of a statute.
AMINs position fails to impress.
The Constitution confers, by express provision, the power of
control over executive departments, bureaus and offices in the President
alone. And it lays down a limitation on the legislative power.
The line that delineates the Legislative and Executive
power is not indistinct. Legislative power is the authority,
under the Constitution, to make laws, and to alter and
repeal them. The Constitution, as the will of the people in
their original, sovereign and unlimited capacity, has
vested this power in the Congress of the Philippines. The
grant of legislative power to Congress is broad, general
and comprehensive. The legislative body possesses
plenary power for all purposes of civil government. Any
power, deemed to be legislative by usage and tradition, is
necessarily possessed by Congress, unless the
Constitution has lodged it elsewhere. In fine, except as
limited by the Constitution, either expressly or impliedly,
legislative power embraces all subjects and extends to
matters of general concern or common interest.
While Congress is vested with the power to enact laws,
the President executes the laws. The executive power is
10
 vested in the President. It is generally defined as the
power to enforce and administer the laws. It is the power
of carrying the laws into practical operation and enforcing
their due observance.
As head of the Executive Department, the President is the
Chief Executive. He represents the government as a
whole and sees to it that all laws are enforced by the
officials and employees of his department. He has control
over the executive department, bureaus and offices. This
means that he has the authority to assume directly the
functions of the executive department, bureau and office,
or interfere with the discretion of its officials. Corollary to
the power of control, the President also has the duty of
supervising and enforcement of laws for the maintenance
of general peace and public order. Thus, he is granted
administrative power over bureaus and offices under his
control to enable him to discharge his duties effectively.[25]
(Italics omitted, underscoring supplied)
The Constitutions express grant of the power of control in the President
justifies an executive action to carry out reorganization measures under a
broad authority of law.[26]
In enacting a statute, the legislature is presumed to have deliberated with
full knowledge of all existing laws and jurisprudence on the subject.[27] It is
thus reasonable to conclude that in passing a statute which places an agency
under the Office of the President, it was in accordance with existing laws
and jurisprudence on the Presidents power to reorganize.
In establishing an executive department, bureau or office, the legislature
necessarily ordains an executive agencys position in the scheme of
administrative structure. Such determination is primary,[28] but subject to the
Presidents continuing authority to reorganize the administrative
structure. As far as bureaus, agencies or offices in the executive department
are concerned, the power of control may justify the President to deactivate
the functions of a particular office. Or a law may expressly grant the
President the broad authority to carry out reorganization measures.[29] The
Administrative Code of 1987 is one such law:[30]
ADMINLAW CASES
SEC. 30. Functions of Agencies under the Office of the
President. Agencies under the Office of the President
shall continue to operate and function in accordance with
their respective charters or laws creating them, except as
otherwise provided in this Code or by law.
SEC. 31. Continuing Authority of the President to
Reorganize his Office. The President, subject to the
policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have
continuing authority to reorganize the administrative
structure of the Office of the President. For this purpose,
he may take any of the following actions:
(1) Restructure the internal organization of the Office of
the President Proper, including the immediate Offices, the
Presidential Special Assistants/Advisers System and the
Common Staff Support System, by abolishing,
consolidating, or merging units thereof or transferring
functions from one unit to another;
(2) Transfer any function under the Office of the President
to any other Department or Agency as well as transfer
functions to the Office of the President from other
Departments and Agencies; and
(3) Transfer any agency under the Office of the President
to any other department or agency as well as transfer
agencies to the Office of the President from other
departments or agencies.[31] (Italics in the original;
emphasis and underscoring supplied)
In carrying out the laws into practical operation, the President is best
equipped to assess whether an executive agency ought to continue operating
in accordance with its charter or the law creating it. This is not to say that
the legislature is incapable of making a similar assessment and appropriate
action within its plenary power. The Administrative Code of 1987 merely
underscores the need to provide the President with suitable solutions to
situations on hand to meet the exigencies of the service that may call for the
exercise of the power of control.
11

x x x The law grants the President this power in
recognition of the recurring need of every President to
reorganize his office to achieve simplicity, economy and
efficiency. The Office of the President is the nerve center
of the Executive Branch. To remain effective and
efficient, the Office of the President must be capable of
being shaped and reshaped by the President in the
manner he deems fit to carry out his directives and
policies. After all, the Office of the President is the
command post of the President. This is the rationale
behind the Presidents continuing authority to reorganize
the administrative structure of the Office of the
President.[32]
The Office of the President consists of the Office of the President proper
and the agencies under it.[33] It is not disputed that PCUP and NCIP were
formed as agencies under the Office of the President.[34] The Agencies under
the Office of the President refer to those offices placed under the
chairmanship of the President, those under the supervision and control of
the President, those under the administrative supervision of the Office of the
President, those attached to the Office for policy and program coordination,
and those that are not placed by law or order creating them under any
special department.[35]
As thus provided by law, the President may transfer any agency under the
Office of the President to any other department or agency, subject to the
policy in the Executive Office and in order to achieve simplicity, economy
and efficiency. Gauged against these guidelines,[36] the challenged executive
orders may not be said to have been issued with grave abuse of discretion or
in violation of the rule of law.
The references in E.O. 364 to asset reform as an anti-poverty measure for
social justice and to rationalization of the bureaucracy in furtherance of
good government[37] encapsulate a portion of the existing policy in the
Executive Office. As averred by the OSG, the President saw it fit to
streamline the agencies so as not to hinder the delivery of crucial social
reforms.[38]
ADMINLAW CASES
The consolidation of functions in E.O. 364 aims to attain the objectives of
simplicity, economy and efficiency as gathered from the provision granting
PCUP and NCIP access to the range of services provided by the DARs
technical offices and support systems.[39]
The characterization of the NCIP as an independent agency under the Office
of the President does not remove said body from the Presidents control and
supervision with respect to its performance of administrative functions. So
it has been opined:
That Congress did not intend to place the NCIP under the
control of the President in all instances is evident in the
IPRA itself, which provides that the decisions of the
NCIP in the exercise of its quasi-judicial functions shall
be appealable to the Court of Appeals, like those of the
National Labor Relations Commission (NLRC) and the
Securities and Exchange Commission (SEC).
Nevertheless, the NCIP, although independent to a
certain degree, was placed by Congress under the office
of the President and, as such, is still subject to the
Presidents power of control and supervisiongranted
under Section 17, Article VII of the Constitution with
respect to its performance of administrative functions[.]
[40]
(Underscoring supplied)
In transferring the NCIP to the DAR as an attached agency, the President
effectively tempered the exercise of presidential authority and considerably
recognized that degree of independence.
The Administrative Code of 1987 categorizes administrative relationships
into (1) supervision and control, (2) administrative supervision, and (3)
attachment.[41] With respect to the third category, it has been held that an
attached agency has a larger measure of independence from the Department
to which it is attached than one which is under departmental supervision
and control or administrative supervision. This is borne out by the lateral
relationship between the Department and the attached agency. The
attachment is merely for policy and program coordination.[42] Indeed, the
essential autonomous character of a board is not negated by its attachment
to a commission.[43]
12

AMIN argues, however, that there is an anachronism of sorts because there
can be no policy and program coordination between conceptually different
areas of reform. It claims that the new framework subsuming agrarian
reform, urban land reform and ancestral domain reform is fundamentally
incoherent in view of the widely different contexts.[44] And it posits that it is
a substantive transformation or reorientation that runs contrary to the
constitutional scheme and policies.
AMIN goes on to proffer the concept of ordering the law[45] which, so it
alleges, can be said of the Constitutions distinct treatment of these three
areas, as reflected in separate provisions in different parts of the
Constitution.[46] It argues that the Constitution did not intend an over-
arching concept of agrarian reform to encompass the two other areas, and
that how the law is ordered in a certain way should not be undermined by
mere executive orders in the guise of administrative efficiency.
The Court is not persuaded.
The interplay of various areas of reform in the promotion of social justice is
not something implausible or unlikely.[47] Their interlocking nature cuts
across labels and works against a rigid pigeonholing of executive tasks
among the members of the Presidents official family. Notably, the
Constitution inhibited from identifying and compartmentalizing the
composition of the Cabinet. In vesting executive power in one person rather
than in a plural executive, the evident intention was to invest the power
holder with energy.[48]
AMIN takes premium on the severed treatment of these reform areas in
marked provisions of the Constitution. It is a precept, however, that
inferences drawn from title, chapter or section headings are entitled to very
little weight.[49] And so must reliance on sub-headings,[50] or the lack thereof,
to support a strained deduction be given the weight of helium.
Secondary aids may be consulted to remove, not to create doubt.
[51]
AMINs thesis unsettles, more than settles the order of things in
construing the Constitution. Its interpretation fails to clearly establish that
the so-called ordering or arrangement of provisions in the Constitution was
ADMINLAW CASES
consciously adopted to imply a signification in terms of government
hierarchy from where a constitutional mandate can per se be derived or
asserted. It fails to demonstrate that the ordering or layout was not simply a
matter of style in constitutional drafting but one of intention in government
structuring. With its inherent ambiguity, the proposed interpretation cannot
be made a basis for declaring a law or governmental act unconstitutional.
A law has in its favor the presumption of constitutionality. For it to be
nullified, it must be shown that there is a clear and unequivocal breach of
the Constitution. The ground for nullity must be clear and beyond
reasonable doubt.[52] Any reasonable doubt should, following the universal
rule of legal hermeneutics, be resolved in favor of the constitutionality of a
law.[53]
Ople v. Torres[54] on which AMIN relies is unavailing. In that case, an
administrative order involved a system of identification that required a
delicate adjustment of various contending state policies properly lodged in
the legislative arena. It was declared unconstitutional for dealing with a
subject that should be covered by law and for violating the right to privacy.
In the present case, AMIN glaringly failed to show how the reorganization
by executive fiat would hamper the exercise of citizens rights and
privileges. It rested on the ambiguous conclusion that the reorganization
jeopardizes economic, social and cultural rights. It intimated, without
expounding, that the agendum behind the issuances is to weaken the
indigenous peoples rights in favor of the mining industry. And it raised
concerns about the possible retrogression in DARs performance as the
added workload may impede the implementation of the comprehensive
agrarian reform program.
AMIN has not shown, however, that by placing the NCIP as an attached
agency of the DAR, the President altered the nature and dynamics of the
jurisdiction and adjudicatory functions of the NCIP concerning all claims
and disputes involving rights of indigenous cultural communities and
13
indigenous peoples. Nor has it been shown, nay alleged, that the
reorganization was made in bad faith.[55]
As for the other arguments raised by AMIN which pertain to the wisdom or
soundness of the executive decision, the Court finds it unnecessary to pass
upon them. The raging debate on the most fitting framework in the delivery
of social services is endless in the political arena. It is not the business of
this Court to join in the fray. Courts have no judicial power to review cases
involving political questions and, as a rule, will desist from taking
cognizance of speculative or hypothetical cases, advisory opinions and
cases that have become moot.[56]
Finally, a word on the last ground proffered for declaring the
unconstitutionality of the assailed issuances that they violate Section 16,
Article XIII of the Constitution[57] on the peoples right to participate in
decision-making through adequate consultation mechanisms.
The framers of the Constitution recognized that the consultation
mechanisms were already operating without the States action by law, such
that the role of the State would be mere facilitation, not necessarily creation
of these consultation mechanisms. The State provides the support, but
eventually it is the people, properly organized in their associations, who can
assert the right and pursue the objective. Penalty for failure on the part of
the government to consult could only be reflected in the ballot box and
would not nullify government action.[58]
WHEREFORE, the petition is DISMISSED. Executive Order Nos. 364
and 379 issued on September 27, 2004 and October 26, 2004, respectively,
are declared not unconstitutional.
SO ORDERED.
G.R. No. 97149. March 31, 1992.*
FIDENCIO Y. BEJA, SR., petitioner, vs. COURT OF
APPEALS, HONORABLE REINERIO O. REYES, in his capacity as
Secretary of the Department of Transportation and Communications;
COMMODORE ROGELIO A. DAYAN, in his capacity as General
Manager of the Philippine Ports Authority; DEPARTMENT OF
TRANSPORTATION AND COMMUNICATIONS,
ADMINLAW CASES
ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A.
VILLALUZ, in his capacity as Chairman of the Administrative Action
Board, DOTC, respondents.
Administrative Law; Suspension; Preventive suspension distinct
from the administrative penalty of removal from office such as one
mentioned in Sec. 8 (d) of P.D. No. 857.Imposed during the pendency of
an administrative investigation, preventive suspension is not a penalty in
itself. It is merely a measure of precaution so that the employee who is
charged may be separated, for obvious reasons, from the scene of his
alleged misfeasance while the same is being investigated. Thus preventive
suspension is distinct from the administrative penalty of removal from
office such as the one mentioned in Sec. 8 (d) of P.D. No. 857. While the
former may be imposed on a respondent during the investigation of the
charges against him, the latter is the penalty which may only be meted upon
him at the termination of the investigation or the final disposition of the
case.
Same; Same; The PPA general manager is the disciplining
authority who may by himself and without the approval of the PPA Board of
Directors subject a respondent in an administrative case to preventive
suspension.The PPA general manager is the disciplining authority who
may, by himself and without the approval of the PPA Board of Directors,
subject a respondent in an administrative case to preventive suspension. His
disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857
aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies
the jurisdiction to investigate and decide matters involving disciplinary
actions against officers and employees in the PPA.
Same; Same; Preventive suspension may be lifted even if the
disciplining authority has not finally decided the administrative case
provided the ninety-day period from the effectivity of the preventive
suspension has been exhausted.Parenthetically, the period of preventive
suspension is limited. It may be lifted even if the disciplining authority has
not finally decided the administrative case provided the ninety-day period
from the effectivity of the preventive suspension has been exhausted. The
employee concerned may then be reinstated. However, the said ninety-day
period may be interrupted. Section 42 of P.D. No. 807 also mandates that
any fault, negligence or petition of a suspended employee may not be
considered in the computation of the said period. Thus, when a suspended
employee obtains from a court of justice a restraining order or a preliminary
injunction inhibiting proceedings in an administrative case, the lifespan of
14
such court order should be excluded in the reckoning of the permissible
period of the preventive suspension.
Same; Same; By vesting the power to remove erring employees on
the General Manager, with the approval of the PPA Board of Directors, the
law impliedly grants said officials the power to investigate its personnel
below the rank of Assistant Manager who may be charged with an
administrative offense.Although the foregoing section does not expressly
provide for a mechanism for an administrative investigation of personnel,
by vesting the power to remove erring employees on the General Manager,
with the approval of the PPA Board of Directors, the law impliedly grants
said officials the power to investigate its personnel below the rank of
Assistant Manager who may be charged with an administrative offense.
During such investigation,the PPA General Manager, as earlier stated, may
subject the employee concerned to preventive suspension. The investigation
should be conducted in accordance with the procedure set out in Sec. 38 of
P.D. No. 807. Beja, Sr. vs. Court of Appeals, 207 SCRA 689, G.R. No.
97149 March 31, 1992
ROMERO, J.:
The instant petition for certiorari questions the jurisdiction of the Secretary
of the Department of Transportation and Communications (DOTC) and/or
its Administrative Action Board (AAB) over administrative cases involving
personnel below the rank of Assistant General Manager of the Philippine
Ports Authority (PPA), an agency attached to the said Department.
1
Petitioner Fidencio Y. Beja, Sr. was first employed by the PPA as arrastre
supervisor in 1975. He became Assistant Port Operations Officer in 1976
and Port Operations Officer in 1977. In February 1988, as a result of the
reorganization of the PPA, he was appointed Terminal Supervisor.
On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed
Administrative Case No. 11-04-88 against petitioner Beja and Hernando G.
Villaluz for grave dishonesty, grave misconduct, willful violation of
ADMINLAW CASES
reasonable office rules and regulations and conduct prejudicial to the best
interest of the service. Beja and Villaluz allegedly erroneously assessed
storage fees resulting in the loss of P38,150.77 on the part of the PPA.
Consequently, they were preventively suspended for the charges. After a
preliminary investigation conducted by the district attorney for Region X,
Administrative Case No. 11-04-88 was "considered closed for lack of
merit."
On December 13, 1988, another charge sheet, docketed as Administrative
Case No. 12-01-88, was filed against Beja by the PPA General Manager
also for dishonesty, grave misconduct, violation of reasonable office rules
and regulations, conduct prejudicial to the best interest of the service and
for being notoriously undesirable. The charge consisted of six (6) different
specifications of administrative offenses including fraud against the PPA in
the total amount of P218,000.00. Beja was also placed under preventive
suspension pursuant to Sec. 41 of P.D. No. 807.
The case was redocketed as Administrative Case No. PPA-AAB-1-049-89
and thereafter, the PPA general manager indorsed it to the AAB for
"appropriate action." At the scheduled hearing, Beja asked for continuance
on the ground that he needed time to study the charges against him. The
AAB proceeded to hear the case and gave Beja an opportunity to present
evidence. However, on February 20, 1989, Beja filed a petition
for certiorari with preliminary injunction before the Regional Trial Court of
Misamis Oriental. 2 Two days later, he filed with the AAB a manifestation
and motion to suspend the hearing of Administrative Case No. PPA-AAB-1-
049-89 on account of the pendency of the certiorari proceeding before the
15
court. AAB denied the motion and continued with the hearing of the
administrative case.
Thereafter, Beja moved for the dismissal of the certiorari case below and
proceeded to file before this Court a petition for certiorari with preliminary
injunction and/or temporary restraining order. The case was docketed as
G.R. No. 87352 captioned "Fidencio Y. Beja v. Hon. Reinerio 0. Reyes, etc.,
et al." In the en banc resolution of March 30, 1989, this Court referred the
case to the Court of Appeals for "appropriate action." 3 G.R. No. 87352 was
docketed in the Court of Appeals as CA-G.R. SP No. 17270.
Meanwhile, a decision was rendered by the AAB in Administrative Case
No. PPA-AAB-049-89. Its dispositive portion reads:
WHEREFORE, judgment is hereby rendered, adjudging
the following, namely:
a) That respondents Geronimo Beja, Jr. and Hernando
Villaluz are exonerated from the charge against them;
b) That respondent Fidencio Y. Beja be dismissed from
the service;
c) That his leave credits and retirement benefits are
declared forfeited;
d) That he be disqualified from re-employment in the
government service;
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e) That his eligibility is recommended to be cancelled.
Pasig, Metro Manila, February 28, 1989.
On December 10, 1990, after appropriate proceedings, the Court of Appeals
also rendered a decision 4 in CA-G.R. SP No. 17270 dismissing the petition
for certiorari for lack of merit. Hence, Beja elevated the case back to this
Court through an "appeal by certiorari with preliminary injunction and/or
temporary restraining order."
We find the pleadings filed in this case to be sufficient bases for arriving at
a decision and hence, the filing of memoranda has been dispensed with.
In his petition, Beja assails the Court of Appeals for having "decided
questions of substance in a way probably not in accord with law or with the
applicable decisions" of this Court. 5 Specifically, Beja contends that the
Court of Appeals failed to declare that: (a) he was denied due process; (b)
the PPA general manager has no power to issue a preventive suspension
order without the necessary approval of the PPA board of directors; (c) the
PPA general manager has no power to refer the administrative case filed
against him to the DOTC-AAB, and (d) the DOTC Secretary, the Chairman
of the DOTC-AAB and DOTC-AAB itself as an adjudicatory body, have no
jurisdiction to try the administrative case against him. Simply put, Beja
challenges the legality of the preventive suspension and the jurisdiction of
the DOTC Secretary and/or the AAB to initiate and hear administrative
cases against PPA personnel below the rank of Assistant General Manager.
16
Petitioner anchors his contention that the PPA general manager cannot
subject him to a preventive suspension on the following provision of Sec. 8,
Art. V of Presidential Decree No. 857 reorganizing the PPA:
(d) the General Manager shall, subject to the approval of
the Board, appoint and remove personnel below the rank
of Assistant General Manager. (Emphasis supplied.)
Petitioner contends that under this provision, the PPA Board of Directors
and not the PPA General Manager is the "proper disciplining authority. 6
Imposed during the pendency of an administrative investigation, preventive
suspension is not a penalty in itself. It is merely a measure of precaution so
that the employee who is charged may be separated, for obvious reasons,
from the scene of his alleged misfeasance while the same is being
investigated. 7 Thus, preventive suspension is distinct from the
administrative penalty of removal from office such as the one mentioned in
Sec. 8(d) of P.D. No 857. While the former may be imposed on a respondent
during the investigation of the charges against him, the latter is the penalty
which may only be meted upon him at the termination of the investigation
or the final disposition of the case.

As correctly observed by the Solicitor General, the petitioner erroneously

The PPA general manager is the disciplining authority who may, by himself
equates "preventive suspension" as a remedial measure with "suspension"
and without the approval of the PPA Board of Directors, subject a
as a penalty for administrative dereliction. The imposition of preventive
respondent in an administrative case to preventive suspension. His
suspension on a government employee charged with an administrative
disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857
offense is subject to the following provision of the Civil Service Law, P.D.
aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies
No. 807:
the "jurisdiction to investigate and decide matters involving disciplinary
actions against officers and employees" in the PPA.
Sec. 41. Preventive Suspension. The proper
disciplining authority may preventively suspend any
Parenthetically, the period of preventive suspension is limited. It may be
subordinate officer or employee under his authority
lifted even if the disciplining authority has not finally decided the
pending an investigation, if the charge against such officer
administrative case provided the ninety-day period from the effectivity of
or employee involves dishonesty, oppression or grave
the preventive suspension has been exhausted. The employee concerned
misconduct, or neglect in the performance of duty, or if
may then be reinstated. 8 However, the said ninety-day period may be
there are reasons to believe that the respondent is guilty of
interrupted. Section 42 of P.D. No. 807 also mandates that any fault,
charges which would warrant his removal from the
negligence or petition of a suspended employee may not be considered in
service.
the computation of the said period. Thus, when a suspended employee

17
ADMINLAW CASES
obtains from a court of justice a restraining order or a preliminary
injunction inhibiting proceedings in an administrative case, the lifespan of
such court order should be excluded in the reckoning of the permissible
period of the preventive suspension. 9
With respect to the issue of whether or not the DOTC Secretary and/or the
AAB may initiate and hear administrative cases against PPA Personnel
below the rank of Assistant General Manager, the Court qualifiedlyrules in
favor of petitioner.
The PPA was created through P.D. No. 505 dated July 11, 1974. Under that
Law, the corporate powers of the PPA were vested in a governing Board of
Directors known as the Philippine Port Authority Council. Sec. 5(i) of the
same decree gave the Council the power "to appoint, discipline and remove,
and determine the composition of the technical staff of the Authority and
other personnel."
On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See.
4(a) thereof created the Philippine Ports Authority which would be
"attached" to the then Department of Public Works, Transportation and
Communication. When Executive Order No. 125 dated January 30, 1987
reorganizing the Ministry of Transportation and Communications was
issued, the PPA retained its "attached" status. 10 Even Executive Order No.
292 or the Administrative Code of 1987 classified the PPA as an agency
"attached" to the Department of Transportation and Communications
(DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of the same Code
provides that the agencies attached to the DOTC "shall continue to operate
ADMINLAW CASES
and function in accordance with the respective charters or laws creating
them, except when they conflict with this Code."
Attachment of an agency to a Department is one of the three administrative
relationships mentioned in Book IV, Chapter 7 of the Administrative Code
of 1987, the other two being supervision and control and administrative
supervision. "Attachment" is defined in Sec. 38 thereof as follows:
(3) Attachment. (a) This refers to the lateral
relationship between the Department or its equivalent
and the attached agency or corporation for purposes of
policy and program coordination. The coordination shall
be accomplished by having the department represented in
the governing board of the attached agency or
corporation, either as chairman or as a member, with or
without voting rights, if this is permitted by the charter;
having the attached corporation or agency comply with a
system of periodic reporting which shall reflect the
progress of programs and projects; and having the
department or its equivalent provide general policies
through its representative in the board, which shall serve
as the framework for the internal policies of the attached
corporation or agency;
(b) Matters of day-to-day administration or all those
pertaining to internal operations shall he left to the
discretion or judgment of the executive officer of the
agency or corporation. In the event that the Secretary and
18
 the head of the board or the attached agency or
corporation strongly disagree on the interpretation and
application of policies, and the Secretary is unable to
resolve the disagreement, he shall bring the matter to the
President for resolution and direction;
(c) Government-owned or controlled corporations
attached to a department shall submit to the Secretary
concerned their audited financial statements within sixty
(60) days after the close of the fiscal year; and
(d) Pending submission of the required financial
statements, the corporation shall continue to operate on
the basis of the preceding year's budget until the financial
statements shall have been submitted. Should any
government-owned or controlled corporation incur an
operation deficit at the close of its fiscal year, it shall be
subject to administrative supervision of the department;
and the corporation's operating and capital budget shall be
subject to the department's examination, review,
modification and approval. (emphasis supplied.)
An attached agency has a larger measure of independence from the
Department to which it is attached than one which is under departmental
supervision and control or administrative supervision. This is borne out by
the "lateral relationship" between the Department and the attached agency.
The attachment is merely for "policy and program coordination." With
respect to administrative matters, the independence of an attached agency
ADMINLAW CASES
from Departmental control and supervision is further reinforced by the fact
that even an agency under a Department's administrative supervision is free
from Departmental interference with respect to appointments and other
personnel actions "in accordance with the decentralization of personnel
functions" under the Administrative Code of 1987. 11 Moreover, the
Administrative Code explicitly provides that Chapter 8 of Book IV on
supervision and control shall not apply to chartered institutions attached to a
Department. 12
Hence, the inescapable conclusion is that with respect to the management of
personnel, an attached agency is, to a certain extent, free from Departmental
interference and control. This is more explicitly shown by P.D. No. 857
which provides:
Sec. 8. Management and Staff. a) The President shall,
upon the recommendation of the Board, appoint the
General Manager and the Assistant General Managers.
(b) All other officials and employees of the Authority
shall be selected and appointed on the basis of merit and
fitness based on a comprehensive and progressive merit
system to be established by the Authority immediately
upon its organization and consistent with Civil Service
rules and regulations.The recruitment, transfer,
promotion, and dismissal of all personnel of the
Authority, including temporary workers, shall be
governed by such merit system.
19
 (c) The General Manager shall, subject to the approval of
the Board, determine the staffing pattern and the number
of personnel of the Authority, define their duties and
responsibilities, and fix their salaries and emoluments.
For professional and technical positions, the General
Manager shall recommend salaries and emoluments that
are comparable to those of similar positions in other
government-owned corporations, the provisions of
existing rules and regulations on wage and position
classification notwithstanding.
(d) The General Manager shall, subject to the approval
by the Board, appoint and remove personnel below the
rank of Assistant General Manager.
xxx xxx xxx
(emphasis supplied.)
Although the foregoing section does not expressly provide for a mechanism
for an administrative investigation of personnel, by vesting the power to
remove erring employees on the General Manager, with the approval of the
PPA Board of Directors, the law impliedly grants said officials the power to
investigate its personnel below the rank of Assistant Manager who may be
charged with an administrative offense. During such investigation, the PPA
General Manager, as earlier stated, may subject the employee concerned to
preventive suspension. The investigation should be conducted in accordance
with the procedure set out in Sec. 38 of P.D. No. 807. 13 Only after gathering
ADMINLAW CASES
sufficient facts may the PPA General Manager impose the proper penalty in
accordance with law. It is the latter action which requires the approval of the
PPA Board of Directors. 14
From an adverse decision of the PPA General Manager and the Board of
Directors, the employee concerned mayelevate the matter to the Department
Head or Secretary. Otherwise, he may appeal directly to the Civil Service
Commission. The permissive recourse to the Department Secretary is
sanctioned by the Civil Service Law (P.D. No. 807) under the following
provisions:
Sec. 37. Disciplinary Jurisdiction. (a) The
Commission shall decide upon appeal all administrative
disciplinary cases involving the imposition of a penalty of
suspension for more than thirty days, or fine in an amount
exceeding thirty days salary, demotion in rank or salary or
transfer, removal or dismissal from office. A complaint
may be filed directly with the Commission by a private
citizen against a government official or employee in
which case it may hear and decide the case or it may
deputize any department or agency or official or group of
officials to conduct the investigation. The results of the
investigation shall be submitted to the Commission with
recommendation as to the penalty to be imposed or other
action to be taken.
(b) The heads of departments, agencies and
instrumentalities, provinces, cities and municipalities
20
 shall have jurisdiction to investigate and decide matters
involving disciplinary action against officers
employees under their jurisdiction. The 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.
xxx xxx xxx
(Emphasis supplied.)
It is, therefore, clear that the transmittal of the complaint by the PPA
General Manager to the AAB was premature. The PPA General Manager
should have first conducted an investigation, made the proper
recommendation for the imposable penalty and sought its approval by the
PPA Board of Directors. It was discretionary on the part of the herein
petitioner to elevate the case to the then DOTC Secretary Reyes. Only then
could the AAB take jurisdiction of the case.
The AAB, which was created during the tenure of Secretary Reyes under
Office Order No. 88-318 dated July 1, 1988, was designed to act, decide
and recommend to him "all cases of administrative malfeasance,
ADMINLAW CASES
irregularities, grafts and acts of corruption in the Department." Composed
and of a Chairman and two (2) members, the AAB came into being pursuant to
15
Administrative Order No. 25 issued by the President on May 25, 1987. Its
special nature as a quasi-judicial administrative body notwithstanding, the
AAB is not exempt from the observance of due process in its
proceedings. 16 We are not satisfied that it did so in this case the respondents
protestation that petitioner waived his right to be heard notwithstanding. It
should be observed that petitioner was precisely questioning the AAB's
jurisdiction when it sought judicial recourse.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar
as it upholds the power of the PPA General Manager to subject petitioner to
preventive suspension and REVERSED insofar as it validates the
jurisdiction of the DOTC and/or the AAB to act on Administrative Case No.
PPA-AAB-1-049-89 and rules that due process has been accorded the
petitioner.
The AAB decision in said case is hereby declared NULL and VOID and the
case in REMANDED to the PPA whose General Manager shall conduct
with dispatch its reinvestigation.
The preventive suspension of petitioner shall continue unless after a
determination of its duration, it is found that he had served the total of
ninety (90) days in which case he shall be reinstated immediately.
SO ORDERED.
G.R. No. 115863. March 31, 1995.*
21
AIDA D. EUGENIO, petitioner, vs. CIVIL SERVICE COMMISSION,
HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR., respondents.
Civil Service Law; P.D. No. 1; Career Executive Service Board; Career
Executive Service Board (CESB) was created by P.D. No. 1 on September
1, 1974.The controlling fact is that the Career Executive Service Board
(CESB) was created by Presidential Decree (P.D.) No. 1 on September 1,
1974 which adopted the Integrated Reorganization Plan.
Same; Same; Same; As CESB was created by law, it can only be abolished
by the legislature.It cannot be disputed, therefore, that as the CESB was
created by law, it can only be abolished by the legislature. This follows an
unbroken stream of rulings that the creation and abolition of public offices
is primarily a legislative function.
Same; Same; Same; CESB was intended to be an autonomous entity, albeit
administratively attached to respondent Commission.From its inception,
the CESB was intended to be an autonomous entity, albeit administratively
attached to respondent Commission. As conceptualized by the
Reorganization Committee the CESB shall be autonomous. It is expected
to view the problem of building up executive manpower in the government
with a broad and positive outlook. The essential autonomous character of
the CESB is not negated by its attachment to respondent Commission. By
said attachment, CESB was not made to fall within the control of
respondent Commission.
ADMINLAW CASES
Administrative Law; Civil Service Law; Purpose of attaching one
functionally inter-related government agency to another is to attain policy
and program coordination.Under the Administrative Code of 1987, the
purpose of attaching one functionally inter-related government agency to
another is to attain policy and program coordination. This is clearly
etched out in Section 38(3), Chapter 7, Book IV of the aforecited Code.
Eugenio vs. Civil Service Commission, 243 SCRA 196, G.R. No. 115863
March 31, 1995
PUNO, J.:
The power of the Civil Service Commission to abolish the Career Executive
Service Board is challenged in this petition for certiorari and prohibition.
First the facts. Petitioner is the Deputy Director of the Philippine Nuclear
Research Institute. She applied for a Career Executive Service (CES)
Eligibility and a CESO rank on August 2, 1993, she was given a CES
eligibility. On September 15, 1993, she was recommended to the President
for a CESO rank by the Career Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil
Service Commission 2 passed Resolution No. 93-4359, viz:
RESOLUTION NO. 93-4359
WHEREAS, Section 1(1) of Article IX-B provides that
Civil Service shall be administered by the Civil Service
Commission, . . .;
22
 WHEREAS, Section 3, Article IX-B of the 1987
Philippine Constitution provides that "The Civil Service
Commission, as the central personnel agency of the
government, is mandated to establish a career service and
adopt measures to promote morale, efficiency, integrity,
responsiveness, progresiveness and courtesy in the civil
service, . . .";
WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of
the Administrative Code of 1987 grants the Commission
the power, among others, to administer and enforce the
constitutional and statutory provisions on the merit
system for all levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the
Administrative Code of 1987 Provides, among others, that
The Career Service shall be characterized by (1) entrance
based on merit and fitness to be determined as far as
practicable by competitive examination, or based highly
technical qualifications; (2) opportunity for advancement
to higher career positions; and (3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of
the administrative Code of 1987 provides that "The third
level shall cover Positions in the Career Executive
Service";
ADMINLAW CASES
WHEREAS, the Commission recognizes the imperative
need to consolidate, integrate and unify the administration
of all levels of positions in the career service.
WHEREAS, the provisions of Section 17, Title I, Subtitle
A. Book V of the Administrative Code of 1987 confers on
the Commission the power and authority to effect changes
in its organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution
provides that the Civil Service Commission shall enjoy
fiscal autonomy and the necessary implications thereof;
NOW THEREFORE, foregoing premises considered, the
Civil Service Commission hereby resolves to streamline
reorganize and effect changes in its organizational
structure. Pursuant thereto, the Career Executive Service
Board, shall now be known as the Office for Career
Executive Service of the Civil Service Commission.
Accordingly, the existing personnel, budget, properties
and equipment of the Career Executive Service Board
shall now form part of the Office for Career Executive
Service.
The above resolution became an impediment. to the appointment of
petitioner as Civil Service Officer, Rank IV. In a letter to petitioner, dated
June 7, 1994, the Honorable Antonio T. Carpio, Chief Presidential legal
Counsel, stated:
23
 xxx xxx xxx A.

On 1 October 1993 the Civil Service Commission issued IN VIOLATION OF THE CONSTITUTION,
CSC Resolution No. 93-4359 which abolished the Career RESPONDENT COMMISSION USURPED THE
Executive Service Board. LEGISLATIVE FUNCTIONS OF CONGRESS WHEN
IT ABOLISHED THE CESB, AN OFFICE CREATED
Several legal issues have arisen as a result of the issuance BY LAW, THROUGH THE ISSUANCE OF CSC:
of CSC Resolution No. 93-4359, including whether the RESOLUTION NO. 93-4359;
Civil Service Commission has authority to abolish the
Career Executive Service Board. Because these issues B.
remain unresolved, the Office of the President has
refrained from considering appointments of career service ALSO IN VIOLATION OF THE CONSTITUTION,

eligibles to career executive ranks. RESPONDENT CSC USURPED THE LEGISLATIVE

xxx xxx xxx
You may, however, bring a case before the appropriate
court to settle the legal issues arising from issuance by the
Civil Service Commission of CSC Resolution No. 93-
4359, for guidance of all concerned.
Thank You.
Finding herself bereft of further administrative relief as the Career
Executive Service Board which recommended her CESO Rank IV has been
abolished, petitioner filed the petition at bench to annul, among others,
resolution No. 93-4359. The petition is anchored on the following
arguments:
FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY
AUTHORIZED THE TRANSFER OF PUBLIC MONEY,
THROUGH THE ISSUANCE OF CSC RESOLUTION
NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the
contentions of petitioner. Respondent Commission, however, chose to
defend its ground. It posited the following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF
ACTION AGAINST THE PUBLIC RESPONDENT-
CSC.

24
ADMINLAW CASES
 II. THE RECOMMENDATION SUBMITTED TO THE HONORABLE MEMBERS OF THE HOUSE OF
PRESIDENT FOR APPOINTMENT TO A CESO RANK REPRESENTATIVES, NAMELY: SIMEON A.
OF PETITIONER EUGENIO WAS A VALID ACT OF DATUMANONG, FELICIANO R. BELMONTE, JR.,
THE CAREER EXECUTIVE SERVICE BOARD OF RENATO V. DIAZ, AND MANUEL M. GARCIA IN
THE CIVIL SERVICE COMMISSION AND IT DOES G.R. NO. 114380. THE AFOREMENTIONED
NOT HAVE ANY DEFECT. PETITIONERS ALSO QUESTIONED THE
INTEGRATION OF THE CESB WITH THE
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED COMMISSION.
FROM QUESTIONING THE VALIDITY OF THE
RECOMMENDATION OF THE CESB IN FAVOR OF We find merit in the petition. 3
PETITIONER EUGENIO SINCE THE PRESIDENT
HAS PREVIOUSLY APPOINTED TO CESO RANK The controlling fact is that the Career Executive Service Board (CESB) was

FOUR (4) OFFICIALS SIMILARLY SITUATED AS created in the Presidential Decree (P.D.) No. 1 on September 1,

SAID PETITIONER. FURTHERMORE, LACK OF 1974 4 which adopted the Integrated Plan. Article IV, Chapter I, Part of the

MEMBERS TO CONSTITUTE A QUORUM. III of the said Plan provides:

ASSUMING THERE WAS NO QUORUM, IS NOT THE

Article IV Career Executive Service
FAULT OF PUBLIC RESPONDENT CIVIL SERVICE
COMMISSION BUT OF THE PRESIDENT WHO HAS
1. A Career Executive Service is created to form a
THE POWER TO APPOINT THE OTHER MEMBERS
continuing pool of well-selected and development
OF THE CESB.
oriented career administrators who shall provide
competent and faithful service.
IV. THE INTEGRATION OF THE CESB INTO THE
COMMISSION IS AUTHORIZED BY LAW (Sec. 12 (1),
2. A Career Executive Service hereinafter referred to in
Title I, Subtitle A, Book V of the Administrative Code of
this Chapter as the Board, is created to serve as the
the 1987). THIS PARTICULAR ISSUE HAD ALREADY
governing body of the Career Executive Service. The
BEEN SETTLED WHEN THE HONORABLE COURT
Board shall consist of the Chairman of the Civil Service
DISMISSED THE PETITION FILED BY THE
Commission as presiding officer, the Executive Secretary

25
ADMINLAW CASES
 and the Commissioner of the Budget as ex- of government it is necessary to create and define duties,
officio members and two other members from the private the legislative department has the discretion to determine
sector and/or the academic community who are familiar whether additional offices shall be created, or whether
with the principles and methods of personnel these duties shall be attached to and become ex-
administration. officio duties of existing offices. An office created by the
legislature is wholly within the power of that body, and it
xxx xxx xxx may prescribe the mode of filling the office and the
powers and duties of the incumbent, and if it sees fit,
5. The Board shall promulgate rules, standards and
abolish the office.
procedures on the selection, classification, compensation
and career development of members of the Career In the petition at bench, the legislature has not enacted any law authorizing
Executive Service. The Board shall set up the the abolition of the CESB. On the contrary, in all the General
organization and operation of the service. (Emphasis Appropriations Acts from 1975 to 1993, the legislature has set aside funds
supplied) for the operation of CESB. Respondent Commission, however, invokes
Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative
It cannot be disputed, therefore, that as the CESB was created by law, it can
Code of 1987 as the source of its power to abolish the CESB. Section 17
only be abolished by the legislature. This follows an unbroken stream of
provides:
rulings that the creation and abolition of public offices is primarily a
legislative function. As aptly summed up in AM JUR 2d on Public Officers Sec. 17. Organizational Structure. Each office of the
and Commission shall be headed by a Director with at least
5
Employees, viz: one Assistant Director, and may have such divisions as
are necessary independent constitutional body, the
Except for such offices as are created by the Constitution,
Commission may effect changes in the organization as the
the creation of public offices is primarily a legislative
need arises.
function. In so far as the legislative power in this respect
is not restricted by constitutional provisions, it supreme, But as well pointed out by petitioner and the Solicitor General, Section 17
and the legislature may decide for itself what offices are must be read together with Section 16 of the said Code which enumerates
suitable, necessary, or convenient. When in the exigencies the offices under the respondent Commission, viz:

26
ADMINLAW CASES
 Sec. 16. Offices in the Commission. The Commission
shall have the following offices:
(1) The Office of the Executive Director headed by an
Executive Director, with a Deputy Executive Director
shall implement policies, standards, rules and regulations
promulgated by the Commission; coordinate the programs
of the offices of the Commission and render periodic
reports on their operations, and perform such other
public personnel management; administer management
improvement programs; and provide fiscal and budgetary
services.
(5) The Central Administrative Office shall provide the
Commission with personnel, financial, logistics and other
basic support services.
(6) The Office of Central Personnel Records shall

functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a
Chairman and two (2) members shall have the following
functions:
formulate and implement policies, standards, rules and
regulations pertaining to personnel records maintenance,
security, control and disposal; provide storage and
extension services; and provide and maintain library
services.

xxx xxx xxx (7) The Office of Position Classification and

Compensation shall formulate and implement policies,
(3) The Office of Legal Affairs shall provide the Chairman standards, rules and regulations relative to the
with legal advice and assistance; render counselling administration of position classification and
services; undertake legal studies and researches; prepare compensation.
opinions and ruling in the interpretation and application of
the Civil Service law, rules and regulations; prosecute (8) The Office of Recruitment, Examination and
violations of such law, rules and regulations; and Placement shall provide leadership and assistance in
represent the Commission before any court or tribunal. developing and implementing the overall Commission
programs relating to recruitment, execution and
(4) The Office of Planning and Management shall placement, and formulate policies, standards, rules and
formulate development plans, programs and projects; regulations for the proper implementation of the
undertake research and studies on the different aspects of Commission's examination and placement programs.

27
ADMINLAW CASES
 (9) The Office of Career Systems and Standards shall
provide leadership and assistance in the formulation and
evaluation of personnel systems and standards relative to
performance appraisal, merit promotion, and employee
incentive benefit and awards.
(10) The Office of Human Resource Development shall
provide leadership and assistance in the development and
retention of qualified and efficient work force in the Civil
Service; formulate standards for training and staff
development; administer service-wide scholarship
programs; develop training literature and materials;
coordinate and integrate all training activities and
evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall
develop policies, standards, rules and regulations for the
effective conduct or inspection and audit personnel and
personnel management programs and the exercise of
delegated authority; provide technical and advisory
services to Civil Service Regional Offices and
government agencies in the implementation of their
personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide
leadership and assistance in the development and
implementation of policies, standards, rules and
regulations in the accreditation of employee associations
ADMINLAW CASES
or organizations and in the adjustment and settlement of
employee grievances and management of employee
disputes.
(13) The Office of Corporate Affairs shall formulate and
implement policies, standards, rules and regulations
governing corporate officials and employees in the areas
of recruitment, examination, placement, career
development, merit and awards systems, position
classification and compensation, performing appraisal,
employee welfare and benefit, discipline and other aspects
of personnel management on the basis of comparable
industry practices.
(14) The Office of Retirement Administration shall be
responsible for the enforcement of the constitutional and
statutory provisions, relative to retirement and the
regulation for the effective implementation of the
retirement of government officials and employees.
(15) The Regional and Field Offices. The Commission
shall have not less than thirteen (13) Regional offices each
to be headed by a Director, and such field offices as may
be needed, each to be headed by an official with at least
the rank of an Assistant Director.
As read together, the inescapable conclusion is that respondent
Commission's power to reorganize is limited to offices under its
28
 control as enumerated in Section 16, supra. From its inception, the representative in the board, which shall serve as the
CESB was intended to be an autonomous entity, albeit framework for the internal policies of the attached
administratively attached to respondent Commission. As corporation or agency.
conceptualized by the Reorganization Committee "the CESB shall
be autonomous. It is expected to view the problem of building up Respondent Commission also relies on the case of Datumanong, et al.,

executive manpower in the government with a broad and positive vs. Civil Service Commission, G. R. No. 114380 where the petition assailing

outlook." 6 The essential autonomous character of the CESB is not the abolition of the CESB was dismissed for lack of cause of action. Suffice

negated by its attachment to respondent Commission. By said to state that the reliance is misplaced considering that the cited case was

attachment, CESB was not made to fall within the control of dismissed for lack of standing of the petitioner, hence, the lack of cause of

respondent Commission. Under the Administrative Code of 1987, action.

the purpose of attaching one functionally inter-related government

IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359
agency to another is to attain "policy and program coordination."
of the respondent Commission is hereby annulled and set aside. No costs.
This is clearly etched out in Section 38(3), Chapter 7, Book IV of
the aforecited Code, to wit:
SO ORDERED.

(3) Attachment. (a) This refers to the lateral

G.R. No. 102976. October 25, 1995.*
relationship between the department or its equivalent and
attached agency or corporation for purposes of policy and IRON AND STEEL AUTHORITY, petitioner, vs. THE COURT OF
program coordination. The coordination may be APPEALS and MARIA CRISTINA FERTILIZER CORPORATION,
accomplished by having the department represented in the respondents.
governing board of the attached agency or corporation,
either as chairman or as a member, with or without voting Actions; Parties; Pleadings and Practice; Those who can be parties to a civil
rights, if this is permitted by the charter; having the action may be broadly categorized into two (2) groupsi.e., persons,
attached corporation or agency comply with a system of whether natural or juridical, and, entities authorized by law.Rule 3,
periodic reporting which shall reflect the progress of Section 1 of the Rules of Court specifies who may be parties to a civil
programs and projects; and having the department or its action: Section 1. Who May Be Parties.Only natural or juridical persons
equivalent provide general policies through its or entities authorized by law may be parties in a civil action. Under the

29
ADMINLAW CASES
above quoted provision, it will be seen that those who can be parties to a
civil action may be broadly categorized into two (2) groups: (a) those who
are recognized as persons under the law whether natural, i.e., biological
persons, on the one hand, or juridical persons such as corporations, on the
other hand; and (b) entities authorized by law to institute actions.
Administrative Law; Government Owned and Controlled Corporations;
Government Agencies and Instrumentalities; The Iron and Steel Authority
(ISA) appears to be a non-incorporated agency or instrumentality of the
Republic of the Philippines, or more precisely of the Government of the
Republic of the Philippines.Clearly, ISA was vested with some of the
powers or attributes normally associated with juridical personality. There is,
however, no provision in P.D. No. 272 recognizing ISA as possessing
general or comprehensive juridical personality separate and distinct from
that of the Government. The ISA in fact appears to the Court to be a non-
incorporated agency or instrumentality of the Republic of the Philippines, or
more precisely of the Government of the Republic of the Philippines. It is
common knowledge that other agencies or instrumentalities of the
Government of the Republic are cast in corporate form, that is to say, are
incorporated agencies or instrumentalities, sometimes with and at other
times without capital stock, and accordingly vested with a juridical
personality distinct from the personality of the Republic.
Same; Same; Same; Words and Phrases; The term Authority has been
used to designate both incorporated and non-incorporated agencies or
instrumentalities of the Government.It is worth noting that the term
Authority has been used to designate both incorporated and non-
ADMINLAW CASES
incorporated agencies or instrumentalities of the Government. Same; Same;
Same; Agency; The ISA is an agent or delegate of the Republic, while the
Republic itself is a body corporate and juridical person vested with the full
panoply of powers and attributes which are compendiously described as
legal personality.We consider that the ISA is properly regarded as an
agent or delegate of the Republic of the Philippines. The Republic itself is a
body corporate and juridical person vested with the full panoply of powers
and attributes which are compendiously described as legal personality.
Same; Same; Same; Same; When the statutory term of a non-incorporated
agency expires, the powers, duties and functions as well as the assets and
liabilities of that agency revert back to, and are reassumed by, the Republic
of the Philippines, in the absence of special provisions of law specifying
some other disposition thereof.When the statutory term of a non-
incorporated agency expires, the powers, duties and functions as well as the
assets and liabilities of that agency revert back to, and are re-assumed by,
the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof such as e.g., devolution or
transmission of such powers, duties, functions, etc to some other identified
successor agency or instrumentality of the Republic of the Philippines.
When the expiring agency is an incorporated one, the consequences of such
expiry must be looked for, in the first instance, in the charter of that agency
and, by way of supplementation, in the provisions of the Corporation Code.
Since, in the instant case, ISA is a non-incorporated agency or
instrumentality of the Republic, its powers, duties, functions, assets and
liabilities are properly regarded as folded back into the Government of the
Republic of the Philippines and hence assumed once again by the Republic,
30
no special statutory provision having been shown to have mandated
succession thereto by some other entity or agency of the Republic.
Actions; Parties; Eminent Domain; The expiration of ISAs statutory term
did not by itself require or justify the dismissal of the eminent domain
proceedings.From the foregoing premises, it follows that the Republic of
the Philippines is entitled to be substituted in the expropriation proceedings
as party-plaintiff in lieu of ISA, the statutory term of ISA having expired.
Put a little differently, the expiration of ISAs statutory term did not by itself
require or justify the dismissal of the eminent domain proceedings.
Same; Same; Same; Pleadings and Practice; The non-joinder of the
Republic which occurred upon the expiration of ISAs statutory term was
not a ground for dismissal of the expropriation proceedings.It is also
relevant to note that the non-joinder of the Republic which occurred upon
the expiration of ISAs statutory term, was not a ground for dismissal of
such proceedings since a party may be dropped or added by order of the
court, on motion of any party or on the courts own initiative at any stage of
the action and on such terms as are just. In the instant case, the Republic has
precisely moved to take over the proceedings as party-plaintiff.
Same; Same; Same; Administrative Law; The Republic may initiate or
participate in actions involving its agents.In E.B. Marcha Transport
Company, Inc. v. Intermediate Appellate Court, the Court recognized that
the Republic may initiate or participate in actions involving its agents.
There the Republic of the Philippines was held to be a proper party to sue
for recovery of possession of property although the real or registered
owner of the property was the Philippine Ports Authority, a government
ADMINLAW CASES
agency vested with a separate juridical personality. The Court said: It can
be said that in suing for the recovery of the rentals, the Republic of the
Philippines acted as principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred on the latter as its agent.
x x x
Same; Same; Same; No new legislative act is necessary should the Republic
decide, upon being substituted for ISA, in fact to continue to prosecute the
expropriation proceedingsthe legislative authority, a long time ago,
enacted a continuing or standing delegation of authority to the President of
the Philippines to exercise, or cause the exercise of, the power of eminent
domain on behalf of the Government.While the power of eminent domain
is, in principle, vested primarily in the legislative department of the
government, we believe and so hold that no new legislative act is necessary
should the Republic decide, upon being substituted for ISA, in fact to
continue to prosecute the expropriation proceedings. For the legislative
authority, a long time ago, enacted a continuing or standing delegation of
authority to the President of the Philippines to exercise, or cause the
exercise of, the power of eminent domain on behalf of the Government of
the Republic of the Philippines. Iron and Steel Authority vs. Court of
Appeals, 249 SCRA 538, G.R. No. 102976 October 25, 1995
FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential
Decree (P.D.) No. 272 dated 9 August 1973 in order, generally, to develop
and promote the iron and steel industry in the Philippines. The objectives of
the ISA are spelled out in the following terms:
31
 Sec. 2. Objectives The Authority shall have the
following objectives:
(a) to strengthen the iron and steel industry of the
Philippines and to expand the domestic and export
markets for the products of the industry;
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. The authority shall have
the following powers and functions:
xxx xxx xxx

(b) to promote the consolidation, integration and (j) to initiate expropriation of land required for basic iron

rationalization of the industry in order to increase industry and steel facilities for subsequent resale and/or lease to

capability and viability to service the domestic market and the companies involved if it is shown that such use of the

to compete in international markets; State's power is necessary to implement the construction

of capacity which is needed for the attainment of the
(c) to rationalize the marketing and distribution of steel objectives of the Authority;
products in order to achieve a balance between demand
and supply of iron and steel products for the country and xxx xxx xxx

to ensure that industry prices and profits are at levels that

(Emphasis supplied)
provide a fair balance between the interests of investors,
consumers suppliers, and the public at large;
P.D. No. 272 initially created petitioner ISA for a term of five (5) years
counting from 9 August 1973. 1 When ISA's original term expired on 10
(d) to promote full utilization of the existing capacity of
October 1978, its term was extended for another ten (10) years by Executive
the industry, to discourage investment in excess capacity,
Order No. 555 dated 31 August 1979.
and in coordination, with appropriate government
agencies to encourage capital investment in priority areas
The National Steel Corporation ("NSC") then a wholly owned subsidiary of
of the industry;
the National Development Corporation which is itself an entity wholly
owned by the National Government, embarked on an expansion program
(e) to assist the industry in securing adequate and low-
embracing, among other things, the construction of an integrated steel mill
cost supplies of raw materials and to reduce the excessive
in Iligan City. The construction of such a steel mill was considered a
dependence of the country on imports of iron and steel.

32
ADMINLAW CASES
priority and major industrial project of the Government. Pursuant to the
expansion program of the NSC, Proclamation No. 2239 was issued by the
President of the Philippines on 16 November 1982 withdrawing from sale
or settlement a large tract of public land (totalling about 30.25 hectares in
area) located in Iligan City, and reserving that land for the use and
immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No.
2239 were occupied by a non-operational chemical fertilizer plant and
related facilities owned by private respondent Maria Cristina Fertilizer
Corporation ("MCFC"), Letter of Instruction (LOI), No. 1277, also dated 16
November 1982, was issued directing the NSC to "negotiate with the
owners of MCFC, for and on behalf of the Government, for the
compensation of MCFC's present occupancy rights on the subject land."
LOI No. 1277 also directed that should NSC and private respondent MCFC
fail to reach an agreement within a period of sixty (60) days from the date
of LOI No. 1277, petitioner ISA was to exercise its power of eminent
domain under P.D. No. 272 and to initiate expropriation proceedings in
respect of occupancy rights of private respondent MCFC relating to the
subject public land as well as the plant itself and related facilities and to
cede the same to the NSC. 2
Negotiations between NSC and private respondent MCFC did fail.
Accordingly, on 18 August 1983, petitioner ISA commenced eminent
domain proceedings against private respondent MCFC in the Regional Trial
Court, Branch 1, of Iligan City, praying that it (ISA) be places in possession
of the property involved upon depositing in court the amount of
ADMINLAW CASES
P1,760,789.69 representing ten percent (10%) of the declared market values
of that property. The Philippine National Bank, as mortgagee of the plant
facilities and improvements involved in the expropriation proceedings, was
also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in
favor of ISA. ISA in turn placed NSC in possession and control of the land
occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the
statutory existence of petitioner ISA expired on 11 August 1988. MCFC
then filed a motion to dismiss, contending that no valid judgment could be
rendered against ISA which had ceased to be a juridical person. Petitioner
ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion
to dismiss and did dismiss the case. The dismissal was anchored on the
provision of the Rules of Court stating that "only natural or juridical persons
or entities authorized by law may be parties in a civil case." 3 The trial court
also referred to non-compliance by petitioner ISA with the requirements of
Section 16, Rule 3 of the Rules of Court. 4
Petitioner ISA moved for reconsideration of the trial court's Order,
contending that despite the expiration of its term, its juridical existence
continued until the winding up of its affairs could be completed. In the
alternative, petitioner ISA urged that the Republic of the Philippines, being
the real party-in-interest, should be allowed to be substituted for petitioner
ISA. In this connection, ISA referred to a letter from the Office of the
33
President dated 28 September 1988 which especially directed the Solicitor
General to continue the expropriation case.
The trial court denied the motion for reconsideration, stating, among other
things that:
The property to be expropriated is not for public use or
benefit [__] but for the use and benefit [__] of NSC, a
government controlled private corporation engaged in
private business and for profit, specially now that the
government, according to newspaper reports, is offering
for sale to the public its [shares of stock] in the National
Steel Corporation in line with the pronounced policy of
the present administration to disengage the government
from its private business ventures. 5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8
October 1991, the Court of Appeals affirmed the order of dismissal of the
trial court. The Court of Appeals held that petitioner ISA, "a government
regulatory agency exercising sovereign functions," did not have the same
rights as an ordinary corporation and that the ISA, unlike corporations
organized under the Corporation Code, was not entitled to a period for
winding up its affairs after expiration of its legally mandated term, with the
result that upon expiration of its term on 11 August 1987, ISA was
"abolished and [had] no more legal authority to perform governmental
functions." The Court of Appeals went on to say that the action for
expropriation could not prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to expropriate, had become
ADMINLAW CASES
ineffective as a result of the delegate's dissolution, and could not be
continued in the name of Republic of the Philippines, represented by the
Solicitor General:
It is our considered opinion that under the law, the
complaint cannot prosper, and therefore, has to be
dismissed without prejudice to the refiling of a new
complaint for expropriation if the Congress sees it fit."
(Emphases supplied)
At the same time, however, the Court of Appeals held that it was
premature for the trial court to have ruled that the expropriation
suit was not for a public purpose, considering that the parties had
not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA
initiated and prosecuted the action for expropriation in its capacity as agent
of the Republic of the Philippines, the Republic, as principal of ISA, is
entitled to be substituted and to be made a party-plaintiff after the agent
ISA's term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of
Congress to enact a law further extending the term of ISA after 11 August
1988 evinced a "clear legislative intent to terminate the juridical existence
of ISA," and that the authorization issued by the Office of the President to
the Solicitor General for continued prosecution of the expropriation suit
could not prevail over such negative intent. It is also contended that the
exercise of the eminent domain by ISA or the Republic is improper, since
34
that power would be exercised "not on behalf of the National Government authorization to ISA to commence expropriation proceedings like those here
but for the benefit of NSC." involved:

The principal issue which we must address in this case is whether or not the Sec. 4. Powers and Functions. The Authority shall
Republic of the Philippines is entitled to be substituted for ISA in view of have the following powers and functions:
the expiration of ISA's term. As will be made clear below, this is really the
only issue which we must resolve at this time. xxx xxx xxx

Rule 3, Section 1 of the Rules of Court specifies who may be parties to a (j) to initiate expropriation of land required for basic iron

civil action: and steel facilities for subsequent resale and/or lease to
the companies involved if it is shown that such use of the
Sec. 1. Who May Be Parties. Only natural or juridical State's power is necessary to implement the construction
persons or entities authorized by law may be parties in a of capacity which is needed for the attainment of the
civil action. objectives of the Authority;

Under the above quoted provision, it will be seen that those who xxx xxx xxx
can be parties to a civil action may be broadly categorized into two
(2) groups: (Emphasis supplied)

(a) those who are recognized as persons under the law It should also be noted that the enabling statute of ISA expressly

whether natural, i.e., biological persons, on the one hand, authorized it to enter into certain kinds of contracts "for and in

or juridical person such as corporations, on the other behalf of the Government" in the following terms:

hand; and
xxx xxx xxx

(b) entities authorized by law to institute actions.

(i) to negotiate, and when necessary, to enter into

Examination of the statute which created petitioner ISA shows that ISA falls contracts for and in behalf of the government, for the bulk

under category (b) above. P.D. No. 272, as already noted, contains express purchase of materials, supplies or services for any sectors

35
ADMINLAW CASES
 in the industry, and to maintain inventories of such We consider that the ISA is properly regarded as an agent or delegate of the
materials in order to insure a continuous and adequate Republic of the Philippines. The Republic itself is a body corporate and
supply thereof and thereby reduce operating costs of such juridical person vested with the full panoply of powers and attributes which
sector; are compendiously described as "legal personality." The relevant definitions
are found in the Administrative Code of 1987:
xxx xxx xxx
Sec. 2. General Terms Defined. Unless the specific
(Emphasis supplied) words of the text, or the context as a whole, or a particular
statute, require a different meaning:
Clearly, ISA was vested with some of the powers or attributes normally
associated with juridical personality. There is, however, no provision in P.D. (1) Government of the Republic of the Philippines refers
No. 272 recognizing ISA as possessing general or comprehensive juridical to the corporate governmental entity through which the
personality separate and distinct from that of the Government. The ISA in functions of government are exercised throughout the
fact appears to the Court to be a non-incorporated agency or Philippines, including, save as the contrary appears from
instrumentality of the Republic of the Philippines, or more precisely of the the context, the various arms through which political
Government of the Republic of the Philippines. It is common knowledge authority is made effective in the Philippines, whether
that other agencies or instrumentalities of the Government of the Republic pertaining to the autonomous regions, the provincial, city,
are cast in corporate form, that is to say, are incorporated municipal or barangay subdivisions or other forms of
agencies or instrumentalities, sometimes with and at other times without local government.
capital stock, and accordingly vested with a juridical personality distinct
from the personality of the Republic. Among such incorporated agencies or xxx xxx xxx
6
instrumentalities are: National Power Corporation; Philippine Ports
Authority; 7 National Housing Authority; 8 Philippine National Oil (4) Agency of the Government refers to any of the various

Company; 9 Philippine National Railways; 10 Public Estates units of the Government, including a department,

Authority; 11 Philippine Virginia Tobacco Administration, 12 and so forth. It bureau, office, instrumentality, or government-owned or

is worth noting that the term "Authority" has been used to designate both controlled corporation, or a local government or a distinct

incorporated and non-incorporated agencies or instrumentalities of the unit therein.

Government.

36
ADMINLAW CASES
 xxx xxx xxx
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department
framework, vested with special functions or jurisdiction
by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and
government-owned or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers,
duties and functions as well as the assets and liabilities of that agency revert
back to, and are re-assumed by, the Republic of the Philippines, in the
absence of special provisions of law specifying some other disposition
thereof such as, e.g., devolution or transmission of such powers, duties,
functions, etc. to some other identified successor agency or instrumentality
of the Republic of the Philippines. When the expiring agency is
an incorporated one, the consequences of such expiry must be looked for, in
the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code. Since, in the
instant case, ISA is a non-incorporated agency or instrumentality of the
Republic, its powers, duties, functions, assets and liabilities are properly
regarded as folded back into the Government of the Republic of the
ADMINLAW CASES
Philippines and hence assumed once again by the Republic, no special
statutory provision having been shown to have mandated succession thereto
by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or
delegate of the Republic of the Philippines and the Republic itself are, at
least in part, spelled out in the Rules of Court. The general rule is, of course,
that an action must be prosecuted and defended in the name of the real party
in interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of
the expropriation proceedings, a real party in interest, having been explicitly
authorized by its enabling statute to institute expropriation proceedings. The
Rules of Court at the same time expressly recognize the role of
representative parties:
Sec. 3. Representative Parties. A trustee of an
expressed trust, a guardian, an executor or administrator,
or a party authorized by statute may sue or be sued
without joining the party for whose benefit the action is
presented or defended; but the court may, at any stage of
the proceedings, order such beneficiary to be made a
party. . . . . (Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its
capacity as an agent or delegate or representative of the Republic of the
Philippines pursuant to its authority under P.D. No. 272. The present
expropriation suit was brought on behalf of and for the benefit of the
Republic as the principal of ISA. Paragraph 7 of the complaint stated:
37
 7. The Government, thru the plaintiff ISA, urgently needs
the subject parcels of land for the construction and
installation of iron and steel manufacturing facilities that
are indispensable to the integration of the iron and steel
making industry which is vital to the promotion of public
interest and welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of the
Philippines and not the National Steel Corporation, even though
the latter may be an ultimate user of the properties involved should
the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines
is entitled to be substituted in the expropriation proceedings as party-
plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little
differently, the expiration of ISA's statutory term did not by itself require or
justify the dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which
occurred upon the expiration of ISA's statutory term, was not a ground for
dismissal of such proceedings since a party may be dropped or added by
order of the court, on motion of any party or on the court's own initiative at
13
any stage of the action and on such terms as are just. In the instant case,
the Republic has precisely moved to take over the proceedings as party-
plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate
Court, 14 the Court recognized that the Republic may initiate or participate
ADMINLAW CASES
in actions involving its agents. There the Republic of the Philippines was
held to be a proper party to sue for recovery of possession of property
although the "real" or registered owner of the property was the Philippine
Ports Authority, a government agency vested with a separate juridical
personality. The Court said:
It can be said that in suing for the recovery of the rentals,
the Republic of the Philippines acted as principal of the
Philippine Ports Authority, directly exercising the
commission it had earlier conferred on the latter as its
agent. . . . 15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the Republic
to commence all over again another proceeding, as the trial court
and Court of Appeals had required, was to generate unwarranted
delay and create needless repetition of proceedings:
More importantly, as we see it, dismissing the complaint
on the ground that the Republic of the Philippines is not
the proper party would result in needless delay in the
settlement of this matter and also in derogation of the
policy against multiplicity of suits. Such a decision would
require the Philippine Ports Authority to refile the very
same complaint already proved by the Republic of the
Philippines and bring back as it were to square
one. 16 (Emphasis supplied)
38
As noted earlier, the Court of Appeals declined to permit the substitution of
the Republic of the Philippines for the ISA upon the ground that the action
for expropriation could not prosper because the basis for the proceedings,
the ISA's exercise of its delegated authority to expropriate, had become
legally ineffective by reason of the expiration of the statutory term of the
other specific powers and duties as are expressly
conferred or imposed on him by law, and also, in
particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be:

agent or delegated i.e., ISA. Since, as we have held above, the powers and
xxx xxx xxx
functions of ISA have reverted to the Republic of the Philippines upon the
termination of the statutory term of ISA, the question should be addressed
(h) To determine when it is necessary or advantageous to
whether fresh legislative authority is necessary before the Republic of the
exercise the right of eminent domain in behalf of the
Philippines may continue the expropriation proceedings initiated by its own
Government of the Philippines; and to direct the
delegate or agent.
Secretary of Justice, where such act is deemed advisable,
to cause the condemnation proceedings to be begun in the
While the power of eminent domain is, in principle, vested primarily in the
court having proper jurisdiction. (Emphasis supplied)
legislative department of the government, we believe and so hold that no
new legislative act is necessary should the Republic decide, upon being
The Revised Administrative Code of 1987 currently in force has
substituted for ISA, in fact to continue to prosecute the expropriation
substantially reproduced the foregoing provision in the following
proceedings. For the legislative authority, a long time ago, enacted a
terms:
continuing or standing delegation of authority to the President of the
Philippines to exercise, or cause the exercise of, the power of eminent Sec. 12. Power of eminent domain. The President
domain on behalf of the Government of the Republic of the Philippines. The shall determine when it is necessary or advantageous to
1917 Revised Administrative Code, which was in effect at the time of the exercise the power of eminent domain in behalf of the
commencement of the present expropriation proceedings before the Iligan National Government, anddirect the Solicitor General,
Regional Trial Court, provided that: whenever he deems the action advisable, to institute
expopriation proceedings in the proper court. (Emphasis
Sec. 64. Particular powers and duties of the President of
supplied)
the Philippines. In addition to his general supervisory
authority, the President of the Philippines shall have such

39
ADMINLAW CASES
 In the present case, the President, exercising the power duly
delegated under both the 1917 and 1987 Revised Administrative
Codes in effect made a determination that it was necessary and
advantageous to exercise the power of eminent domain in behalf of
the Government of the Republic and accordingly directed the
Solicitor General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after
becoming once more the depository of primary legislative power, had not
enacted a statute extending the term of ISA, such non-enactment must be
deemed a manifestation of a legislative design to discontinue or abort the
present expropriation suit. We find this argument much too speculative; it
rests too much upon simple silence on the part of Congress and casually
disregards the existence of Section 12 of the 1987 Administrative Code
already quoted above.
Other contentions are made by private respondent MCFC, such as, that the
constitutional requirement of "public use" or "public purpose" is not present
in the instant case, and that the indispensable element of just compensation
is also absent. We agree with the Court of Appeals in this connection that
these contentions, which were adopted and set out by the Regional Trial
Court in its order of dismissal, are premature and are appropriately
addressed in the proceedings before the trial court. Those proceedings have
yet to produce a decision on the merits, since trial was still on going at the
time the Regional Trial Court precipitously dismissed the expropriation
proceedings. Moreover, as a pragmatic matter, the Republic is, by such
substitution as party-plaintiff, accorded an opportunity to determine whether
ADMINLAW CASES
or not, or to what extent, the proceedings should be continued in view of all
the subsequent developments in the iron and steel sector of the country
including, though not limited to, the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals
dated 8 October 1991 to the extent that it affirmed the trial court's order
dismissing the expropriation proceedings, is hereby REVERSED and SET
ASIDE and the case is REMANDED to the court a quo which shall allow
the substitution of the Republic of the Philippines for petitioner Iron and
Steel Authority and for further proceedings consistent with this Decision.
No pronouncement as to costs.
SO ORDERED.
678
SUPREME COURT REPORTS ANNOTATED
Smart Communications, Inc. (SMART) vs. National
Telecommunications Commission (NTC)
G.R. No. 152063. August 12, 2003.*
GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS
CO., INC. (ISLACOM), petitioners, vs. COURT OF APPEALS (The
Former 6th Division) and the NATIONAL TELECOMMUNICATIONS
COMMISSION, respondents.
Administrative Law; National Telecommunications Commission; Powers;
Quasi-Legislative Power; Administrative agencies possess quasilegislative
or rule-making powers and quasi-judicial or administrative adjudicatory
powers.Administrative agencies possess quasi-legislative or rule-making
powers and quasi-judicial or administrative adjudicatory powers. Quasi-
legislative or rule-making power is the power to make rules and regulations
which results in delegated legislation that is within the confines of the
granting statute and the doctrine of non-delegability and separability of
powers.
Same; Same; Same; Same; The rules and regulations that administrative
agencies promulgate, which are the product of a delegated legislative power
40
to create new and additional legal provisions that have the effect of law,
should be within the scope of the statutory authority granted by the
legislature to the administrative agency.The rules and regulations that
administrative agencies promulgate, which are the product of a delegated
legislative power to create new and additional legal provisions that have the
effect of law, should be within the scope of the statutory authority granted
by the legislature to the administrative agency. It is required that the
regulation be germane to the objects and purposes of the law, and be not in
contradiction to, but in conformity with, the standards prescribed by law.
They must conform to and be consistent with the provisions of the enabling
statute in order for such rule or regulation to be valid. Constitutional and
statutory provisions control with respect to what rules and regulations may
be promulgated by an administrative body, as well as with respect to what
fields are subject to regulation by it. It may not make rules and regulations
which are inconsistent with the provisions of the Constitution or a statute,
particularly the statute it is administering or which created it, or which are
in derogation of, or defeat, the purpose of a statute. In case of conflict
between a statute and an administrative order, the former must prevail.
Same; Same; Same, Quasi-Judicial Power; 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.Not to be
confused with the quasi-legislative or rule-making power of an
administrative agency is its quasi-judicial or administrative adjudicatory
power. This is the power to hear and determine questions of fact to which
the legislative policy is to apply and to decide in accordance with the
standards laid down by the law itself in enforcing and administering the
same law. The administrative body exercises its quasi-judicial power when
it performs in a judicial manner an act which is essentially of an executive
or administrative nature, where the power to act in such manner is
incidental to or reasonably necessary for the performance of the executive
or administrative duty entrusted to it. In carrying out their quasi-judicial
functions, the administrative officers or bodies are required to investigate
facts or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions from them as basis for their official action and exercise of
discretion in a judicial nature.
Same; Same; Same; Exhaustion of Administrative Remedies; Exception; In
questioning the validity or constitutionality of a rule or regulation issued by
an administrative agency, a party need not exhaust administrative remedies
before going to court.In questioning the validity or constitutionality of a
rule or regulation issued by an administrative agency, a party need not
ADMINLAW CASES
exhaust administrative remedies before going to court. This principle
applies only where the act of the administrative agency concerned was
performed pursuant to its quasi-judicial function, and not when the assailed
act pertained to its rule-making or quasi-legislative power.
Same; Same; Same; Doctrine of Primary Jurisdiction; The doctrine of
primary jurisdiction applies only where the administrative agency exercises
its quasi-judicial or adjudicatory function.In like manner, the doctrine of
primary jurisdiction applies only where the administrative agency exercises
its quasi-judicial or adjudicatory function. Thus, in cases involving
specialized disputes, the practice has been to refer the same to an
administrative agency of special competence pursuant to the doctrine of
primary jurisdiction. The courts will not determine a controversy involving
a question which is within the jurisdiction of the administrative tribunal
prior to the resolution of that question by the administrative tribunal, where
the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the
administrative tribunal to determine technical and intricate matters of fact,
and a uni-formity of ruling is essential to comply with the premises of the
regulatory statute administered. The objective of the doctrine of primary
jurisdiction is to guide a court in determining whether it should refrain from
exercising its jurisdiction until after an administrative agency has
determined some question or some aspect of some question arising in the
proceeding before the court. It applies where the claim is originally
cognizable in the courts and comes into play whenever enforcement of the
claim requires the resolution of issues which, under a regulatory scheme,
has been placed within the special competence of an administrative body; in
such case, the judicial process is suspended pending referral of such issues
to the administrative body for its view.
Constitutional Law; Judicial Power; Words and Phrases; Definition; Where
what is assailed is the validity or constitutionality of a rule or regulation
issued by the administrative agency in the performance of its
quasilegislative function, the regular courts have jurisdiction to pass upon
the same.Where what is assailed is the validity or constitutionality of a
rule or regulation issued by the administrative agency in the performance of
its quasi-legislative function, the regular courts have jurisdiction to pass
upon the same. The determination of whether a specific rule or set of rules
issued by an administrative agency contravenes the law or the constitution
is within the jurisdiction of the regular courts. Indeed, the Constitution vests
the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order, instruction,
41
ordinance, or regulation in the courts, including the regional trial courts. be given 45 days from the date the prepaid SIM card is fully consumed but
This is within the scope of judicial power, which includes the authority of
not beyond 2 years and 45 days from date of first use to replenish the SIM
the courts to determine in an appropriate action the validity of the acts of
the political departments. Judicial power includes the duty of the courts of card, otherwise the SIM card shall be rendered invalid. The validity of an
justice to settle actual controversies involving rights which are legally
invalid SIM card, however, shall be installed upon request of the customer
demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction at no additional charge except the presentation of a valid prepaid call card.
on the part of any branch or instrumentality of the Government.
(4) Subscribers shall be updated of the remaining value of their cards before
YNARES-SANTIAGO, J.:
the start of every call using the cards.
Pursuant to its rule-making and regulatory powers, the National
(5) The unit of billing for the cellular mobile telephone service whether
Telecommunications Commission (NTC) issued on June 16, 2000
postpaid or prepaid shall be reduced from 1 minute per pulse to 6 seconds
Memorandum Circular No. 13-6-2000, promulgating rules and regulations
per pulse. The authorized rates per minute shall thus be divided by 10.[1]
on the billing of telecommunications services. Among its pertinent
provisions are the following:
The Memorandum Circular provided that it shall take effect 15 days
after its publication in a newspaper of general circulation and three certified
(1) The billing statements shall be received by the subscriber of the
true copies thereof furnished the UP Law Center. It was published in the
telephone service not later than 30 days from the end of each billing
newspaper, The Philippine Star, on June 22, 2000. [2]Meanwhile, the
cycle. In case the statement is received beyond this period, the subscriber
provisions of the Memorandum Circular pertaining to the sale and use of
shall have a specified grace period within which to pay the bill and the
prepaid cards and the unit of billing for cellular mobile telephone service
public telecommunications entity (PTEs) shall not be allowed to disconnect
took effect 90 days from the effectivity of the Memorandum Circular.
the service within the grace period.

On August 30, 2000, the NTC issued a Memorandum to all cellular

(2) There shall be no charge for calls that are diverted to a voice mailbox,
mobile telephone service (CMTS) operators which contained measures to
voice prompt, recorded message or similar facility excluding the customers
minimize if not totally eliminate the incidence of stealing of cellular phone
own equipment.
units. The Memorandum directed CMTS operators to:
(3) PTEs shall verify the identification and address of each purchaser of
prepaid SIM cards. Prepaid call cards and SIM cards shall be valid for at
least 2 years from the date of first use. Holders of prepaid SIM cards shall

42
ADMINLAW CASES
 a. strictly comply with Section B(1) of MC 13-6-2000 requiring
the presentation and verification of the identity and addresses
of prepaid SIM card customers;
b. require all your respective prepaid SIM cards dealers to
comply with Section B(1) of MC 13-6-2000;
c. deny acceptance to your respective networks prepaid and/or
postpaid customers using stolen cellphone units or cellphone
units registered to somebody other than the applicant when
properly informed of all information relative to the stolen
cellphone units;
d. share all necessary information of stolen cellphone units to all
other CMTS operators in order to prevent the use of stolen
cellphone units; and
e. require all your existing prepaid SIM card customers to
register and present valid identification cards.[3]
This was followed by another Memorandum dated October 6, 2000
addressed to all public telecommunications entities, which reads:
This is to remind you that the validity of all prepaid cards sold on 07
October 2000 and beyond shall be valid for at least two (2) years
from date of first use pursuant to MC 13-6-2000.
ADMINLAW CASES
In addition, all CMTS operators are reminded that all SIM packs
used by subscribers of prepaid cards sold on 07 October 2000 and
beyond shall be valid for at least two (2) years from date of first
use. Also, the billing unit shall be on a six (6) seconds pulse effective
07 October 2000.
For strict compliance.[4]
On October 20, 2000, petitioners Isla Communications Co., Inc. and
Pilipino Telephone Corporation filed against the National
Telecommunications Commission, Commissioner Joseph A. Santiago,
Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor
C. Dacanay, an action for declaration of nullity of NTC Memorandum
Circular No. 13-6-2000 (the Billing Circular) and the NTC Memorandum
dated October 6, 2000, with prayer for the issuance of a writ of preliminary
injunction and temporary restraining order. The complaint was docketed as
Civil Case No. Q-00-42221 at the Regional Trial Court of Quezon City,
Branch 77.[5]
Petitioners Islacom and Piltel alleged, inter alia, 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
43
prepaid card buyers and call balance announcement are unreasonable.
Hence, they prayed that the Billing Circular be declared null and void ab
initio.
Soon thereafter, petitioners Globe Telecom, Inc and Smart
Communications, Inc. filed a joint Motion for Leave to Intervene and to
Admit Complaint-in-Intervention.[6] This was granted by the trial court.
On October 27, 2000, the trial court issued a temporary restraining
order enjoining the NTC from implementing Memorandum Circular No.
13-6-2000 and the Memorandum dated October 6, 2000.[7]
In the meantime, respondent NTC and its co-defendants filed a motion
to dismiss the case on the ground of petitioners failure to exhaust
administrative remedies.
Subsequently, after hearing petitioners application for preliminary
injunction as well as respondents motion to dismiss, the trial court issued on
November 20, 2000 an Order, the dispositive portion of which reads:
WHEREFORE, premises considered, the defendants motion to dismiss is
hereby denied for lack of merit. The plaintiffs application for the issuance
of a writ of preliminary injunction is hereby granted. Accordingly, the
defendants are hereby enjoined from implementing NTC Memorandum
Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000,
pending the issuance and finality of the decision in this case. The plaintiffs
and intervenors are, however, required to file a bond in the sum of FIVE
HUNDRED THOUSAND PESOS (P500,000.00), Philippine currency.
ADMINLAW CASES
SO ORDERED.[8]
Defendants filed a motion for reconsideration, which was denied in an
Order dated February 1, 2001.[9]
Respondent NTC thus filed a special civil action for certiorari and
prohibition with the Court of Appeals, which was docketed as CA-G.R. SP.
No. 64274. On October 9, 2001, a decision was rendered, the decretal
portion of which reads:
WHEREFORE, premises considered, the instant petition for certiorari and
prohibition is GRANTED, in that, the order of the court a quo denying the
petitioners motion to dismiss as well as the order of the court a quo granting
the private respondents prayer for a writ of preliminary injunction, and the
writ of preliminary injunction issued thereby, are hereby ANNULLED and
SET ASIDE. The private respondents complaint and complaint-in-
intervention below are hereby DISMISSED, without prejudice to the
referral of the private respondents grievances and disputes on the assailed
issuances of the NTC with the said agency.
SO ORDERED.[10]
Petitioners motions for reconsideration were denied in a Resolution
dated January 10, 2002 for lack of merit.[11]
Hence, the instant petition for review filed by Smart and Piltel, which
was docketed as G.R. No. 151908, anchored on the following grounds:
44
A. Likewise, Globe and Islacom filed a petition for review, docketed as
G.R. No. 152063, assigning the following errors:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED
IN HOLDING THAT THE NATIONAL 1. THE HONORABLE COURT OF APPEALS SO GRAVELY
TELECOMMUNICATIONS COMMISSION (NTC) AND NOT ERRED BECAUSE THE DOCTRINES OF PRIMARY
THE REGULAR COURTS HAS JURISDICTION OVER THE JURISDICTION AND EXHAUSTION OF
CASE. ADMINISTRATIVE REMEDIES DO NOT APPLY SINCE
THE INSTANT CASE IS FOR LEGAL NULLIFICATION
B. (BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS
OF LAW) OF A PURELY ADMINISTRATIVE
THE HONORABLE COURT OF APPEALS ALSO GRAVELY
REGULATION PROMULGATED BY AN AGENCY IN
ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS
THE EXERCISE OF ITS RULE MAKING POWERS AND
FAILED TO EXHAUST AN AVAILABLE ADMINISTRATIVE
INVOLVES ONLY QUESTIONS OF LAW.
REMEDY.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY

C.
ERRED BECAUSE THE DOCTRINE ON EXHAUSTION
OF ADMINISTRATIVE REMEDIES DOES NOT APPLY
THE HONORABLE COURT OF APPEALS ERRED IN NOT
WHEN THE QUESTIONS RAISED ARE PURELY LEGAL
HOLDING THAT THE BILLING CIRCULAR ISSUED BY THE
QUESTIONS.
RESPONDENT NTC IS UNCONSTITUTIONAL AND
CONTRARY TO LAW AND PUBLIC POLICY.
3. THE HONORABLE COURT OF APPEALS SO GRAVELY
ERRED BECAUSE THE DOCTRINE OF EXHAUSTION
D.
OF ADMINISTRATIVE REMEDIES DOES NOT APPLY

THE HONORABLE COURT OF APPEALS ERRED IN WHERE THE ADMINISTRATIVE ACTION IS

HOLDING THAT THE PRIVATE RESPONDENTS FAILED TO COMPLETE AND EFFECTIVE, WHEN THERE IS NO

SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT THE OTHER REMEDY, AND THE PETITIONER STANDS TO

ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.[12] SUFFER GRAVE AND IRREPARABLE INJURY.

45
ADMINLAW CASES
 4. THE HONORABLE COURT OF APPEALS SO GRAVELY scope of the statutory authority granted by the legislature to the
ERRED BECAUSE PETITIONERS IN FACT administrative agency. It is required that the regulation be germane to the
EXHAUSTED ALL ADMINISTRATIVE REMEDIES objects and purposes of the law, and be not in contradiction to, but in
AVAILABLE TO THEM. conformity with, the standards prescribed by law.[17] They must conform to
and be consistent with the provisions of the enabling statute in order for
5. THE HONORABLE COURT OF APPEALS SO GRAVELY such rule or regulation to be valid. Constitutional and statutory provisions
ERRED IN ISSUING ITS QUESTIONED RULINGS IN control with respect to what rules and regulations may be promulgated by
THIS CASE BECAUSE GLOBE AND ISLA HAVE A an administrative body, as well as with respect to what fields are subject to
[13]
CLEAR RIGHT TO AN INJUNCTION. regulation by it. It may not make rules and regulations which are
inconsistent with the provisions of the Constitution or a statute, particularly
The two petitions were consolidated in a Resolution dated February
the statute it is administering or which created it, or which are in derogation
17, 2003.[14]
of, or defeat, the purpose of a statute. In case of conflict between a statute
and an administrative order, the former must prevail.[18]
On March 24, 2003, the petitions were given due course and the
parties were required to submit their respective memoranda.[15]
Not to be confused with the quasi-legislative or rule-making power of
an administrative agency is its quasi-judicial or administrative adjudicatory
We find merit in the petitions.
power. This is the power to hear and determine questions of fact to which

Administrative agencies possess quasi-legislative or rule-making the legislative policy is to apply and to decide in accordance with the

powers and quasi-judicial or administrative adjudicatory powers. Quasi- standards laid down by the law itself in enforcing and administering the

legislative or rule-making power is the power to make rules and regulations same law. The administrative body exercises its quasi-judicial power when

which results in delegated legislation that is within the confines of the it performs in a judicial manner an act which is essentially of an executive

granting statute and the doctrine of non-delegability and separability of or administrative nature, where the power to act in such manner is

powers.[16] incidental to or reasonably necessary for the performance of the executive

or administrative duty entrusted to it. In carrying out their quasi-judicial
The rules and regulations that administrative agencies promulgate, functions, the administrative officers or bodies are required to investigate
which are the product of a delegated legislative power to create new and facts or ascertain the existence of facts, hold hearings, weigh evidence, and
additional legal provisions that have the effect of law, should be within the

46
ADMINLAW CASES
draw conclusions from them as basis for their official action and exercise of
[19]
discretion in a judicial nature.
In questioning the validity or constitutionality of a rule or regulation
issued by an administrative agency, a party need not exhaust administrative
remedies before going to court. This principle applies only where the act of
the administrative agency concerned was performed pursuant to its quasi-
judicial function, and not when the assailed act pertained to its rule-making
or quasi-legislative power. In Association of Philippine Coconut
[20]
Dessicators v. Philippine Coconut Authority, it was held:
The rule of requiring exhaustion of administrative remedies before a party
may seek judicial review, so strenuously urged by the Solicitor General on
behalf of respondent, has obviously no application here. The resolution in
question was issued by the PCA in the exercise of its rule- making or
legislative power. However, only judicial review of decisions of
administrative agencies made in the exercise of their quasi-judicial function
is subject to the exhaustion doctrine.
Even assuming arguendo that the principle of exhaustion of
administrative remedies apply in this case, the records reveal that petitioners
sufficiently complied with this requirement. Even during the drafting and
deliberation stages leading to the issuance of Memorandum Circular No.
13-6-2000, petitioners were able to register their protests to the proposed
billing guidelines. They submitted their respective position papers setting
forth their objections and submitting proposed schemes for the billing
circular.[21] After the same was issued, petitioners wrote successive letters
dated July 3, 2000[22] and July 5, 2000,[23] asking for the suspension and
ADMINLAW CASES
reconsideration of the so-called Billing Circular. These letters were not
acted upon until October 6, 2000, when respondent NTC issued the second
assailed Memorandum implementing certain provisions of the Billing
Circular. This was taken by petitioners as a clear denial of the requests
contained in their previous letters, thus prompting them to seek judicial
relief.
In like manner, the doctrine of primary jurisdiction applies only where
the administrative agency exercises its quasi-judicial or adjudicatory
function. Thus, in cases involving specialized disputes, the practice has
been to refer the same to an administrative agency of special competence
pursuant to the doctrine of primary jurisdiction. The courts will not
determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that
question by the administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special knowledge,
experience and services of the administrative tribunal to determine technical
and intricate matters of fact, and a uniformity of ruling is essential to
comply with the premises of the regulatory statute administered.The
objective of the doctrine of primary jurisdiction is to guide a court in
determining whether it should refrain from exercising its jurisdiction until
after an administrative agency has determined some question or some
aspect of some question arising in the proceeding before the court. It applies
where the claim is originally cognizable in the courts and comes into play
whenever enforcement of the claim requires the resolution of issues which,
under a regulatory scheme, has been placed within the special competence
47
of an administrative body; in such case, the judicial process is suspended
[24]
pending referral of such issues to the administrative body for its view.
However, where what is assailed is the validity or constitutionality of a
rule or regulation issued by the administrative agency in the performance of
its quasi-legislative function, the regular courts have jurisdiction to pass
upon the same. The determination of whether a specific rule or set of rules
issued by an administrative agency contravenes the law or the constitution
is within the jurisdiction of the regular courts.Indeed, the Constitution vests
the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order, instruction,
ordinance, or regulation in the courts, including the regional trial courts.
[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
[26]
the political departments. Judicial power includes the duty of the courts
of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government.[27]
In the case at bar, 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
[28]
the constitutionality and validity of the said issuances. In Drilon v. Lim,
was held:
ADMINLAW CASES
We stress at the outset that the lower court had jurisdiction to consider the
constitutionality of Section 187, this authority being embraced in the
general definition of the judicial power to determine what are the valid and
binding laws by the criterion of their conformity to the fundamental
law. Specifically, B.P. 129 vests in the regional trial courts jurisdiction over
all civil cases in which the subject of the litigation is incapable of pecuniary
estimation, even as the accused in a criminal action has the right to question
in his defense the constitutionality of a law he is charged with violating and
of the proceedings taken against him, particularly as they contravene the
Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution vests
in the Supreme Court appellate jurisdiction over final judgments and orders
of lower courts in all cases in which the constitutionality or validity of any
treaty, international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.[29]
In their complaint before the Regional Trial Court, petitioners averred
that the Circular contravened Civil Code provisions on sales and violated
the constitutional prohibition against the deprivation of property without
due process of law. These are within the competence of the trial
judge. Contrary to the finding of the Court of Appeals, the issues raised in
the complaint do not entail highly technical matters. Rather, what is
required of the judge who will resolve this issue is a basic familiarity with
the workings of the cellular telephone service, including prepaid SIM and
call cards and this is judicially known to be within the knowledge of a good
it percentage of our population and expertise in fundamental principles of
civil law and the Constitution.
48
 Hence, the Regional Trial Court has jurisdiction to hear and decide
Civil Case No. Q-00-42221. The Court of Appeals erred in setting aside the
orders of the trial court and in dismissing the case.
WHEREFORE, in view of the foregoing, the consolidated petitions
are GRANTED. The decision of the Court of Appeals in CA-G.R. SP No.
64274 dated October 9, 2001 and its Resolution dated January 10, 2002 are
REVERSED and SET ASIDE. The Order dated November 20, 2000 of the
Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Q-00-
42221 is REINSTATED. This case is REMANDED to the court a quo for
continuation of the proceedings.
SO ORDERED.
G.R. No. 112526. March 16, 2005.*
STA. ROSA REALTY DEVELOPMENT CORPORATION, petitioner,
vs. JUAN B. AMANTE, Sta. Rosa Realty Development Corporation vs.
Amante, 453 SCRA 432, G.R. No. 112526, G.R. No. 118838 March 16,
2005
Actions; Appeals; Certiorari; Pleadings and Practice; Petitioner should not
have been allowed, in the first place, to pursue simultaneously the remedies
of petition for review on certiorari and as a special civil action for certiorari
as these are mutually exclusive.The Court notes that petitioner designated
its petition in G.R. No. 112526 as one for review on certiorari of the
decision of the CA. In the same breath, it likewise averred that it was also
being filed as a special civil action for certiorari as public respondents
committed grave abuse of discretion. Petitioner should not have been
allowed, in the first place, to pursue such remedies simultaneously as these
are mutually exclusive.
Same; Same; Factual issues are, as a rule, not considered by the Supreme
Court; Exceptions.It is Sta. Rosa Realty Development Corporations
(SRRDCs) claim that the CA committed grave abuse of discretion in
holding that the subject property is agricultural in nature. In support of its
contention, it argued, among others, that the subject property had already
ADMINLAW CASES
been classified as park since 1979 under the Zoning Ordinance of
Cabuyao, as approved by the Housing and Land Use Regulatory Board
(HLURB); that it forms part of a watershed; and that the CA disregarded
ecological considerations. SRRDC also claimed that Amante, et al. are not
qualified beneficiaries. Clearly, these issues are factual in nature, which the
Court, as a rule, should not have considered in this case. However, there are
recognized exceptions, e.g., when the factual inferences of the appellate
court are manifestly mistaken; the judgment is based on a mis-apprehension
of facts; or the CA manifestly overlooked certain relevant and undisputed
facts that, if properly considered, would justify a different legal conclusion.
The present cases fall under the above exceptions.
Agrarian Reform Law; Land Conversions; An ordinance converting
agricultural lands into residential or light industrial should be given
prospective application only, and should not change the nature of existing
agricultural lands in the area or the legal relationships existing over such
lands.The Court recognizes the power of a local government to reclassify
and convert lands through local ordinance, especially if said ordinance is
approved by the HLURB. Municipal Ordinance No. 110-54 dated
November 3, 1979, enacted by the Municipality of Cabuyao, divided the
municipality into residential, commercial, industrial, agricultural and
institutional districts, and districts and parks for open spaces. It did not
convert, however, existing agricultural lands into residential, commercial,
industrial, or institutional. While it classified Barangay Casile into a
municipal park, as shown in its permitted uses of land map, the ordinance
did not provide for the retroactivity of its classification. In Co vs.
Intermediate Appellate Court, it was held that an ordinance converting
agricultural lands into residential or light industrial should be given
prospective application only, and should not change the nature of existing
agricultural lands in the area or the legal relationships existing over such
lands.
Same; Same; Words and Phrases; Agricultural Land, and Agricultural
Activity, Defined.Under Section 3 (c) of R.A. No. 6657, agricultural
land is defined as land devoted to agricultural activity and not classified as
mineral, forest, residential, commercial or industrial land. Section 3 (b)
meanwhile defines agricultural activity as the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock, poultry or fish,
including the harvesting of such products, and other farm activities, and
practices performed by a farmer in conjunction with such farming
operations done by persons whether natural or juridical.
49
Same; Same; Under Section 10 of R.A. No. 6657, as implemented by DAR
Administrative Order No. 13 dated August 30, 1990, also provides that
those with 18% slope and over but already developed for agricultural
purposes as of June 15, 1988, may be allocated to qualified occupants.
SRRDC also contends that the property has an 18% slope and over and
therefore exempt from acquisition and distribution under Section 10 of R.A.
No. 6657. What SRRDC opted to ignore is that Section 10, as implemented
by DAR Administrative Order No. 13 dated August 30, 1990, also provides
that those with 18% slope and over but already developed for agricultural
purposes as of June 15, 1988, may be allocated to qualified occupants.
Hence, even assuming that the property has an 18% slope and above, since
it is already developed for agricultural purposes, then it cannot be exempt
from acquisition and distribution. Moreover, the topography maps prepared
by Agricultural Engineer Rosalina H. Jumaquio show that the property to be
acquired has a 5-10% flat to undulating scope; that it is suitable to
agricultural crops; and it is in fact already planted with diversified crops.
Same; Department of Agrarian Reform Adjudication Board (DARAB);
Appeals; The Court of Appeals does not have the discretion to consider
evidence in a petition for certiorari or petition for review on certiorari
outside than that submitted before the DARAB.The same goes with the
CA, which did not have the discretion to consider evidence in a petition for
certiorari or petition for review on certiorari outside than that submitted
before the DARAB. The CA noted petitioners failure to present evidence in
behalf of its arguments, thus: . . . It must be recalled that petitioner Sta.
Rosa Realty itself had asked the DARAB in a petition dated March 18,
1991 to allow it to adduce evidence in support of its position that the
subject parcels of land are not covered by the CARP beginning on the
scheduled hearing dated April 4, 1991. And DARAB obliged as in fact the
petitioner commenced to introduce evidence. If petitioner failed to complete
the presentation of evidence to support its claim of exemption from CARP
coverage, it has only itself to blame for which DARAB cannot be accused
of not being impartial. Consequently, there is no need to order the remand
of the case to the DARAB for reevaluation and determination of the nature
of the parcels of land involved. It runs contrary to orderly administration of
justice and would give petitioner undue opportunity to present evidence in
support of its stance, an opportunity it already had during the DARAB
proceedings, and which opportunity it regrettably failed to take advantage
of.
Same; Watersheds; In order to be exempt from Comprehensive Agrarian
Reform Program (CARP) coverage, the land must have been classified or
ADMINLAW CASES
proclaimed and actually, directly and exclusively used and found to be
necessary for watershed purposes.In order to be exempt from coverage,
the land must have been classified or proclaimed and actually, directly and
exclusively used and found to be necessary for watershed purposes. In this
case, at the time the DAR issued the Notices of Coverage up to the time the
DARAB rendered its decision on the dispute, the subject property is yet to
be officially classified or proclaimed as a watershed and has in fact long
been used for agricultural purposes. SRRDC relies on the case of Central
Mindanao University (CMU) vs. DARAB, wherein the Court ruled that
CMU is in the best position to determine what property is found necessary
for its use. SRRDC claims that it is in the best position to determine
whether its properties are necessary for development as park and
watershed area. But SRRDCs reliance on the CMU case is flawed. In the
CMU case, the subject property from the very beginning was not alienable
and disposable because Proclamation No. 476 issued by the late President
Carlos P. Garcia already reserved the property for the use of the school.
Besides, the subject property in the CMU case was actually, directly and
exclusively used and found to be necessary for educational purposes.
Same; Under Section 15 of R.A. No. 6657, the identification of
beneficiaries is a matter involving strictly the administrative
implementation of the CARP, a matter which is exclusively vested in the
Secretary of Agrarian Reform, through its authorized officesit behooves
the courts to exercise great caution in substituting its own determination of
the issue, unless there is grave abuse of discretion committed by the
administrative agency.SRRDC also objects to the identification of
Amante, et al. as beneficiaries of the subject property. Suffice it to say that
under Section 15 of R.A. No. 6657, the identification of beneficiaries is a
matter involving strictly the administrative implementation of the CARP, a
matter which is exclusively vested in the Secretary of Agrarian Reform,
through its authorized offices. The farmer-beneficiaries have already been
identified in this case. Also, the DAR Secretary has already issued Notices
of Coverage and Notices of Acquisition pertaining to the subject property. It
behooves the courts to exercise great caution in substituting its own
determination of the issue, unless there is grave abuse of discretion
committed by the administrative agency, which in these cases the Court
finds none.
Same; Judicial Review; Requisites.The Court cannot entertain such
constitutional challenge. The requirements before a litigant can challenge
the constitutionality of a law are well-delineated, viz.: (1) The existence of
an actual and appropriate case; (2) A personal and substantial interest of the
50
party raising the constitutional question; (3) The exercise of judicial review
is pleaded at the earliest opportunity; and (4) The constitutional question is
the lis mota of the case. (Emphasis supplied)
Same; Same; Words and Phrases; Earliest opportunity means that the
question of unconstitutionality of the act in question should have been
immediately raised in the proceedings in the court below, in this case, the
DAR Secretaryall controversies on the implementation of the CARP fall
under the jurisdiction of the DAR, even though they raise questions that are
also legal or constitutional in nature.Earliest opportunity means that the
question of unconstitutionality of the act in question should have been
immediately raised in the proceedings in the court below, in this case, the
DAR Secretary. It must be pointed out that all controversies on the
implementation of the CARP fall under the jurisdiction of the DAR, even
though they raise questions that are also legal or constitutional in nature.
The earliest opportunity to raise a constitutional issue is to raise it in the
pleadings before a competent court that can resolve the same, such that, if
it is not raised in the pleadings, it cannot be considered at the trial, and, if
not considered at the trial, it cannot be considered on appeal. Records
show that SRRDC raised such constitutional challenge only before this
Court despite the fact that it had the opportunity to do so before the DAR
Secretary. The DARAB correctly refused to deal on this issue as it is the
DAR Secretary who, under the law, has the authority to determine the
beneficiaries of the CARP. This Court will not entertain questions on the
invalidity of a statute where that issue was not specifically raised, insisted
upon, and adequately argued in the DAR.
Same; Same; Basic is the rule that every law has in its favor the
presumption of constitutionality, and to justify its nullification, there must
be a clear and unequivocal breach of the Constitution, and not one that is
doubtful, speculative or argumentative.The constitutional question raised
by SRRDC is not the very lis mota in the present case. Basic is the rule that
every law has in its favor the presumption of constitutionality, and to justify
its nullification, there must be a clear and unequivocal breach of the
Constitution, and not one that is doubtful, speculative or argumentative. The
controversy at hand is principally anchored on the coverage of the subject
property under the CARP, an issue that can be determined without delving
into the constitutionality of Section 22 of R.A. No. 6657. While the
identification of Amante, et al. as farmer-beneficiaries is a corollary matter,
yet, the same may be resolved by the DAR.
Same; Administrative Law; The DARs jurisdiction under Section 50 of
R.A. No. 6657 is two-foldthe first is essentially executive and pertains to
ADMINLAW CASES
the enforcement and administration of the laws, carrying them into practical
operation and enforcing their due observance, while the second is judicial
and involves the determination of rights and obligations of the parties.
There is no question that the power to determine whether a property is
subject to CARP coverage lies with the DAR Secretary. Section 50 of R.A.
No. 6657 provides that: SEC. 50. Quasi-Judicial Powers of the DAR.The
DAR is hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction over
all matters involving the implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the Department of Agriculture
(DA) and the Department of Environment and Natural Resources (DENR). .
. . The DARs jurisdiction under Section 50 of R.A. No. 6657 is two-fold.
The first is essentially executive and pertains to the enforcement and
administration of the laws, carrying them into practical operation and
enforcing their due observance, while the second is judicial and involves the
determination of rights and obligations of the parties.
Same; Estoppel; It is elementary that the active participation of a party in a
case pending against him before a court or a quasi-judicial body, is
tantamount to a recognition of that courts or bodys jurisdiction and a
willingness to abide by the resolution of the case and will bar said party
from later on impugning the courts or bodys jurisdiction.In CA-G.R. SP
No. 27234, the CA likewise found that it was SRRDC that called upon the
DARAB to determine the issue and it, in fact, actively participated in the
proceedings before it. It was SRRDCs own act of summoning the
DARABs authority that cured whatever jurisdictional defect it now raises.
It is elementary that the active participation of a party in a case pending
against him before a court or a quasi-judicial body, is tantamount to a
recognition of that courts or bodys jurisdiction and a willingness to abide
by the resolution of the case and will bar said party from later on impugning
the courts or bodys jurisdiction.
Same; Same; As a rule, when a party adopts a certain theory, and the case is
tried and decided upon that theory in the court below, he will not be
permitted to change his theory on appeal.The issue of jurisdiction was
raised by SRRDC only before the CA. It was never presented or discussed
before the DARAB for obvious reasons, i.e., it was SRRDC itself that
invoked the latters jurisdiction. As a rule, when a party adopts a certain
theory, and the case is tried and decided upon that theory in the court below,
he will not be permitted to change his theory on appeal. Points of law,
theories, issues and arguments not brought to the attention of the lower
court need not be, and ordinarily will not be, considered by a reviewing
51
court, as these cannot be raised for the first time at such late stage. To
permit SRRDC to change its theory on appeal would not only be unfair to
Amante, et al. but would also be offensive to the basic scales of fair play,
justice and due process.
Same; Just Compensation; Administrative Circular No. 9, Series of 1990,
providing for the opening of trust accounts in lieu of the deposit in cash or
in bonds contemplated in Section 16 (e) of R.A. No. 6657 is voidthe trust
accounts earlier opened should be retroactively converted to a deposit
accounts.The Court notes that then DAR Secretary Benjamin T. Leong
issued a Memorandum on July 11, 1991, ordering the opening of a trust
account in favor of SRRDC. In Land Bank of the Philippines vs. Court of
Appeals, this Court struck down as void DAR Administrative Circular No.
9, Series of 1990, providing for the opening of trust accounts in lieu of the
deposit in cash or in bonds contemplated in Section 16 (e) of R.A. No.
6657. As a result, the DAR issued Administrative Order No. 2, Series of
1996, converting trust accounts in the name of landowners into deposit
accounts. Thus, the trust account opened by the LBP per instructions of
DAR Secretary Benjamin T. Leong should be converted to a deposit
account, to be retroactive in application in order to rectify the error
committed by the DAR in opening a trust account and to grant the
landowners the benefits concomitant to payment in cash or LBP bonds prior
to the ruling of the Court in Land Bank of the Philippines vs. Court of
Appeals. The account shall earn a 12% interest per annum from the time the
LBP opened a trust account up to the time said account was actually
converted into cash and LBP bonds deposit accounts. Sta. Rosa Realty
Development Corporation vs. Amante, 453 SCRA 432, G.R. No. 112526,
G.R. No. 118838 March 16, 2005
AMENDEDDECISION
AUSTRIA-MARTINEZ, J.:
By virtue of the En Banc Resolution issued on January 13, 2004, the
Court authorized the Special First Division to suspend the Rules so as to
allow it to consider and resolve the second Motion for Reconsideration of
respondents,[1] after the motion was heard on oral arguments on August 13,
2003. On July 9, 2004,[2] the Court resolved to submit for resolution the
second Motion for Reconsideration in G.R. No. 112526together with G.R.
No. 118338 in view of the Resolution of the Court dated January 15, 2001
issued in G.R. No. 118838,[3] consolidating the latter case with G.R. No.
ADMINLAW CASES
112526, the issues therein being interrelated.[4] Hence, the herein Amended
Decision.
The factual background of the two cases is as follows:
The Canlubang Estate in Laguna is a vast landholding previously titled
in the name of the late Speaker and Chief Justice Jose Yulo, Sr. Within this
estate are two parcels of land (hereinafter referred to as the subject
property) covered by TCT Nos. 81949 and 84891 measuring 254.766
hectares and part of Barangay Casile, subsequently titled in the name of Sta.
Rosa Realty Development Corporation (SRRDC), the majority stockholder
of which is C.J. Yulo and Sons, Inc.
The subject property was involved in civil suits and administrative
proceedings that led to the filing of G.R. Nos. 112526 and 118838, thus:
Injunction Case Filed by Amante, et al.
On December 6, 1985, Amante, et al., who are the private respondents
in G.R. No. 112526 and petitioners in G.R. No. 118838, instituted an action
for injunction with damages in the Regional Trial Court of Laguna (Branch
24) against Luis Yulo, SRRDC, and several SRRDC security personnel,
docketed as Civil Case No. B-2333. Amante, et al. alleged that: they are
residents of Barangay Casile, Cabuyao, Laguna, which covers an area of
around 300 hectares; in 1910, their ancestors started occupying the area,
built their houses and planted fruit-bearing trees thereon, and since then,
have been peacefully occupying the land; some time in June 3, 1985,
SRRDCs security people illegally entered Bgy. Casile and fenced the area;
SRRDCs men also entered the barangay on November 4, 1985, cut down
the trees, burned their huts, and barred the lone jeepney from entering the
Canlubang Sugar Estate; as a result of these acts, Amante, et al. were
deprived of possession and cultivation of their lands. Thus, they claimed
damages, sought the issuance of permanent injunction and proposed that a
right of way be declared.[5]
In their Answer, the defendants denied the allegations and disclaimed
any control and supervision over its security personnel. Defendant SRRDC
also alleged that as the real owner of the property, it was the one that
suffered damages due to the encroachment on the property.[6]
52
 A writ of preliminary injunction was issued by the trial court on
August 17, 1987,[7] but this was subsequently dissolved by the Court of
Appeals (CA) on April 22, 1988 in its decision in CA-G.R. SP No. 13908.[8]
After trial on the merits, the trial court, on January 20, 1992, rendered
a decision ordering Amante, et al. to vacate the property, the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor
of the defendants and against the plaintiffs hereby dismissing the complaint
and amended complaint.
The plaintiffs are hereby ordered to vacate the parcels of land belonging to
the defendants Luis Yulo and Sta. Rosa Realty. They are likewise enjoined
from entering the subject parcels of land.
Although attorneys fees and expenses of litigation are recoverable in case of
a clearly unfounded civil action against the plaintiff (Enervida vs. De la
Torre, 55 SCRA 339), this Court resolves not to award attorneys fees etc. in
favor of the defendants because the plaintiffs appear to have acted in good
faith in filing the present civil action (Salao vs. Salao, 70 SCRA 65) and
that it would not be just and equitable to award the same in the case at bar.
(Liwanag vs. Court of Appeals, 121 SCRA 354) Accordingly, the other
reliefs prayed for by the defendants are hereby dismissed.
SO ORDERED.[9]
Amante, et al. appealed the aforesaid decision to the CA, docketed as
CA-G.R. CV No. 38182.
On June 28, 1994, the CA affirmed with modification the decision of
the trial court in the injunction case. The dispositive portion of the appellate
courts decision[10] reads as follows:
WHEREFORE, the judgment herein appealed from is hereby AFFIRMED,
with the modification that the defendants-appellees are hereby ordered,
jointly and severally, to pay the plaintiffs-appellants nominal damages in the
amount of P5,000.00 per plaintiff. No pronouncement as to costs.
ADMINLAW CASES
SO ORDERED.[11]
Nominal damages were awarded by the CA because it found that
SRRDC violated Amante, et al.s rights as possessors of the subject property.
[12]
Amante, et al. filed a motion for reconsideration thereof, pointing out
the DARABs decision placing the property under compulsory acquisition,
and the CA decision in CA-G.R. SP No. 27234, affirming the same.[13] The
CA, however, denied the motion, with the modification that only SRRDC
and the defendants-security guards should be held jointly and severally
liable for the nominal damages awarded. It also made the clarification that
the decision should not preempt any judgment or prejudice the right of any
party in the agrarian reform case pending before the Supreme Court (G.R.
No. 112526).[14]
Thus, Amante, et al. filed on March 2, 1995, herein petition, docketed
as G.R. No. 118838 on the following grounds:
4.1. THE COURT OF APPEALS DECIDED THE CASE CONTRARY TO
LAW OR APPLICABLE SUPREME COURT DECISIONS BECAUSE:
4.1.1 FIRST, PETITIONERS MAY NOT BE LAWFULLY EVICTED
FROM THEIR LANDHOLDINGS CONSIDERING THAT:
-- (A) PETITIONERS ARE ALREADY THE REGISTERED OWNERS
UNDER THE TORRENS SYSTEM OF THE PROPERTIES IN
QUESTION SINCE FEBRUARY 26, 1992 BY VIRTUE OF RA 6657 OR
THE COMPREHENSIVE AGRARIAN REFORM LAW;
-- (B) THE COURT OF APPEALS HAS AFFIRMED THE REGIONAL
TRIAL COURT OF LAGUNAS DISMISSAL OF THE EJECTMENT
CASES FILED BY RESPONDENT SRRDC AGAINST PETITIONERS;
AND
-- (C) ASSUMING FOR THE SAKE OF ARGUMENT ONLY THAT
PETITIONERS ARE NOT YET THE REGISTERED OWNERS OF THE
PROPERTIES IN QUESTION, RESPONDENTS MAY NOT RAISE THE
ISSUE OF OWNERSHIP IN THIS CASE FOR INJUNCTION WITH
DAMAGES, THE SAME TO BE VENTILATED IN A SEPARATE
53
ACTION, NOT IN THIS CASE BROUGHT TO PREVENT
RESPONDENTS FROM COMMITTING FURTHER ACTS OF
DISPOSSESSION [BACAR V. DEL ROSARIO ET AL., 171 SCRA 451
(1989)].
4.1.2 SECOND, PETITIONERS ARE ENTITLED TO MORAL,
EXEMPLARY DAMAGES AND ATTORNEYS FEES, INSTEAD OF
MERE NOMINAL DAMAGES, CONSIDERING THAT THE COURT OF
APPEALS FOUND RESPONDENTS TO HAVE UNLAWFULLY AND
ILLEGALLY DISTURBED PETITIONERS PEACEFUL AND
CONTINUOUS POSSESSION.[15]
Ejectment Cases Filed by SRRDC
Between October 1986 and August 1987, after the injunction case was
filed by Amante, et al., SRRDC filed with the Municipal Trial Court (MTC)
of Cabuyao, Laguna, several complaints for forcible entry with preliminary
injunction and damages against Amante, et al., docketed asCivil Cases Nos.
250, 258, 260, 262 and 266. SRRDC alleged that some time in July 1987,
they learned that Amante, et al., without their authority and through stealth
and strategy, were clearing, cultivating and planting on the subject property;
and that despite requests from SRRDCs counsel, Amante, et al. refused to
vacate the property, prompting them to file the ejectment cases. [16] Amante,
et al. denied that SRRDC are the absolute owners of the property, stating
that they have been in peaceful possession thereof, through their
predecessors-in-interest, since 1910.[17]
On May 24, 1991, the MTC-Cabuyao rendered its decision in favor of
SRRDC. Amante, et al. were ordered to surrender possession and vacate the
subject property. The decision was appealed to the Regional Trial Court of
Bian, Laguna (Assisting Court).
On February 18, 1992, the RTC dismissed the ejectment cases on the
ground that the subject property is an agricultural land being tilled by
Amante, et al., hence it is the Department of Agrarian Reform (DAR),
which has jurisdiction over the dispute.[18] The RTCs dismissal of the
complaints was brought to the CA via a petition for review, docketed
as CA-G.R. SP No. 33382.[19] In turn, the CA dismissed the petition per its
ADMINLAW CASES
Decision dated January 17, 1995 on the ground that SRRDC failed to show
any prior physical possession of the subject property that would have
justified the filing of the ejectment cases.[20] Also, the CA did not sustain the
RTCs finding that the subject properties are agricultural lands and Amante,
et al. are tenant/farmers thereof, as the evidence on record does not support
such finding. The parties did not file any motion for reconsideration from
the Court of Appeals dismissal, hence, it became final and executory.[21]
Administrative Proceedings
While the injunction and ejectment cases were still in process, it
appears that in August, 1989, the Municipal Agrarian Reform Office
(MARO) issued a Notice of Coverage to SRRDC, informing petitioners that
the property covered by TCT Nos. T-81949, T-84891 and T-92014 is
scheduled for compulsory acquisition under the Comprehensive Agrarian
Reform Program (CARP).[22] SRRDC filed its Protest and Objection with
the MARO on the grounds that the area was not appropriate for agricultural
purposes, as it was rugged in terrain with slopes of 18% and above, and that
the occupants of the land were squatters, who were not entitled to any land
as beneficiaries.[23] Thereafter, as narrated in the Decision of the Court dated
October 12, 2001 in G.R. No. 112526, the following proceedings ensued:
On August 29, 1989, the farmer beneficiaries together with the BARC
chairman answered the protest and objection stating that the slope of the
land is not 18% but only 5-10% and that the land is suitable and
economically viable for agricultural purposes, as evidenced by the
Certification of the Department of Agriculture, municipality of Cabuyao,
Laguna.
On September 8, 1989, MARO Belen dela Torre made a summary
investigation report and forwarded the Compulsory Acquisition Folder
Indorsement (CAFI) to the Provincial Agrarian Reform Officer (hereafter,
PARO).
On September 21, 1989, PARO Durante Ubeda forwarded his endorsement
of the compulsory acquisition to the Secretary of Agrarian Reform.
54
On November 23, 1989, Acting Director Eduardo C. Visperas of the Bureau
of Land Acquisition and Development, DAR forwarded two (2)
Compulsory Acquisition Claim Folders covering the landholding of
SRRDC, covered by TCT Nos. T-81949 and T-84891 to the President, Land
Bank of the Philippines for further review and evaluation.
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor
Santiago sent two (2) notices of acquisition to petitioner, stating that
petitioners landholdings covered by TCT Nos. T-81949 and T-84891,
containing an area of 188.2858 and 58.5800 hectares, valued
at P4,417,735.65 and P1,220,229.93, respectively, had been placed under
the Comprehensive Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters separately addressed
to Secretary Florencio B. Abad and the Director, Bureau of Land
Acquisition and Distribution, sent its formal protest, protesting not only the
amount of compensation offered by DAR for the property but also the two
(2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB
for summary proceedings to determine just compensation under R.A.
No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders previously
referred for review and evaluation to the Director of BLAD mentioning its
inability to value the SRRDC landholding due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote the
Land Bank President Deogracias Vistan to forward the two (2) claim
folders involving the property of SRRDC to the DARAB for it to
conduct summary proceedings to determine the just compensation for
the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the Philippines
stating that its property under the aforesaid land titles were exempt from
CARP coverage because they had been classified as watershed area and
were the subject of a pending petition for land conversion.
ADMINLAW CASES
On May 10, 1990, Director Narciso Villapando of BLAD turned over the
two (2) claim folders (CACFs) to the Executive Director of the DAR
Adjudication Board for proper administrative valuation. Acting on the
CACFs, on September 10, 1990, the Board promulgated a resolution
asking the office of the Secretary of Agrarian Reform (DAR) to first
resolve two (2) issues before it proceeds with the summary land
valuation proceedings.
The issues that need to be threshed out were as follows: (1) whether the
subject parcels of land fall within the coverage of the Compulsory
Acquisition Program of the CARP; and (2) whether the petition for land
conversion of the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the
Undersecretary for Operations (Assistant Secretary for Luzon
Operations) and the Regional Director of Region IV, submitted a report
answering the two issues raised. According to them, firstly, by virtue of
the issuance of the notice of coverage on August 11, 1989, and notice of
acquisition on December 12, 1989, the property is covered under
compulsory acquisition. Secondly, Administrative Order No. 1, Series of
1990, Section IV D also supports the DAR position on the coverage of
the said property. During the consideration of the case by the Board,
there was no pending petition for land conversion specifically
concerning the parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing to all the parties
interested, setting the hearing for the administrative valuation of the subject
parcels of land on March 6, 1991. However, on February 22, 1991, Atty.
Ma. Elena P. Hernandez-Cueva, counsel for SRRDC, wrote the Board
requesting for its assistance in the reconstruction of the records of the case
because the records could not be found as her co-counsel, Atty. Ricardo
Blancaflor, who originally handled the case for SRRDC and had possession
of all the records of the case was on indefinite leave and could not be
contacted. The Board granted counsels request and moved the hearing on
April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the
latter to resolve SRRDCs petition for exemption from CARP coverage
55
before any administrative valuation of their landholding could be had
by the Board.
On April 4, 1991, the initial DARAB hearing of the case was held and
subsequently, different dates of hearing were set without objection from
counsel of SRRDC. During the April 15, 1991 hearing, the subdivision plan
of subject property at Casile, Cabuyao, Laguna was submitted and marked
as Exhibit 5 for SRRDC. At the hearing on April 23, 1991, the Land Bank
asked for a period of one month to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning
Administrator Generoso B. Opina was presented. The certification issued on
September 8, 1989, stated that the parcels of land subject of the case were
classified as Industrial Park per Sangguniang Bayan Resolution No. 45-89
dated March 29, 1989.
To avert any opportunity that the DARAB might distribute the lands to the
farmer beneficiaries, on April 30, 1991, petitioner filed a petition with
DARAB to disqualify private respondents as beneficiaries. However,
DARAB refused to address the issue of beneficiaries.[24]
...
On December 19, 1991, the DARAB promulgated a decision,
affirming the dismissal of the protest of SRRDC against the compulsory
coverage of the property covered by TCT Nos. 81949 and 84891. The
decretal portion of the decision reads:
WHEREFORE, based on the foregoing premises, the Board hereby orders:
1. The dismissal for lack of merit of the protest against the
compulsory coverage of the landholdings of Sta. Rosa Realty
Development Corporation (Transfer Certificates of Title Nos.
81949 and 84891 with an area of 254.766 hectares) in
Barangay Casile, Municipality of Cabuyao, Province of
Laguna under the Comprehensive Agrarian Reform Program
is hereby affirmed;
ADMINLAW CASES
2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa
Realty Development Corporation the amount of Seven
Million Eight Hundred Forty-One Thousand, Nine Hundred
Ninety Seven Pesos and Sixty-Four centavos (P7,841,997.64)
for its landholdings covered by the two (2) Transfer
Certificates of Title mentioned above. Should there be a
rejection of the payment tendered, to open, if none has yet
been made, a trust account for said amount in the name of
Sta. Rosa Realty Development Corporation;
3. The Register of Deeds of the Province of Laguna to cancel
with dispatch Transfer Certificate of Title Nos. 84891 and
81949 and new one be issued in the name of the Republic of
the Philippines, free from liens and encumbrances;
4. The Department of Environment and Natural Resources either
through its Provincial Office in Laguna or the Regional
Office, Region IV, to conduct a final segregation survey on
the lands covered by Transfer Certificate of Title Nos. 84891
and 81949 so the same can be transferred by the Register of
Deeds to the name of the Republic of the Philippines;
5. The Regional Office of the Department of Agrarian Reform
through its Municipal and Provincial Agrarian Reform Office
to take immediate possession on the said landholding after
Title shall have been transferred to the name of the Republic
of the Philippines, and distribute the same to the immediate
issuance of Emancipation Patents to the farmer-beneficiaries
as determined by the Municipal Agrarian Reform Office of
Cabuyao, Laguna.[25]
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a
memorandum directing the Land Bank of the Philippines (LBP) to open a
trust account in favor of SRRDC, for P5,637,965.55, as valuation for the
SRRDC property.
The titles in the name of SRRDC were cancelled and
corresponding TCTs were issued in the name of the Republic of the
Philippines on February 11, 1992,[26] after which Certificates of Land
Ownership Award (CLOA) were issued in the name of the farmers-
beneficiaries on February 26, 1992.[27]
56
 In the meantime, SRRDC had filed with the CA a petition for review
of the DARABs decision, docketed as CA-G.R. SP No. 27234.
On November 5, 1993, the CA affirmed the decision of DARAB, to
wit:
WHEREFORE, premises considered, the DARAB decision dated December
19, 1991 is AFFIRMED, without prejudice to petitioner Sta. Rosa Realty
Development Corporation ventilating its case with the Special Agrarian
Court on the issue of just compensation.[28]
Hence, SRRDC filed on November 24, 1993, herein petition, docketed
as G.R. No. 112526 on the following grounds:
I of the CARP to landless residents is unconstitutional.
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS
JURISDICTION IN RULING THAT THE SRRDC PROPERTIES,
DESPITE THE UNDISPUTED FACT OF THEIR NON-AGRICULTURAL
CLASSIFICATION PRIOR TO RA 6657, ARE COVERED BY THE
CARP CONTRARY TO THE NATALIA REALTY DECISION OF THIS
HONORABLE COURT.
i. The SRRDC properties have been zoned and approved as
PARK since 1979.
ii. The SRRDC properties form part of a watershed area.
II
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS
JURISDICTION IN DISREGARDING ECOLOGICAL
CONSIDERATIONS AS MANDATED BY LAW.
III
ADMINLAW CASES
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS
JURISDICTION IN AFFIRMING THE DISTRIBUTION OF THE SRRDC
PROPERTIES TO PRIVATE RESPONDENTS WHO HAVE BEEN
JUDICIALLY DECLARED AS SQUATTERS AND THEREFORE ARE
NOT QUALIFIED BENEFICIARIES PURSUANT TO THE CENTRAL
MINDANAO UNIVERSITY DECISION OF THIS HONORABLE
COURT.
i. The acquisition of the SRRDC properties cannot be valid
for future beneficiaries.
ii. Section 22 of RA 6657 insofar as it expands the coverage
IV
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS
JURISDICTION IN HOLDING THAT THE DARAB HAS
JURISDICTION TO PASS UPON THE ISSUE OF WHETHER THE
SRRDC PROPERTIES ARE SUBJECT TO CARP COVERAGE.[29]
On October 12, 2001, the Court rendered its Decision in G.R. No.
112526 only, setting aside the decision of the CA in CA-G.R. SP No. 27234
and ordering the remand of the case to the DARAB for re-evaluation and
determination of the nature of the land. The dispositive portion of the
Decision reads as follows:
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the Court of
Appeals in CA-G.R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for re-
evaluation and determination of the nature of the parcels of land involved to
resolve the issue of its coverage by the Comprehensive Land Reform
Program.
57
In the meantime, the effects of the CLOAs issued by the DAR to supposed
farmer beneficiaries shall continue to be stayed by the temporary restraining
order issued on December 15, 1993, which shall remain in effect until final
decision on the case.
No costs.
SO ORDERED.[30]
It is the opinion of the Court in G.R. No. 112526, that the property is
part of a watershed, and that during the hearing at the DARAB, there was
proof that the land may be excluded from the coverage of the CARP
because of its high slopes.[31] Thus, the Court concluded that a remand of the
case to the DARAB for re-evaluation of the issue of coverage is appropriate
in order to resolve the true nature of the subject property.[32]
In their Memorandum, Amante, et al. argues that there exist
compelling reasons to grant the second motion for reconsideration of the
assailed decision of the Court, to wit:
2.1 Only QUESTIONS OF LAW are admittedly and undeniably at issue;
yet the Honorable Court reviewed the findings of facts of the Court of
Appeals and the DARAB although the case does not fall into any of the
well-recognized exceptions to conduct a factual review. Worse, the 12
October 2001 Decision assumed facts not proven before any administrative,
quasi-judicial or judicial bodies;
2.2 The DARAB and the Court of Appeals already found the land to be
CARPable; yet the Honorable Court remanded the case to DARAB to re-
evaluate if the land is CARPable;
2.3 The Decision did not express clearly and distinctly the facts and the law
on which it is based;
2.4 The Decision renewed the Temporary Restraining Order issued on 15
December 1993, issuance of which is barred by Sec. 55 of R.A. 6657; and
ADMINLAW CASES
2.5 This Honorable Court denied private respondents Motion for
Reconsideration although issues raised therein were never passed upon in
the 12 October 2001 Decision or elsewhere.[33]
The DAR and the DARAB, through the Office of the Solicitor
General, did not interpose any objection to the second motion for
reconsideration. It also maintained that if SRRDCs claim that the property
is watershed is true, then it is the DENR that should exercise control and
supervision in the disposition, utilization, management, renewal and
conservation of the property.[34]
SRRDC meanwhile insists that there are no compelling reasons to give
due course to the second motion for reconsideration.[35]
At the outset, the Court notes that petitioner designated its petition
in G.R. No. 112526 as one for review on certiorari of the decision of the
CA. In the same breath, it likewise averred that it was also being filed as a
special civil action for certiorari as public respondents committed grave
abuse of discretion.[36] Petitioner should not have been allowed, in the first
place, to pursue such remedies simultaneously as these are mutually
exclusive.[37]
It is SRRDCs claim that the CA committed grave abuse of discretion
in holding that the subject property is agricultural in nature. In support of its
contention, it argued, among others, that the subject property had already
been classified as park since 1979 under the Zoning Ordinance of Cabuyao,
as approved by the Housing and Land Use Regulatory Board (HLURB);
that it forms part of a watershed; and that the CA disregarded ecological
considerations.[38] SRRDC also claimed that Amante, et al. are not qualified
beneficiaries.[39]
Clearly, these issues are factual in nature, which the Court, as a rule,
should not have considered in this case. However, there are recognized
exceptions, e.g., when the factual inferences of the appellate court are
manifestly mistaken; the judgment is based on a misapprehension of facts;
or the CA manifestly overlooked certain relevant and undisputed facts that,
if properly considered, would justify a different legal conclusion.[40] The
present cases fall under the above exceptions.
Thus, in order to finally set these cases to rest, the Court shall resolve
the substantive matters raised, which in effect comes down to the issue of
the validity of the acquisition of the subject property by the Government
58
under Republic Act (R.A.) No. 6657, or the Comprehensive Agrarian
Reform Law of 1988 (CARL).
As noted earlier, the DARAB made its finding regarding the nature of
the property in question, i.e., the parcels of land are agricultural and may be
the subject of compulsory acquisition for distribution to farmer-
beneficiaries, thus:
Ocular inspections conducted by the Board show that the subject
landholdings have been under the possession and tillage of the DAR
identified potential beneficiaries which they inherited from their forebears
(workers of the Yulo Estate). They are bonafide residents and registered
voters (DARAB Exhibits C and J) of Barangay Casile, Cabuyao, Laguna.
There is a barangay road leading toward the barangay school and sites and
the settlement has a barangay hall, church, elementary school buildings
(DARAB Exhibit Q), Comelec precincts (DARAB Exhibits J-1 and J-2),
and other structures extant in progressive communities. The barangay
progressive development agencies, like the DECS, DA, COMELEC, DAR
and Support Services of Land Bank, DPWH, DTI and the Cooperative
Development Authority have extended support services to the community
(DARAB Exhibits I, K to K-3, L, M, N, O, P to P-6). More importantly,
subject landholdings are suitable for agriculture. Their topography is
flat to undulating 3-15% slope. (Testimony of Rosalina Jumaquio,
Agricultural Engineer, DAR, TSN, June 21, 1991, DARAB Exhibits F
and H). Though some portions are over 18% slope, nevertheless, clearly
visible thereat are fruit-bearing trees, like coconut, coffee, and
pineapple plantations, etc. (see Petitioners Exhibits A to YYY and
DARAB Exhibits A to S, Records). In other words, they are already
productive and fully developed.
...
As the landholdings of SRRDC subject of the instant proceedings are
already developed not only as a community but also as an agricultural
farm capable of sustaining daily existence and growth, We find no
infirmity in placing said parcels of land under compulsory coverage.
They do not belong to the exempt class of lands. The claim that the
landholding of SRRDC is a watershed; hence, belonging to the exempt
class of lands is literally throwing punches at the moon because the
DENR certified that the only declared watershed in Laguna Province
ADMINLAW CASES
and San Pablo City is the Caliraya-Lumot Rivers (Petitioners Exhibit
A). A sensu contrario, the landholdings subject herein are not.
[41]
(Emphasis supplied)
The evidence on record supports these findings, to wit:
1. Certification dated January 16, 1989 by the OIC Provincial
Environment and Natural Resources Office of Laguna that
the only declared watershed in the Laguna province and San
Pablo City is the Caliraya-Lumot Rivers No. 1570 dated
September 1, 1976;[42]
2. Map prepared by Agricultural Engineer Rosalina H. Jumaquio
showing that: a) the topography of the property covered by
TCT No. T-84891 topography is flat to undulating with a 5 to
10% slope; (b) it is suitable to agricultural crops; and (c) the
land is presently planted with diversified crops;[43]
3. Certification dated August 28, 1989 by APT Felicito Buban of
the Department of Agriculture of Laguna that, per his ocular
inspection, the subject property is an agricultural area, and
that the inhabitants main occupation is farming;[44]
4. Pictures taken by MARO Belen La Torre of Cabuyao, Laguna,
showing that the property is cultivated and inhabited by the
farmer-beneficiaries;[45]
SRRDC however, insists that the property has already been classified
as a municipal park and beyond the scope of CARP. To prove this, SRRDC
submitted the following:
1. Certification dated March 1, 1991 by the Municipality of
Cabuyao, Laguna that the entire barangay of Casile is
delineated as Municipal Park;[46]
2. Certification dated March 11, 1991 by the Housing and Land
Use Regulatory Board that the parcels of land located in
Barangay Casile are within the Municipal Park, based on the
municipalitys approved General Land Use Plan ratified by the
Housing and Land Use Regulatory Board as per Resolution
No. 38-2 dated June 25, 1980;[47]
59
 3. Photocopies of pictures taken by Mr. Ernesto Garcia, Officer-
in-Charge of the Special Project Section of CJ Yulo and Sons,
Inc., of portions of Barangay Casile;[48]
The Court recognizes the power of a local government to reclassify
and convert lands through local ordinance, especially if said ordinance is
approved by the HLURB.[49] Municipal Ordinance No. 110-54 dated
November 3, 1979, enacted by the Municipality of Cabuyao, divided the
municipality into residential, commercial, industrial, agricultural and
institutional districts, and districts and parks for open spaces. [50] It did not
convert, however, existing agricultural lands into residential, commercial,
industrial, or institutional. While it classified Barangay Casile into a
municipal park, as shown in its permitted uses of land map, the ordinance
did not provide for the retroactivity of its classification. In Co vs.
Intermediate Appellate Court,[51] it was held that an ordinance converting
agricultural lands into residential or light industrial should be given
prospective application only, and should not change the nature of existing
agricultural lands in the area or the legal relationships existing over such
lands. Thus, it was stated:
A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981,
does not disclose any provision converting existing agricultural lands in the
covered area into residential or light industrial. While it declared that after
the passage of the measure, the subject area shall be used only for
residential or light industrial purposes, it is not provided therein that it shall
have retroactive effect so as to discontinue all rights previously acquired
over lands located within the zone which are neither residential nor light
industrial in nature. This simply means that, if we apply the general rule,
as we must, the ordinance should be given prospective operation only.
The further implication is that it should not change the nature of
existing agricultural lands in the area or the legal relationships existing
over such lands [52] (Emphasis supplied)
Under Section 3 (c) of R.A. No. 6657, agricultural land is defined as
land devoted to agricultural activity and not classified as mineral, forest,
residential, commercial or industrial land. Section 3 (b) meanwhile defines
agricultural activity as the cultivation of the soil, planting of crops, growing
of fruit trees, raising of livestock, poultry or fish, including the harvesting of
such products, and other farm activities, and practices performed by a
ADMINLAW CASES
farmer in conjunction with such farming operations done by persons
whether natural or juridical.
Before Barangay Casile was classified into a municipal park by the
local government of Cabuyao, Laguna in November 1979, it was part of a
vast property popularly known as the Canlubang Sugar Estate. SRRDC
claimed that in May 1979, the late Miguel Yulo allowed the employees of
the Yulo group of companies to cultivate a maximum area of one hectare
each subject to the condition that they should not plant crops being grown
by the Canlubang Sugar Estate, like coconuts and coffee, to avoid confusion
as to ownership of crops.[53] The consolidation and subdivision plan
surveyed for SRRDC on March 10-15, 1984[54] also show that the subject
property is sugar land. Evidently, the subject property is already agricultural
at the time the municipality of Cabuyao enacted the zoning ordinance, and
such ordinance should not affect the nature of the land. More so since the
municipality of Cabuyao did not even take any step to utilize the
property as a park.
SRRDC cites the case of Natalia Realty, Inc. vs. DAR,[55] wherein it
was ruled that lands not devoted to agricultural activity and not classified as
mineral or forest by the DENR and its predecessor agencies, and not
classified in town plans and zoning ordinances as approved by the HLURB
and its preceding competent authorities prior to the enactment of R.A. No.
6657 on June 15, 1988, are outside the coverage of the CARP. Said ruling,
however, finds no application in the present case. As previously stated,
Municipal Ordinance No. 110-54 of the Municipality of Cabuyao did not
provide for any retroactive application nor did it convert existing
agricultural lands into residential, commercial, industrial, or institutional.
Consequently, the subject property remains agricultural in nature and
therefore within the coverage of the CARP.
Only on March 9, 2004, SRRDC filed with the Court a Manifestation
pointing out DAR Order No. (E)4-03-507-309 dated February 17, 2004,
exempting from CARP coverage two parcels of land owned by SRRDC and
covered by TCT Nos. T-85573 and T-92014.[56] The DAR found that these
properties have been re-classified into Municipal Parks by the Municipal
Ordinance of Cabuyao, Laguna, and are part of the Kabangaan-Casile
watershed, as certified by the DENR.[57]
The Court notes however that the said DAR Order has absolutely no
bearing on these cases. The herein subject property is covered by TCT Nos.
60
81949 and 34891, totally different, although adjacent, from the property
referred to in said DAR Order.
SRRDC also contends that the property has an 18% slope and over
and therefore exempt from acquisition and distribution under Section 10 of
R.A. No. 6657. What SRRDC opted to ignore is that Section 10, as
implemented by DAR Administrative Order No. 13 dated August 30, 1990,
also provides that those with 18% slope and over but already developed
for agricultural purposes as of June 15, 1988, may be allocated to
qualified occupants.[58] Hence, even assuming that the property has an 18%
slope and above, since it is already developed for agricultural purposes, then
it cannot be exempt from acquisition and distribution. Moreover, the
topography maps prepared by Agricultural Engineer Rosalina H. Jumaquio
show that the property to be acquired has a 5-10% flat to undulating scope;
[59]
that it is suitable to agricultural crops;[60] and it is in fact already planted
with diversified crops.[61]
Also, the Certification dated July 1, 1991 by Geodetic Engineer
Conrado R. Rigor that the top portion of Barangay Casile has a 0 to 18%
slope while the side of the hill has a 19 to 75% slope,[62] was presented by
SRRDC only during the proceedings before the CA which had no probative
value in a petition for review proceedings. The Court notes that SRRDC had
been given ample time and opportunity by the DARAB to prove the
grounds for its protest and objection but miserably failed to take advantage
of such time and opportunity[63] in the DARAB proceedings.
SRRDC also contends that the property is part of a watershed, citing
as evidence, the Certification dated June 26, 1991 by the Laguna Lake
Development Authority that Barangay Casile is part of the watershed area
of the Laguna Lake Basin,[64] and the Final Report for Watershed Area
Assessment Study for the Canlubang Estate dated July 1991 undertaken by
the Engineering & Development Corporation of the Philippines.[65] It must
be noted, however, that these pieces of evidence were likewise brought to
record only when petitioner filed its petition for review with the CA. The
DARAB never had the opportunity to assess these pieces of evidence.
The DARAB stated:
Noting the absence of evidence which, in the nature of things, should have
been submitted by landowner SRRDC and to avoid any claim of deprivation
of its right to prove its claim to just compensation (Uy v. Genato, 57 SCRA
ADMINLAW CASES
123). We practically directed its counsel in not only one instance, during the
series of hearings conducted, to do so. We even granted continuances to
give it enough time to prepare and be ready with the proof and documents.
To Our dismay, none was submitted and this constrained Us to take the
failure/refusal of SRRDC to present evidence as a waiver or, at least, an
implied acceptance of the valuation made by the DAR.[66]
The same goes with the CA, which did not have the discretion to
consider evidence in a petition for certiorari or petition for review
oncertiorari outside than that submitted before the DARAB. The CA noted
petitioners failure to present evidence in behalf of its arguments, thus:
. . . It must be recalled that petitioner Sta. Rosa Realty itself had asked the
DARAB in a petition dated March 18, 1991 to allow it to adduce evidence
in support of its position that the subject parcels of land are not covered by
the CARP beginning on the scheduled hearing dated April 4, 1991. And
DARAB obliged as in fact the petitioner commenced to introduce evidence.
If petitioner failed to complete the presentation of evidence to support its
claim of exemption from CARP coverage, it has only itself to blame for
which DARAB cannot be accused of not being impartial.[67]
Consequently, there is no need to order the remand of the case to the
DARAB for re-evaluation and determination of the nature of the parcels of
land involved. It runs contrary to orderly administration of justice and
would give petitioner undue opportunity to present evidence in support of
its stance, an opportunity it already had during the DARAB proceedings,
and which opportunity it regrettably failed to take advantage of.
More significantly however, it is the DAR Secretary that originally
declared the subject property as falling under the coverage of the
CARP.
Moreover, DAR Administrative Order No. 13, Series of 1990 (Rules
and Procedure Governing Exemption of Lands from CARP Coverage under
Section 10, R.A. No. 6657) provides:
I. LEGAL MANDATE
61
The general policy under CARP is to cover as much lands suitable for
agriculture as possible. However, Section 10, RA 6657 excludes and
exempts certain types of lands from the coverage of CARP, to wit:
A. Lands actually, directly and exclusively used and found to be
necessary for parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watersheds and mangroves,
national defense, school sites and campuses including
experimental farm stations operated by public or private schools
for educational purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereof,
communal burial grounds and cemeteries, penal colonies and
penal farms actually worked by the inmates, government and
private research and quarantine centers; and
...
II. POLICIES
In the application of the aforecited provision of law, the following
guidelines shall be observed:
A. For an area in I.A to be exempted from CARP coverage, it
must be actually, directly and exclusively used and found
to be necessary for the purpose so stated.
...
C. Lands which have been classified or proclaimed, and/or actually directly
and exclusively used and found to be necessary for parks, wildlife, forest
reserves, fish sanctuaries and breeding grounds, and watersheds and
mangroves shall be exempted from the coverage of CARP until Congress,
taking into account ecological, developmental and equity considerations,
shall have determined by law, the specific limits of public domain, as
provided for under Sec. 4(a) of RA 6657, and a reclassification of the said
areas or portions thereof as alienable and disposable has been approved.
(Emphasis supplied)
ADMINLAW CASES
In order to be exempt from coverage, the land must have
been classified or proclaimed and actually, directly and exclusively used
and found to be necessary for watershed purposes.[68] In this case, at the
time the DAR issued the Notices of Coverage up to the time the DARAB
rendered its decision on the dispute, the subject property is yet to be
officially classified or proclaimed as a watershed and has in fact long been
used for agricultural purposes. SRRDC relies on the case of Central
Mindanao University (CMU) vs. DARAB,[69] wherein the Court ruled that
CMU is in the best position to determine what property is found necessary
for its use. SRRDC claims that it is in the best position to determine
whether its properties are necessary for development as park and watershed
area.[70]
But SRRDCs reliance on the CMU case is flawed. In the CMU case,
the subject property from the very beginning was not alienable and
disposable because Proclamation No. 476 issued by the late President
Carlos P. Garcia already reserved the property for the use of the school.
Besides, the subject property in the CMU case was actually, directly and
exclusively used and found to be necessary for educational purposes.
In the present case, the property is agricultural and was not actually
and exclusively used for watershed purposes. As records show, the subject
property was first utilized for the purposes of the Canlubang Sugar Estate.
[71]
Later, petitioner claimed that the occupants were allowed to cultivate the
area so long as they do not plant crops being grown by the Canlubang Sugar
Estate in order to avoid confusion as to ownership thereof.[72] Thus, based
on its own assertions, it appears that it had benefited from the fruits of the
land as agricultural land. Now, in a complete turnaround, it is claiming that
the property is part of a watershed.
Furthermore, in a belated attempt to prove that the subject property is
part of a watershed that must be environmentally protected, SRRDC
submitted before the Court a Final Report dated February 1994 undertaken
by the Ecosystems Research and Development Bureau (ERDB) of the
DENR entitled, Environmental Assessment of the Casile and Kabanga-an
River Watersheds.[73] The study, according to SRRDC, was made pursuant
to a handwritten instruction issued by then President Fidel V. Ramos. The
study noted that, the continuing threat of widespread deforestation and
unwise land use practices have resulted in the deteriorating condition of the
watersheds.[74] But the Court also notes the Memorandum for the President
dated September 1993 by then DENR Secretary Angel C. Alcala that, after a
62
field inspection conducted by the DENRs Regional Executive Director and
the Provincial and Community Natural Resource Officers, it was found that:
...
2. Many bankal trees were found growing in the
watershed/CARP areas, including some which have been
coppiced, and that water conduits for domestic and industrial
uses were found installed at the watershed area claimed by
the Yulos. Records further show that in the 1970s, a Private
Land Timber Permit was issued to Canlubang Sugar Estate
thru its marketing arm, the Sta. Rosa Realty Devpt. Corp.
3. Resident farmers denied that they have been cutting bankal
trees and volunteered the information that one of the Estates
security guards was dismissed for cutting and transporting
bankal trees. The trees cut by the dismissed security guard
were found stacked adjacent to the Canlubang Security
Agencys headquarters.[75]
Evidently, SRRDC had a hand in the degradation of the area, and now
wants to put the entire blame on the farmer-beneficiaries. It is reasonable to
conclude that SRRDC is merely using ecological considerations to avert
any disposition of the property adverse to it.
SRRDC also objects to the identification of Amante, et al. as
beneficiaries of the subject property. Suffice it to say that under Section 15
of R.A. No. 6657, the identification of beneficiaries is a matter involving
strictly the administrative implementation of the CARP, a matter which is
exclusively vested in the Secretary of Agrarian Reform, through its
authorized offices. Section 15 reads:
SECTION 15. Registration of Beneficiaries. The DAR in coordination with
the Barangay Agrarian Reform Committee (BARC) as organized in this Act,
shall register all agricultural lessees, tenants and farmworkers who are
qualified to be beneficiaries of the CARP. These potential beneficiaries with
the assistance of the BARC and the DAR shall provide the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and
the length of tenurial relationship;
(c) location and area of the land they work;
ADMINLAW CASES
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages received.
A copy of the registry or list of all potential CARP beneficiaries in the
barangay shall be posted in the barangay hall, school or other public
buildings in the barangay where it shall be open to inspection by the public
at all reasonable hours.
Meanwhile, Administrative Order No. 10 (Rules and Procedures
Governing the Registration of Beneficiaries), Series of 1989, provides:
SUBJECT: I. PREFATORY STATEMENT
Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian Reform
Law of 1988, the DAR, in coordination with the Barangay Agrarian Reform
Committee (BARC), as organized pursuant to RA 6657, shall register all
agricultural lessees, tenants and farmworkers who are qualified
beneficiaries of the CARP. This Administrative Order provides the
Implementing Rules and Procedures for the said registration.
...
B. Specific
1. Identify the actual and potential farmer-beneficiaries of the CARP.
In Lercana vs. Jalandoni,[76] the Court categorically stated that:
the identification and selection of CARP beneficiaries are matters involving
strictly the administrative implementation of the CARP, a matter
exclusively cognizable by the Secretary of the Department of Agrarian
Reform, and beyond the jurisdiction of the DARAB.[77]
The farmer-beneficiaries have already been identified in this case.
Also, the DAR Secretary has already issued Notices of Coverage and
Notices of Acquisition pertaining to the subject property. It behooves the
courts to exercise great caution in substituting its own determination of the
63
issue, unless there is grave abuse of discretion committed by the
administrative agency,[78] which in these cases the Court finds none.
SRRDC questions the constitutionality of Section 22 of R.A. No.
6657, which reads in part:
SECTION 22. Qualified Beneficiaries. The lands covered by the CARP
shall be distributed as much as possible to landless residents of the same
barangay, or in the absence thereof, landless residents of the same
municipality in the following order of priority.
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(g) others directly working on the land.
...
SRRDC argues that Section 22 sweepingly declares landless residents
as beneficiaries of the CARP (to mean also squatters), in violation of Article
XIII, Section 4 of the Constitution, which aims to benefit only the landless
farmers and regular farmworkers.[79]
The Court cannot entertain such constitutional challenge. The
requirements before a litigant can challenge the constitutionality of a law
are well-delineated, viz.:
(1) The existence of an actual and appropriate case;
(2) A personal and substantial interest of the party raising the
constitutional question;
(3) The exercise of judicial review is pleaded at the earliest
opportunity; and
(4) The constitutional question is the lis mota of the case.
[80]
(Emphasis supplied)
ADMINLAW CASES
Earliest opportunity means that the question of unconstitutionality of
the act in question should have been immediately raised in the proceedings
in the court below,[81] in this case, the DAR Secretary. It must be pointed out
that all controversies on the implementation of the CARP fall under the
jurisdiction of the DAR, even though they raise questions that are also
legal or constitutional in nature.[82] The earliest opportunity to raise a
constitutional issue is to raise it in the pleadings before a competent court
that can resolve the same, such that, if it is not raised in the pleadings, it
cannot be considered at the trial, and, if not considered at the trial, it cannot
be considered on appeal.[83]Records show that SRRDC raised such
constitutional challenge only before this Court despite the fact that it had
the opportunity to do so before the DAR Secretary. The DARAB correctly
refused to deal on this issue as it is the DAR Secretary who, under the law,
has the authority to determine the beneficiaries of the CARP. This Court
will not entertain questions on the invalidity of a statute where that issue
was not specifically raised, insisted upon, and adequately argued[84] in the
DAR.
Likewise, the constitutional question raised by SRRDC is not the
very lis mota in the present case. Basic is the rule that every law has in its
favor the presumption of constitutionality, and to justify its nullification,
there must be a clear and unequivocal breach of the Constitution, and not
one that is doubtful, speculative or argumentative.[85] The controversy at
hand is principally anchored on the coverage of the subject property under
the CARP, an issue that can be determined without delving into the
constitutionality of Section 22 of R.A. No. 6657. While the identification of
Amante, et al. as farmer-beneficiaries is a corollary matter, yet, the same
may be resolved by the DAR.
SRRDC questions the DARABs jurisdiction to entertain the question
of whether the subject property is subject to CARP coverage.
According to SRRDC, such authority is vested with the DAR
Secretary who has the exclusive prerogative to resolve matters involving the
administrative implementation of the CARP and agrarian laws and
regulations.[86]
There is no question that the power to determine whether a property is
subject to CARP coverage lies with the DAR Secretary. Section 50 of R.A.
No. 6657 provides that:
64
SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested
with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, except those falling under
the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).
...
The DARs jurisdiction under Section 50 of R.A. No. 6657 is two-fold.
The first is essentially executive and pertains to the enforcement and
administration of the laws, carrying them into practical operation and
enforcing their due observance, while the second is judicial and involves the
determination of rights and obligations of the parties.[87]
Pursuant to its judicial mandate of achieving a just, expeditious and
inexpensive determination of every action or proceeding before it,[88]the
DAR adopted the DARAB Revised Rules, Rule II (Jurisdiction of the
Adjudication Board) of which provides:
SECTION 1. Primary, Original and Appellate Jurisdiction. The Agrarian
Reform Adjudication Board shall have primary jurisdiction, both original
and appellate, to determine and adjudicate all agrarian disputes, cases,
controversies, and matters or incidents involving the implementation of the
Comprehensive Agrarian Reform Program under Republic Act No. 6657,
Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as
amended by Republic Act No. 6389, Presidential Decree No. 27 and other
agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall extend over but not be limited to the
following:
a) Cases involving the rights and obligations of persons engaged in the
cultivation and use of agricultural land covered by the Comprehensive
Agrarian Reform Program (CARP) and other agrarian laws;
b) Cases involving the valuation of land, and determination and payment of
just compensation, fixing and collection of lease rentals, disturbance
ADMINLAW CASES
compensation, amortization payments, and similar disputes concerning the
functions of the Land Bank;
c) Cases involving the annulment or cancellation of orders or decisions of
DAR officials other than the Secretary, lease contracts or deeds of sale or
their amendments under the administration and disposition of the DAR and
LBP;
d) Cases arising from, or connected with membership or representation in
compact farms, farmers cooperatives and other registered farmers
associations or organizations, related to land covered by the CARP and
other agrarian laws;
e) Cases involving the sale, alienation, mortgage, foreclosure, pre-emption
and redemption of agricultural lands under the coverage of the CARP or
other agrarian laws;
f) Cases involving the issuance of Certificate of Land Transfer (CLT),
Certificate of Land Ownership Award (CLOA) and Emancipation Patent
(EP) and the administrative correction thereof;
g) And such other agrarian cases, disputes, matters or concerns referred to it
by the Secretary of the DAR.
Provided, however, that matters involving strictly the administrative
implementation of the CARP and other agrarian laws and regulations,
shall be the exclusive prerogative of and cognizable by the Secretary of
the DAR. (Emphasis supplied)
On the other hand, Administrative Order No. 06-00,[89] which provides
for the Rules of Procedure for Agrarian Law Implementation (ALI) Cases,
govern the administrative function of the DAR. Under said Rules of
Procedure, the DAR Secretary has exclusive jurisdiction over classification
and identification of landholdings for coverage under the CARP, including
protests or oppositions thereto and petitions for lifting of coverage. Section
2 of the said Rules specifically provides, inter alia, that:
65
SECTION 2. Cases Covered. - These Rules shall govern cases falling
within the exclusive jurisdiction of the DAR Secretary which shall include
the following:
(a) Classification and identification of landholdings for coverage under
the Comprehensive Agrarian Reform Program (CARP), including
protests or oppositions thereto and petitions for lifting of coverage;
(b) Identification, qualification or disqualification of potential farmer-
beneficiaries;
(c) Subdivision surveys of lands under CARP;
(d) Issuance, recall or cancellation of Certificates of Land Transfer (CLTs)
and CARP Beneficiary Certificates (CBCs) in cases outside the purview of
Presidential Decree (PD) No. 816, including the issuance, recall or
cancellation of Emancipation Patents (EPs) or Certificates of Land
Ownership Awards (CLOAs) not yet registered with the Register of Deeds;
(e) Exercise of the right of retention by landowner; . . . (Emphasis supplied)
Thus, the power to determine whether a property is agricultural and
subject to CARP coverage together with the identification, qualification or
disqualification of farmer-beneficiaries lies with the DAR Secretary.[90]
Significantly, the DAR had already determined that the properties
are subject to expropriation under the CARP and has distributed the
same to the farmer-beneficiaries.
Initially, the LBP forwarded the two Compulsory Acquisition Claim
Folders (CACF) covering the subject properties to the DARAB for
summary proceedings for the sole purpose of determining just
compensation. SRRDC then sent a letter to the LBP claiming that the
subject properties were exempt from CARP coverage and subject of a
pending petition for land conversion. As a consequence, the DARAB asked
the DAR Secretary to first resolve the issues raised by SRRDC before it can
proceed with the land valuation proceedings. In response, the DAR, through
the Undersecretary for Operations and the Regional Director of Region IV,
submitted its report stating that: (1) the property is subject to compulsory
acquisition by virtue of the Notice of Coverage issued on August 11, 1989,
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and Notice of Acquisition issued on December 12, 1989, and that it was
subject to CARP coverage per Section IV D of DAR Administrative Order
No. 1, Series of 1990; and (2) there was no pending petition for land
conversion involving the subject property. When SRRDC petitioned the
DARAB to resolve the issue of exemption from coverage, it was only then
that the DARAB took cognizance of said issue.[91]
As the DARAB succinctly pointed out, it was SRRDC that initiated
and invoked the DARABs jurisdiction to pass upon the question of CARP
coverage. As stated by the DARAB:
4.5.2.2. The ISSUE ON CARP COVERAGE was initiated and incorporated
in said proceeding, at the instance of petitioner itself, by filing a petition
dated March 18, 1991, Prayed therein were that DARAB:
1. Take cognizance and assume jurisdiction over the question of CARP
coverage of the subject parcels of land;
2. Defer or hold in abeyance the proceedings for administrative valuation of
the subject properties pending determination of the question of CARP
coverage;
3. Allow respondent SRRDC to adduce evidence in support of its position
that the subject parcels of land are not covered by the CARP beginning on
the scheduled hearing date of April 4, 1991 (p.3; emphasis and underscoring
supplied).
Upon persistent request of petitioner SRRDC, it was accommodated by
DARAB and a counsel of SRRDC even took the witness stand. Its lawyers
were always in attendance during the scheduled hearings until it was time
for SRRDC to present its own evidence.
4.5.2.3. But, as earlier stated, despite the open session proddings by
DARAB for SRRDC to submit evidence and the rescheduling for, allegedly,
they are still collating the evidence, nay, the request that it be allowed to
adduce evidence, none was adduced and this constrained public respondent
to declare SRRDC as having waived its right to present evidence. And, after
the remaining parties were heard, the hearing was formally terminated.
66
...
4.5.3. Needless to state, the jurisdictional objection (CARP coverage),
now being raised herein was not one of the original matters in issue.
Principally, DARAB was called upon under Section 16 of Republic Act
No. 6657 to resolve a land valuation case. But SRRDC itself insisted
that DARAB should take cognizance thereof in the same land valuation
proceeding. And, SRRDC, through its lawyers, actively participated in
the hearings conducted.
4.5.4. It was only when an adverse decision was rendered by DARAB
that the jurisdictional issue was raised in the petition for review it filed
with the Honorable Court of Appeals. It was also only then that
petitioner presented proof/evidence.
...
4.5.6. Public respondents (DAR/DARAB) are not unmindful of the rule that
matter of jurisdiction may be raised at any stage of the proceeding. But for
two serious considerations, the applicability thereof in the case at bar should
not be allowed.
4.5.6.1. The fact [part (municipal/industrial) and/or watershed] upon which
the jurisdictional issue interchangeably hinges were not established during
the hearing of the case. No proof was adduced. That the matter of CARP
coverage is strictly administrative implementation of CARP and, therefore,
beyond the competence of DARAB, belonging, as it does, to the DAR
Secretary, was not even alleged, either before DARAB or the Honorable
Court of Appeals, the numerous petitions/incidents filed notwithstanding.
Be it that as it may, the records of the case show that initially DARAB
refused to take cognizance thereof and, in fact, forwarded the issue of
CARP coverage to the office of the DAR Secretary. It was only when it was
returned to DARAB by said office that proceedings thereon commenced
pursuant to Section 1(g) of Rule II of the DARAB Revised Rules of
Procedure.
4.5.6.2. Petitioner is now estopped from assailing the jurisdiction of
DARAB. First, it expressly acknowledged the same, in fact invoked it,
when it filed its petition (Annex 4); and, second, during the scheduled
ADMINLAW CASES
hearings, SRRDC, through its counsel, actively participated, one of its
counsel (sic) even testifying. It may not now be allowed to impugn the
jurisdiction of public respondent [92] (Emphasis supplied)
In CA-G.R. SP No. 27234, the CA likewise found that it was SRRDC
that called upon the DARAB to determine the issue and it, in fact, actively
participated in the proceedings before it.[93] It was SRRDCs own act of
summoning the DARABs authority that cured whatever jurisdictional defect
it now raises. It is elementary that the active participation of a party in a
case pending against him before a court or a quasi-judicial body, is
tantamount to a recognition of that courts or bodys jurisdiction and a
willingness to abide by the resolution of the case and will bar said party
from later on impugning the courts or bodys jurisdiction.[94]
Moreover, the issue of jurisdiction was raised by SRRDC only before
the CA. It was never presented or discussed before the DARAB for obvious
reasons, i.e., it was SRRDC itself that invoked the latters jurisdiction. As a
rule, when a party adopts a certain theory, and the case is tried and decided
upon that theory in the court below, he will not be permitted to change his
theory on appeal.[95] Points of law, theories, issues and arguments not
brought to the attention of the lower court need not be, and ordinarily will
not be, considered by a reviewing court, as these cannot be raised for the
first time at such late stage.[96] To permit SRRDC to change its theory on
appeal would not only be unfair to Amante, et al. but would also be
offensive to the basic scales of fair play, justice and due process. [97]
Finally, the Court notes that then DAR Secretary Benjamin T. Leong
issued a Memorandum on July 11, 1991, ordering the opening of a trust
account in favor of SRRDC. In Land Bank of the Philippines vs. Court of
Appeals, this Court struck down as void DAR Administrative Circular No.
9, Series of 1990, providing for the opening of trust accounts in lieu of the
deposit in cash or in bonds contemplated in Section 16 (e) of R.A. No.
6657. As a result, the DAR issued Administrative Order No. 2, Series of
1996, converting trust accounts in the name of landowners into deposit
accounts.[98] Thus, the trust account opened by the LBP per instructions of
DAR Secretary Benjamin T. Leong should be converted to a deposit
account, to be retroactive in application in order to rectify the error
committed by the DAR in opening a trust account and to grant the
landowners the benefits concomitant to payment in cash or LBP bonds prior
to the ruling of the Court in Land Bank of the Philippines vs. Court of
Appeals. The account shall earn a 12% interest per annum from the time the
67
LBP opened a trust account up to the time said account was actually
converted into cash and LBP bonds deposit accounts.
Given the foregoing conclusions, the petition filed in G.R. No.
118838, which primarily rests on G.R. No. 112526, should be granted.
The judgments of the trial court in the injunction case (Civil Case No.
B-2333) and the CA in CA-G.R. SP No. 38182 were premised on SRRDCs
transfer certificates of title over the subject property. The trial court and the
CA cannot be faulted for denying the writ of injunction prayed for by
Amante, et al. since at the time the trial court rendered its decision in the
injunction case on January 20, 1992, SRRDC was still the holder of the
titles covering the subject property. The titles in its name were cancelled
and corresponding TCTs were issued in the name of the Republic of the
Philippines on February 11, 1992, and CLOAs were issued to the farmer-
beneficiaries on February 26, 1992. When Amante, et al., in their motion for
reconsideration filed in CA-G.R. SP No. 38182, brought to the CAs
attention the issuance of the CLOAs, the CA, per Resolution dated January
19, 1995, reiterated its ruling that whether or not the subject property is
covered by the Comprehensive Agrarian Reform Law (R.A. No. 6657) is
the subject matter of a separate case, and we cannot interfere with the same
at the present time. The CA further stated that (O)ur present decision is,
therefore, not intended to preempt any judgment or prejudice the right of
any party in the said case.[99] It must be noted that at that juncture, the
DARAB Decision and the CA decision in CA-G.R. SP No. 27234, finding
the subject property covered by the CARP Law, is yet to be finally resolved
by this Court in G.R. No. 112526 and in fact, a temporary restraining order
was issued by the Court on December 15, 1993, enjoining the DARAB
from enforcing the effects of the CLOAs. Amante, et al. was likewise
restrained from further clearing the subject property.[100] Hence, the decision
of the trial court and the CA denying the writ of injunction was warranted.
Nevertheless, considering that the subject property is agricultural and
may be acquired for distribution to farmer-beneficiaries identified by the
DAR under the CARP, the transfer certificates of title issued in the name of
the Republic of the Philippines and the CLOAs issued by the DAR in the
names of Amante, et al.,[101] are valid titles and therefore must be upheld. By
virtue thereof, Amante, et al. who have been issued CLOAs are now the
owners of the subject property. Consequently, the decisions of the trial
court in the injunction case and the CA in CA-G.R. SP No. 38182 must now
ADMINLAW CASES
be set aside, insofar as it orders Amante, et al. to vacate and/or enjoins them
from entering the subject property.
The Court, however, agrees with the CA that Amante, et al. is not
entitled to actual, moral and exemplary damages, as well as attorneys fees.
SRRDCs right of possession over the subject property was predicated on its
claim of ownership, and it cannot be sanctioned in exercising its rights or
protecting its interests thereon. As was ruled by the CA, Amante, et al. is
merely entitled to nominal damages as a result of SRRDCs acts.[102]
All is not lost in this case. In its Memorandum dated September 29,
1993, to the DAR Secretary, the DENR manifested that:
. . . the farmers themselves could be tapped to undertake watershed
management and protection. This community-based approach in natural
resource management, is in fact, being used in numerous watershed
management projects nationwide. Adopting the same approach in the area is
deemed the best possible solution to the case since it will not prejudice the
CLOAs issued to the farmer-beneficiaries. They should, however, be
required to undertake the necessary reforestation and other watershed
management/rehabilitation measures in the area.
In view of the foregoing, we recommend that a watershed management plan
for the area espousing the community-based approach be drawn-up jointly
by the DAR and DENR. . . .[103]
If SRRDC sincerely wants to preserve the property for ecological
considerations, it can be done regardless of who owns it. After all, we are all
stewards of this earth, and it rests on all of us to tend to it.
WHEREFORE, the Second Motion for Reconsideration is
GRANTED. The Courts Decision dated October 12, 2001 in G.R. No.
112526 is SET ASIDE and the Decision of the Court of Appeals dated
November 5, 1993 in CA-G.R. SP No. 27234 is AFFIRMED with
MODIFICATION, in that the Land Bank of the Philippines is ordered to
convert the trust account in the name of Sta. Rosa Realty Development
Corporation to a deposit account, subject to a 12% interest per annum from
the time the LBP opened a trust account up to the time said account was
actually converted into cash and LBP bonds deposit accounts. The
temporary restraining order issued by the Court on December 15, 1993, is
LIFTED.
68
 The petition filed by Amante, et al. in G.R. No.
118838 is GRANTED in that Sta. Rosa Realty Development Corporation is
herebyENJOINED from disturbing the peaceful possession of the farmer-
beneficiaries with CLOAs. The Decision of the Court of Appeals dated June
28, 1994 in CA-G.R. CV No. 38182 is AFFIRMED insofar as the award of
nominal damages is concerned.
The Department of Environment and Natural Resources and the
Department of Agrarian Reform, in coordination with the farmer-
beneficiaries identified by the DAR, are URGED to formulate a
community-based watershed plan for the management and rehabilitation of
Barangay Casile.
SO ORDERED.
G.R. No. 164785. April 29, 2009.*
ELISEO F. SORIANO, petitioner, vs. MA. CONSOLIZA P.
LAGUARDIA, in her capacity as Chairperson of the Movie and
Television Review and Classification Board, MOVIE AND
TELEVISION REVIEW AND CLASSIFICATION BOARD, JESSIE
L. GALAPON, ANABEL M. DELA CRUZ, MANUEL M.
HERNANDEZ, JOSE L. LOPEZ, CRISANTO SORIANO, BERNABE
S. YARIA, JR., MICHAEL M. SANDOVAL, and ROLDAN A.
GAVINO, respondents.
G.R. No. 165636. April 29, 2009.*
ELISEO F. SORIANO, petitioner, vs. MOVIE AND TELEVISION
REVIEW AND CLASSIFICATION BOARD, ZOSIMO G. ALEGRE,
JACKIE AQUINO-GAVINO, NOEL R. DEL PRADO, EMMANUEL
BORLAZA, JOSE E. ROMERO IV, and FLORIMONDO C. ROUS, in
their capacity as members of the Hearing and Adjudication Committee
of the MTRCB, JESSIE L. GALAPON, ANABEL M. DELA CRUZ,
MANUEL M. HERNANDEZ, JOSE L. LOPEZ, CRISANTO
SORIANO, BERNABE S. YARIA, JR., MICHAEL M. SANDOVAL,
and ROLDAN A. GAVINO, in their capacity as complainants before
the MTRCB, respondents.
Administrative Law; Movie and Television Review and Classification
Board (MTRCB); Powers of an administrative agency is ascertained from
the law itself which is liberally construed. Movie and Television Review
and Classification Board (MTRCB) has the power to issue a preventive
suspension order.Administrative agencies have powers and functions
which may be administrative, investigatory, regulatory, quasi-legislative, or
ADMINLAW CASES
quasi-judicial, or a mix of the five, as may be conferred by the Constitution
or by statute. They have in fine only such powers or authority as are granted
or delegated, expressly or impliedly, by law. And in determining whether an
agency has certain powers, the inquiry should be from the law itself. But
once ascertained as existing, the authority given should be liberally
construed. A perusal of the MTRCBs basic mandate under PD 1986 reveals
the possession by the agency of the authority, albeit impliedly, to issue the
challenged order of preventive suspension. And this authority stems
naturally from, and is necessary for the exercise of, its power of regulation
and supervision.
Same; Same; Jurisdiction; Administrative Agencies.But the mere absence
of a provision on preventive suspension in PD 1986, without more, would
not work to deprive the MTRCB a basic disciplinary tool, such as
preventive suspension. Recall that the MTRCB is expressly empowered by
statute to regulate and supervise television programs to obviate the
exhibition or broadcast of, among others, indecent or immoral materials and
to impose sanctions for violations and, corollarily, to prevent further
violations as it investigates. Contrary to petitioners assertion, the
aforequoted Sec. 3 of the IRR neither amended PD 1986 nor extended the
effect of the law. Neither did the MTRCB, by imposing the assailed
preventive suspension, outrun its authority under the law. Far from it. The
preventive suspension was actually done in furtherance of the law, imposed
pursuant, to repeat, to the MTRCBs duty of regulating or supervising
television programs, pending a determination of whether or not there has
actually been a violation. In the final analysis, Sec. 3, Chapter XIII of the
2004 IRR merely formalized a power which PD 1986 bestowed, albeit
impliedly, on MTRCB.
Same; Same; Same; Movie and Television Review and Classification
Boards (MTRCBs) power to issue a preventive suspension order includes
TV programs.We cannot agree with petitioners assertion that the
aforequoted IRR provision on preventive suspension is applicable only to
motion pictures and publicity materials. The scope of the MTRCBs
authority extends beyond motion pictures. What the acronym MTRCB
stands for would suggest as much. And while the law makes specific
reference to the closure of a television network, the suspension of a
television program is a far less punitive measure that can be undertaken,
with the purpose of stopping further violations of PD 1986. Again, the
MTRCB would regretfully be rendered ineffective should it be subject to
the restrictions petitioner envisages.
69
Same; Same; Due Process; Movie and Television Review and Classification
Board (MTRCB) issued the assailed order after a hearing.Just as
untenable is petitioners argument on the nullity of the preventive
suspension order on the ground of lack of hearing. As it were, the MTRCB
handed out the assailed order after petitioner, in response to a written notice,
appeared before that Board for a hearing on private respondents complaint.
No less than petitioner admitted that the order was issued after the
adjournment of the hearing, proving that he had already appeared before the
MTRCB. Under Sec. 3, Chapter XIII of the IRR of PD 1986, preventive
suspension shall issue [a]ny time during the pendency of the case. In this
particular case, it was done after MTRCB duly apprised petitioner of his
having possibly violated PD 1986 and of administrative complaints that had
been filed against him for such violation.
Evidence; Constitutional Law; Petitioner has not been denied the equal
protection of the law as the Iglesia Ni Cristo (INC) ministers he criticized
are not facing any administrative charges.Petitioners position does not
persuade. The equal protection clause demands that all persons subject to
legislation should be treated alike, under like circumstances and conditions
both in the privileges conferred and liabilities imposed. It guards against
undue favor and individual privilege as well as hostile discrimination.
Surely, petitioner cannot, under the premises, place himself in the same
shoes as the INC ministers, who, for one, are not facing administrative
complaints before the MTRCB. For another, he offers no proof that the said
ministers, in their TV programs, use language similar to that which he used
in his own, necessitating the MTRCBs disciplinary action. If the immediate
result of the preventive suspension order is that petitioner remains
temporarily gagged and is unable to answer his critics, this does not become
a deprivation of the equal protection guarantee. The Court need not belabor
the fact that the circumstances of petitioner, as host of Ang Dating Daan, on
one hand, and the INC ministers, as hosts of Ang Tamang Daan, on the
other, are, within the purview of this case, simply too different to even
consider whether or not there is a prima facie indication of oppressive
inequality.
Same; Same; Religious Freedom; Plain and simple insults to another
person cannot be elevated to the status of a religious speech.There is
nothing in petitioners statements subject of the complaints expressing any
particular religious belief, nothing furthering his avowed evangelical
mission. The fact that he came out with his statements in a televised bible
exposition program does not automatically accord them the character of a
religious discourse. Plain and simple insults directed at another person
ADMINLAW CASES
cannot be elevated to the status of religious speech. Even petitioners
attempts to place his words in context show that he was moved by anger
and the need to seek retribution, not by any religious conviction. His claim,
assuming its veracity, that some INC ministers distorted his statements
respecting amounts Ang Dating Daan owed to a TV station does not convert
the foul language used in retaliation as religious speech. We cannot accept
that petitioner made his statements in defense of his reputation and religion,
as they constitute no intelligible defense or refutation of the alleged lies
being spread by a rival religious group. They simply illustrate that petitioner
had descended to the level of name-calling and foul-language discourse.
Petitioner could have chosen to contradict and disprove his detractors, but
opted for the low road.
Same; Same; Same; A TV program rated G or for general viewership
reaches adults and children alike. What may not be obscene speech to adults
may be considered obscene for children.A cursory examination of the
utterances complained of and the circumstances of the case reveal that to an
average adult, the utterances Gago ka talaga x x x, masahol ka pa sa
putang babae xxx. Yung putang babae ang gumagana lang doon yung
ibaba, [dito] kay Michael ang gumagana ang itaas, o di ba! may not
constitute obscene but merely indecent utterances. They can be viewed as
figures of speech or merely a play on words. In the context they were used,
they may not appeal to the prurient interests of an adult. The problem with
the challenged statements is that they were uttered in a TV program that is
rated G or for general viewership, and in a time slot that would likely
reach even the eyes and ears of children.
Same; Same; Same; Words and Phrases.While adults may have
understood that the terms thus used were not to be taken literally, children
could hardly be expected to have the same discernment. Without parental
guidance, the unbridled use of such language as that of petitioner in a
television broadcast could corrupt impressionable young minds. The term
putang babae means a female prostitute, a term wholly inappropriate
for children, who could look it up in a dictionary and just get the literal
meaning, missing the context within which it was used. Petitioner further
used the terms, ang gumagana lang doon yung ibaba, making reference to
the female sexual organ and how a female prostitute uses it in her trade,
then stating that Sandoval was worse than that by using his mouth in a
similar manner. Children could be motivated by curiosity and ask the
meaning of what petitioner said, also without placing the phrase in context.
They may be inquisitive as to why Sandoval is different from a female
prostitute and the reasons for the dissimilarity. And upon learning the
70
meanings of the words used, young minds, without the guidance of an adult,
may, from their end, view this kind of indecent speech as obscene, if they
take these words literally and use them in their own speech or form their
own ideas on the matter. In this particular case, where children had the
opportunity to hear petitioners words, when speaking of the average person
in the test for obscenity, we are speaking of the average child, not the
average adult. The average child may not have the adults grasp of figures
of speech, and may lack the understanding that language may be colorful,
and words may convey more than the literal meaning. Undeniably the
subject speech is very suggestive of a female sexual organ and its function
as such. In this sense, we find petitioners utterances obscene and not
entitled to protection under the umbrella of freedom of speech.
Same; Same; Same; Freedom of Speech; As a standard of limitation on
freedom of speech and press, the clear and present danger test is not a magic
incantation.It was originally designed to determine the latitude which
should be given to speech that espouses anti-government action, or to have
serious and substantial deleterious consequences on the security and public
order of the community. The clear and present danger rule has been applied
to this jurisdiction. As a standard of limitation on free speech and press,
however, the clear and present danger test is not a magic incantation that
wipes out all problems and does away with analysis and judgment in the
testing of the legitimacy of claims to free speech and which compels a court
to release a defendant from liability the moment the doctrine is invoked,
absent proof of imminent catastrophic disaster. As we observed in Eastern
Broadcasting Corporation vs. Dans, Jr.,137 SCRA 628 (1985), the clear and
present danger test does not lend itself to a simplistic and all embracing
interpretation applicable to all utterances in all forums.
Same; Same; Same; Same; The State has a compelling interest to protect
minors, against offensive language in TV programs.The State has a
compelling interest in extending social protection to minors against all
forms of neglect, exploitation, and immorality which may pollute innocent
minds. It has a compelling interest in helping parents, through regulatory
mechanisms, protect their childrens minds from exposure to undesirable
materials and corrupting experiences. The Constitution, no less, in fact
enjoins the State, as earlier indicated, to promote and protect the physical,
moral, spiritual, intellectual, and social well-being of the youth to better
prepare them fulfill their role in the field of nation-building. In the same
way, the State is mandated to support parents in the rearing of the youth for
civic efficiency and the development of moral character. Petitioners
offensive and obscene language uttered in a television broadcast, without
ADMINLAW CASES
doubt, was easily accessible to the children. His statements could have
exposed children to a language that is unacceptable in everyday use. As
such, the welfare of children and the States mandate to protect and care for
them, as parens patriae, constitute a substantial and compelling government
interest in regulating petitioners utterances in TV broadcast as provided in
PD 1986.
Same; Same; Same; The assailed order penalized petitioner for past speech,
not future speeches in a TV program.Neither can petitioners virtual
inability to speak in his program during the period of suspension be
plausibly treated as prior restraint on future speech. For viewed in its proper
perspective, the suspension is in the nature of an intermediate penalty for
uttering an unprotected form of speech. It is definitely a lesser punishment
than the permissible cancellation of exhibition or broadcast permit or
license. In fine, the suspension meted was simply part of the duties of the
MTRCB in the enforcement and administration of the law which it is tasked
to implement. Viewed in its proper context, the suspension sought to
penalize past speech made on prime-time G rated TV program; it does not
bar future speech of petitioner in other television programs; it is a
permissible subsequent administrative sanction; it should not be confused
with a prior restraint on speech. While not on all fours,the Court, in
MTRCB, sustained the power of the MTRCB to penalize a broadcast
company for exhibiting/airing a pre-taped TV episode without Board
authorization in violation of Sec. 7 of PD 1986.
Same; Same; Same; Jurisdiction; Presidential Decree No. 1986 is
constitutional; The investiture of supervisory power would be meaningless
if it did not carry with it the power to penalize the supervised as may be
proportionate to the offense proved.Complementing this provision is Sec.
3(k) of the decree authorizing the MTRCB to exercise such powers and
functions as may be necessary or incidental to the attainment of the purpose
and objectives of [the law]. As earlier explained, the investiture of
supervisory, regulatory, and disciplinary power would surely be a
meaningless grant if it did not carry with it the power to penalize the
supervised or the regulated as may be proportionate to the offense
committed, charged, and proved.
Same; Same; Same; Same; Administrative regulation or subordinate
legislation to promote public interest is a necessity in modern life.The
grant of the rule-making power to administrative agencies is a relaxation of
the principle of separation of powers and is an exception to the non-
delegation of legislative powers. Administrative regulations or subordinate
legislation calculated to promote the public interest are necessary because
71
of the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of
administering the law. Allowing the MTRCB some reasonable elbow-room
in its operations and, in the exercise of its statutory disciplinary functions,
according it ample latitude in fixing, by way of an appropriate issuance,
administrative penalties with due regard for the severity of the offense and
attending mitigating or aggravating circumstances, as the case may be,
would be consistent with its mandate to effectively and efficiently regulate
the movie and television industry.
Same; Same; Same; Same; Movie and Television Review and Classification
Board (MTRCB) may suspend a TV program but not its host.But even as
we uphold the power of the MTRCB to review and impose sanctions for
violations of PD 1986, its decision to suspend petitioner must be modified,
for nowhere in that issuance, particularly the power-defining Sec. 3 nor in
the MTRCB Schedule of Administrative Penalties effective January 1, 1999
is the Board empowered to suspend the program host or even to prevent
certain people from appearing in television programs. The MTRCB, to be
sure, may prohibit the broadcast of such television programs or cancel
permits for exhibition, but it may not suspend television personalities, for
such would be beyond its jurisdiction. The MTRCB cannot extend its
exercise of regulation beyond what the law provides. Only persons,
offenses, and penalties clearly falling clearly within the letter and spirit of
PD 1986 will be considered to be within the decrees penal or disciplinary
operation. And when it exists, the reasonable doubt must be resolved in
favor of the person charged with violating the statute and for whom the
penalty is sought. Thus, the MTRCBs decision in Administrative Case No.
01-04 dated September 27, 2004 and the subsequent order issued pursuant
to said decision must be modified. The suspension should cover only the
television program on which petitioner appeared and uttered the offensive
and obscene language, which sanction is what the law and the facts
obtaining call for. Soriano vs.Laguardia, 587 SCRA 79, G.R. No. 164785
April 29, 2009
DECISION
VELASCO, JR., J.:
In these two petitions for certiorari and prohibition under Rule 65,
petitioner Eliseo F. Soriano seeks to nullify and set aside an order and a
decision of the Movie and Television Review and Classification Board
(MTRCB) in connection with certain utterances he made in his television
show, Ang Dating Daan.
ADMINLAW CASES
Facts of the Case
On August 10, 2004, at around 10:00 p.m., petitioner, as host of the
program Ang Dating Daan, aired on UNTV 37, made the following
remarks:
Lehitimong anak ng demonyo; sinungaling;
Gago ka talaga Michael, masahol ka pa sa putang babae
o di ba. Yung putang babae ang gumagana lang doon
yung ibaba, [dito] kay Michael ang gumagana ang itaas,
o di ba! O, masahol pa sa putang babae yan. Sabi ng lola
ko masahol pa sa putang babae yan. Sobra ang
kasinungalingan ng mga demonyong ito.[1] x x x
Two days after, before the MTRCB, separate but almost identical
affidavit-complaints were lodged by Jessie L. Galapon and seven other
private respondents, all members of the Iglesia ni Cristo (INC),[2] against
petitioner in connection with the above broadcast. Respondent Michael M.
Sandoval, who felt directly alluded to in petitioners remark, was then a
minister of INC and a regular host of the TV program Ang Tamang Daan.
[3]
Forthwith, the MTRCB sent petitioner a notice of the hearing on August
16, 2004 in relation to the alleged use of some cuss words in the August 10,
2004 episode of Ang Dating Daan.[4]
After a preliminary conference in which petitioner appeared, the
MTRCB, by Order of August 16, 2004, preventively suspended the showing
of Ang Dating Daan program for 20 days, in accordance with Section 3(d)
of Presidential Decree No. (PD) 1986, creating the MTRCB, in relation to
Sec. 3, Chapter XIII of the 2004 Implementing Rules and Regulations (IRR)
of PD 1986 and Sec. 7, Rule VII of the MTRCB Rules of Procedure.[5] The
same order also set the case for preliminary investigation.
The following day, petitioner sought reconsideration of the
preventive suspension order, praying that Chairperson Consoliza P.
Laguardia and two other members of the adjudication board recuse
themselves from hearing the case.[6] Two days after, however, petitioner
sought to withdraw[7] his motion for reconsideration, followed by the filing
with this Court of a petition for certiorari and prohibition,[8] docketed as
G.R. No. 164785, to nullify the preventive suspension order thus issued.
72
 (D) FOR BEING VIOLATIVE OF FREEDOM OF
On September 27, 2004, in Adm. Case No. 01-04, the MTRCB RELIGION; AND
issued a decision, disposing as follows: (E) FOR BEING VIOLATIVE OF FREEDOM OF
SPEECH AND EXPRESSION.[10]
WHEREFORE, in view of all the foregoing, a
Decision is hereby rendered, finding respondent Soriano In G.R. No. 165636, petitioner relies on the following grounds:
liable for his utterances and thereby imposing on him a
penalty of three (3) months suspension from his program, SECTION 3(C) OF [PD] 1986, IS
Ang Dating Daan. PATENTLY UNCONSTITUTIONAL AND ENACTED
WITHOUT OR IN EXCESS OF JURISDICTION x x x
Co-respondents Joselito Mallari, Luzviminda CONSIDERING THAT:
Cruz and UNTV Channel 37 and its owner, PBC, are
hereby exonerated for lack of evidence. I

SO ORDERED.[9] SECTION 3(C) OF [PD] 1986, AS APPLIED TO

PETITIONER, UNDULY INFRINGES ON THE
Petitioner then filed this petition for certiorari and prohibition with CONSTITUTIONAL GUARANTEE OF FREEDOM OF
prayer for injunctive relief, docketed as G.R. No. 165636. RELIGION, SPEECH, AND EXPRESSION AS IT
PARTAKES OF THE NATURE OF A SUBSEQUENT
In a Resolution dated April 4, 2005, the Court consolidated G.R. PUNISHMENT CURTAILING THE SAME;
No. 164785 with G.R. No. 165636. CONSEQUENTLY, THE IMPLEMENTING RULES
AND REGULATIONS, RULES OF PROCEDURE, AND
In G.R. No. 164785, petitioner raises the following issues: OFFICIAL ACTS OF THE MTRCB PURSUANT
THERETO, I.E. DECISION DATED 27
THE ORDER OF PREVENTIVE SUSPENSION SEPTEMBER 2004 AND ORDER DATED 19
PROMULGATED BY RESPONDENT [MTRCB] OCTOBER 2004, ARE LIKEWISE
DATED 16 AUGUST 2004 AGAINST THE CONSTITUTIONALLY INFIRM AS APPLIED IN THE
TELEVISION PROGRAM ANG DATING DAAN x x x CASE AT BENCH;
IS NULL AND VOID FOR BEING ISSUED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION
II
(A) BY REASON THAT THE [IRR] IS INVALID
INSOFAR AS IT PROVIDES FOR THE SECTION 3(C) OF [PD] 1986, AS APPLIED TO
ISSUANCE OF PREVENTIVE SUSPENSION PETITIONER, UNDULY INFRINGES ON THE
ORDERS; CONSTITUTIONAL GUARANTEE OF DUE
(B) BY REASON OF LACK OF DUE HEARING IN PROCESS OF LAW AND EQUAL PROTECTION
THE CASE AT BENCH; UNDER THE LAW; CONSEQUENTLY, THE [IRR],
(C) FOR BEING VIOLATIVE OF EQUAL RULES OF PROCEDURE, AND OFFICIAL ACTS OF
PROTECTION UNDER THE LAW; THE MTRCB PURSUANT THERETO, I.E., DECISION

73
ADMINLAW CASES
 DATED 27 SEPTEMBER 2004 AND ORDER DATED
19 OCTOBER 2004, ARE LIKEWISE
CONSTITUTIONALLY INFIRM AS APPLIED IN THE
CASE AT BENCH; AND
III
[PD] 1986 IS NOT COMPLETE IN ITSELF AND DOES
NOT PROVIDE FOR A SUFFICIENT STANDARD FOR
ITS IMPLEMENTATION THEREBY RESULTING IN
AN UNDUE DELEGATION OF LEGISLATIVE
POWER BY REASON THAT IT DOES NOT PROVIDE
FOR THE PENALTIES FOR VIOLATIONS OF ITS
PROVISIONS. CONSEQUENTLY, THE [IRR], RULES
OF PROCEDURE, AND OFFICIAL ACTS OF THE
MTRCB PURSUANT THERETO, I.E. DECISION
DATED 27 SEPTEMBER 2004 AND ORDER DATED
19 OCTOBER 2004, ARE LIKEWISE
CONSTITUTIONALLY INFIRM AS APPLIED IN THE
CASE AT BENCH[11]
G.R. No. 164785
We shall first dispose of the issues in G.R. No. 164785, regarding
the assailed order of preventive suspension, although its implementability
had already been overtaken and veritably been rendered moot by the equally
assailed September 27, 2004 decision.
It is petitioners threshold posture that the preventive suspension
imposed against him and the relevant IRR provision authorizing it are
invalid inasmuch as PD 1986 does not expressly authorize the MTRCB to
issue preventive suspension.
Petitioners contention is untenable.
Administrative agencies have powers and functions which may be
administrative, investigatory, regulatory, quasi-legislative, or quasi-judicial,
or a mix of the five, as may be conferred by the Constitution or by statute.
[12]
They have in fine only such powers or authority as are granted or
delegated, expressly or impliedly, by law.[13] And in determining whether an
ADMINLAW CASES
agency has certain powers, the inquiry should be from the law itself. But
once ascertained as existing, the authority given should be liberally
construed.[14]
A perusal of the MTRCBs basic mandate under PD 1986 reveals
the possession by the agency of the authority, albeit impliedly, to issue the
challenged order of preventive suspension. And this authority stems
naturally from, and is necessary for the exercise of, its power of regulation
and supervision.
Sec. 3 of PD 1986 pertinently provides the following:
Section 3. Powers and Functions.The BOARD shall have
the following functions, powers and duties:
xxxx
c) To approve or disapprove, delete objectionable
portions from and/or prohibit the x x x production, x x x
exhibition and/or television broadcast of the motion
pictures, television programs and publicity materials
subject of the preceding paragraph, which, in the
judgment of the board applying contemporary Filipino
cultural values as standard, are objectionable for being
immoral, indecent, contrary to law and/or good customs,
injurious to the prestige of the Republic of the Philippines
or its people, or with a dangerous tendency to encourage
the commission of violence or of wrong or crime such as
but not limited to:
xxxx
vi) Those which are libelous or defamatory to the
good name and reputation of any person, whether
living or dead;
xxxx
(d) To supervise, regulate, and grant, deny or cancel,
permits for the x x x production, copying, distribution,
sale, lease, exhibition, and/or television broadcast of all
motion pictures, television programs and publicity
materials, to the end that no such pictures, programs
74
 and materials as are determined by the BOARD to be
objectionable in accordance with paragraph (c) hereof
shall be x x x produced, copied, reproduced, distributed,
sold, leased, exhibited and/or broadcast by television;
xxxx
k) To exercise such powers and functions as may be
necessary or incidental to the attainment of the purposes
and objectives of this Act x x x.(Emphasis added.)
The issuance of a preventive suspension comes well within the
scope of the MTRCBs authority and functions expressly set forth in PD
1986, more particularly under its Sec. 3(d), as quoted above, which
empowers the MTRCB to supervise, regulate, and grant, deny or cancel,
permits for the x x x exhibition, and/or television broadcast of all motion
pictures, television programs and publicity materials, to the end that no such
pictures, programs and materials as are determined by the BOARD to be
objectionable in accordance with paragraph (c) hereof shall be x x x
exhibited and/or broadcast by television.
Surely, the power to issue preventive suspension forms part of the
MTRCBs express regulatory and supervisory statutory mandate and its
investigatory and disciplinary authority subsumed in or implied from such
mandate. Any other construal would render its power to regulate, supervise,
or discipline illusory.
Preventive suspension, it ought to be noted, is not a penalty by
itself, being merely a preliminary step in an administrative investigation.
[15]
And the power to discipline and impose penalties, if granted, carries with
it the power to investigate administrative complaints and, during such
investigation, to preventively suspend the person subject of the complaint.
[16]
To reiterate, preventive suspension authority of the MTRCB
springs from its powers conferred under PD 1986. The MTRCB did not, as
petitioner insinuates, empower itself to impose preventive suspension
through the medium of the IRR of PD 1986. It is true that the matter of
ADMINLAW CASES
imposing preventive suspension is embodied only in the IRR of PD 1986.
Sec. 3, Chapter XIII of the IRR provides:
Sec. 3. PREVENTION SUSPENSION
ORDER.Any time during the pendency of the case, and in
order to prevent or stop further violations or for the
interest and welfare of the public, the Chairman of the
Board may issue a Preventive Suspension Order
mandating the preventive x x x suspension of the
permit/permits involved, and/or closure of the x x x
television network, cable TV station x x x provided that
the temporary/preventive order thus issued shall have a
life of not more than twenty (20) days from the date of
issuance.
But the mere absence of a provision on preventive suspension in
PD 1986, without more, would not work to deprive the MTRCB a basic
disciplinary tool, such as preventive suspension. Recall that the MTRCB is
expressly empowered by statute to regulate and supervise television
programs to obviate the exhibition or broadcast of, among others, indecent
or immoral materials and to impose sanctions for violations and, corollarily,
to prevent further violations as it investigates. Contrary to petitioners
assertion, the aforequoted Sec. 3 of the IRR neither amended PD 1986 nor
extended the effect of the law. Neither did the MTRCB, by imposing the
assailed preventive suspension, outrun its authority under the law. Far from
it. The preventive suspension was actually done in furtherance of the law,
imposed pursuant, to repeat, to the MTRCBs duty of regulating or
supervising television programs, pending a determination of whether or not
there has actually been a violation. In the final analysis, Sec. 3, Chapter XIII
of the 2004 IRR merely formalized a power which PD 1986 bestowed,
albeit impliedly, on MTRCB.
Sec. 3(c) and (d) of PD 1986 finds application to the present case,
sufficient to authorize the MTRCBs assailed action.Petitioners restrictive
reading of PD 1986, limiting the MTRCB to functions within the literal
confines of the law, would give the agency little leeway to operate, stifling
and rendering it inutile, when Sec. 3(k) of PD 1986 clearly intends to grant
the MTRCB a wide room for flexibility in its operation. Sec. 3(k), we
reiterate, provides, To exercise such powers and functions as may be
necessary or incidental to the attainment of the purposes and objectives of
this Act x x x. Indeed, the power to impose preventive suspension is one of
75
the implied powers of MTRCB. As distinguished from express powers,
implied powers are those that can be inferred or areimplicit in the wordings
or conferred by necessary or fair implication of the enabling act.[17] As we
held in Angara v. Electoral Commission, when a general grant of power is
conferred or a duty enjoined, every particular power necessary for the
exercise of one or the performance of the other is also conferred by
necessary implication.[18] Clearly, the power to impose preventive
suspension pending investigation is one of the implied or inherent powers of
MTRCB.
We cannot agree with petitioners assertion that the aforequoted
IRR provision on preventive suspension is applicable only to motion
pictures and publicity materials. The scope of the MTRCBs authority
extends beyond motion pictures. What the acronym MTRCB stands for
would suggest as much. And while the law makes specific reference to the
closure of a television network, the suspension of a television program is a
far less punitive measure that can be undertaken, with the purpose of
stopping further violations of PD 1986. Again, the MTRCB would
regretfully be rendered ineffective should it be subject to the restrictions
petitioner envisages.
Just as untenable is petitioners argument on the nullity of the
preventive suspension order on the ground of lack of hearing. As it were,
the MTRCB handed out the assailed order after petitioner, in response to a
written notice, appeared before that Board for a hearing on private
respondents complaint. No less than petitioner admitted that the order was
issued after the adjournment of the hearing,[19] proving that he had already
appeared before the MTRCB. Under Sec. 3, Chapter XIII of the IRR of PD
1986, preventive suspension shall issue [a]ny time during the pendency of
the case. In this particular case, it was done after MTRCB duly apprised
petitioner of his having possibly violated PD 1986[20] and of administrative
complaints that had been filed against him for such violation.[21]
At any event, that preventive suspension can validly be meted out
even without a hearing.[22]
Petitioner next faults the MTRCB for denying him his right to the
equal protection of the law, arguing that, owing to the preventive suspension
order, he was unable to answer the criticisms coming from the INC
ministers.
ADMINLAW CASES
Petitioners position does not persuade. The equal protection clause
demands that all persons subject to legislation should be treated alike, under
like circumstances and conditions both in the privileges conferred and
liabilities imposed.[23] It guards against undue favor and individual privilege
as well as hostile discrimination.[24] Surely, petitioner cannot, under the
premises, place himself in the same shoes as the INC ministers, who, for
one, are not facing administrative complaints before the MTRCB. For
another, he offers no proof that the said ministers, in their TV programs, use
language similar to that which he used in his own, necessitating the
MTRCBs disciplinary action. If the immediate result of the preventive
suspension order is that petitioner remains temporarily gagged and is unable
to answer his critics, this does not become a deprivation of the equal
protection guarantee. The Court need not belabor the fact that the
circumstances of petitioner, as host of Ang Dating Daan, on one hand, and
the INC ministers, as hosts of Ang Tamang Daan, on the other, are, within
the purview of this case, simply too different to even consider whether or
not there is aprima facie indication of oppressive inequality.
Petitioner next injects the notion of religious freedom, submitting
that what he uttered was religious speech, adding that words like putang
babae were said in exercise of his religious freedom.
The argument has no merit.
The Court is at a loss to understand how petitioners utterances in
question can come within the pale of Sec. 5, Article III of the 1987
Constitution on religious freedom. The section reads as follows:
No law shall be made respecting the
establishment of a religion, or prohibiting the free
exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination
or preference, shall forever be allowed. No religious test
shall be required for the exercise of civil or political
rights.
There is nothing in petitioners statements subject of the complaints
expressing any particular religious belief, nothing furthering his avowed
evangelical mission. The fact that he came out with his statements in a
televised bible exposition program does not automatically accord them the
character of a religious discourse. Plain and simple insults directed at
76
another person cannot be elevated to the status of religious speech. Even
petitioners attempts to place his words in context show that he was moved
by anger and the need to seek retribution, not by any religious
conviction. His claim, assuming its veracity, that some INC ministers
distorted his statements respecting amounts Ang Dating Daan owed to a TV
station does not convert the foul language used in retaliation as religious
speech. We cannot accept that petitioner made his statements in defense of
his reputation and religion, as they constitute no intelligible defense or
refutation of the alleged lies being spread by a rival religious group. They
simply illustrate that petitioner had descended to the level of name-calling
and foul-language discourse. Petitioner could have chosen to contradict and
disprove his detractors, but opted for the low road.
Petitioner, as a final point in G.R. No. 164785, would have the
Court nullify the 20-day preventive suspension order, being, as insisted, an
unconstitutional abridgement of the freedom of speech and expression and
an impermissible prior restraint. The main issue tendered respecting the
adverted violation and the arguments holding such issue dovetails with
those challenging the three-month suspension imposed under the assailed
September 27, 2004 MTRCB decision subject of review under G.R. No.
165636. Both overlapping issues and arguments shall be jointly addressed.
G.R. No. 165636
Petitioner urges the striking down of the decision suspending him
from hosting Ang Dating Daan for three months on the main ground that
the decision violates, apart from his religious freedom, his freedom of
speech and expression guaranteed under Sec. 4, Art. III of the Constitution,
which reads:
No law shall be passed abridging the freedom of
speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the government
for redress of grievance.
He would also have the Court declare PD 1986, its Sec. 3(c) in
particular, unconstitutional for reasons articulated in this petition.
ADMINLAW CASES
We are not persuaded as shall be explained shortly. But first, we
restate certain general concepts and principles underlying the freedom of
speech and expression.
It is settled that expressions by means of newspapers, radio,
television, and motion pictures come within the broad protection of the free
speech and expression clause.[25] Each method though, because of its
dissimilar presence in the lives of people and accessibility to children, tends
to present its own problems in the area of free speech protection,
with broadcast media, of all forms of communication, enjoying a lesser
degree of protection.[26] Just as settled is the rule that restrictions, be it in the
form of prior restraint, e.g., judicial injunction against publication or threat
of cancellation of license/franchise, or subsequent liability, whether in libel
and damage suits, prosecution for sedition, or contempt proceedings, are
anathema to the freedom of expression. Prior restraint means official
government restrictions on the press or other forms of expression in
advance of actual publication or dissemination.[27] The freedom of
expression, as with the other freedoms encased in the Bill of Rights, is,
however, not absolute. It may be regulated to some extent to serve
important public interests, some forms of speech not being protected. As has
been held, the limits of the freedom of expression are reached when the
expression touches upon matters of essentially private concern.[28] In the oft-
quoted expression of Justice Holmes, the constitutional guarantee obviously
was not intended to give immunity for every possible use of language.
[29]
From Lucas v. Royo comes this line: [T]he freedom to express ones
sentiments and belief does not grant one the license to vilify in public the
honor and integrity of another. Any sentiments must be expressed within the
proper forum and with proper regard for the rights of others.[30]
Indeed, as noted in Chaplinsky v. State of New Hampshire,[31] there
are certain well-defined and narrowly limited classes of speech that are
harmful, the prevention and punishment of which has never been thought to
raise any Constitutional problems. In net effect, some forms of speech are
not protected by the Constitution, meaning that restrictions on unprotected
speech may be decreed without running afoul of the freedom of speech
clause.[32] A speech would fall under the unprotected type if the utterances
involved are no essential part of any exposition of ideas, and are of such
slight social value as a step of truth that any benefit that may be derived
from them is clearly outweighed by the social interest in order and morality.
[33]
Being of little or no value, there is, in dealing with or regulating them, no
77
imperative call for the application of the clear and present danger rule or the
balancing-of-interest test, they being essentially modes of weighing
competing values,[34] or, with like effect, determining which of the clashing
interests should be advanced.
Petitioner asserts that his utterance in question is a protected form
of speech.
The Court rules otherwise. It has been established in this
jurisdiction that unprotected speech or low-value expression refers to
libelous statements, obscenity or pornography, false or misleading
advertisement, insulting or fighting words, i.e., those which by their very
utterance inflict injury or tend to incite an immediate breach of peace and
expression endangering national security.
The Court finds that petitioners statement can be treated as
obscene, at least with respect to the average child. Hence, it is, in that
context, unprotected speech. In Fernando v. Court of Appeals, the Court
expressed difficulty in formulating a definition ofobscenity that would
apply to all cases, but nonetheless stated the ensuing observations on the
matter:
There is no perfect definition of obscenity but
the latest word is that of Miller v. California which
established basic guidelines, to wit: (a) whether to the
average person, applying contemporary standards would
find the work, taken as a whole, appeals to the prurient
interest; (b) whether the work depicts or describes, in a
patently offensive way, sexual conduct specifically
defined by the applicable state law; and (c) whether the
work, taken as a whole, lacks serious literary, artistic,
political, or scientific value. But, it would be a serious
misreading of Miller to conclude that the trier of facts has
the unbridled discretion in determining what is patently
offensive. x x x What remains clear is that obscenity is an
issue proper for judicial determination and should be
treated on a case to case basis and on the judges sound
discretion.[35]
ADMINLAW CASES
Following the contextual lessons of the cited case of Miller v.
California,[36] a patently offensive utterance would come within the pale of
the term obscenity should it appeal to the prurient interest of an average
listener applying contemporary standards.
A cursory examination of the utterances complained of and the
circumstances of the case reveal that to an average adult, the
utterances Gago ka talaga x x x, masahol ka pa sa putang babae x x x. Yung
putang babae ang gumagana lang doon yung ibaba, [dito] kay Michael ang
gumagana ang itaas, o di ba! may not constitute obscene but merely
indecent utterances. They can be viewed as figures of speech or merely a
play on words. In the context they were used, they may not appeal to the
prurient interests of an adult. The problem with the challenged statements is
that they were uttered in a TV program that is rated G or for general
viewership, and in a time slot that would likely reach even the eyes and ears
of children.
While adults may have understood that the terms thus used were
not to be taken literally, children could hardly be expected to have the same
discernment. Without parental guidance, the unbridled use of such language
as that of petitioner in a television broadcast could corrupt impressionable
young minds. The term putang babae means a female prostitute, a term
wholly inappropriate for children, who could look it up in a dictionary and
just get the literal meaning, missing the context within which it was
used. Petitioner further used the terms, ang gumagana lang doon yung
ibaba, making reference to the female sexual organ and how a female
prostitute uses it in her trade, then stating that Sandoval was worse than that
by using his mouth in a similar manner. Children could be motivated by
curiosity and ask the meaning of what petitioner said, also without placing
the phrase in context. They may be inquisitive as to why Sandoval is
different from a female prostitute and the reasons for the dissimilarity. And
upon learning the meanings of the words used, young minds, without the
guidance of an adult, may, from their end, view this kind of indecent speech
as obscene, if they take these words literally and use them in their own
speech or form their own ideas on the matter. In this particular case, where
children had the opportunity to hear petitioners words, when speaking of the
average person in the test for obscenity, we are speaking of the average
child, not the average adult. The average child may not have the adults
grasp of figures of speech, and may lack the understanding that language
may be colorful, and words may convey more than the literal
meaning. Undeniably the subject speech is very suggestive of a female
78
sexual organ and its function as such. In this sense, we find petitioners
utterances obscene and not entitled to protection under the umbrella of
freedom of speech.
Even if we concede that petitioners remarks are not obscene but merely
indecent speech, still the Court rules that petitioner cannot avail himself of
the constitutional protection of free speech. Said statements were made in a
medium easily accessible to children. With respect to the young minds, said
utterances are to be treated as unprotected speech.
No doubt what petitioner said constitutes indecent or offensive
utterances. But while a jurisprudential pattern involving certain offensive
utterances conveyed in different mediums has emerged, this case is
veritably one of first impression, it being the first time that indecent speech
communicated via television and the applicable norm for its regulation are,
in this jurisdiction, made the focal point. Federal Communications
Commission (FCC) v. Pacifica Foundation,[37] a 1978 American landmark
case cited in Eastern Broadcasting Corporation v. Dans, Jr.[38] and Chavez
v. Gonzales,[39] is a rich source of persuasive lessons. Foremost of these
relates to indecent speech without prurient appeal component coming under
the category of protected speech depending on the context within which it
was made, irresistibly suggesting that, within a particular context, such
indecent speech may validly be categorized as unprotected, ergo,
susceptible to restriction.
In FCC, seven of what were considered filthy words[40] earlier recorded in a
monologue by a satiric humorist later aired in the afternoon over a radio
station owned by Pacifica Foundation. Upon the complaint of a man who
heard the pre-recorded monologue while driving with his son, FCC declared
the language used as patently offensive and indecent under a prohibiting
law, though not necessarily obscene. FCC added, however, that its
declaratory order was issued in a special factual context, referring, in gist, to
an afternoon radio broadcast when children were undoubtedly in the
audience. Acting on the question of whether the FCC could regulate the
subject utterance, the US Supreme Court ruled in the affirmative, owing to
two special features of the broadcast medium, to wit: (1) radio is a
pervasive medium and (2) broadcasting is uniquely accessible to children.
The US Court, however, hastened to add that the monologue would be
protected speech in other contexts, albeit it did not expound and identify a
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compelling state interest in putting FCCs content-based regulatory action
under scrutiny.
The Court in Chavez[41] elucidated on the distinction between regulation or
restriction of protected speech that is content-based and that which is
content-neutral. A content-based restraint is aimed at the contents or idea of
the expression, whereas a content-neutral restraint intends to regulate the
time, place, and manner of the expression under well-defined standards
tailored to serve a compelling state interest, without restraint on the
message of the expression. Courts subject content-based restraint to strict
scrutiny.
With the view we take of the case, the suspension MTRCB imposed under
the premises was, in one perspective, permissible restriction. We make this
disposition against the backdrop of the following interplaying factors: First,
the indecent speech was made via television, a pervasive medium that, to
borrow from Gonzales v. Kalaw Katigbak,[42] easily reaches every home
where there is a set [and where] [c]hildren will likely be among the avid
viewers of the programs therein shown; second, the broadcast was aired at
the time of the day when there was a reasonable risk that children might be
in the audience; and third, petitioner uttered his speech on a G or for general
patronage rated program. Under Sec. 2(A) of Chapter IV of the IRR of the
MTRCB, a show for general patronage is [s]uitable for all ages, meaning
that the material for television x x x in the judgment of the BOARD, does
not contain anything unsuitable for children and minors, and may be viewed
without adult guidance or supervision. The words petitioner used were, by
any civilized norm, clearly not suitable for children. Where a language is
categorized as indecent, as in petitioners utterances on a general-patronage
rated TV program, it may be readily proscribed as unprotected speech.
A view has been advanced that unprotected speech refers only to
pornography,[43] false or misleading advertisement,[44] advocacy of imminent
lawless action, and expression endangering national security. But this list is
not, as some members of the Court would submit, exclusive or carved in
stone. Without going into specifics, it may be stated without fear of
contradiction that US decisional law goes beyond the aforesaid general
exceptions. As the Court has been impelled to recognize exceptions to the
rule against censorship in the past, this particular case constitutes yet
another exception, another instance of unprotected speech, created by the
79
necessity of protecting the welfare of our children. As unprotected speech,
petitioners utterances can be subjected to restraint or regulation.
Despite the settled ruling in FCC which has remained undisturbed since
1978, petitioner asserts that his utterances must present a clear and present
danger of bringing about a substantive evil the State has a right and duty to
prevent and such danger must be grave and imminent.[45]
Petitioners invocation of the clear and present danger doctrine, arguably the
most permissive of speech tests, would not avail him any relief, for the
application of said test is uncalled for under the premises. The doctrine, first
formulated by Justice Holmes, accords protection for utterances so that the
printed or spoken words may not be subject to prior restraint or subsequent
punishment unless its expression creates a clear and present danger of
bringing about a substantial evil which the government has the power to
prohibit.[46] Under the doctrine, freedom of speech and of press is
susceptible of restriction when and only when necessary to prevent grave
and immediate danger to interests which the government may lawfully
protect. As it were, said doctrine evolved in the context of prosecutions for
rebellion and other crimes involving the overthrow of government.[47] It was
originally designed to determine the latitude which should be given to
speech that espouses anti-government action, or to have serious and
substantial deleterious consequences on the security and public order of the
community.[48] The clear and present danger rule has been applied to this
jurisdiction.[49] As a standard of limitation on free speech and press,
however, the clear and present danger test is not a magic incantation that
wipes out all problems and does away with analysis and judgment in the
testing of the legitimacy of claims to free speech and which compels a court
to release a defendant from liability the moment the doctrine is invoked,
absent proof of imminent catastrophic disaster.[50] As we observed
in Eastern Broadcasting Corporation, the clear and present danger test does
not lend itself to a simplistic and all embracing interpretation applicable to
all utterances in all forums.[51]
To be sure, the clear and present danger doctrine is not the only test which
has been applied by the courts. Generally, said doctrine is applied to cases
involving the overthrow of the government and even other evils which do
not clearly undermine national security. Since not all evils can be measured
in terms of proximity and degree the Court, however, in several casesAyer
Productions v. Capulong[52] and Gonzales v. COMELEC,[53] applied the
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balancing of interests test. Former Chief Justice Fred Ruiz Castro,
inGonzales v. COMELEC, elucidated in his Separate Opinion that where the
legislation under constitutional attack interferes with the freedom of speech
and assembly in a more generalized way and where the effect of the speech
and assembly in terms of the probability of realization of a specific danger
is not susceptible even of impressionistic calculation,[54] then the balancing
of interests test can be applied.
The Court explained also in Gonzales v. COMELEC the balancing of
interests test:
When particular conduct is regulated in the interest of
public order, and the regulation results in an indirect,
conditional, partial abridgment of speech, the duty of
the courts is to determine which of the two
conflicting interests demands the greater protection
under the particular circumstances presented. x x x
We must, therefore, undertake the delicate and
difficult task x x x to weigh the circumstances and to
appraise the substantiality of the reasons advanced in
support of the regulation of the free enjoyment of
rights x x x.
In enunciating standard premised on a judicial
balancing of the conflicting social values and
individual interests competing for ascendancy in
legislation which restricts expression, the court
in Douds laid the basis for what has been called the
balancing-of-interests test which has found
application in more recent decisions of the U.S.
Supreme Court. Briefly stated, the balancing test
requires a court to take conscious and detailed
consideration of the interplay of interests observable
in a given situation or type of situation.
xxxx
Although the urgency of the public interest sought to
be secured by Congressional power restricting the
individuals freedom, and the social importance and
value of the freedom so restricted, are to be judged in
80
 the concrete, not on the basis of abstractions, a wide
range of factors are necessarily relevant in
ascertaining the point or line of equilibrium. Among
these are (a) the social value and importance of the
specific aspect of the particular freedom restricted by
the legislation; (b) the specific thrust of the
restriction, i.e., whether the restriction is direct or
indirect, whether or not the persons affected are few;
(c) the value and importance of the public interest
sought to be secured by the legislationthe reference
here is to the nature and gravity of the evil which
Congress seeks to prevent; (d) whether the specific
restriction decreed by Congress is reasonably
appropriate and necessary for the protection of such
public interest; and (e) whether the necessary
safeguarding of the public interest involved may be
achieved by some other measure less restrictive of
the protected freedom.[55]
This balancing of interest test, to borrow from Professor Kauper,[56] rests on
the theory that it is the courts function in a case before it when it finds
public interests served by legislation, on the one hand, and the free
expression clause affected by it, on the other, to balance one against the
other and arrive at a judgment where the greater weight shall be placed. If,
on balance, it appears that the public interest served by restrictive
legislation is of such nature that it outweighs the abridgment of freedom,
then the court will find the legislation valid. In short, the balance-of-
interests theory rests on the basis that constitutional freedoms are not
absolute, not even those stated in the free speech and expression clause, and
that they may be abridged to some extent to serve appropriate and important
interests.[57] To the mind of the Court, the balancing of interest doctrine is
the more appropriate test to follow.
In the case at bar, petitioner used indecent and obscene language and a three
(3)-month suspension was slapped on him for breach of MTRCB rules. In
this setting, the assertion by petitioner of his enjoyment of his freedom of
speech is ranged against the duty of the government to protect and promote
the development and welfare of the youth.
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After a careful examination of the factual milieu and the arguments raised
by petitioner in support of his claim to free speech, the Court rules that the
governments interest to protect and promote the interests and welfare of the
children adequately buttresses the reasonable curtailment and valid restraint
on petitioners prayer to continue as program host of Ang Dating
Daan during the suspension period.
No doubt, one of the fundamental and most vital rights granted to citizens
of a State is the freedom of speech or expression, for without the enjoyment
of such right, a free, stable, effective, and progressive democratic state
would be difficult to attain. Arrayed against the freedom of speech is the
right of the youth to their moral, spiritual, intellectual, and social being
which the State is constitutionally tasked to promote and protect. Moreover,
the State is also mandated to recognize and support the vital role of the
youth in nation building as laid down in Sec. 13, Art. II of the 1987
Constitution.
The Constitution has, therefore, imposed the sacred obligation and
responsibility on the State to provide protection to the youth against illegal
or improper activities which may prejudice their general well-being. The
Article on youth, approved on second reading by the Constitutional
Commission, explained that the State shall extend social protection to
minors against all forms of neglect, cruelty, exploitation, immorality, and
practices which may foster racial, religious or other forms of discrimination.
[58]
Indisputably, the State has a compelling interest in extending social
protection to minors against all forms of neglect, exploitation, and
immorality which may pollute innocent minds. It has a compelling interest
in helping parents, through regulatory mechanisms, protect their childrens
minds from exposure to undesirable materials and corrupting
experiences. The Constitution, no less, in fact enjoins the State, as earlier
indicated, to promote and protect the physical, moral, spiritual, intellectual,
and social well-being of the youth to better prepare them fulfill their role in
the field of nation-building.[59] In the same way, the State is mandated to
support parents in the rearing of the youth for civic efficiency and the
development of moral character.[60]
Petitioners offensive and obscene language uttered in a television broadcast,
without doubt, was easily accessible to the children. His statements could
81
have exposed children to a language that is unacceptable in everyday
use. As such, the welfare of children and the States mandate to protect and
care for them, as parens patriae,[61] constitute a substantial and compelling
government interest in regulating petitioners utterances in TV broadcast as
provided in PD 1986.
FCC explains the duty of the government to act as parens patriae to protect
the children who, because of age or interest capacity, are susceptible of
being corrupted or prejudiced by offensive language, thus:
[B]roadcasting is uniquely accessible to children, even
those too young to read. Although Cohens written
message, [Fuck the Draft], might have been
incomprehensible to a first grader, Pacificas broadcast
could have enlarged a childs vocabulary in an
instant. Other forms of offensive expression may be
withheld from the young without restricting the
expression at its source. Bookstores and motion picture
theaters, for example, may be prohibited from making
indecent material available to children. We held
in Ginsberg v. New York that the governments interest in
the well-being of its youth and in supporting parents
claim to authority in their own household justified the
regulation of otherwise protected expression. The ease
with which children may obtain access to broadcast
material, coupled with the concerns recognized
in Ginsberg, amply justify special treatment of indecent
broadcasting.
Moreover, Gonzales v. Kalaw Katigbak likewise stressed the duty of the
State to attend to the welfare of the young:
x x x It is the consensus of this Court that where
television is concerned, a less liberal approach calls for
observance. This is so because unlike motion pictures
where the patrons have to pay their way, television
reaches every home where there is a set. Children then
will likely will be among the avid viewers of the
programs therein shown. As was observed by Circuit
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Court of Appeals Judge Jerome Frank, it is hardly the
concern of the law to deal with the sexual fantasies of the
adult population. It cannot be denied though that the State
as parens patriae is called upon to manifest an attitude of
caring for the welfare of the young.[62]
The compelling need to protect the young impels us to sustain the
regulatory action MTRCB took in the narrow confines of the case.To
reiterate, FCC justified the restraint on the TV broadcast grounded on the
following considerations: (1) the use of television with its unique
accessibility to children, as a medium of broadcast of a patently offensive
speech; (2) the time of broadcast; and (3) the G rating of the Ang Dating
Daan program. And in agreeing with MTRCB, the court takes stock of and
cites with approval the following excerpts from FCC:
It is appropriate, in conclusion, to emphasize the
narrowness of our holding. This case does not involve a
two-way radio conversation between a cab driver and a
dispatcher, or a telecast of an Elizabethan comedy. We
have not decided that an occasional expletive in either
setting would justify any sanction. x x x The [FFCs]
decision rested entirely on a nuisance rationale under
which context is all important. The concept requires
consideration of a host of variables. The time of day was
emphasized by the [FFC]. The content of the program in
which the language is used will affect the composition of
the audience x x x. As Mr. Justice Sutherland wrote a
nuisance may be merely a right thing in the wrong place,
like a pig in the parlor instead of the barnyard. We simply
hold that when the [FCC] finds that a pig has entered the
parlor, the exercise of its regulatory power does not
depend on proof that the pig is obscene. (Citation
omitted.)
There can be no quibbling that the remarks in question petitioner uttered on
prime-time television are blatantly indecent if not outright obscene. It is the
kind of speech that PD 1986 proscribes necessitating the exercise by
MTRCB of statutory disciplinary powers. It is the kind of speech that the
State has the inherent prerogative, nay duty, to regulate and prevent should
82
such action served and further compelling state interests. One who utters
indecent, insulting, or offensive words on television when unsuspecting
children are in the audience is, in the graphic language of FCC, a pig in the
parlor. Public interest would be served if the pig is reasonably restrained or
even removed from the parlor.
Ergo, petitioners offensive and indecent language can be subjected to prior
restraint.
Petitioner theorizes that the three (3)-month suspension is either prior
restraint or subsequent punishment that, however, includes prior restraint,
albeit indirectly.
After a review of the facts, the Court finds that what MTRCB imposed on
petitioner is an administrative sanction or subsequent punishment for his
offensive and obscene language in Ang Dating Daan.
To clarify, statutes imposing prior restraints on speech are generally illegal
and presumed unconstitutional breaches of the freedom of speech. The
exceptions to prior restraint are movies, television, and radio broadcast
censorship in view of its access to numerous people, including the young
who must be insulated from the prejudicial effects of unprotected
speech. PD 1986 was passed creating the Board of Review for Motion
Pictures and Television (now MTRCB) and which requires prior permit or
license before showing a motion picture or broadcasting a TV program. The
Board can classify movies and television programs and can cancel permits
for exhibition of films or television broadcast.
The power of MTRCB to regulate and even impose some prior restraint on
radio and television shows, even religious programs, was upheld in Iglesia
Ni Cristo v. Court of Appeals. Speaking through Chief Justice Reynato S.
Puno, the Court wrote:
We thus reject petitioners postulate that its religious
program is per se beyond review by the respondent
Board. Its public broadcast on TV of its religious program
brings it out of the bosom of internal belief. Television is
a medium that reaches even the eyes and ears of children.
The Court iterates the rule that the exercise of religious
freedom can be regulated by the State when it will bring
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about the clear and present danger of some substantive
evil which the State is duty bound to prevent, i.e., serious
detriment to the more overriding interest of public health,
public morals, or public welfare. x x x
xxxx
While the thesis has a lot to commend itself, we are not
ready to hold that [PD 1986] is unconstitutional for
Congress to grant an administrative body quasi-judicial
power to preview and classify TV programs and enforce
its decision subject to review by our courts. As far back as
1921, we upheld this setup in Sotto vs. Ruiz, viz:
The use of the mails by private persons
is in the nature of a privilege which can be
regulated in order to avoid its abuse. Persons
possess no absolute right to put into the mail
anything they please, regardless of its character.
[63]
Bernas adds:
Under the decree a movie classification board is
made the arbiter of what movies and television programs
or parts of either are fit for public consumption. It decides
what movies are immoral, indecent, contrary to law
and/or good customs, injurious to the prestige of the
Republic of thePhilippines or its people, and what tend to
incite subversion, insurrection, rebellion or sedition, or
tend to undermine the faith and confidence of the people
in their government and/or duly constituted authorities,
etc. Moreover, its decisions are executory unless stopped
by a court.[64]
Moreover, in MTRCB v. ABS-CBN Broadcasting Corporation,[65] it was held
that the power of review and prior approval of MTRCB extends to all
television programs and is valid despite the freedom of speech guaranteed
by the Constitution. Thus, all broadcast networks are regulated by the
83
MTRCB since they are required to get a permit before they air their
television programs.Consequently, their right to enjoy their freedom of
speech is subject to that requirement. As lucidly explained by Justice Dante
O. Tinga, government regulations through the MTRCB became a necessary
evil with the government taking the role of assigning bandwidth to
individual broadcasters. The stations explicitly agreed to this regulatory
scheme; otherwise, chaos would result in the television broadcast industry
as competing broadcasters will interfere or co-opt each others signals. In
this scheme, station owners and broadcasters in effect waived their right to
the full enjoyment of their right to freedom of speech in radio and television
programs and impliedly agreed that said right may be subject to prior
restraintdenial of permit or subsequent punishment, like suspension or
cancellation of permit, among others.
The three (3) months suspension in this case is not a prior restraint on the
right of petitioner to continue with the broadcast of Ang Dating Daan as a
permit was already issued to him by MTRCB for such broadcast. Rather,
the suspension is in the form of permissible administrative sanction or
subsequent punishment for the offensive and obscene remarks he uttered on
the evening of August 10, 2004 in his television program, Ang Dating
Daan. It is a sanction that the MTRCB may validly impose under its charter
without running afoul of the free speech clause. And the imposition is
separate and distinct from the criminal action the Board may take pursuant
to Sec. 3(i) of PD 1986 and the remedies that may be availed of by the
aggrieved private party under the provisions on libel or tort, if
applicable. As FCC teaches, the imposition of sanctions on broadcasters
who indulge in profane or indecent broadcasting does not constitute
forbidden censorship. Lest it be overlooked, the sanction imposed is not per
se for petitioners exercise of his freedom of speech via television, but for
the indecent contents of his utterances in a G rated TV program.
More importantly, petitioner is deemed to have yielded his right to his full
enjoyment of his freedom of speech to regulation under PD 1986 and its
IRR as television station owners, program producers, and hosts have
impliedly accepted the power of MTRCB to regulate the broadcast industry.
Neither can petitioners virtual inability to speak in his program during the
period of suspension be plausibly treated as prior restraint on future
speech. For viewed in its proper perspective, the suspension is in the nature
of an intermediate penalty for uttering an unprotected form of speech. It is
definitely a lesser punishment than the permissible cancellation of
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exhibition or broadcast permit or license. In fine, the suspension meted was
simply part of the duties of the MTRCB in the enforcement and
administration of the law which it is tasked to implement. Viewed in its
proper context, the suspension sought to penalize past speech made on
prime-time G rated TV program; it does not bar future speech of petitioner
in other television programs; it is a permissible subsequent administrative
sanction; it should not be confused with a prior restraint on speech. While
not on all fours, the Court, in MTRCB,[66]sustained the power of the
MTRCB to penalize a broadcast company for exhibiting/airing a pre-taped
TV episode without Board authorization in violation of Sec. 7 of PD 1986.
Any simplistic suggestion, however, that the MTRCB would be crossing the
limits of its authority were it to regulate and even restrain the prime-time
television broadcast of indecent or obscene speech in a G rated program is
not acceptable. As made clear in Eastern Broadcasting Corporation, the
freedom of television and radio broadcasting is somewhat lesser in scope
than the freedom accorded to newspaper and print media. The MTRCB, as a
regulatory agency, must have the wherewithal to enforce its mandate, which
would not be effective if its punitive actions would be limited to mere
fines. Television broadcasts should be subject to some form of regulation,
considering the ease with which they can be accessed, and violations of the
regulations must be met with appropriate and proportional disciplinary
action. The suspension of a violating television program would be a
sufficient punishment and serve as a deterrent for those responsible. The
prevention of the broadcast of petitioners television program is justified,
and does not constitute prohibited prior restraint. It behooves the Court to
respond to the needs of the changing times, and craft jurisprudence to
reflect these times.
Petitioner, in questioning the three-month suspension, also tags as
unconstitutional the very law creating the MTRCB, arguing that PD 1986,
as applied to him, infringes also upon his freedom of religion. The Court
has earlier adequately explained why petitioners undue reliance on the
religious freedom cannot lend justification, let alone an exempting
dimension to his licentious utterances in his program. The Court sees no
need to address anew the repetitive arguments on religious freedom. As
earlier discussed in the disposition of the petition in G.R. No. 164785, what
was uttered was in no way a religious speech. Parenthetically, petitioners
attempt to characterize his speech as a legitimate defense of his religion
fails miserably. He tries to place his words in perspective, arguing evidently
84
as an afterthought that this was his method of refuting the alleged distortion
of his statements by the INC hosts of Ang Tamang Daan. But on the night
he uttered them in his television program, the word simply came out as
profane language, without any warning or guidance for undiscerning ears.
As to petitioners other argument about having been denied due process and
equal protection of the law, suffice it to state that we have at length
debunked similar arguments in G.R. No. 164785. There is no need to further
delve into the fact that petitioner was afforded due process when he
attended the hearing of the MTRCB, and that he was unable to demonstrate
that he was unjustly discriminated against in the MTRCB proceedings.
Finally, petitioner argues that there has been undue delegation of legislative
power, as PD 1986 does not provide for the range of imposable penalties
that may be applied with respect to violations of the provisions of the law.
The argument is without merit.
In Edu v. Ericta, the Court discussed the matter of undue
delegation of legislative power in the following wise:
It is a fundamental principle flowing from the
doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of
the government, subject to the exception that local
governments may over local affairs participate in its
exercise. What cannot be delegated is the authority under
the Constitution to make laws and to alter and repeal
them; the test is the completeness of the statute in all its
term and provisions when it leaves the hands of the
legislature. To determine whether or not there is an undue
delegation of legislative power, the inquiry must be
directed to the scope and definiteness of the measure
enacted. The legislature does not abdicate its functions
when it describes what job must be done, who is to do it,
and what is the scope of his authority. For a complex
economy, that may indeed be the only way in which the
legislative process can go forward. A distinction has
rightfully been made between delegation of power to
make laws which necessarily involves a discretion as to
ADMINLAW CASES
what it shall be, which constitutionally may not be done,
and delegation of authority or discretion as to its
execution to be exercised under and in pursuance of the
law, to which no valid objection can be made. The
Constitution is thus not to be regarded as denying the
legislature the necessary resources of flexibility and
practicability.
To avoid the taint of unlawful delegation, there
must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays
down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel. A standard thus
defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the
executive or administrative office designated may in
pursuance of the above guidelines promulgate
supplemental rules and regulations.[67]
Based on the foregoing pronouncements and analyzing the law in
question, petitioners protestation about undue delegation of legislative
power for the sole reason that PD 1986 does not provide for a range of
penalties for violation of the law is untenable. His thesis is that MTRCB, in
promulgating the IRR of PD 1986, prescribing a schedule of penalties for
violation of the provisions of the decree, went beyond the terms of the law.
Petitioners posture is flawed by the erroneous assumptions holding it
together, the first assumption being that PD 1986 does not prescribe the
imposition of, or authorize the MTRCB to impose, penalties for violators of
PD 1986. As earlier indicated, however, the MTRCB, by express and direct
conferment of power and functions, is charged with supervising and
regulating, granting, denying, or canceling permits for the exhibition and/or
television broadcast of all motion pictures, television programs, and
publicity materials to the end that no such objectionable pictures, programs,
and materials shall be exhibited and/or broadcast by television.
Complementing this provision is Sec. 3(k) of the decree authorizing the
85
MTRCB to exercise such powers and functions as may be necessary or
incidental to the attainment of the purpose and objectives of [the law]. As
earlier explained, the investiture of supervisory, regulatory, and disciplinary
power would surely be a meaningless grant if it did not carry with it the
power to penalize the supervised or the regulated as may be proportionate to
the offense committed, charged, and proved. As the Court said in Chavez v.
National Housing Authority:
x x x [W]hen a general grant of 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. x x x [W]hen the statute
does not specify the particular method to be followed or
used by a government agency in the exercise of the power
vested in it by law, said agency has the authority to adopt
any reasonable method to carry out its function.[68]
Given the foregoing perspective, it stands to reason that the power of the
MTRCB to regulate and supervise the exhibition of TV programs carries
with it or necessarily implies the authority to take effective punitive action
for violation of the law sought to be enforced. And would it not be logical
too to say that the power to deny or cancel a permit for the exhibition of a
TV program or broadcast necessarily includes the lesser power to suspend?
The MTRCB promulgated the IRR of PD 1986 in accordance with Sec. 3(a)
which, for reference, provides that agency with the power [to] promulgate
such rules and regulations as are necessary or proper for the implementation
of this Act, and the accomplishment of its purposes and objectives x x x.
And Chapter XIII, Sec. 1 of the IRR providing:
Section 1. VIOLATIONS AND
ADMINISTRATIVE SANCTIONS.Without prejudice to
the immediate filing of the appropriate criminal action
and the immediate seizure of the pertinent articles
pursuant to Section 13, any violation of PD 1986 and its
Implementing Rules and Regulations governing
motion pictures, television programs, and related
promotional materials shall be penalized with
suspension or cancellation of permits and/or licenses
issued by the Board and/or with the imposition of fines
ADMINLAW CASES
and other administrative penalty/penalties. The Board
recognizes the existing Table of Administrative Penalties
attached without prejudice to the power of the Board to
amend it when the need arises. In the meantime the
existing revised Table of Administrative Penalties shall be
enforced. (Emphasis added.)
This is, in the final analysis, no more than a measure to specifically
implement the aforequoted provisions of Sec. 3(d) and (k). Contrary to what
petitioner implies, the IRR does not expand the mandate of the MTRCB
under the law or partake of the nature of an unauthorized administrative
legislation. The MTRCB cannot shirk its responsibility to regulate the
public airwaves and employ such means as it can as a guardian of the
public.
In Sec. 3(c), one can already find the permissible actions of the
MTRCB, along with the standards to be applied to determine whether there
have been statutory breaches. The MTRCB may evaluate motion pictures,
television programs, and publicity materials applying contemporary Filipino
cultural values as standard, and, from there, determine whether these audio
and video materials are objectionable for being immoral, indecent, contrary
to law and/or good customs, [etc.] x x x and apply the sanctions it deems
proper. The lawmaking body cannot possibly provide for all the details in
the enforcement of a particular statute.[69] The grant of the rule-making
power to administrative agencies is a relaxation of the principle of
separation of powers and is an exception to the non-delegation of legislative
powers.[70] Administrative regulations or subordinate legislation calculated
to promote the public interest are necessary because of the growing
complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the
law.[71] Allowing the MTRCB some reasonable elbow-room in its operations
and, in the exercise of its statutory disciplinary functions, according it
ample latitude in fixing, by way of an appropriate issuance, administrative
penalties with due regard for the severity of the offense and attending
mitigating or aggravating circumstances, as the case may be, would be
consistent with its mandate to effectively and efficiently regulate the movie
and television industry.
But even as we uphold the power of the MTRCB to review and
impose sanctions for violations of PD 1986, its decision to suspend
86
petitioner must be modified, for nowhere in that issuance, particularly the
power-defining Sec. 3 nor in the MTRCB Schedule of Administrative
Penalties effective January 1, 1999 is the Board empowered to suspend the
program host or even to prevent certain people from appearing in television
programs. The MTRCB, to be sure, may prohibit the broadcast of such
television programs or cancel permits for exhibition, but it may not suspend
television personalities, for such would be beyond its jurisdiction.The
MTRCB cannot extend its exercise of regulation beyond what the law
provides. Only persons, offenses, and penalties clearly falling clearly within
the letter and spirit of PD 1986 will be considered to be within the decrees
penal or disciplinary operation. And when it exists, the reasonable doubt
must be resolved in favor of the person charged with violating the statute
and for whom the penalty is sought. Thus, the MTRCBs decision in
Administrative Case No. 01-04 dated September 27, 2004 and the
subsequent order issued pursuant to said decision must be modified. The
suspension should cover only the television program on which petitioner
appeared and uttered the offensive and obscene language, which sanction is
what the law and the facts obtaining call for.
In ending, what petitioner obviously advocates is an unrestricted
speech paradigm in which absolute permissiveness is the norm. Petitioners
flawed belief that he may simply utter gutter profanity on television without
adverse consequences, under the guise of free speech, does not lend itself to
acceptance in this jurisdiction. We repeat: freedoms of speech and
expression are not absolute freedoms. To say any act that restrains speech
should be greeted with furrowed brows is not to say that any act that
restrains or regulates speech or expression is per se invalid. This only
recognizes the importance of freedoms of speech and expression, and
indicates the necessity to carefully scrutinize acts that may restrain or
regulate speech.
WHEREFORE, the decision of the MTRCB in Adm. Case No.
01-04 dated September 27, 2004 is hereby AFFIRMEDwith
the MODIFICATION of limiting the suspension to the program Ang
Dating Daan. As thus modified, the fallo of the MTRCB shall read as
follows:
WHEREFORE, in view of all the foregoing, a
Decision is hereby rendered, imposing a penalty
of THREE (3) MONTHS SUSPENSION on the
ADMINLAW CASES
television program, Ang Dating Daan, subject of the
instant petition.
Co-respondents Joselito Mallari, Luzviminda
Cruz, and UNTV Channel 37 and its owner, PBC, are
hereby exonerated for lack of evidence.
Costs against petitioner.
SO ORDERED.
RIZAL EMPIRE INSURANCE GROUP AND/OR SERGIO CORPUS,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION,
TEODORICO L, RUIZ, as Labor Arbiter and ROGELIO R. CORIA,
respondents.
Labor; Illegal Dismissal; Reinstatement with back wages; Denial of the
employer's motion for extension of time to file memorandum of appeal
despite the no-extension policy of the NLRC, correct; Liberal construction
of the Rules, not provided in Revised Rules of the NLRC but in the Rules of
CourtPetitioners claim, among other things, that respondent Commission
committed a grave abuse of discretion amounting to lack of jurisdiction in
arbitrarily dismissing petitioners' appeal on a technicality (Rollo, p. 9). It
invokes the Rules of Court provision on liberal construction of the Rules in
the interest of substantial justice. It will be noted however, that the
foregoing provision refers to the Rules of Court. On the other hand, the
Revised Rules of the National Labor Relations Commission are clear and
explicit and leave no room for interpretation.
Same; Same; Same; Same; Rule in administrative law that administrative
regulations and policies of administrative bodies have the force of law and
are entitled to great respectMoreover, it is an elementary rule in
administrative law that administrative regulations and policies enacted by
administrative bodies to interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to great respect (Espanol v.
Philippine Veterans Administration, 137 SCRA 314 [1985]).
Same; Same; Same; Same; Decision of Labor Arbiter which has become
final and executory can no longer be subject to appeal, for employer's
failure to file its memorandum of appeal.Under the above-quoted
provisions of the Revised NLRC Rules, the decision appealed from in this
case has become final and executory and can no longer be subject to appeal.
87
Same; Same; Same; Labor Arbiter's ruling is correct, as the consistent
promotions in rank and salary of the employee indicate that he is a highly
efficient worker despite occasional lapses in punctuality and attendance.
Even on the merits, the ruling of the Labor Arbiter appears to be correct; the
consistent promotions in rank and salary of the private respondent indicate
he must have been a highly efficient worker, who should be retained despite
occasional lapses in punctuality and attendance. Perfection cannot after all
be demanded. Rizal Empire Insurance Group vs. NLRC, 150 SCRA 565,
No. L-73140 May 29, 1987
PARAS, J.:
This is a petition for review on certiorari of the March 14, 1985 Decision of
Labor Arbiter Teodorico L. Ruiz which held that herein private respondent
Rogelio R. Coria was illegally dismissed; and of the Resolution of the
National Labor Relations Commission which dismissed petitioner's appeal
on the ground that the same was filed out of time.
ADMINLAW CASES
In August, 1977, herein private respondent Rogelio R. Coria was hired by
herein petitioner Rizal Empire Insurance Group as a casual employee with a
salary of P10.00 a day. On January 1, 1978, he was made a regular
employee, having been appointed as clerk-typist, with a monthly salary of
P300.00. Being a permanent employee, he was furnished a copy of
petitioner company's "General Information, Office Behavior and Other
Rules and Regulations." In the same year, without change in his position-
designation, he was transferred to the Claims Department and his salary was
increased to P450,00 a month. In 1980, he was transferred to the
Underwriting Department and his salary was increased to P580.00 a month
plus cost of living allowance, until he was transferred to the Fire
Department as filing clerk. In July, 1983, he was made an inspector of the
Fire Division with a monthly salary of P685.00 plus allowances and other
benefits.
On October 15, 1983, private respondent Rogelio R. Coria was dismissed
from work, allegedly, on the grounds of tardiness and unexcused absences.
Accordingly, he filed a complaint with the Ministry of Labor and
Employment (MOLE), and in a Decision dated March 14, 1985 (Record,
pp. 80-87), Labor Arbiter Teodorico L. Ruiz reinstated him to his position
with back wages. Petitioner filed an appeal with the National labor
Relations Commission (NLRC) but, in a Resolution dated November 15,
1985 (Ibid, pp. 31-32), the appeal was dismissed on the ground that the
same had been filed out of time. Hence, the instant petition (Ibid, pp. 2-22).
In compliance with the resolution of the Second Division of this Court
dated April 30, 1986 (Ibid., p. 94), private respondent filed his Comment on
88
May 23, 1986 (Ibid., pp. 97-101) and public respondent on July 2, 1986
(Ibid.,pp. 120-124).
On June 6, 1986, petitioners filed their Reply to private respondent's
Comment (Ibid, pp. 102-105) and on July 25, 1986, their Reply to public
respondent's Comment (Ibid., pp. 126-131).
In a Resolution dated August 18, 1986, the Second Division of this Court
resolved to give due course to the petition and to require the parties to
submit their respective memoranda (Ibid., P. 132).
In compliance with the above mentioned Resolution, petitioners filed the,.r
memorandum on November 10, 1986; while private respondent filed his
Memorandum on October 17, 1986 (Ibid, pp. 139-144), and public
respondent on November 16, 1986 (Ibid., pp. 160-166).
Before going however, into the merits of the case, an important point to
consider is whether or not it is still within the jurisdiction of this Court to
review.
Rule VIII of the Revised Rules of the National Labor Relations
Commission on appeal, provides:
SECTION 1. (a) Appeal. Decision or orders of a labor
Arbiter shall be final and executory unless appealed to the
Commission by any or both of the parties within ten (10)
calendar days from receipt of notice thereof.
ADMINLAW CASES
xxx xxx xxx
SECTION 6. No extension of period. No motion or
request for extension of the period within which to perfect
an appeal shall be entertained.
The record shows that the employer (petitioner herein) received a copy of
the decision of the Labor Arbiter on April 1, 1985. It filed a Motion for
Extension of Time to File Memorandum of Appeal on April 11, 1985 and
filed the Memorandum of Appeal on April 22, 1985. Pursuant to the "no
extension policy" of the National Labor Relations Commission, aforesaid
motion for extension of time was denied in its resolution dated November
15, 1985 and the appeal was dismissed for having been filed out of time
(Rollo, pp. 31-32).
Petitioners claim, among other things, that respondent Commission
committed a grave abuse of discretion amounting to lack of jurisdiction in
arbitrarily dismissing petitioners' appeal on a technicality (Rollo, p. 9). It
invokes the Rules of Court provision on liberal construction of the Rules in
the interest of substantial justice.
It will be noted however, that the foregoing provision refers to the Rules of
Court. On the other hand, the Revised Rules of the National Labor
Relations Commission are clear and explicit and leave no room for
interpretation.
Moreover, it is an elementary rule in administrative law that administrative
regulations and policies enacted by administrative bodies to interpret the
89
law which they are entrusted to enforce, have the force of law, and are
entitled to great respect (Espanol v. Philippine Veterans Administration, 137
SCRA 314 [1985]).
Under the above-quoted provisions of the Revised NLRC Rules, the
decision appealed from in this case has become final and executory and can
no longer be subject to appeal.
Even on the merits, the ruling of the Labor Arbiter appears to be correct; the
consistent promotions in rank and salary of the private respondent indicate
he must have been a highly efficient worker, who should be retained despite
occasional lapses in punctuality and attendance. Perfection cannot after all
be demanded.
WHEREFORE, this petition is DISMISSED.
SO ORDERED.
G.R. No. 163123. April 15, 2005.*
PHILIPPINE HEALTH INSURANCE CORPORATION, petitioner, vs.
CHINESE GENERAL HOSPITAL AND MEDICAL CENTER,
respondent.
Health; Philippine Health Insurance Corporation (Philhealth); The state
policy in creating a national health insurance program is to grant discounted
medical coverage to all citizens, with priority to the needs of the
underprivileged, sick, elderly, disabled, women and children, and free
medical care to paupers.The state policy in creating a national health
insurance program is to grant discounted medical coverage to all citizens,
with priority to the needs of the underprivileged, sick, elderly, disabled,
women and children, and free medical care to paupers. The very same
policy was adopted in RA 7875 which sought to: a) provide all citizens of
the Philippines with the mechanism to gain financial access to health
ADMINLAW CASES
services; b) create the National Health Insurance Program to serve as the
means to help the people pay for the health services; c) prioritize and
accelerate the provision of health services to all Filipinos, especially that
segment of the population who cannot afford such services; and d) establish
the Philippine Health Insurance Corporation that will administer the
program at central and local levels.
Same; Same; The unreasonably strict implementation of the 60-day rule for
the filing of claims with Philhealth, without regard to the causes of delay
beyond a health care providers control, will be counter-productive to the
long-term effectiveness of the NHIP.The unreasonably strict
implementation of the 60-day rule, without regard to the causes of delay
beyond respondents control, will be counter-productive to the long-term
effectiveness of the NHIP. Instead of placing a premium on participation in
the Program, Philhealth punishes an accredited health provider like CGH by
refusing to pay its claims for services already rendered. Under these
circumstances, no accredited provider will gamble on honoring claims with
delayed supporting papersno matter how meritoriousknowing that
reimbursement from Philhealth will not be forthcoming.
Same; Same; Administrative Law; The Supreme Court will not hesitate,
whenever necessary, to allow a liberal implementation of the rules and
regulations of an administrative agency in cases where their unjustifiably
rigid enforcement will result in a deprivation of legal rights.This Court
will not hesitate, whenever necessary, to allow a liberal implementation of
the rules and regulations of an administrative agency in cases where their
unjustifiably rigid enforcement will result in a deprivation of legal rights. In
this case, respondent had already rendered the services for which it was
filing its claims. Technicalities should not be allowed to defeat respondents
right to be reimbursed, specially since petitioners charter itself guarantees
such reimbursement.
Same; Same; Same; A careful reading of RA 7875 shows that the law itself
does not provide for any specific period within which to file claims, thus it
can safely be presumed that the period for filing was not per se the principal
concern of the legislature.A careful reading of RA 7875 shows that the
law itself does not provide for any specific period within which to file
claims. We can safely presume therefore that the period for filing was not
per se the principal concern of the legislature. More important than mere
technicalities is the realization of the state policy to provide Philhealth
members with the requisite medical care at the least possible cost. Truly,
nothing can be more disheartening than to see the Acts noble objective
frustrated by the overly stringent application of technical rules. The fact is
90
that it was not RA 7875 itself but Section 52 of its Implementing Rules and subject of the controversy is private land; 10) in quo warranto proceedings.
Regulations which established the 60-day cut-off for the filing of claims. Philippine Health Insurance Corporation vs. Chinese General Hospital and
Same; Same; Same; While it is doctrinal in administrative law that the rules Medical Center, 456 SCRA 459, G.R. No. 163123 April 15, 2005
and regulations of administrative bodies interpreting the law they are
entrusted to enforce have the force of law, these issuances are by no means DECISION
iron-clad norms.While it is doctrinal in administrative law that the rules
and regulations of administrative bodies interpreting the law they are
entrusted to enforce have the force of law, these issuances are by no means CORONA, J.:
iron-clad norms. Administrative bodies themselves can and have in fact
bent the rules for reasons of public interest. On September 15, 1998, for
instance, petitioner issued Philhealth Circular No. 31-A: IN ORDER to Before us is a petition for review on certiorari under Rule 45 of the
allow members of the National Health Insurance Program (NHIP) sufficient Rules of Court assailing the March 29, 2004 decision [1] of the Court of
time to complete all documents to support their medical care claims,
Philhealth is temporarily suspending the sixty (60)-day reglementary period Appeals, the dispositive portion of which read:
for filing claims. While Section 52 (b), Rule VIII of the Implementing Rules
and Regulations of R.A. 7875 provides that all claims for payment of FOR THE FOREGOING DISQUISITIONS, the petition is GRANTED,
services shall be filed within 60 calendar days from the day of discharge of
a patient, there is a need to extend this period to minimize the incidence of the Philippine Health Insurance Corporation[2] is hereby ordered to give due
late filing due to members personal difficulties and circumstances beyond course to petitioners, Chinese General Hospital and Medical Center, claims
their control. (emphasis ours) And then again, on April 20, 1999, Philhealth
Circular No. 50 was issued: TO MINIMIZE the incidence of late filing of for the period from 1989 to 1992, amounting to FOURTEEN MILLION
claims due to members personal difficulties in preparing the needed TWO HUNDRED NINETY ONE THOUSAND FIVE HUNDRED SIXTY
documents, Philhealth is extending the period for filing of claims x x x
(emphasis ours) EIGHT PESOS and 71/100 PESOS (P14,291,568.71).[3]
Same; Same; Same; Doctrine of Exhaustion of Administrative Remedies;
Under the doctrine of exhaustion of administrative remedies, an
administrative decision must first be appealed to the administrative The facts, as culled by the Court of Appeals, follow.
superiors at the highest level before it may be elevated to a court of justice
for review; Exceptions.Under the doctrine of exhaustion of administrative On February 14, 1995, Republic Act No. 7875, otherwise known as An Act
remedies, an administrative decision must first be appealed to the
administrative superiors at the highest level before it may be elevated to a Instituting a National Health Insurance Program for all Filipinos and
court of justice for review. This doctrine, however, is a relative one and its Establishing the Philippine Health Insurance Corporation For the Purpose,
flexibility is conditioned on the peculiar circumstances of a case. There are
a number of instances when the doctrine has been held to be inapplicable. was approved and signed into law. As its guiding principle, it is provided in
Among the established exceptions are: 1) when the question raised is purely Section 2 thereof, thus:
legal; 2) when the administrative body is in estoppel; 3) when the act
complained of is patently illegal; 4) when there is urgent need for judicial
intervention; 5) when the claim involved is small; 6) when irreparable Section 2. Declaration of Principles and Policies. Section 11, Article XIII of
damage will be suffered; 7) when there is no other plain, speedy and
the Constitution of the Republic of the Philippines declares that the state
adequate remedy; 8) when strong public interest is involved; 9) when the

91
ADMINLAW CASES
shall adopt an integrated and comprehensive approach to health Corporation (PHILHEALTH) without need of conveyance, transfer or
development which shall endeavor to make essential goods, health and assignment. The PMCC shall thereafter cease to exist.
other social services available to all the people at affordable cost. Priority
for the needs of the underprivileged, sick, elderly, disabled, women, and The liabilities of the PMCC shall be treated in accordance with existing

children should be recognized. Likewise, it shall be the policy of the State laws and pertinent rules and regulations. xxx

to provide free medical care to paupers.

SECTION 52. Transfer of Health Insurance Funds of the SSS and GSIS.

Prior to the enactment of R.A. 7875. CGH [4] had been an accredited health The Health Insurance Funds being administered by the SSS and GSIS shall

care provider under the Philippine Medical Care Commission (PMCC), be transferred to the Corporation within sixty (60) days from the

more popularly known as Medicare. As defined by R.A. 7875, a health care promulgation of the implementing rules and regulations. The SSS and GSIS

provider refers to a health care institution, which is duly licensed and shall, however, continue to perform Medicare functions under contract with

accredited devoted primarily to the maintenance and operation of facilities the Corporation until such time that such functions are assumed by the

for health promotion, prevention, diagnosis, treatment and care of Corporation xxx.

individuals suffering from illness, disease, injury, disability or deformity, or

Being the successor of the PMCC, PHILHEALTH, in compliance with the
in need of obstetrical or other medical and nursing care.[5]
mandate of R.A. 7875,[7] promulgated the rules and regulations

As such, petitioner[6] filed its Medicare claims with the Social Security implementing said act, Section 52 of which provides:

System (SSS), which, together with the Government Service Insurance

SECTION 52. Fee for Service Guidelines on Claims Payment. xxx b. All
System (GSIS), administered the Health Insurance Fund of the PMMC.
claims for payment of services rendered shall be filed within sixty (60)
Thus, petitioner filed its claim from 1989 to 1992 with the SSS, amounting
calendar days from the date of discharge of the patient. Otherwise, the claim
to EIGHT MILLION ONE HUNDRED TWO THOUSAND SEVEN
shall be barred from payment except if the delay in the filing of thee claim
HUNDRED EIGHTY-TWO and 10/100 (P8,102,782.10). Its application for
is due to natural calamities and other fortuitous events. If the claim is sent
the payment of its claim with the SSS was overtaken by the passage of R.A.
through mail, the date of the mailing as stamped by the post office of origin
7875, which in Section 51 and 52, provides:
shall be considered as the date of the filing.

SECTION 51. Merger. Within sixty (60) days from the promulgation of the
implementing rules and regulations, all functions and assets of the
Philippine Medical Care Commission shall be merged with those of the

92
ADMINLAW CASES
If the delay in the filing is due to natural calamities or other fortuitous
events, the health care provider shall be accorded an extension period of
sixty (60) calendar days.
If the delay in the filing of the claim is caused by the health care provider,
and the Medicare benefits had already been deducted, the claim will not be
paid. If the claim is not yet deducted, it will be paid to the member
chargeable to the future claims of the health care provider.
Instead of giving due course to petitioners claims totaling to EIGHT
MILLION ONE HUNDRED TWO THOUSAND SEVEN HUNDRED
EIGHTY-TWO and 10/100 (P8,102,782.10), only ONE MILLION THREE
HUNDRED SIXTY-FIVE THOUSAND FIVE HUNDRED FIFTY-SIX and
32/100 Pesos (1,365,556.32) was paid to petitioner, representing its claims
from 1989 to 1992 (sic).
Petitioner again filed its claims representing services rendered to its patients
from 1998 to 1999, amounting to SEVEN MILLION FIVE HUNDRED
FIFTY FOUR THOUSAND THREE HUNDRED FORTY TWO and
93/100 Pesos (P7,554,342.93). For being allegedly filed beyond the sixty
(60) day period allowed by the implementing rules and regulations, Section
52 thereof, petitioners claims were denied by the Claims Review Unit of
Philhealth in its letter dated January 14, 200, thus:
xxx
This pertains to your three hundred seventy three Philhealth medicare
claims (373) which were primarily denied by Claims Processing
ADMINLAW CASES
Department for late filing and for which you made an appeal to this office.
We regret to inform you that after thorough evaluation of your claims,
[your] 361 medicare claims were DENIED, due to the fact that the
claims were filed 5 to 16 months after discharge. However, the
remaining medicare claims have been forwarded to Claims Processing
Department (CPD) for payment.
SECTION 52 (B) Rule 52 (B) Rule VIII of the Implementing Rules and
Regulations of 7875 provides that all claims for payment of services
rendered shall be filed within sixty (60) days from the day of discharge of
the patient. However, Philhealth Circular No, 31-A, series of 1998, state
that all claims pending with Philhealth as of September 15, 1998 and
claims with discharge dates from September to December 31, 1998 are
given one hundred twenty (120) days from the date of discharge to file their
claim. In as much as we would like to grant your request for
reconsideration, the Corporation could no longer extend the period of filing
xxx.
Petitioners claim was denied with finality by PHILHEALTH in its assailed
decision dated June 6, 2000.
In a petition for review under Rule 43 of the Rules of Court, the Court
of Appeals ordered herein petitioner Philippine Health Insurance
Corporation (Philhealth) to pay the claims in the amount of Fourteen
Million Two Hundred Ninety-one Thousand Five Hundred Sixty-eight
Pesos and 71/100 (P14,291,568.71), principally on the ground of liberal
application of the 60-day rule under Section 52 of RA 7875s Implementing
Rules and Regulations. According to the Court of Appeals:
93
The avowed policy in the creation of a national health program is, as
provided in Section 11, Article XIII of the 1987 Constitution, to adopt an
integrated and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all people at affordable cost. To assist the state in
pursuing this policy, hospitals and medical institutions such as herein
petitioner are accredited to provide health care. It is true, as aptly stated by
the OGCC, that petitioner was not required by the government to take part
in its program, it did so voluntarily. But the fact that the government did not
twist petitioners arm, so to speak, to participate does not make petitioners
participation in the program less commendable, considering that at rate
PHILHEALTH is denying claims of health care givers, it is more risky
rather than providential for health care givers to take part in the
governments health program.
It is Our firmly held view that the policy of the state in creating a national
health insurance program would be better served by granting the instant
petition. Thus, it is noteworthy to mention that health care givers are
threatening to boycott PHILHEALTH, reasoning that the claims approved
by PHILHEALTH are not commensurate to the services rendered by them
to its members. Thus, how can these accredited health care givers be
encouraged to serve an increasing number of members when they end up on
the losing end of this venture. We must admit that the costs of operating
these medical institutions cannot be taken lightly. They must also earn a
modicum amount of profit in order to operate properly.
ADMINLAW CASES
Again, it is trite to emphasize that essentially, the purpose of the national
health insurance program is to provide members immediate medical care
with the least amount of cash expended. Thus, with PHILHEALTH,
members/patients need only to present their card to prove their membership
and the accredited health care giver is mandated by law to provide the
necessary medical assistance, said health care giver shouldering the
PHILHEALTH part of the bill. However, it is the members/patients who
bear the brunt. Thus, they are made to shoulder the PHILHEALTH part of
the bill, and the refund thereof is subject to whether or not the claims of the
health care providers are approved by PHILHEALTH. This is blatantly
contrary to the very purpose for which the National Health Insurance
Program was created.[8]
xxxxxxxxx
We agree.
The state policy in creating a national health insurance program is to
grant discounted medical coverage to all citizens, with priority to the needs
of the underprivileged, sick, elderly, disabled, women and children, and free
medical care to paupers[9].
The very same policy was adopted in RA 7875[10] which sought to:
a) provide all citizens of the Philippines with the mechanism to
gain financial access to health services;
94
 b) create the National Health Insurance Program to serve as the
means to help the people pay for the health services;
c) prioritize and accelerate the provision of health services to all
Filipinos, especially that segment of the population who
cannot afford such services; and
d) establish the Philippine Health Insurance Corporation that will
administer the program at central and local levels.[11]
To assist the state in pursuing the aforementioned policy, health
institutions were granted the privilege of applying for accreditation as
[12]
health care providers. Respondent Chinese General Hospital and Medical
Center (CGH) was one of those which received such accreditation.
Under the rules promulgated by the Philhealth Board pursuant to RA
7875, any claim for payment of services rendered (to a patient) shall be
filed within sixty (60) calendar days from the date of discharge of the
patient. Otherwise, the claim is barred.[13]
But before a claim is filed with petitioner Philhealth for services
already rendered, an accredited health care provider like respondent CGH is
required to:
a. accomplish a Philhealth claim form;
b. accomplish an itemized list of the medicines administered to
and medical supplies used by the patient concerned,
ADMINLAW CASES
indicating therein the quality, unit, price and total price
corresponding thereto;
c. require the patient concerned and his/her employer to
accomplish and submit a Philhealth member/employer
certification;
d. in case the patient gave birth, require her to submit a certified
true copy of the childs birth certificate;
e. in case the patient died, require the immediate relatives to
submit a certified true copy of the deceaseds death
certificate; and
f. in case a members dependent is hospitalized for which the
member seeks coverage, require the member to submit proof
of relationship to the patient and to execute an affidavit of
support.[14]
Apart from the foregoing requirements which often necessitate
securing documents from other government offices, and the fact that most
patients are unable to immediately accomplish and submit the required
documents, an accredited health care provider like CGH has to contend with
an average of about a thousand members and/or dependents seeking
medical treatment for various illnesses per month.
Under these circumstances, it is unreasonable to expect respondent
CGH to comply 100% of the time with the prescribed 60-day rule of
95
Philhealth. Despite the prescribed standard procedures, respondent has no
assurance of the members prompt submission of the required documents.
This factor is completely beyond its control. There will always be delay not
attributable to respondent.
The unreasonably strict implementation of the 60-day rule, without
regard to the causes of delay beyond respondents control, will be counter-
productive to the long-term effectiveness of the NHIP. Instead of placing a
premium on participation in the Program, Philhealth punishes an accredited
health provider like CGH by refusing to pay its claims for services already
rendered. Under these circumstances, no accredited provider will gamble on
honoring claims with delayed supporting papers no matter how
meritorious knowing that reimbursement from Philhealth will not be
forthcoming.
This Court will not hesitate, whenever necessary, to allow a liberal
implementation of the rules and regulations of an administrative agency in
cases where their unjustifiably rigid enforcement will result in a deprivation
of legal rights. In this case, respondent had already rendered the services for
which it was filing its claims. Technicalities should not be allowed to defeat
respondents right to be reimbursed, specially since petitioners charter itself
guarantees such reimbursement.
A careful reading of RA 7875 shows that the law itself does not
provide for any specific period within which to file claims. We can safely
presume therefore that the period for filing was not per se the principal
concern of the legislature. More important than mere technicalities is the
realization of the state policy to provide Philhealth members with the
ADMINLAW CASES
requisite medical care at the least possible cost. Truly, nothing can be more
disheartening than to see the Acts noble objective frustrated by the overly
stringent application of technical rules.
The fact is that it was not RA 7875 itself but Section 52 of its
Implementing Rules and Regulations which established the 60-day cut-off
for the filing of claims.
While it is doctrinal in administrative law that the rules and
regulations of administrative bodies interpreting the law they are entrusted
to enforce have the force of law[15], these issuances are by no means iron-
clad norms. Administrative bodies themselves can and have in fact bent the
rules for reasons of public interest. On September 15, 1998, for instance,
petitioner issued Philhealth Circular No. 31-A:[16]
IN ORDER to allow members of the National Health Insurance Program
(NHIP) sufficient time to complete all documents to support their medical
care claims, Philhealth is temporarily suspending the sixty (60)-day
reglementary period for filing claims.
While Section 52 (b), Rule VIII of the Implementing Rules and
Regulations of R.A. 7875 provides that all claims for payment of
services shall be filed within 60 calendar days from the day of discharge
of a patient, there is a need to extend this period to minimize the
incidence of late filing due to members personal difficulties and
circumstances beyond their control. (emphasis ours)
96
 And then again, on April 20, 1999, Philhealth Circular No. 50 was
issued:
TO MINIMIZE the incidence of late filing of claims due to members
personal difficulties in preparing the needed documents, Philhealth is
extending the period for filing of claims xxx (emphasis ours)
The above circulars indubitably recognized the necessity of extending
the 60-day period because of the difficulties encountered by members in
completing the required documents, often due to circumstances beyond
their control. Petitioner appeared to be well aware of the problems
encountered by its members in complying with the 60-day rule.
Furthermore, implicit in the wording of the circulars was the cognition of
Under the doctrine of exhaustion of administrative remedies, an
administrative decision must first be appealed to the administrative
superiors at the highest level before it may be elevated to a court of justice
for review.
This doctrine, however, is a relative one and its flexibility is
conditioned on the peculiar circumstances of a case. [17] There are a number
of instances when the doctrine has been held to be inapplicable. Among the
established exceptions are:
1) when the question raised is purely legal;
2) when the administrative body is in estoppel;

the fact that the fault was not always attributable to the health care providers
3) when the act complained of is patently illegal;
like CGH but to the members themselves.

4) when there is urgent need for judicial intervention;

Delay on the part of members is an ordinary occurrence. There is no
need to make a mountain out of a molehill as far as this particular point is
5) when the claim involved is small;
concerned. To this day, members continue to encounter delay in submitting
their documents. There was therefore no compelling reason for the exacting 6) when irreparable damage will be suffered;
and meticulous enforcement of the rule when, in at least two instances,
petitioner itself implemented it liberally and on the same ground that it was 7) when there is no other plain, speedy and adequate remedy;
using against respondent.
8) when strong public interest is involved;
Petitioner likewise contends that respondent failed to exhaust
administrative remedies before resorting to judicial intervention. We 9) when the subject of the controversy is private land;
disagree.
10) in quo warranto proceedings.[18]

97
ADMINLAW CASES
 As explained by the appellate court:
It is Our view that the instant case falls as one of the exceptions, concerning
as it does public interest. As mentioned earlier, although they were not made
parties to the instant case, the rights of millions of Filipinos who are
members of PHILHEALTH and who obviously rely on it for their health
care, are considered, nonetheless, parties to the present case. This Court is
mandated herein to take conscious and detailed consideration of the
interplay of the interests of the state, the health care giver and the members.
With these in mind, We hold that the greater interest of the greater number
of people, mostly members of PHILHEALTH, is paramount.
Furthermore, when the representatives of herein petitioner met with Dr.
Enrique Zalamea, PHILHEALTHs President and Chief Executive Officer,
he informed them that, in lieu of protest to be filed directly with him, the
representatives could make representations with the Office of the President,
which petitioner did to no avail, considering that the formal protest filed
was referred back by the Office of the President to Dr. Zalamea. Being then
the head of PHILHEALTH, and expected to have an intimate knowledge of
the law and the rules creating the National Health Insurance Program, under
which PHILHEALTH was created, he instructed herein petitioner to pursue
a remedy not sanctioned by the rules and not in accord with the rule of
exhaustion of administrative remedies. In so doing, PHILHEALTH is
deemed estopped from assailing the instant petition for failure to exhaust
administrative remedies when PHILHEALTH itself, through its president,
does not subscribe to it.[19]
ADMINLAW CASES
There is no need to belabor the fact that the baseless denial of
respondents claims will be gravely disturbing to the health care industry,
specially the providers whose claims will be unpaid. The unfortunate reality
is that there are today some health care providers who admit numbers for
treatment and/or confinement yet require them to pay the portion which
ought to be shouldered by Philhealth. A refund is made only if their claim is
first paid, due to the apprehension of not being reimbursed. Simply stated, a
member cannot avail of his benefits under the NHIP at the time he needs it
most.
We cannot turn a deaf ear to respondents plea for fairness which
essentially demands that its claims for services already rendered be honored
as the National Health Insurance Program law intended.
WHEREFORE, the assailed decision of the Court of Appeals is
hereby AFFIRMED. Petitioner is hereby ordered to pay respondents claims
representing services rendered to its members from 1989 to 1992.
No costs.
SO ORDERED.
G.R. No. 127624. November 18, 2003.*
BPI LEASING CORPORATION, petitioner, vs. THE HONORABLE
COURT OF APPEALS, COURT OF TAX APPEAL, AND
COMMISSIONER OF INTERNAL REVENUE, respondents.
Actions; Pleadings and Practice; Attorneys; Certificate of Non-Forum
Shopping; Corporation Law; While the certificate of non-forum shopping
may be signed, for and on behalf of a corporation, by a specifically
authorized lawyer who has personal knowledge of the facts required to be
dis-closed in such document, it does not mean that any lawyer, acting on
98
behalf of the corporation he is representing, may routinely sign a
certification of non-forum shoppingthe lawyer must be specifically
authorized in order to validly sign the certification.As to the first issue,
the Court agrees with respondents contention that the petition should be
dismissed outright for failure to comply with Supreme Court Circular 28-
91, now incorporated as Section 2 of Rule 42 of the Rules of Court. The
records plainly show, and this has not been denied by BLC, that the
certification was executed by counsel who has not been shown to have
specific authority to sign the same for BLC. In BA Savings Bank v. Sia, it
was held that the certificate of non-forum shopping may be signed, for and
on behalf of a corporation, by a specifically authorized lawyer who has
personal knowledge of the facts required to be disclosed in such document.
This ruling, however, does not mean that any lawyer, acting on behalf of the
corporation he is representing, may routinely sign a certification of non-
forum shopping. The Court emphasizes that the lawyer must be
specifically authorized in order validly to sign the certification.
Same; Same; Same; Same; Same; Since powers of corporations are
exercised through their board of directors and/or duly authorized officers
and agents, physical acts, like the signing of documents, can be performed
only by natural persons duly authorized for the purpose by corporate bylaws
or by specific acts of the board of directors; Being counsel of record does
not vest upon a lawyer the authority to execute the certification on behalf of
his client.Corporations have no powers except those expressly conferred
upon them by the Corporation Code and those that are implied by or are
incidental to its existence. These powers are exercised through their board
of directors and/or duly authorized officers and agents. Hence, physical
acts, like the signing of documents, can be performed only by natural
persons duly authorized for the purpose by corporate bylaws or by specific
act of the board of directors. The records are bereft of the authority of
BLCs counsel to institute the present petition and to sign the certification
of non-forum shopping. While said counsel may be the counsel of record
for BLC, the representation does not vest upon him the authority to execute
the certification on behalf of his client. There must be a resolution issued by
the board of directors that specifically authorizes him to institute the
petition and execute the certification, for it is only then that his actions can
be legally binding upon BLC.
Same; Same; Same; Same; Same; Substantial Compliance Argument; The
view in Dimagiba v. Montalvo, Jr., 202 SCRA 461 (1991), to the effect that
a lawyer who assumes responsibility for a clients cause has the duty to
know the entire history of the case, especially if any litigation is
ADMINLAW CASES
commenced, no longer holds authoritative value in light of Digital
Microwave Corporation v. Court of Appeals, 328 SCRA 286 (2000), where
it was held that the reason the certification against forum shopping is
required to be accomplished by petitioner himself is that only he himself
has actual knowledge of whether or not he has initiated similar actions or
proceedings in other courts or tribunals.The argument of substantial
compliance deserves no merit, given the Courts ruling in Mendigorin v.
Cabantog: ...The CA held that there was substantial compliance with the
Rules of Court, citing Dimagiba vs. Montalvo, Jr. [202 SCRA 641] to the
effect that a lawyer who assumes responsibility for a clients cause has the
duty to know the entire history of the case, especially if any litigation is
commenced. This view, however, no longer holds authoritative value in the
light of Digital Microwave Corporation vs. CA [328 SCRA 286], where it
was held that the reason the certification against forum shopping is required
to be accomplished by petitioner himself is that only the petitioner himself
has actual knowledge of whether or not he has initiated similar actions or
proceedings in other courts or tribunals. Even counsel of record may be
unaware of such fact. To our mind, this view is more in accord with the
intent and purpose of Revised Circular No. 28-91.
Administrative Law; Taxation; Administrative issuances may be
distinguished according to their nature and substancelegislative and
interpretative; Revenue Regulation 19-86 was issued pursuant to the rule-
making power of the Secretary of Finance, thus making it legislative, and
not interpretative.Administrative issuances may be distinguished
according to their nature and substance: legislative and interpretative. A
legislative rule is in the matter of subordinate legislation, designed to
implement a primary legislation by providing the details thereof. An
interpretative rule, on the other hand, is designed to provide guidelines to
the law which the administrative agency is in charge of enforcing. The
Court finds the questioned revenue regulation to be legislative in nature.
Section 1 of Revenue Regulation 19-86 plainly states that it was
promulgated pursuant to Section 277 of the NIRC. Section 277 (now
Section 244) is an express grant of authority to the Secretary of Finance to
promulgate all needful rules and regulations for the effective enforcement of
the provisions of the NIRC. In Paper Industries Corporation of the
Philippines v. Court of Appeals, the Court recognized that the application of
Section 277 calls for none other than the exercise of quasi-legislative or
rule-making authority. Verily, it cannot be disputed that Revenue Regulation
19-86 was issued pursuant to the rule-making power of the Secretary of
99
Finance, thus making it legislative, and not interpretative as alleged by
BLC.
Same; Same; The doctrine enunciated in Fortune Tobacco, and reiterated in
CIR v. Michel J. Lhuillier Pawnshop, Inc., is that when an administrative
rule goes beyond merely providing for the means that can facilitate or
render less cumbersome the implementation of the law and substantially
increases the burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard and, thereafter, to be
duly informed, before the issuance is given the force and effect of law.
The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v. Michel
J. Lhuillier Pawnshop, Inc., is that when an administrative rule goes beyond
merely providing for the means that can facilitate or render less
cumbersome the implementation of the law and substantially increases the
burden of those governed, it behooves the agency to accord at least to those
directly affected a chance to be heard and, thereafter, to be duly informed,
before the issuance is given the force and effect of law. In Lhuillier and
Fortune Tobacco, the Court invalidated the revenue memoranda concerned
because the same increased the tax liabilities of the affected taxpayers
without affording them due process. In this case, Revenue Regulation 19-86
would be beneficial to the taxpayers as they are subjected to lesser taxes.
Petitioner, in fact, is invoking Revenue Regulation 19-86 as the very basis
of its claim for refund. If it were invalid, then petitioner all the more has no
right to a refund.
Same; Same; Statutory Construction; The principle is well entrenched that
statutes, including administrative rules and regulations, operate
prospectively only, unless the legislative intent to the contrary is manifest
by express terms or by necessary implication.The principle is well
entrenched that statutes, including administrative rules and regulations,
operate prospectively only, unless the legislative intent to the contrary is
manifest by express terms or by necessary implication. In the present case,
there is no indication that the revenue regulation may operate retroactively.
Furthermore, there is an express provision stating that it shall take effect
on January 1, 1987, and that it shall be applicable to all leases written on
or after the said date. Being clear on its prospective application, it must be
given its literal meaning and applied without further interpretation. Thus,
BLC is not in a position to invoke the provisions of Revenue Regulation 19-
86 for lease rentals it received prior to January 1, 1987.
Same; Same; Same; Tax refunds are in the nature of tax exemptions and are
to be strictly construed against the person or entity claiming the exemption.
It is also apt to add that tax refunds are in the nature of tax exemptions.
ADMINLAW CASES
As such, these are regarded as in derogation of sovereign authority and are
to be strictly construed against the person or entity claiming the exemption.
The burden of proof is upon him who claims the exemption and he must be
able to justify his claim by the clearest grant under Constitutional or
statutory law, and he cannot be permitted to rely upon vague implications.
Nothing that BLC has raised justifies a tax refund. BPI Leasing Corporation
vs. Court of Appeals, 416 SCRA 4, G.R. No. 127624 November 18, 2003
DECISION
AZCUNA, J.:
The present petition for review on certiorari assails the decision[1] of
the Court of Appeals in CA-G.R. SP No. 38223 and its subsequent
resolution[2] denying the motion for reconsideration. The assailed decision
and resolution affirmed the decision of the Court of Tax Appeals (CTA)
which denied petitioner BPI Leasing Corporations (BLC) claim for tax
refund in CTA Case No. 4252.
The facts are not disputed.
BLC is a corporation engaged in the business of leasing properties.
[3]
For the calendar year 1986, BLC paid the Commissioner of Internal
Revenue (CIR) a total of P1,139,041.49 representing 4% contractors
percentage tax then imposed by Section 205 of the National Internal
Revenue Code (NIRC), based on its gross rentals from equipment leasing
for the said year amounting to P27,783,725.42.[4]
On November 10, 1986, the CIR issued Revenue Regulation 19-86.
Section 6.2 thereof provided that finance and leasing companies registered
100
under Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1%
on actual income earned. This means that companies registered under
Republic Act 5980, such as BLC, are not liable for contractors percentage
tax under Section 205 but are, instead, subject to gross receipts tax under
Section 260 (now Section 122) of the NIRC. Since BLC had earlier paid the
aforementioned contractors percentage tax, it re-computed its tax liabilities
under the gross receipts tax and arrived at the amount of P361,924.44.
On April 11, 1988, BLC filed a claim for a refund with the CIR for the
amount of P777,117.05, representing the difference between
theP1,139,041.49 it had paid as contractors percentage tax and P361,924.44
it should have paid for gross receipts tax. [5] Four days later, to stop the
running of the prescriptive period for refunds, petitioner filed a petition for
review with the CTA.[6]
[7]
In a decision dated May 13, 1994, the CTA dismissed the petition
and denied BLCs claim of refund. The CTA held that Revenue Regulation
19-86, as amended, may only be applied prospectively such that it only
covers all leases written on or after January 1, 1987, as stated under Section
7 of said revenue regulation:
Section 7. Effectivity These regulations shall take effect on January 1,
1987 and shall be applicable to all leases written on or after the said date.
The CTA ruled that, since BLCs rental income was all received prior
to 1986, it follows that this was derived from lease transactions prior
toJanuary 1, 1987, and hence, not covered by the revenue regulation.
ADMINLAW CASES
A motion for reconsideration of the CTAs decision was filed, but was
denied in a resolution dated July 26, 1995.[8] BLC then appealed the case to
the Court of Appeals, which issued the aforementioned assailed decision
and resolution.[9] Hence, the present petition.
In seeking to reverse the denial of its claim for tax refund, BLC
submits that the Court of Appeals and the CTA erred in not ruling that
Revenue Regulation 19-86 may be applied retroactively so as to allow
BLCs claim for a refund of P777,117.05.
Respondents, on the other hand, maintain that the provision on the
date of effectivity of Revenue Regulation 19-86 is clear and unequivocal,
leaving no room for interpretation on its prospective application. In
addition, respondents argue that the petition should be dismissed on the
ground that the Verification/Certification of Non-Forum Shopping was
signed by the counsel of record and not by BLC, through a duly authorized
representative, in violation of Supreme Court Circular 28-91.
In a resolution dated March 29, 2000,[10] the petition was given due
course and the Court required the parties to file their respective
Memoranda. Upon submission of the Memoranda, the issues in this case
were delineated, as follows:[11]
WHETHER THE INSTANT PETITION FOR REVIEW ON CERTIORARI
SUBSTANTIALLY COMPLIES WITH SUPREME COURT CIRCULAR
28-91.
101
WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS Corporations have no powers except those expressly conferred upon
LEGISLATIVE OR INTERPRETATIVE IN NATURE. them by the Corporation Code and those that are implied by or are
incidental to its existence. These powers are exercised through their board
WHETHER REVENUE REGULATION 19-86, AS AMENDED, IS of directors and/or duly authorized officers and agents. Hence, physical
PROSPECTIVE OR RETROACTIVE IN ITS APPLICATION. acts, like the signing of documents, can be performed only by natural
persons duly authorized for the purpose by corporate bylaws or by specific
WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS,
act of the board of directors.[13]
FAILED TO MEET THE QUANTUM OF EVIDENCE REQUIRED IN
REFUND CASES. The records are bereft of the authority of BLCs counsel to institute the
present petition and to sign the certification of non-forum shopping.While
WHETHER PETITIONER, AS FOUND BY THE COURT OF APPEALS,
said counsel may be the counsel of record for BLC, the representation does
IS ESTOPPED FROM CLAIMING ITS PRESENT REFUND.
not vest upon him the authority to execute the certification on behalf of his
client. There must be a resolution issued by the board of directors that
As to the first issue, the Court agrees with respondents contention that
specifically authorizes him to institute the petition and execute the
the petition should be dismissed outright for failure to comply with
certification, for it is only then that his actions can be legally binding upon
Supreme Court Circular 28-91, now incorporated as Section 2 of Rule 42 of
BLC.
the Rules of Court. The records plainly show, and this has not been denied
by BLC, that the certification was executed by counsel who has not been
BLC however insists that there was substantial compliance with SC
shown to have specific authority to sign the same for BLC.
Circular No. 28-91 because the verification/certification was issued by a
counsel who had full personal knowledge that no other petition or action
In BA Savings Bank v. Sia,[12] it was held that the certificate of non-
has been filed or is pending before any other tribunal. According to BLC,
forum shopping may be signed, for and on behalf of a corporation, by a
said counsels law firm has handled this case from the very beginning and
specifically authorized lawyer who has personal knowledge of the facts
could very well attest and/or certify to the absence of an instituted or
required to be disclosed in such document. This ruling, however, does not
pending case involving the same or similar issues.
mean that any lawyer, acting on behalf of the corporation he is representing,
may routinely sign a certification of non-forum shopping. The Court
The argument of substantial compliance deserves no merit, given the
emphasizes that the lawyer must be specifically authorized in order validly
Courts ruling in Mendigorin v. Cabantog:[14]
to sign the certification.

102
ADMINLAW CASES
The CA held that there was substantial compliance with the Rules of Court,
citing Dimagiba vs. Montalvo, Jr. [202 SCRA 641] to the effect that a
lawyer who assumes responsibility for a client's cause has the duty to know
the entire history of the case, especially if any litigation is commenced. This
view, however, no longer holds authoritative value in the light of Digital
Microwave Corporation vs. CA [328 SCRA 286], where it was held that the
reason the certification against forum shopping is required to be
accomplished by petitioner himself is that only the petitioner himself has
actual knowledge of whether or not he has initiated similar actions or
proceedings in other courts or tribunals. Even counsel of record may be
unaware of such fact. To our mind, this view is more in accord with the
intent and purpose of Revised Circular No. 28-91.
Clearly, therefore, the present petition lacks the proper certification as
strictly required by jurisprudence and the Rules of Court.
Even if the Court were to ignore the aforesaid procedural infirmity, a
perusal of the arguments raised in the petition indicates that a resolution on
the merits would nevertheless yield the same outcome.
BLC attempts to convince the Court that Revenue Regulation 19-86 is
legislative rather than interpretative in character and hence, should retroact
to the date of effectivity of the law it seeks to interpret.
Administrative issuances may be distinguished according to their
nature and substance: legislative and interpretative. A legislative rule is in
the matter of subordinate legislation, designed to implement a primary
legislation by providing the details thereof. An interpretative rule, on the
ADMINLAW CASES
other hand, is designed to provide guidelines to the law which the
administrative agency is in charge of enforcing.[15]
The Court finds the questioned revenue regulation to be legislative in
nature. Section 1 of Revenue Regulation 19-86 plainly states that it was
promulgated pursuant to Section 277 of the NIRC. Section 277 (now
Section 244) is an express grant of authority to the Secretary of Finance to
promulgate all needful rules and regulations for the effective enforcement of
the provisions of the NIRC. In Paper Industries Corporation of the
Philippines v. Court of Appeals,[16] the Court recognized that the application
of Section 277 calls for none other than the exercise of quasi-legislative or
rule-making authority. Verily, it cannot be disputed that Revenue Regulation
19-86 was issued pursuant to the rule-making power of the Secretary of
Finance, thus making it legislative, and not interpretative as alleged by
BLC.
BLC further posits that, assuming the revenue regulation is legislative
in nature, it is invalid for want of due process as no prior notice, publication
and public hearing attended the issuance thereof. To support its view, BLC
cited CIR v. Fortune Tobacco, et al.,[17] wherein the Court nullified a
revenue memorandum circular which reclassified certain cigarettes and
subjected them to a higher tax rate, holding it invalid for lack of notice,
publication and public hearing.
The doctrine enunciated in Fortune Tobacco, and reiterated in CIR v.
Michel J. Lhuillier Pawnshop, Inc.,[18] is that when an administrative
rule goes beyond merely providing for the means that can facilitate or
render less cumbersome the implementation of the law and substantially
103
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 the issuance is given the force and effect of
law. In Lhuillier and Fortune Tobacco, the Court invalidated the revenue
memoranda concerned because the same increased the tax liabilities of the
affected taxpayers without affording them due process. In this case,
Revenue Regulation 19-86 would be beneficial to the taxpayers as they are
subjected to lesser taxes. Petitioner, in fact, is invoking Revenue Regulation
19-86 as the very basis of its claim for refund. If it were invalid, then
petitioner all the more has no right to a refund.
After upholding the validity of Revenue Regulation 19-86, the Court
now resolves whether its application should be prospective or retroactive.
The principle is well entrenched that statutes, including administrative
rules and regulations, operate prospectively only, unless the legislative
intent to the contrary is manifest by express terms or by necessary
implication.[19] In the present case, there is no indication that the revenue
regulation may operate retroactively. Furthermore, there is an express
provision stating that it shall take effect on January 1, 1987, and that it shall
be applicable to all leases written on or after the said date. Being clear on its
prospective application, it must be given its literal meaning and applied
without further interpretation.[20] Thus, BLC is not in a position to invoke
the provisions of Revenue Regulation 19-86 for lease rentals it received
prior to January 1, 1987.
It is also apt to add that tax refunds are in the nature of tax
exemptions. As such, these are regarded as in derogation of sovereign
ADMINLAW CASES
authority and are to be strictly construed against the person or entity
claiming the exemption. The burden of proof is upon him who claims the
exemption and he must be able to justify his claim by the clearest grant
under Constitutional or statutory law, and he cannot be permitted to rely
upon vague implications.[21] Nothing that BLC has raised justifies a tax
refund.
It is not necessary to rule on the remaining issues.
WHEREFORE, the petition for review is hereby DENIED, and the
assailed decision and resolution of the Court of Appeals are AFFIRMED.No
pronouncement as to costs.
SO ORDERED.
MAURICIO CRUZ; petitioner and appellant, vs. STANTON
YOUNGBERG, Director of the Bureau of Animal Industry, respondent
and appellee.
1.STATUTES; CONSTITUTIONALITY OF.Act No. 3155 is entirely
valid. The Legislature passed this Act to protect the cattle industry of the
country and to prevent the introduction of cattle diseases through the
importation of foreign cattle. It is now generally recognized that the
promotion of industries affecting the public welfare and the development of
the resources of the country are objects within the scope of the police power
(12 C. J., 927; 6 R. C. L., 203-206, and decision cited therein; Reid vs.
Colorado, 187 U. S., 137, 147, 152; Yeazel. vs. Alexander, 58 111., 254). It
has been shown that at the time Act No. 3155 was promulgated there was
reasonable necessity therefor and it cannot be said that the Legislature
exceeded its power in passing the Act. That being so, it is not for this court
to avoid or vacate the Act upon constitutional grounds nor will it assume to
determine whether the measures are wise or the best that might have been
adopted. (6 R. C. L., 243 and decisions cited therein.)
2.ID.; DELEGATION OF POWER.The power given by Act No. 3155 to
the Governor-General to suspend or not, at his discretion, the prohibition
104
provided in the Act does not constitute an unlawful delegation of the
legislative powers, but confers an authority or discretion as to its execution,
to be exercised under and in pursuance of the law. The first cannot be done;
to the latter no valid objection can be made.
3.ID.; TARIFF LAW, ACT No. 3155 AMENDMENT OF.Act No. 3155 is
not an absolute prohibition of the importation of cattle and it does not add
any provision to section 3 of the Tariff Law. It is not an amendment of the
Tariff Law. Cruz vs. Youngberg, 56 Phil. 234, No. 34674 October 26, 1931
OSTRAND, J.:
This is a petition brought originally before the Court of First Instance of
Manila for the issuance of a writ of mandatory injunction against the
respondent, Stanton Youngberg, as Director of the Bureau of Animal
Industry, requiring him to issue a permit for the landing of ten large cattle
imported by the petitioner and for the slaughter thereof. The petitioner
attacked the constitutionality of Act No. 3155, which at present prohibits the
importation of cattle from foreign countries into the Philippine Islands.
Among other things in the allegation of the petition, it is asserted that "Act
No. 3155 of the Philippine Legislature was enacted for the sole purpose of
preventing the introduction of cattle diseases into the Philippine Islands
from foreign countries, as shown by an explanatory note and text of Senate
Bill No. 328 as introduced in the Philippine Legislature, ... ." The Act in
question reads as follows:
SECTION 1. After March thirty-first, nineteen hundred and
twenty-five existing contracts for the importation of cattle into this
country to the contrary notwithstanding, it shall be strictly
prohibited to import, bring or introduce into the Philippine Islands
any cattle from foreign countries: Provided, however, That at any
ADMINLAW CASES
time after said date, the Governor-General, with the concurrence of
the presiding officers of both Houses, may raise such prohibition
entirely or in part if the conditions of the country make this
advisable or if decease among foreign cattle has ceased to be a
menace to the agriculture and live stock of the lands.
SEC. 2. All acts or parts of acts inconsistent with this Act are
hereby repealed.
SEC. 3. This Act shall take effect on its approval.
Approved, March 8, 1924.
The respondent demurred to the petition on the ground that it did not state
facts sufficient to constitute a cause of action. The demurrer was based on
two reasons, namely, (1) that if Act No. 3155 were declared unconstitutional
and void, the petitioner would not be entitled to the relief demanded
because Act No. 3052 would automatically become effective and would
prohibit the respondent from giving the permit prayed for; and (2) that Act
No. 3155 was constitutional and, therefore, valid.
The court sustained the demurrer and the complaint was dismissed by
reason of the failure of the petitioner to file another complaint. From that
order of dismissal, the petitioner appealed to this court.
The appellee contends that even if Act No. 3155 be declared
unconstitutional by the fact alleged by the petitioner in his complaint, still
the petitioner can not be allowed to import cattle from Australia for the
105
reason that, while Act No. 3155 were declared unconstitutional, Act No.
3052 would automatically become effective. Act No. 3052 reads as follows:
SECTION 1. Section seventeen hundred and sixty-two of Act
Numbered Twenty-seven hundred and eleven, known as the
Administrative Code, is hereby amended to read as follows:
"SEC. 1762. Bringing of animals imported from foreign
countries into the Philippine Islands. It shall be
unlawful for any person or corporation to import, bring or
introduce live cattle into the Philippine Islands from any
foreign country. The Director of Agriculture may, with the
approval of the head of the department first had, authorize
the importation, bringing or introduction of various
classes of thoroughbred cattle from foreign countries for
breeding the same to the native cattle of these Islands, and
such as may be necessary for the improvement of the
breed, not to exceed five hundred head
annum: Provided, however, That the Director
Agriculture shall in all cases permit the importation,
bringing or introduction of draft cattle and bovine cattle
for the manufacture of serum:Provided, further, That all
live cattle from foreign countries the importation,
bringing or introduction of which into the Islands is
authorized by this Act, shall be submitted to regulations
issued by the Director of Agriculture, with the approval of
ADMINLAW CASES
the head of the department, prior to authorizing its
transfer to other provinces.
"At the time of the approval of this Act, the Governor-
General shall issue regulations and others to provide
against a raising of the price of both fresh and refrigerated
meat. The Governor-General also may, by executive
order, suspend, this prohibition for a fixed period in case
local conditions require it."
SEC. 2. This Act shall take effect six months after approval.
Approved, March 14, 1922.
The petitioner does not present any allegations in regard to Act No. 3052 to
show its nullity or unconstitutionality though it appears clearly that in the
absence of Act No. 3155 the former act would make it impossible for the
Director of the Bureau of Animal Industry to grant the petitioner a permit
per
for the importation of the cattle without the approval of the head of the
of
corresponding department.
An unconstitutional statute can have no effect to repeal former
laws or parts of laws by implication, since, being void, it is not
inconsistent with such former laws. (I Lewis Sutherland, Statutory
Construction 2nd ed., p. 458, citing McAllister vs. Hamlin, 83 Cal.,
361; 23 Pac., 357; Orange Country vs. Harris, 97 Cal., 600; 32
Pac., 594; Carr vs. State, 127 Ind., 204; 11 L.R.A., 370, etc.)
106
This court has several times declared that it will not pass upon the
constitutionality of statutes unless it is necessary to do so (McGirr vs.
Hamilton and Abreu, 30 Phil., 563, 568; Walter E. Olsen & Co. vs. Aldanese
and Trinidad, 43 Phil., 259) but in this case it is not necessary to pass upon
the validity of the statute attacked by the petitioner because even if it were
declared unconstitutional, the petitioner would not be entitled to relief
inasmuch as Act No. 3052 is not in issue.
But aside from the provisions of Act No. 3052, we are of the opinion that
Act No. 3155 is entirely valid. As shown in paragraph 8 of the amended
petition, the Legislature passed Act No. 3155 to protect the cattle industry
of the country and to prevent the introduction of cattle diseases through
importation of foreign cattle. It is now generally recognized that the
promotion of industries affecting the public welfare and the development of
the resources of the country are objects within the scope of the police power
(12 C.J., 927; 6 R.C.L., 203-206 and decisions cited therein; Reid vs.
Colorado, 187 U.S., 137, 147, 152; Yeazel vs. Alexander, 58 Ill., 254). In
this connection it is said in the case of Punzalan vs. Ferriols and Provincial
Board of Batangas (19 Phil., 214), that the provisions of the Act of
Congress of July 1, 1902, did not have the effect of denying to the
Government of the Philippine Islands the right to the exercise of the
sovereign police power in the promotion of the general welfare and the
public interest. The facts recited in paragraph 8 of the amended petition
shows that at the time the Act No. 3155 was promulgated there was
reasonable necessity therefor and it cannot be said that the Legislature
exceeded its power in passing the Act. That being so, it is not for this court
to avoid or vacate the Act upon constitutional grounds nor will it assume to
ADMINLAW CASES
determine whether the measures are wise or the best that might have been
adopted. (6 R.C.L., 243 and decisions cited therein.)1awphil.net
In his third assignment of error the petitioner claims that "The lower court
erred in not holding that the power given by Act No. 3155 to the Governor-
General to suspend or not, at his discretion, the prohibition provided in the
act constitutes an unlawful delegation of the legislative powers." We do not
think that such is the case; as Judge Ranney of the Ohio Supreme Court in
Cincinnati, Wilmington and Zanesville Railroad Co. vs. Commissioners of
Clinton County (1 Ohio St., 77, 88) said in such case:
The true distinction, therefore, is between the delegation of power
to make the law, which necessarily involves a discretion as to what
it shall be, and conferring an authority or discretion as to its
execution, to be exercised under and in pursuance of the law. The
first cannot be done; to the latter no valid objection can be made.
Under his fourth assignment of error the appellant argues that Act No. 3155
amends section 3 of the Tariff Law, but it will be noted that Act No. 3155 is
not an absolute prohibition of the importation of cattle and it does not add
any provision to section 3 of the Tariff Law. As stated in the brief of the
Attorney-General: "It is a complete statute in itself. It does not make any
reference to the Tariff Law. It does not permit the importation of articles,
whose importation is prohibited by the Tariff Law. It is not a tariff measure
but a quarantine measure, a statute adopted under the police power of the
Philippine Government. It is at most a `supplement' or an `addition' to the
Tariff Law. (See MacLeary vs. Babcock, 82 N.E., 453, 455; 169 Ind., 228
for distinction between `supplemental' and `amendatory' and O'Pry vs. U.S.,
107
249 U.S., 323; 63 Law. ed., 626, for distinction between `addition' and HERMOSISIMA, JR., J.:
`amendment.')"
Questions of law which are the first impression are sought to be
The decision appealed from is affirmed with the costs against the appellant. resolved in this case: Should the rate of interest on a loan or forbearance of
So ordered. money, goods or credits, as stipulated in a contract, far in excess of the
ceiling prescribed under or pursuant to the Usury Law, prevail over Section
G.R. No. 113926. October 23, 1996.* 2 of Central Bank Circular No. 905 which prescribes that the rate of interest
SECURITY BANK AND TRUST COMPANY, petitioner, vs.
REGIONAL TRIAL COURT OF MAKATI, BRANCH 61, thereof shall continue to be 12% per annum? Do the Courts have the
MAGTANGGOL EUSEBIO and LEILA VENTURA, respondents. discretion to arbitrarily override stipulated interest rates of promissory notes
Interests; Usury Law; CB Circular No. 905; P.D. No. 1684 and CB Circular
No. 905 no more than allow contracting parties to stipulate freely regarding and stipulated interest rates of promissory notes and thereby impose a 12%
any subsequent adjustment in the interest rate that shall accrue on a loan or interest on the loans, in the absence of evidence justifying the impositions
forbearance of money.This court has ruled in the case of Philippine
National Bank v. Court of Appeals that: P.D. No. 1684 and C.B. Circular of a higher rate?
No. 905 no more than allow contracting parties to stipulate freely regarding
any subsequent adjustment in the interest rate that shall accrue on a loan or
This is a petition for review on certiorari for the purpose of assailing
forbearance of money, goods or credits. In fine, they can agree to adjust,
upward or downward, the interest previously stipulated. the decision of Honorable Judge Fernando V. Gorospe of the Regional Trial
Same; Same; Same; Circular No. 905 did not repeal nor in any way amend
Court of Makati, Branch 61, dated March 30, 1993, which found private
the Usury Law but simply suspended the latters effectivity.All the
promissory notes were signed in 1983 and, therefore, were already covered respondent Eusebio liable to petitioner for a sum of money. Interest was
by CB Circular No. 905. Contrary to the claim of respondent court, this
lowered by the court a quo from 23% per annum as agreed upon by the
circular did not repeal nor in any way amend the Usury Law but simply
suspended the latters effectivity. parties to 12% per annum.
Same; Same; Same; In a loan or forbearance of money, the interest due
should be that stipulated in writing and in the absence thereof the rate shall
be 12% per annum.We find no valid reason for the respondent court a quo The undisputed facts are as follows:
to impose a 12% rate of interest on the principal balance owing to petitioner
by respondent in the presence of a valid stipulation. In a loan or forbearance On April 27, 1983, private respondent Magtanggol Eusebio executed
of money, the interest due should be that stipulated in writing, and in the
absence thereof, the rate shall be 12% per annum. Hence, only in the Promissory Note No. TL/74/178/83 in favor of petitioner Security Bank and
absence of a stipulation can the court impose the 12% rate of interest. Trust Co. (SBTC) in the total amount of One Hundred Thousand Pesos
Security Bank and Trust Company vs. RTC of Makati, Br. 61, 263 SCRA
483, G.R. No. 113926 October 23, 1996 (P100,000.00) payable in six monthly installments with a stipulated interest
of 23% per annum up to the fifth installments.[1]
DECISION

108
ADMINLAW CASES
 On July 28, 1983, respondent Eusebio again executed Promissory note
No TL/74/1296/83 in favor of petitioner SBTC. Respondent bound himself
to pay the sum of One Hundred Thousand Pesos (P100.000.00) in six (6)
monthly installments plus 23% interest per annum.[2]
Finally, another Promissory Note No. TL74/1491/83 was executed
on August 31, 1983 in the amount of Sixty Five Thousand Pesos
(P65,000.00). Respondent agreed to pay this note in six (6) monthly
installments plus interest at the rate of 23% per annum.[3]
On all the abovementioned notes, private respondents Leila Ventura
had signed as co-maker.[4]
Upon maturity which fell on the different dates below, the principal
balance remaining on the notes stood at:
1) PN No. TL/74/748/83 P16,665.00 as of September 1983.
2) PN No. TL/74/1296/83 P83,333.00 as of August 1983
3) PN No. TL/74/1991/83 P65,000.00 as of August 1983.
Upon the failure and refusal of respondent Eusebio to pay the
aforestated balance payable, a collectible case was filed in court by
petitioner SBTC.[5] On March 30, 1993, the court a quo rendered a judgment
in favor of petitioner SBTC, the dispositive portion which reads:
ADMINLAW CASES
WHEREFORE, premises above-considered, and plaintiffs claim having
been duly proven, judgment is hereby rendered in favor of plaintiff and as
against defendant Eusebio who is hereby ordered to:
1. Pay the sum of P16,665.00, plus interest of 12% per annum starting 27
September 1983, until fully paid;
2. Pay the sum of P83,333.00, plus interest of 12% per annum starting 28
August 1983, until fully paid;
3. Pay the sum of P65,000.00, plus interest of 12% per annum starting 31
August 1983, until fully paid;
4. Pay the sum equivalent to 20% of the total amount due and payable to
plaintiff as and by way of attorneys fees; and to
5. Pay the cost of this suit.
SO ORDERED.[6]
On August 6, 1993, a motion for partial reconsideration was filed by
petitioner SBTC contending that:
(1) the interest rate agreed upon by the parties during the signing
of the promissory notes was 23% per annum;
(2) the interests awarded should be compounded quarterly from
due date as provided in three (3) promissory notes;
109
 (3) defendant Leila Ventura should likewise be held liable to pay
the balance on the promissory notes since she has signed as co-maker
and as such, is liable jointly and severally with defendant Eusebio
without a need for demand upon her.[7]
Consequently, an Order was issued by the court a quo denying the
motion to grant the rates of interest beyond 12% per annum; and holding
defendant Leila Ventura jointly and severally liable with co-defendant
Eusebio.
Hence, this petition.
The sole issue to be settled in this petition is whether or not the 23%
rate of interest per annum agreed upon by petitioner bank and respondents
is allowable and not against the Usury Law.
We find merit in this petition.
From the examination of the records, it appears that indeed the agreed
rate of interest as stipulated on the three (3) promissory notes is 23% per
annum.[8] The applicable provision of law is the Central Bank Circular No.
905 which took effect on December 22, 1982, particularly Sections 1 and 2
which state:[9]
Sec. 1. The rate of interest, including commissions, premiums, fees and
other charges, on a loan or forbearance of any money, goods or credits,
regardless of maturity and whether secured or unsecured, that may be
charged or collected by any person, whether natural or judicial, shall not be
ADMINLAW CASES
subject to any ceiling prescribed under or pursuant to the Usury Law, as
amended.
Sec. 2. The rate of interest for the loan or forbearance of any money, goods
or credits and the rate allowed in judgments, in the absence of express
contract as to such rate of interest, shall continue to be twelve per cent
(12%) per annum.
CB Circular 905 was issued by the Central Banks Monetary Board
pursuant to P.D. 1684 empowering them to prescribe the maximum rates of
interest for loans and certain forbearances, to wit:
SECTION 1. Section 1-a of Act No. 2655, as amended, is hereby amended
to read as follows:
SEC. 1-a The Monetary Board is hereby authorized to prescribed the
maximum rate or rates of interest for the loan or renewal thereof or the
forbearance of any money, goods or credits, and to change such rate or rates
whenever warranted by prevailing economic and social
conditions: Provided, That changes in such rates or rates may be effected
gradually on scheduled dates announced in advance.
In the exercise of the authority herein granted, the Monetary Board may
prescribed higher maximum rates for loans of low priority, such as
consumer loans or renewals thereof as well as such loans made by
pawnshops, finance companies and other similar credit institutions although
the rates prescribed for these institutions need not necessarily be
uniform. The Monetary Board is also authorized to prescribed different
110
maximum rate or rates for different types of borrowings, including deposits where a provision of law peremptorily calls for application. Where a
[10]
and deposit substitutes, or loans of financial intermediaries. requirement or condition is made in explicit and unambiguous terms, no
discretion is left to the judiciary. It must see to it that its mandate is obeyed.
This court has ruled in the case of Philippine National Bank v. Court of
Appeals[11] that: The rate of interest was agreed upon by the parties
freely. Significantly, respondent did not question that rate. It is not for
P.D. No. 1684 and C.B. Circular No. 905 no more than allow contracting respondent court a quo to change the stipulations in the contract where it is
parties to stipulate freely regarding any subsequent adjustment in the not illegal. Furthermore, Article 1306 of the New Civil code provides that
interest rate that shall accrue on a loan or forbearance of money, goods or contracting parties may establish such stipulations, clauses, terms and
credits. In fine, they can agree to adjust, upward or downward, the interest conditions as they may deem convenient, provided they are not contrary to
previously stipulated. law, morals, good customs, public order, or public policy. We find no valid
reason for the respondent court a quo to impose a 12% rate of interest on
All the promissory notes were signed in 1983 and, therefore, were
the principal balance owing to petitioner by respondent in the presence of a
already covered by CB Circular No. 905. Contrary to the claim of
valid stipulation. In a loan or forbearance of money, the interest due should
respondent court, this circular did not repeal nor in anyway amend the
be that stipulated in writing, and in the absence thereof, the rate shall be
Usury Law but simply suspended the latters effectivity.
12% per annum.[13] Hence, only in the absence of a stipulation can the court
impose the 12% rate of interest.
Basic is the rule of statutory construction that when the law is clear
and unambiguous, the court is left with no alternative but to apply the same
The promissory notes were signed by both parties
according to its clear language. As we have held in the case of Quijano v.
voluntarily. Therefore, stipulations therein are binding between
Development Bank of the Philippines:[12]
them. Respondent Eusebio, likewise, did not question any of the stipulations
therein. In fact, in the Comment file by respondent Eusebio to this court, he
xxx We cannot see any room for interpretation or construction in the clear
chose not to question the decision and instead expressed his desire to
and unambiguous language of the above-quoted provision of law. This
negotiate with the petitioner bank for terms within which to settle his
Court had steadfastly adhered to the doctrine that its first and fundamental
obligation.[14]
duty is the application of the law according to its express terms,
interpretation being called for only when such literal application is
impossible. No process of interpretation or construction need be resorted to

111
ADMINLAW CASES
 IN VIEW OF THE FOREGOING, the decision of the respondent therein the policy to be executed, carried out, or implemented by the
delegate; and (b) fixes a standardthe limits of which are sufficiently
court a quo, is hereby AFFIRMED with the MODIFICATION that the rate
determinate and determinableto which the delegate must conform in the
of interest that should be imposed be 23% per annum. performance of his functions. A sufficient standard is one which defines
legislative policy, marks its limits, maps out its boundaries and specifies the
public agency to apply it. It indicates the circumstances under which the
SO ORDERED. legislative command is to be effected.
Same; Same; Same; There is no delegation of power to speak of between
Philracom, as the delegator and Manila Jockey Club, Inc. (MJCI) and
G.R. No. 175220.February 12, 2009.*
Philippine Racing Club, Inc. (PRCI) as delegates; Compliance with the
WILLIAM C. DAGAN, CARLOS H. REYES, NARCISO MORALES,
Philracoms directive is part of the mandate of Philippine Racing Club, Inc.
BONIFACIO MANTILLA, CESAR AZURIN, WEITONG LIM, MA.
(PRCI) and Manila Jockey Club, Inc. (MJCI) under Section 1 of R.A. No.
TERESA TRINIDAD, MA. CARMELITA FLORENTINO, petitioners,
7953 and Sections 1 and 2 of 8407.There is no delegation of power to
vs. PHILIPPINE RACING COMMISSION, MANILA JOCKEY
speak of between Philracom, as the delegator and MJCI and PRCI as
CLUB, INC., and PHILIPPINE RACING CLUB, INC., respondents.
delegates. The Philracom directive is merely instructive in character.
Constitutional Law; Administrative Law; Requisites for the validity of an
Philracom had instructed PRCI and MJCI to immediately come up with
administrative issuance.The validity of an administrative issuance, such
Clubs House Rule to address the problem and rid their facilities of horses
as the assailed guidelines, hinges on compliance with the following
infected with EIA. PRCI and MJCI followed-up when they ordered the
requisites: 1. Its promulgation must be authorized by the legislature; 2. It
racehorse owners to submit blood samples and subject their race horses to
must be promulgated in accordance with the prescribed procedure; 3. It
blood testing. Compliance with the Philracoms directive is part of the
must be within the scope of the authority given by the legislature; 4. It must
mandate of PRCI and MJCI under Section 1 of R.A. No. 7953 and Sections
be reasonable.
1 and 2 of 8407.
Same; Same; Delegation of Powers; The rule is that what has been
Same; Same; Same; As a rule, the issuance of rules and regulations in the
delegated cannot be delegated or as expressed in the Latin maxim: potestas
exercise of an administrative agency of its quasi-legislative power does not
delegate non delegare potest; Rule admits of recognized exceptions such as
require notice and hearing.As a rule, the issuance of rules and regulations
the grant of rule-making power to administrative agencies.The rule is that
in the exercise of an administrative agency of its quasi-legislative power
what has been delegated cannot be delegated, or as expressed in the Latin
does not require notice and hearing. In Abella, Jr. v. Civil Service
maxim: potestas delegate non delegare potest. This rule is based upon the
Commission, 442 SCRA 507 (2004), this Court had the occasion to rule that
ethical principle that such delegated power constitutes not only a right but a
prior notice and hearing are not essential to the validity of rules or
duty to be performed by the delegate by the instrumentality of his own
regulations issued in the exercise of quasi-legislative powers since there is
judgment acting immediately upon the matter of legislation and not through
no determination of past events or facts that have to be established or
the intervening mind of another. This rule however admits of recognized
ascertained.
exceptions such as the grant of rule-making power to administrative
DECISION
agencies. They have been granted by Congress with the authority to issue
rules to regulate the implementation of a law entrusted to them. Delegated
TINGA, J.:
rule-making has become a practical necessity in modern governance due to
the increasing complexity and variety of public functions.
The subject of this petition for certiorari is the decision[1] of the
Same; Same; Same; In every case of permissible delegation, there must be a
Court of Appeals in CA-G.R. SP No. 95212, affirming in totothe
showing that the delegation itself is valid; Requisites for Validity.In every
judgment[2] of the Regional Trial Court of Makati in Civil Case No. 04-
case of permissible delegation, there must be a showing that the delegation
1228.
itself is valid. It is valid only if the law (a) is complete in itself, setting forth

112
ADMINLAW CASES

The controversy stemmed from the 11 August
2004 directive[3] issued by the Philippine Racing Commission (Philracom)
directing the Manila Jockey Club, Inc. (MJCI) and Philippine Racing Club,
Inc. (PRCI) to immediately come up with their respective Clubs House Rule
to address Equine Infectious Anemia (EIA)[4] problem and to rid their
facilities of horses infected with EIA. Said directive was issued pursuant to
Administrative Order No. 5[5] dated 28 March 1994 by the Department of
Agriculture declaring it unlawful for any person, firm or corporation to ship,
drive, or transport horses from any locality or place except when
accompanied by a certificate issued by the authority of the Director of the
Bureau of Animal Industry (BAI).[6]
In compliance with the directive, MJCI and PRCI ordered the
owners of racehorses stable in their establishments to submit the horses to
blood sampling and administration of the Coggins Test to determine
whether they are afflicted with the EIA virus.Subsequently, on 17
September 2004, Philracom issued copies of the guidelines for the
monitoring and eradication of EIA.[7]
Petitioners and racehorse owners William Dagan (Dagan), Carlos
Reyes, Narciso Morales, Bonifacio Montilla, Cezar Azurin, Weitong Lim,
Ma. Teresa Trinidad and Ma. Carmelita Florentino refused to comply with
the directive. First, they alleged that there had been no prior consultation
with horse owners. Second, they claimed that neither official guidelines nor
regulations had been issued relative to the taking of blood samples. And
third, they asserted that no documented case of EIA had been presented to
justify the undertaking.[8]
Despite resistance from petitioners, the blood testing
proceeded. The horses, whose owners refused to comply were banned from
the races, were removed from the actual day of race, prohibited from
renewing their licenses or evicted from their stables.
ADMINLAW CASES
When their complaint went unheeded, the racehorse owners lodged a
complaint before the Office of the President (OP) which in turn issued a
directive instructing Philracom to investigate the matter.
For failure of Philracom to act upon the directive of the OP, petitioners filed
a petition for injunction with application for the issuance of a temporary
restraining order (TRO). In an order[9] dated 11 November 2004, the trial
court issued a TRO.
Dagan refused to comply with the directives because, according to him, the
same are unfair as there are no implementing rules on the banning of sick
horses from races. Consequently, his horses were evicted from the stables
and transferred to an isolation area. He also admitted that three of his horses
had been found positive for EIA.[10]
Confronted with two issues, namely: whether there were valid grounds for
the issuance of a writ of injunction and whether respondents had acted with
whim and caprice in the implementation of the contested guideline, the trial
court resolved both queries in the negative.
The trial court found that most racehorse owners, except for Dagan, had
already subjected their racehorses to EIA testing. Their act constituted
demonstrated compliance with the contested guidelines, according to the
trial court. Hence, the acts sought to be enjoined had been rendered moot
and academic.
With respect to the subject guidelines, the trial court upheld their validity as
an exercise of police power, thus:
The Petitioners submission that the subject
guidelines are oppressive and hence confiscatory of
proprietary rights is likewise viewed by this Court to be
barren of factual and legal support. The horseracing
industry, needless to state, is imbued with public interest
deserving of utmost concern if not constant vigilance. The
Petitioners do not dispute this. It is because of this basic
fact that respondents are expected to police the concerned
individuals and adopt measures that will promote and
protect the interests of all the stakeholders starting from
113
 the moneyed horse-owners, gawking bettors down to the
lowly maintainers of the stables. This is a clear and valid
exercise of police power with the respondents acting for
the State. Participation in the business of horseracing is
but a privilege; it is not a right. And no clear acquiescence
to this postulation can there be than the Petitioners' own
undertaking to abide by the rules and conditions issued
and imposed by the respondents as specifically shown by
their contracts of lease with MCJI.[11]

Petitioners appealed to the Court of Appeals. In its Decision

dated 27 October 2006, the appellate court affirmed in toto the decision of
the trial court.

The appellate court upheld the authority of Philracom to formulate

guidelines since it is vested with exclusive jurisdiction over and control of
the horse-racing industry per Section 8 of Presidential Decree (P.D.) No.
8. The appellate court further pointed out that P.D. No. 420 also endows
Philracom with the power to prescribe additional rules and regulations not
otherwise inconsistent with the said presidential decree[12] and to perform
such duties and exercise all powers incidental or necessary to the
accomplishment of its aims and objectives.[13] It similarly concluded that the
petition for prohibition should be dismissed on the ground of mootness in
light of evidence indicating that petitioners had already reconsidered their
refusal to have their horses tested and had, in fact, subsequently requested
the administration of the test to the horses.[14]

114
ADMINLAW CASES

Aggrieved by the appellate courts decision, petitioners filed the
instant certiorari petition[15] imputing grave abuse of discretion on the part of
respondents in compelling petitioners to subject their racehorses to blood
testing.
In their amended petition,[16] petitioners allege that Philracoms
unsigned and undated implementing guidelines suffer from several
infirmities. They maintain that the assailed guidelines do not comply with
due process requirements. Petitioners insist that racehorses already in the
MJCI stables were allowed to be so quartered because the individual horse
owners had already complied with the Philracom regulation that horses
should not bear any disease. There was neither a directive nor a rule that
racehorses already lodged in the stables of the racing clubs should again be
subjected to the collection of blood samples preparatory to the conduct of
the EIA tests,[17] petitioners note. Thus, it came as a surprise to horse owners
when told about the administration of a new Coggins Tests on old horses
since the matter had not been taken up with them.[18] No investigation or at
least a summary proceeding was conducted affording petitioners an
opportunity to be heard.[19] Petitioners also aver that the assailed guidelines
are ultra vires in that the sanctions imposed for refusing to submit to
medical examination are summary eviction from the stables or arbitrary
banning of participation in the races, notwithstanding the penalties
prescribed in the contract of lease.[20]
In its Comment,[21] the PRCI emphasizes that it merely obeyed the
terms of its franchise and abided by the rules enacted by Philracom.[22] For
its part, Philracom, through the Office of the Solicitor-General (OSG),
stresses that the case has become moot and academic since most of
petitioners had complied with the guidelines by subjecting their race horses
to EIA testing. The horses found unafflicted with the disease were
eventually allowed to join the races.[23] Philracom also justified its right
under the law toregulate horse racing.[24] MJCI adds that Philracom need
not delegate its rule-making power to the former since MJCIs right to
formulate its internal rules is subsumed under the franchise granted to it by
Congress.[25]
In their Reply,[26] petitioners raise for the first time the issue that Philracom
had unconstitutionally delegated its rule-making power to PRCI and MJCI
in issuing the directive for them to come up with club rules. In response to
ADMINLAW CASES
the claim that respondents had merely complied with their duties under their
franchises, petitioners counter that the power granted to PRCI and MJCI
under their respective franchises is limited to: (1) the construction,
operation and maintenance of racetracks; (2) the establishment of branches
for booking purposes; and (3) the conduct of horse races.
It appears on record that only Dagan had refused to comply with
the orders of respondents. Therefore, the case subsists as regards Dagan.
Petitioners essentially assail two issuances of Philracom; namely:
the Philracom directive[27] and the subsequent guidelines addressed to MJCI
and PRCI.
The validity of an administrative issuance, such as the assailed
guidelines, hinges on compliance with the following requisites:
1. Its promulgation must be authorized by the legislature;
2. It must be promulgated in accordance with the prescribed
procedure;
3. It must be within the scope of the authority given by the
legislature;
4. It must be reasonable.[28]
All the prescribed requisites are met as regards the questioned
issuances. Philracoms authority is drawn from P.D. No. 420.The delegation
made in the presidential decree is valid. Philracom did not exceed its
authority. And the issuances are fair and reasonable.
The rule is that what has been delegated cannot be delegated, or as
expressed in the Latin maxim: potestas delegate non delegare potest. This
rule is based upon the ethical principle that such delegated power
constitutes not only a right but a duty to be performed by the delegate by the
instrumentality of his own judgment acting immediately upon the matter of
legislation and not through the intervening mind of another.[29] This rule
however admits of recognized exceptions[30] such as the grant of rule-
making power to administrative agencies. They have been granted by
Congress with the authority to issue rules to regulate the implementation of
115
a law entrusted to them. Delegated rule-making has become a practical
necessity in modern governance due to the increasing complexity and
variety of public functions.[31]
However, in every case of permissible delegation, there must be a
showing that the delegation itself is valid. It is valid only if the law (a) is
complete in itself, setting forth therein the policy to be executed, carried
out, or implemented by the delegate; and (b) fixes a standardthe limits of
which are sufficiently determinate and determinableto which the delegate
must conform in the performance of his functions. A sufficient standard is
one which defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected.[32]
P.D. No. 420 hurdles the tests of completeness and standards
sufficiency.
Philracom was created for the purpose of carrying out the declared
policy in Section 1 which is to promote and direct the accelerated
development and continued growth of horse racing not only in pursuance of
the sports development program but also in order to insure the full
exploitation of the sport as a source of revenue and employment.
Furthermore, Philracom was granted exclusive jurisdiction and control over
every aspect of the conduct of horse racing, including the framing and
scheduling of races, the construction and safety of race tracks, and the
security of racing. P.D. No. 420 is already complete in itself.
Section 9 of the law fixes the standards and limitations to which
Philracom must conform in the performance of its functions, to wit:
Section 9. Specific Powers. Specifically, the
Commission shall have the power:
a. To enforce all laws, decrees and executive
orders relating to horse-racing that are not
expressly or implied repealed or modified by
this Decree, including all such existing rules
and regulations until otherwise modified or
amended by the Commission;
b. To prescribe additional rules and regulations
not otherwise inconsistent with this Decree;
c. To register race horses, horse owners or
associations or federations thereof, and to
regulate the construction of race tracks and to
grant permit for the holding of races;
d. To issue, suspend or revoke permits and
licenses and to impose or collect fees for the
issuance of such licenses and permits to
persons required to obtain the same;
e. To review, modify, approve or disapprove the
rules and regulations issued by any person or
entity concerning the conduct of horse races
held by them;
f. To supervise all such race meeting to assure
integrity at all times. It can order the
suspension of any racing event in case of
violation of any law, ordinance or rules and
regulations;
g. To prohibit the use of improper devices,
drugs, stimulants or other means to enhance
or diminish the speed of horse or materially
harm their condition;
h. To approve the annual budget of the omission
and such supplemental budgets as may be
necessary;
i. To appoint all personnel, including an
Executive Director of the Commission, as it
may be deem necessary in the exercise and
performance of its powers and duties; and
j. To enter into contracts involving obligations
chargeable to or against the funds of the
Commission. (Emphasis supplied)
Clearly, there is a proper legislative delegation of rule-making
power to Philracom. Clearly too, for its part Philracom has exercised its
rule-making power in a proper and reasonable manner. More specifically, its
discretion to rid the facilities of MJCI and PRCI of horses afflicted with
EIA is aimed at preserving the security and integrity of horse races.

116
ADMINLAW CASES

Petitioners also question the supposed delegation by Philracom of
its rule-making powers to MJCI and PRCI.
There is no delegation of power to speak of between Philracom, as
the delegator and MJCI and PRCI as delegates. The Philracom directive is
merely instructive in character. Philracom had instructed PRCI and MJCI to
immediately come up with Clubs House Rule to address the problem and
rid their facilities of horses infected with EIA. PRCI and MJCI followed-up
when they ordered the racehorse owners to submit blood samples and
subject their race horses to blood testing. Compliance with the Philracoms
directive is part of the mandate of PRCI and MJCI under Sections 1[33] of
R.A. No. 7953[34] and Sections 1[35] and 2[36] of 8407.[37]
As correctly proferred by MJCI, its duty is not derived from the
delegated authority of Philracom but arises from the franchise granted to
them by Congress allowing MJCI to do and carry out all such acts, deeds
and things as may be necessary to give effect to the foregoing. [38] As
justified by PRCI, obeying the terms of the franchise and abiding by
whatever rules enacted by Philracom is its duty.[39]
More on the second, third and fourth requisites.
As to the second requisite, petitioners raise some infirmities
relating to Philracoms guidelines. They question the supposed belated
issuance of the guidelines, that is, only after the collection of blood samples
for the Coggins Test was ordered. While it is conceded that the guidelines
were issued a month after Philracoms directive, this circumstance does not
render the directive nor the guidelines void. The directives validity and
effectivity are not dependent on any supplemental guidelines. Philracom has
every right to issue directives to MJCI and PRCI with respect to the conduct
of horse racing, with or without implementing guidelines.
Petitioners also argue that Philracoms guidelines have no force and
effect for lack of publication and failure to file copies with the University of
the Philippines (UP) Law Center as required by law.
ADMINLAW CASES
As a rule, the issuance of rules and regulations in the exercise of an
administrative agency of its quasi-legislative power does not require notice
7and hearing.[40] In Abella, Jr. v. Civil Service Commission,[41] this Court had
the occasion to rule that prior notice and hearing are not essential to the
validity of rules or regulations issued in the exercise of quasi-legislative
powers since there is no determination of past events or facts that have to be
established or ascertained.[42]
The third requisite for the validity of an administrative issuance is
that it must be within the limits of the powers granted to it.The
administrative body may not make rules and regulations which are
inconsistent with the provisions of the Constitution or a statute, particularly
the statute it is administering or which created it, or which are in derogation
of, or defeat, the purpose of a statute.[43]
The assailed guidelines prescribe the procedure for monitoring and
eradicating EIA. These guidelines are in accord with Philracoms mandate
under the law to regulate the conduct of horse racing in the country.
Anent the fourth requisite, the assailed guidelines do not appear to
be unreasonable or discriminatory. In fact, all horses stabled at the MJCI
and PRCIs premises underwent the same procedure. The guidelines
implemented were undoubtedly reasonable as they bear a reasonable
relation to the purpose sought to be accomplished, i.e., the complete
riddance of horses infected with EIA.
It also appears from the records that MJCI properly notified the
racehorse owners before the test was conducted.[44] Those who failed to
comply were repeatedly warned of certain consequences and sanctions.
Furthermore, extant from the records are circumstances which
allow respondents to determine from time to time the eligibility of horses as
race entries. The lease contract executed between petitioner and MJC
contains a proviso reserving the right of the lessor, MJCI in this case, the
right to determine whether a particular horse is a qualified horse. In
addition, Philracoms rules and regulations on horse racing provide that
horses must be free from any contagious disease or illness in order to be
eligible as race entries.
117
 All told, we find no grave abuse of discretion on the part of
Philracom in issuing the contested guidelines and on the part MJCI and
PRCI in complying with Philracoms directive.
WHEREFORE, the petition is DISMISSED. Costs against
petitioner William Dagan.
SO ORDERED.
G.R. No. 180046.April 2, 2009.*
REVIEW CENTER ASSOCIATION OF THE PHILIPPINES,
petitioner, vs. EXECUTIVE SECRETARY EDUARDO ERMITA and
COMMISSION ON HIGHER EDUCATION represented by its
Chairman ROMULO L. NERI, respondents.
CPA REVIEW SCHOOL OF THE PHILIPPINES, INC. (CPAR),
PROFESSIONAL REVIEW AND TRAINING CENTER, INC.
(PRTC), ReSA REVIEW SCHOOL, INC. (ReSA), CRC-ACE
REVIEW SCHOOL, INC. (CRC-ACE), petitioners-intervenors.
PIMSAT COLLEGES, respondent-intervenor.
Constitutional Law; Presidency; Executive Department; Executive Order
No. 292; Commission on Higher Education (CHED); Section 20, Title I of
Book III of Executive Order 292 speaks of other powers vested in the
President under the lawthe exercise of the Presidents residual powers
under this provision requires legislation, as the provision clearly states that
the exercise of the Presidents other powers and functions has to be
provided for under the law.Section 20, Title I of Book III of EO 292
speaks of other powers vested in the President under the law. The exercise
of the Presidents residual powers under this provision requires legislation,
as the provision clearly states that the exercise of the Presidents other
powers and functions has to be provided for under the law. There is no
law granting the President the power to amend the functions of the CHED.
The President may not amend RA 7722 through an Executive Order without
a prior legislation granting her such power.
Same; Same; Same; The President has no inherent or delegated legislative
power to amend the functions of the Commission on Higher Education
(CHED) under Republic Act (RA) 7722, since, legislative power, which is
the authority to make laws and to alter or repeal them, is vested with the
Congress.The President has no inherent or delegated legislative power to
amend the functions of the CHED under RA 7722. Legislative power is the
authority to make laws and to alter or repeal them, and this power is vested
with the Congress under Section 1, Article VI of the 1987 Constitution
ADMINLAW CASES
which states: Section 1. The legislative power shall be vested in the
Congress of the Philippines which shall consist of a Senate and a House of
Representatives, except to the extent reserved to the people by the provision
on initiative and referendum.
Administrative Agencies; Commission on Higher Education (CHED);
Administrative agencies exercise their quasi-legislative or rule-making
power through the promulgation of rules and regulationsthe Commission
on Higher Education (CHED) may only exercise its rule-making power
within the confines of its jurisdiction under RA 7722.Administrative
agencies exercise their quasi-legislative or rule-making power through the
promulgation of rules and regulations. The CHED may only exercise its
rule-making power within the confines of its jurisdiction under RA 7722.
The RIRR covers review centers and similar entities which are neither
institutions of higher education nor institutions offering degree-granting
programs.
Constitutional Law; Police Power; Valid Delegation of Power; Police power
to prescribe regulations to promote the health, morals, education, good
order or safety, and the general welfare of the people flows from the
recognition that salus populi est suprema lexthe welfare of the people is
the supreme law.Police power to prescribe regulations to promote the
health, morals, education, good order or safety, and the general welfare of
the people flows from the recognition that salus populi est suprema lexthe
welfare of the people is the supreme law. Police power primarily rests with
the legislature although it may be exercised by the President and
administrative boards by virtue of a valid delegation. Here, no delegation of
police power exists under RA 7722 authorizing the President to regulate the
operations of non-degree granting review centers.
Administrative Law; Administrative Agencies; Power of the Professional
Regulation Commission (PRC); The Professional Regulation Commission
(PRC) has the power to investigate any of the members of the Professional
Regulatory Boards (PRB) for commission of any irregularities in the
licensure examinations which taint or impugn the integrity and authenticity
of the results of the said examinationsthis is an administrative power
which the Professional Regulation Commission (PRC) exercises over
members of the Professional Regulatory Board (PRB).The PRC has the
power to investigate any of the members of the Professional Regulatory
Boards (PRB) for commission of any irregularities in the licensure
examinations which taint or impugn the integrity and authenticity of the
results of the said examinations. This is an administrative power which the
PRC exercises over members of the PRB. However, this power has nothing
118
to do with the regulation of review centers. The PRC has the power to bar
PRB members from conducting review classes in review centers. However,
to interpret this power to extend to the power to regulate review centers is
clearly an unwarranted interpretation of RA 8981. The PRC may prohibit
the members of the PRB from conducting review classes at review centers
because the PRC has administrative supervision over the members of the
PRB. However, such power does not extend to the regulation of review
centers.
Same; Same; Professional Regulation Commission (PRC); The Professional
Regulation Commission (PRC) has no mandate to supervise review centers
that give courses or lectures intended to prepare examinees for licensure
examinations given by the PRC as it is like the Court regulating bar review
centers just because the Court conducts the bar examinations, and similarly,
the PRC has no mandate to regulate similar entities whose reviewees will
not even take any licensure examination given by the PRC.The assailed
EO 566 seeks to regulate not only review centers but also similar entities.
The questioned CHED RIRR defines similar entities as referring to other
review centers providing review or tutorial services in areas not covered by
licensure examinations given by the PRC including but not limited to
college entrance examinations, Civil Service examinations, tutorial services
in specific fields like English, Mathematics and the like. The PRC has no
mandate to supervise review centers that give courses or lectures intended
to prepare examinees for licensure examinations given by the PRC. It is like
the Court regulating bar review centers just because the Court conducts the
bar examinations. Similarly, the PRC has no mandate to regulate similar
entities whose reviewees will not even take any licensure examination given
by the PRC.
Administrative Law; Administrative Agencies; Special Law; Republic Act
No. 8981 (Professional Regulation Commission [PRC] Law); Section 5 of
Republic Act No. 8981 defines the Professional Regulation Commission
(PRCs) primary mandate, which is to establish and maintain a high
standard of admission to the practice of all professions and at all times
ensure and safeguard the integrity of all licensure examinations.The law
dealing with leakage and manipulation of licensure examinations is
Republic Act No. 8981 (the PRC Law). Section 5 of this law defines the
PRCs primary mandate, which is to establish and maintain a high standard
of admission to the practice of all professions and at all times ensure and
safeguard the integrity of all licensure examinations.
Same; Same; Same; Same; The valid grant of the authority to issue
subordinate legislation to the Professional Regulation Commission (PRC)
ADMINLAW CASES
and the exercise of this power by the President as the head of the executive
department of government, however, do not extend to the authority of the
President to take control of the PRCs powers under the PRC Law, and to
assign these to another agency within the executive branch.The
Presidents direct exercise of the power of subordinate legislation is done
via the issuance of an executive or administrative order, defined under
Section 2, Chapter 2, Book III of EO 292, as an ordinance issued by the
President providing for rules of a general or permanent character in the
implementation or execution of constitutional or statutory powers. The valid
grant of the authority to issue subordinate legislation to the PRC and the
exercise of this power by the President as the head of the executive
department of government, however, do not extend to the authority of the
President to take control of the PRCs powers under the PRC Law, and to
assign these to another agency within the executive branch.
Constitutional Law; Delegation of Power; What has once been delegated by
the Congress can no longer be further delegated by the original delegate to
another, expressed in the Latin maximpotestas delegata non delegare
potest; When the Professional Regulation Commission (PRC) Law granted
the power of subordinate legislation to the PRC, the mandate was given to
this agency (and under the control powers of the President, to the President
by necessary implication) as the original delegate; the faithful fulfillment of
this mandate is a duty that the PRC itself, as the delegate, must perform
using its own judgment and not the intervening mind of another.The
President, through EO 566, took control of the PRCs authority to issue
subordinate legislation to regulate review centers, and transferred this
power to the CHED. This is an illegal sub-delegation of delegated power.
What has once been delegated by Congress can no longer be further
delegated by the original delegate to another, expressed in the Latin maxim
potestas delegata non delegare potest. When the PRC Law granted the
power of subordinate legislation to the PRC, the mandate was given to this
agency (and under the control powers of the President, to the President by
necessary implication) as the original delegate; the faithful fulfillment of
this mandate is a duty that the PRC itself, as the delegate, must perform
using its own judgment and not the intervening mind of another. Review
Center Association of the Philippines vs. Ermita, 583 SCRA 428, G.R. No.
180046 April 2, 2009
DECISION
CARPIO, J.:
The Case
119
Before the Court is a petition for prohibition and mandamus assailing
Executive Order No. 566 (EO 566)[1] and Commission on Higher Education
(CHED) Memorandum Order No. 30, series of 2007 (RIRR).[2]
The Antecedent Facts
On 11 and 12 June 2006, the Professional Regulation Commission (PRC)
conducted the Nursing Board Examinations nationwide. In June 2006,
licensure applicants wrote the PRC to report that handwritten copies of two
sets of examinations were circulated during the examination period among
the examinees reviewing at the R.A. Gapuz Review Center and Inress
Review Center. George Cordero, Inress Review Centers President, was then
the incumbent President of the Philippine Nurses Association. The
examinees were provided with a list of 500 questions and answers in two of
the examinations five subjects, particularly Tests III (Psychiatric Nursing)
and V (Medical-Surgical Nursing). The PRC later admitted the leakage and
traced it to two Board of Nursing members.[3]On 19 June 2006, the PRC
released the results of the Nursing Board Examinations. On 18 August
2006, the Court of Appeals restrained the PRC from proceeding with the
oath-taking of the successful examinees set on 22 August 2006.
Consequently, President Gloria Macapagal-Arroyo (President Arroyo)
replaced all the members of the PRCs Board of Nursing.President Arroyo
also ordered the examinees to re-take the Nursing Board Examinations.
On 8 September 2006, President Arroyo issued EO 566 which authorized
the CHED to supervise the establishment and operation of all review centers
and similar entities in the Philippines.
On 3 November 2006, the CHED, through its then Chairman Carlito S.
Puno (Chairman Puno), approved CHED Memorandum Order No. 49,
series of 2006 (IRR).[4]
In a letter dated 24 November 2006,[5] the Review Center Association of the
Philippines (petitioner), an organization of independent review centers,
asked the CHED to amend, if not withdraw the IRR arguing, among other
things, that giving permits to operate a review center to Higher Education
Institutions (HEIs) or consortia of HEIs and professional organizations will
effectively abolish independent review centers.
ADMINLAW CASES
In a letter dated 3 January 2007,[6] Chairman Puno wrote petitioner, through
its President Jose Antonio Fudolig (Fudolig), that to suspend the
implementation of the IRR would be inconsistent with the mandate of EO
566. Chairman Puno wrote that the IRR was presented to the stakeholders
during a consultation process prior to its finalization and publication on 13
November 2006. Chairman Puno also wrote that petitioners comments and
suggestions would be considered in the event of revisions to the IRR.
In view of petitioners continuing request to suspend and re-evaluate the
IRR, Chairman Puno, in a letter dated 9 February 2007,[7]invited petitioners
representatives to a dialogue on 14 March 2007. In accordance with what
was agreed upon during the dialogue, petitioner submitted to the CHED its
position paper on the IRR. Petitioner also requested the CHED to confirm in
writing Chairman Punos statements during the dialogue, particularly on
lowering of the registration fee from P400,000 to P20,000 and the
requirement for reviewers to have five years teaching experience instead of
five years administrative experience. Petitioner likewise requested for a
categorical answer to their request for the suspension of the IRR. The
CHED did not reply to the letter.
On 7 May 2007, the CHED approved the RIRR. On 22 August 2007,
petitioner filed before the CHED a Petition to Clarify/Amend Revised
Implementing Rules and Regulations[8] praying for a ruling:
1. Amending the RIRR by excluding independent review
centers from the coverage of the CHED;
2. Clarifying the meaning of the requirement for existing
review centers to tie-up or be integrated with HEIs,
consortium or HEIs and PRC-recognized professional
associations with recognized programs, or in the
alternative, to convert into schools; and
3. Revising the rules to make it conform with Republic
Act No. 7722 (RA 7722)[9] limiting the CHEDs coverage
to public and private institutions of higher education as
well as degree-granting programs in post-secondary
educational institutions.
120
On 8 October 2007, the CHED issued Resolution No. 718-2007[10] referring
petitioners request to exclude independent review centers from CHEDs
supervision and regulation to the Office of the President as the matter
requires the amendment of EO 566. In a letter dated 17 October 2007,
[11]
then CHED Chairman Romulo L. Neri (Chairman Neri) wrote petitioner
regarding its petition to be excluded from the coverage of the CHED in the
RIRR. Chairman Neri stated:
While it may be true that regulation of review centers is
not one of the mandates of CHED under Republic Act
7722, however, on September 8, 2006, Her Excellency,
President Gloria Macapagal-Arroyo, issued Executive
Order No. 566 directing the Commission on Higher
Education to regulate the establishment and operation of
review centers and similar entities in the entire country.
With the issuance of the aforesaid Executive Order, the
CHED now is the agency that is mandated to regulate the
establishment and operation of all review centers as
provided for under Section 4 of the Executive Order
which provides that No review center or similar entities
shall be established and/or operate review classes
without the favorable expressed indorsement of the
CHED and without the issuance of the necessary
permits or authorizations to conduct review classes. x x
x of the Petition and a Petition In Intervention were filed by CPA Review
To exclude the operation of independent review centers
from the coverage of CHED would clearly contradict
the intention of the said Executive Order No. 566.
Considering that the requests requires the amendment of
Executive Order No. 566, the Commission, during its
305th Commission Meeting, resolved that the said request
be directly referred to the Office of the President for
appropriate action.
As to the request to clarify what is meant by tie-up/be
integrated with an HEI, as required under the Revised
Implementing Rules and Regulations, tie-up/be integrated
ADMINLAW CASES
simply means, to be in partner with an HEI.
[12]
(Boldfacing and underscoring in the original)
On 26 October 2007, petitioner filed a petition for Prohibition and
Mandamus before this Court praying for the annulment of the RIRR,
the declaration of EO 566 as invalid and unconstitutional, and the
prohibition against CHED from implementing the RIRR.
Dr. Freddie T. Bernal, Director III, Officer-In-Charge, Office of the Director
IV of CHED, sent a letter[13] to the President of Northcap Review Center,
Inc., a member of petitioner, that it had until 27 November 2007 to comply
with the RIRR.
On 15 February 2008,[14] PIMSAT Colleges (respondent-intervenor) filed a
Motion For Leave to Intervene and To Admit Comment-in-Intervention and
a Comment-in-Intervention praying for the dismissal of the
petition. Respondent-intervenor alleges that the Office of the President and
the CHED did not commit any act of grave abuse of discretion in issuing
EO 566 and the RIRR.Respondent-intervenor alleges that the requirements
of the RIRR are reasonable, doable, and are not designed to deprive existing
review centers of their review business. The Court granted the Motion for
Leave to Intervene and to Admit Comment-in-Intervention in its 11 March
2008 Resolution.[15]
On 23 April 2008, a Motion for Leave of Court for Intervention In Support
School of the Philippines, Inc. (CPAR), Professional Review and Training
Center, Inc. (PRTC), ReSA Review School, Inc. (ReSA), CRC-ACE
Review School, Inc. (CRC-ACE), all independent CPA review
centers operating in Manila (collectively, petitioners-
intervenors). Petitioners-intervenors pray for the declaration of EO 566
and the RIRR as invalid on the ground that both constitute an
unconstitutional exercise of legislative power. The Court granted the
intervention in its 29 April 2008 Resolution.[16]
On 21 May 2008, the CHED issued CHED Memorandum Order No. 21,
Series of 2008 (CMO 21, s. 2008)[17] extending the deadline for six months
from 27 May 2008 for all existing independent review centers to tie-up or
be integrated with HEIs in accordance with the RIRR.
121
In its 25 November 2008 Resolution, this Court resolved to require the
parties to observe the status quo prevailing before the issuance of EO 566,
the RIRR, and CMO 21, s. 2008.
The Assailed Executive Order and the RIRR
Executive Order No. 566 states in full:
EXECUTIVE ORDER NO. 566
DIRECTING THE COMMISSION ON HIGHER
EDUCATION TO REGULATE THE ESTABLISHMENT
AND OPERATION OF REVIEW CENTERS AND
SIMILAR ENTITIES
WHEREAS, the State is mandated to protect the right of
all citizens to quality education at all levels and shall take
appropriate steps to make education accessible to all,
pursuant to Section 1, Article XIV of the 1987
Constitution;
WHEREAS, the State has the obligation to ensure and
promote quality education through the proper supervision
and regulation of the licensure examinations given
through the various Boards of Examiners under the
Professional Regulation Commission;
WHEREAS, the lack of regulatory framework for the
establishment and operation of review centers and similar
entities, as shown in recent events, have adverse
consequences and affect public interest and welfare;
WHEREAS, the overriding necessity to protect the public
against substandard review centers and unethical practices
committed by some review centers demand that a
regulatory framework for the establishment and operation
of review centers and similar entities be immediately
instituted;
ADMINLAW CASES
WHEREAS, Republic Act No. 7722, otherwise known as
the Higher Education Act of 1994, created the
Commission on Higher Education, which is best equipped
to carry out the provisions pertaining to the regulation of
the establishment and operation of review centers and
similar entities.
NOW, THEREFORE, I, GLORIA MACAPAGAL-
ARROYO, the President of the Republic of the
Philippines, by virtue of the powers vested in me by law,
do hereby order:
SECTION 1. Establishment of a System of Regulation for
Review Centers and Similar Entities. The Commission on
Higher Education (CHED), in consultation with other
concerned government agencies, is hereby directed to
formulate a framework for the regulation of review centers
and similar entities, including but not limited to the
development and institutionalization of policies,
standards, guidelines for the establishment, operation and
accreditation of review centers and similar entities;
maintenance of a mechanism to monitor the adequacy,
transparency and propriety of their operations; and
reporting mechanisms to review performance and ethical
practice.
SEC. 2. Coordination and Support. The Professional
Regulation Commission (PRC), Technical Skills
Development Authority (TESDA), Securities and
Exchange Commission (SEC), the various Boards of
Examiners under the PRC, as well as other concerned
non-government organizations life professional societies,
and various government agencies, such as the Department
of Justice (DOJ), National Bureau of Investigation (NBI),
Office of the Solicitor General (OSG), and others that may
be tapped later, shall provide the necessary assistance and
technical support to the CHED in the successful
operationalization of the System of Regulation envisioned
by this Executive Order.
122
 SEC. 3. Permanent Office and Staff. To ensure the
effective implementation of the System of Regulation, the
CHED shall organize a permanent office under its
supervision to be headed by an official with the rank of
Director and to be composed of highly competent
individuals with expertise in educational assessment,
evaluation and testing; policies and standards
development, monitoring, legal and enforcement; and
statistics as well as curriculum and instructional materials
development. The CHED shall submit the staffing pattern
and budgetary requirements to the Department of Budget
and Management (DBM) for approval.
SEC. 4. Indorsement Requirement. No review center or
similar entities shall be established and/or operate review
classes without the favorable expressed indorsement of the
CHED and without the issuance of the necessary permits
or authorizations to conduct review classes. After due
consultation with the stakeholders, the concerned review
centers and similar entities shall be given a reasonable
period, at the discretion of the CHED, to comply with the
policies and standards, within a period not exceeding three
(3) years, after due publication of this Executive
Order. The CHED shall see to it that the System of
Regulation including the implementing mechanisms,
policies, guidelines and other necessary procedures and
documentation for the effective implementation of the
System, are completed within sixty days (60) upon
effectivity of this Executive Order.
SEC. 5. Funding. The initial amount necessary for the
development and implementation of the System of
Regulation shall be sourced from the CHED Higher
Education Development Fund (HEDF), subject to the
usual government accounting and auditing practices, or
from any applicable funding source identified by the
DBM. For the succeeding fiscal year, such amounts as
may be necessary for the budgetary requirement of
implementing the System of Regulation and the provisions
of this Executive Order shall be provided for in the annual
ADMINLAW CASES
General Appropriations Act in the budget of the
CHED. Whenever necessary, the CHED may tap its
Development Funds as supplemental source of funding for
the effective implementation of the regulatory system. In
this connection, the CHED is hereby authorized to create
special accounts in the HEDF exclusively for the purpose
of implementing the provisions of this Executive Order.
SEC. 6. Review and Reporting. The CHED shall provide
for the periodic review performance of review centers and
similar entities and shall make a report to the Office of the
President of the results of such review, evaluation and
monitoring.
SEC. 7. Separability. Any portion or provision of this
Executive Order that may be declared unconstitutional
shall not have the effect of nullifying other provisions
hereof, as long as such remaining provisions can still
subsist and be given effect in their entirely.
SEC. 8. Repeal. All rules and regulations, other issuances
or parts thereof, which are inconsistent with this Executive
Order, are hereby repealed or modified accordingly.
SEC. 9. Effectivity. This Executive Order shall take effect
immediately upon its publication in a national newspaper
of general circulation.
DONE in the City of Manila, this 8th day of September, in
the year of Our Lord, Two Thousand and Six.
(Sgd.) Gloria Macapagal-Arroyo
By the President:
(Sgd.) Eduardo R. Ermita
Executive Secretary
123
The pertinent provisions of the RIRR affecting independent review centers
are as follows:
Rule VII
IMPLEMENTING GUIDELINES AND PROCEDURES
Section 1. Authority to Establish and Operate Only CHED
recognized, accredited and reputable HEIs may be
authorized to establish and operate review center/course by
the CHED upon full compliance with the conditions and
requirements provided herein and in other pertinent laws,
rules and regulations. In addition, a consortium or
consortia of qualified schools and/or entities may establish
and operate review centers or conduct review classes upon
compliance with the provisions of these Rules.
Rule XIV
TRANSITORY PROVISIONS
Section 1. Review centers that are existing upon the
approval of Executive Order No. 566 shall be given a
grace period of up to one (1) year, to tie-up/be integrated
with existing HEIs[,] consortium of HEIs and PRC
recognized Professional Associations with recognized
programs under the conditions set forth in this Order and
upon mutually acceptable covenants by the contracting
parties. In the alternative, they may convert as a school and
apply for the course covered by the review subject to rules
and regulations of the CHED and the SEC with respect to
the establishment of schools. In the meantime, no permit
shall be issued if there is non-compliance with these
conditions or non-compliance with the requirements set
forth in these rules.
ADMINLAW CASES
Section 2. Only after full compliance with the
requirements shall a Permit be given by the CHED to
review centers contemplated under this Rule.
Section 3. Failure of existing review centers to fully
comply with the above shall bar them from existing as
review centers and they shall be deemed as operating
illegally as such. In addition, appropriate administrative
and legal proceedings shall be commence[d] against the
erring entities that continue to operate and appropriate
sanctions shall be imposed after due process.
The Issues
The issues raised in this case are the following:
1. Whether EO 566 is an unconstitutional exercise by the
Executive of legislative power as it expands the CHEDs
jurisdiction; and
2. Whether the RIRR is an invalid exercise of the
Executives rule-making power.
The Ruling of this Court
The petition has merit.
Violation of Judicial Hierarchy
The Office of the Solicitor General (OSG) prays for the dismissal of the
petition. Among other grounds, the OSG alleges that petitioner violated the
rule on judicial hierarchy in filing the petition directly with this Court.
This Courts original jurisdiction to issue a writ of certiorari, prohibition,
mandamus, quo warranto, habeas corpus, and injunction is not exclusive but
is concurrent with the Regional Trial Courts and the Court of Appeals in
certain cases.[18] The Court has explained:
124

This concurrence of jurisdiction is not, however, to be
taken as according to parties seeking any of the writs an
absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after
all a hierarchy of courts. That hierarchy is determinative
of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the
extraordinary writs. A becoming regard of that judicial
hierarchy most certainly indicates that petitions for the
issuance of extraordinary writs against first level (inferior)
courts should be filed with the Regional Trial Court, and
those against the latter, with the Court of Appeals. A direct
invocation of the Supreme Courts original jurisdiction to
issue these writs should be allowed only when there are
special and important reasons therefor, clearly and
specifically set out in the petition. This is [an] established
policy. It is a policy necessary to prevent inordinate
demands upon the Courts time and attention which are
better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the
Courts docket.[19]
The Court has further explained:
The propensity of litigants and lawyers to disregard the
hierarchy of courts in our judicial system by seeking
relief directly from this Court must be put to a halt for
two reasons: (1) it would be an imposition upon the
precious time of this Court; and (2) it would cause an
inevitable and resultant delay, intended or otherwise, in
the adjudication of cases, which in some instances had to
be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped
to resolve the issues because this Court is not a trier of
facts.[20]
The rule, however, is not absolute, as when exceptional and compelling
circumstances justify the exercise of this Court of its primary
ADMINLAW CASES
jurisdiction. In this case, petitioner alleges that EO 566 expands the
coverage of RA 7722 and in doing so, the Executive Department usurps the
legislative powers of Congress. The issue in this case is not only the validity
of the RIRR. Otherwise, the proper remedy of petitioner and petitioners-
intervenors would have been an ordinary action for the nullification of the
RIRR before the Regional Trial Court.[21] The alleged violation of the
Constitution by the Executive Department when it issued EO 566 justifies
the exercise by the Court of its primary jurisdiction over the case. The Court
is not precluded from brushing aside technicalities and taking cognizance of
an action due to its importance to the public and in keeping with its duty to
determine whether the other branches of the Government have kept
themselves within the limits of the Constitution.[22]
OSGs Technical Objections
The OSG alleges that the petition should be dismissed because the
verification and certification of non-forum shopping were signed only by
Fudolig without the express authority of any board resolution or power of
attorney. However, the records show that Fudolig was authorized under
Board Resolution No. 3, series of 2007[23] to file a petition before this Court
on behalf of petitioner and to execute any and all documents necessary to
implement the resolution.
The OSG also alleges that the petition should be dismissed for violation of
the 2004 Rules on Notarial Practice because Fudolig only presented his
community tax certificate as competent proof of identity before the notary
public. The Court would have required Fudolig to comply with the 2004
Rules on Notarial Practice except that Fudolig already presented his
Philippine passport before the notary public when petitioner submitted its
reply to the OSGs comment.
EO 566 Expands the Coverage of RA 7722
The OSG alleges that Section 3 of RA 7722 should be read in conjunction
with Section 8, enumerating the CHEDs powers and functions. In particular,
the OSG alleges that the CHED has the power under paragraphs (e) and (n)
of Section 8 to:
(e) monitor and evaluate the performance of programs and
institutions of higher learning for appropriate incentives as
well as the imposition of sanctions such as, but not limited
125
 to, diminution or withdrawal of subsidy, recommendation
on the downgrading or withdrawal of accreditation,
program termination or school closure;
(n) promulgate such rules and regulations and exercise
such other powers and functions as may be necessary to
carry out effectively the purpose and objectives of this
Act[.]
The OSG justifies its stand by claiming that the term programs x x x of
higher learning is broad enough to include programs offered by review
centers.
We do not agree.
Section 3 of RA 7722 provides:
Sec. 3. Creation of Commission on Higher Education. - In
pursuance of the abovementioned policies, the
Commission on Higher Education is hereby created,
hereinafter referred to as the Commission.
The Commission shall be independent and separate from
the Department of Education, Culture and Sports (DECS),
and attached to the Office of the President for
administrative purposes only. Its coverage shall be both
public and private institutions of higher education as
well as degree-granting programs in all post-
secondary educational institutions, public and private.
(Emphasis supplied)
Neither RA 7722 nor CHED Order No. 3, series of 1994 (Implementing
Rules of RA 7722)[24] defines an institution of higher learning or a program
of higher learning.
ADMINLAW CASES
Higher education, however, is defined as education beyond the secondary
level[25] or education provided by a college or university.[26] Under the plain
meaning or verba legis rule in statutory construction, if the statute is clear,
plain, and free from ambiguity, it must be given its literal meaning and
applied without interpretation.[27] The legislature is presumed to know the
meaning of the words, to have used words advisedly, and to have expressed
its intent by use of such words as are found in the statute.[28] Hence, the term
higher education should be taken in its ordinary sense and should be read
and interpreted together with the phrase degree-granting programs in all
post-secondary educational institutions, public and private. Higher
education should be taken to mean tertiary education or that which grants a
degree after its completion.
Further, Articles 6 and 7 of the Implementing Rules provide:
Article 6. Scope of Application. - The coverage of the
Commission shall be both public and private institutions
of higher education as well as degree granting
programs in all post-secondary educational institutions,
public and private.
These Rules shall apply to all public and private
educational institutions offering tertiary degree
programs.
The establishment, conversion, or elevation of degree-
granting institutions shall be within the responsibility of
the Commission.
Article 7. Jurisdiction. - Jurisdiction over institutions of
higher learning primarily offering tertiary degree
programs shall belong to the Commission.(Emphasis
supplied)
Clearly, HEIs refer to degree-granting institutions, or those offering tertiary
degree or post-secondary programs. In fact, Republic Act No. 8292 or the
Higher Education Modernization Act of 1997 covers chartered state
126
universities and colleges. State universities and colleges primarily offer
degree courses and programs.
Sections 1 and 8, Rule IV of the RIRR define a review center and similar
entities as follows:
Section 1. REVIEW CENTER. - refers to a center
operated and owned by a duly authorized entity pursuant
to these Rules intending to offer to the public and/or to
specialized groups whether for a fee or for free a program
or course of study that is intended to refresh and enhance
the knowledge and competencies and skills of reviewees
obtained in the formal school setting in preparation for the
licensure examinations given by the Professional
Regulations Commission (PRC). The term review center
as understood in these rules shall also embrace the
operation or conduct of review classes or courses
provided by individuals whether for a fee or not in
preparation for the licensure examinations given by the
Professional Regulations Commission.
xxx
Section 8. SIMILAR ENTITIES the term refer to other
review centers providing review or tutorial services in
areas not covered by licensure examinations given by the
Professional Regulations Commission including but not
limited to college entrance examinations, Civil Service
examinations, tutorial services in specific fields like
English, Mathematics and the like.
The same Rule defines a review course as follows:
Section 3. REVIEW COURSE refers to the set of non-
degree instructional program of study and/or instructional
materials/module, offered by a school with a recognized
ADMINLAW CASES
course/program requiring licensure examination, that are
intended merely to refresh and enhance the knowledge or
competencies and skills of reviewees.
The scopes of EO 566 and the RIRR clearly expand the CHEDs coverage
under RA 7722. The CHEDs coverage under RA 7722 is limited to public
and private institutions of higher education and degree-granting
programs in all public and private post-secondary educational
institutions. EO 566 directed the CHED to formulate a framework for the
regulation of review centers and similar entities.
The definition of a review center under EO 566 shows that it refers to one
which offers a program or course of study that is intended to refresh
and enhance the knowledge or competencies and skills of reviewees
obtained in the formal school setting in preparation for the licensure
examinations given by the PRC. It also covers the operation or conduct of
review classes or courses provided by individuals whether for a fee or not in
preparation for the licensure examinations given by the PRC.
A review center is not an institution of higher learning as contemplated by
RA 7722. It does not offer a degree-granting program that would put it
under the jurisdiction of the CHED. A review course is only intended to
refresh and enhance the knowledge or competencies and skills of
reviewees. A reviewee is not even required to enroll in a review center or to
take a review course prior to taking an examination given by the PRC. Even
if a reviewee enrolls in a review center, attendance in a review course is not
mandatory.The reviewee is not required to attend each review class. He is
not required to take or pass an examination, and neither is he given a
grade. He is also not required to submit any thesis or dissertation. Thus,
programs given by review centers could not be considered programs x x x
of higher learning that would put them under the jurisdiction of the CHED.
Further, the similar entities in EO 566 cover centers providing review or
tutorial services in areas not covered by licensure examinations given by the
PRC, which include, although not limited to, college entrance examinations,
Civil Services examinations, and tutorial services. These review and tutorial
services hardly qualify as programs of higher learning.
Usurpation of Legislative Power
127

The OSG argues that President Arroyo was merely exercising her executive
power to ensure that the laws are faithfully executed. The OSG further
argues that President Arroyo was exercising her residual powers under
Executive Order No. 292 (EO 292),[29]particularly Section 20, Title I of
Book III, thus:
Section 20. Residual Powers. - Unless Congress provides
otherwise, the President shall exercise such other
powers and functions vested in the President which
are provided for under the laws and which are not
specifically enumerated above, or which are not delegated
by the President in accordance with law. (Emphasis
supplied)
Section 20, Title I of Book III of EO 292 speaks of other powers vested in
the President under the law.[30] The exercise of the Presidents residual
powers under this provision requires legislation,[31] as the provision clearly
states that the exercise of the Presidents other powers and functions has to
be provided for under the law. There is no law granting the President the
power to amend the functions of the CHED. The President may not amend
RA 7722 through an Executive Order without a prior legislation granting
her such power.
The President has no inherent or delegated legislative power to amend the
functions of the CHED under RA 7722. Legislative power is the authority to
make laws and to alter or repeal them,[32] and this power is vested with the
Congress under Section 1, Article VI of the 1987 Constitution which states:
Section 1. The legislative power shall be vested in the
Congress of the Philippines which shall consist of a
Senate and a House of Representatives, except to the
extent reserved to the people by the provision on initiative
and referendum.
ADMINLAW CASES
In Ople v. Torres,[33] the Court declared void, as a usurpation of legislative
power, Administrative Order No. 308 (AO 308) issued by the President to
create a national identification system. AO 308 mandates the adoption of a
national identification system even in the absence of an enabling
legislation. The Court distinguished between Legislative and Executive
powers, as follows:
The line that delineates Legislative and Executive power is
not indistinct. Legislative power is the authority, under the
Constitution, to make laws, and to alter and repeal
them. The Constitution, as the will of the people in their
original, sovereign and unlimited capacity, has vested this
power in the Congress of the Philippines. The grant of
legislative power to Congress is broad, general and
comprehensive. The legislative body possesses plenary
power for all purposes of civil government. Any power,
deemed to be legislative by usage and tradition, is
necessarily possessed by Congress, unless the Constitution
has lodged it elsewhere. In fine, except as limited by the
Constitution, either expressly or impliedly, legislative
power embraces all subjects and extends to matters of
general concern or common interest.
While Congress is vested with the power to enact
laws, the President executes the laws. The executive
power is vested in the President. It is generally defined as
the power to enforce and administer laws. It is the power
of carrying the laws into practical operation and enforcing
their due observance.
As head of the Executive Department, the President is the
Chief Executive. He represents the government as a whole
and sees to it that all laws are enforced by the officials and
employees of his department. He has control over the
executive department, bureaus and offices. This means
that he has the authority to assume directly the functions
of the executive department, bureau and office, or interfere
with the discretion of its officials. Corollary to the power
of control, the President also has the duty of supervising
the enforcement of laws for the maintenance of general
128
 peace and public order.Thus, he is granted administrative
power over bureaus and offices under his control to enable
him to discharge his duties effectively.
Administrative power is concerned with the work of
applying policies and enforcing orders as determined by
proper governmental organs.It enables the President to fix
a uniform standard of administrative efficiency and check
the official conduct of his agents. To this end, he can issue
administrative orders, rules and regulations.
x x x. An administrative order is:
Sec. 3. Administrative Orders. - Acts of the
President which relate to particular aspects of
governmental operation in pursuance of his
duties as administrative head shall be
promulgated in administrative orders.
An administrative order is an ordinance issued by the
President which relates to specific aspects in the
administrative operation of government. It must be in
harmony with the law and should be for the sole purpose
of implementing the law and carrying out the legislative
policy. x x x.[34]
Just like AO 308 in Ople v. Torres, EO 566 in this case is not supported by
any enabling law. The Court further stated in Ople:
x x x. As well stated by Fisher: x x x Many regulations
however, bear directly on the public. It is here that
administrative legislation must be restricted in its scope
and application. Regulations are not supposed to be a
substitute for the general policy-making that Congress
enacts in the form of a public law. Although
administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an
independent source of power to make laws.[35]
ADMINLAW CASES
Since EO 566 is an invalid exercise of legislative power, the RIRR is also
an invalid exercise of the CHEDs quasi-legislative power.
Administrative agencies exercise their quasi-legislative or rule-making
power through the promulgation of rules and regulations.[36]The CHED may
only exercise its rule-making power within the confines of its jurisdiction
under RA 7722. The RIRR covers review centers and similar entities which
are neither institutions of higher education nor institutions offering degree-
granting programs.
Exercise of Police Power
Police power to prescribe regulations to promote the health, morals,
education, good order or safety, and the general welfare of the people flows
from the recognition that salus populi est suprema lex the welfare of the
people is the supreme law.[37] Police power primarily rests with the
legislature although it may be exercised by the President and administrative
boards by virtue of a valid delegation.[38] Here, no delegation of police
power exists under RA 7722 authorizing the President to regulate the
operations of non-degree granting review centers.
Republic Act No. 8981 is Not the Appropriate Law
It is argued that the President of the Philippines has adequate powers under
the law to regulate review centers and this could have been done under an
existing validly delegated authority, and that the appropriate law is Republic
Act No. 8981[39] (RA 8981). Under Section 5 of RA 8981, the PRC is
mandated to establish and maintain a high standard of admission to the
practice of all professions and at all times ensure and safeguard the integrity
of all licensure examinations. Section 7 of RA 8981 further states that the
PRC shall adopt measures to preserve the integrity and inviolability of
licensure examinations.
There is no doubt that a principal mandate of the PRC is to preserve the
integrity of licensure examinations. The PRC has the power to adopt
measures to preserve the integrity and inviolability of licensure
examinations. However, this power should properly be interpreted to refer
to the conduct of the examinations. The enumeration of PRCs powers
under Section 7(e) includes among others, the fixing of dates and places of
129

the examinations and the appointment of supervisors and watchers. The
power to preserve the integrity and inviolability of licensure examinations
should be read together with these functions. These powers of the PRC
have nothing to do at all with the regulation of review centers.
The PRC has the power to investigate any of the members of the
Professional Regulatory Boards (PRB) for commission of any irregularities
in the licensure examinations which taint or impugn the integrity and
authenticity of the results of the said examinations.[40] This is an
administrative power which the PRC exercises over members of the
PRB. However, this power has nothing to do with the regulation of review
centers. The PRC has the power to bar PRB members from conducting
review classes in review centers. However, to interpret this power to
extend to the power to regulate review centers is clearly an
unwarranted interpretation of RA 8981. The PRC may prohibit the
members of the PRB from conducting review classes at review centers
because the PRC has administrative supervision over the members of the
PRB. However, such power does not extend to the regulation of review
centers.
Section 7(y) of RA 8981 giving the PRC the power to perform such other
functions and duties as may be necessary to carry out the provisions of RA
8981 does not extend to the regulation of review centers. There is
absolutely nothing in RA 8981 that mentions regulation by the PRC of
review centers.
The Court cannot likewise interpret the fact that RA 8981 penalizes any
person who manipulates or rigs licensure examination results, secretly
informs or makes known licensure examination questions prior to the
conduct of the examination or tampers with the grades in the professional
licensure examinations[41] as a grant of power to regulate review
centers. The provision simply provides for the penalties for manipulation
and other corrupt practices in the conduct of the professional examinations.
The assailed EO 566 seeks to regulate not only review centers but also
similar entities. The questioned CHED RIRR defines similar entities as
referring to other review centers providing review or tutorial services in
areas not covered by licensure examinations given by the PRC including but
not limited to college entrance examinations, Civil Service examinations,
tutorial services in specific fields like English, Mathematics and the like.
ADMINLAW CASES
[42]
The PRC has no mandate to supervise review centers that give courses or
lectures intended to prepare examinees for licensure examinations given by
the PRC. It is like the Court regulating bar review centers just because the
Court conducts the bar examinations. Similarly, the PRC has no mandate
to regulate similar entities whose reviewees will not even take any
licensure examination given by the PRC.
WHEREFORE, we GRANT the petition and the petition-in-
intervention. We DECLARE Executive Order No. 566 and Commission on
Higher Education Memorandum Order No. 30, series of 2007 VOID for
being unconstitutional.
SO ORDERED.
G.R. No. 127198. May 16, 2005.*
LAND BANK OF THE PHILIPPINES, petitioner, vs. HON. ELI G. C.
NATIVIDAD, Presiding Judge of the Regional Trial Court, Branch 48,
San Fernando, Pampanga, and JOSE R. CAGUIAT represented by
Attorneys-in-fact JOSE T. BARTOLOME and VICTORIO
MANGALINDAN, respondents.
Actions; Pleadings and Practice; Notice of Hearing; Attorneys; Relief from
Judgment; A counsels failure to include a notice of hearing does not
constitute excusable negligence; The remedy of relief from judgment can
only be resorted to on grounds of fraud, accident, mistake or excusable
negligence; Heavy workload is by no means excusable.At issue is
whether counsels failure to include a notice of hearing constitutes
excusable negligence entitling Land Bank to a relief from judgment. Section
1, Rule 38 of the 1997 Rules of Civil Procedure provides: Sec. 1. Petition
for relief from judgment, order, or other proceedings.When a judgment or
final order is entered, or any other proceeding is thereafter taken against a
party in any court through fraud, accident, mistake, or excusable
negligence, he may file a petition in such court and in the same case praying
that the judgment, order or proceeding be set aside. As can clearly be
gleaned from the foregoing provision, the remedy of relief from judgment
can only be resorted to on grounds of fraud, accident, mistake or excusable
negligence. Negligence to be excusable must be one which ordinary
diligence and prudence could not have guarded against. Measured against
this standard, the reason profferred by Land Banks counsel, i.e., that his
heavy workload prevented him from ensuring that the motion for
reconsideration included a notice of hearing, was by no means excusable.
130
Same; Same; Same; Same; Counsels admission that he simply scanned
and signed the Motion for Reconsideration * * * not knowing, or unmindful
that it had no notice of hearing speaks volumes of his arrant negligence,
and cannot in any manner be deemed to constitute excusable negligence;
Failure to attach a notice of hearing would have been less odious if
committed by a greenhorn but not by a lawyer who claims to have
mastered the intricate art and technique of pleading.Counsels exclusive original jurisdiction over all matters involving the implementation
admission that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of
Pampanga, Branch 48, not knowing, or unmindful that it had no notice of
hearing speaks volumes of his arrant negligence, and cannot in any manner
be deemed to constitute excusable negligence. The failure to attach a notice
of hearing would have been less odious if committed by a greenhorn but not
by a lawyer who claims to have mastered the intricate art and technique of
pleading.
Same; Same; Same; Same; A motion that does not contain the requisite
notice of hearing is nothing but a mere scrap of paperthe clerk of court
does not even have the duty to accept it, much less bring it to the attention
of the presiding judge.A motion that does not contain the requisite notice
of hearing is nothing but a mere scrap of paper. The clerk of court does not
even have the duty to accept it, much less to bring it to the attention of the
presiding judge. The trial court therefore correctly considered the motion
for reconsideration pro forma. Thus, it cannot be faulted for denying Land
Banks motion for reconsideration and petition for relief from judgment.
Same; Same; Same; Same; Procedural Rules and Technicalities; While in
certain instances, the Court allows the relaxation in the application of the
rules, it never intends to forge a weapon for erring litigants to violate the
rules with impunity; Party litigants and their counsel are well advised to
abide by, rather than flaunt, procedural rules for these rules illumine the
path of the law and rationalize the pursuit of justice.It should be
emphasized at this point that procedural rules are designed to facilitate the
adjudication of cases. Courts and litigants alike are enjoined to abide strictly
by the rules. While in certain instances, we allow a relaxation in the
application of the rules, we never intend to forge a weapon for erring
litigants to violate the rules with impunity. The liberal interpretation and
application of rules apply only in proper cases of demonstrable merit and
under justifiable causes and circumstances. While it is true that litigation is
not a game of technicalities, it is equally true that every case must be
prosecuted in accordance with the prescribed procedure to ensure an orderly
and speedy administration of justice. Party litigants and their counsel are
ADMINLAW CASES
well advised to abide by, rather than flaunt, procedural rules for these rules
illumine the path of the law and rationalize the pursuit of justice.
Same; Agrarian Reform Law; Just Compensation; Administrative Law;
Jurisdictions; Doctrine of Primary Jurisdiction; There is nothing
contradictory between the Department of Agrarian Relations primary
jurisdiction to determine and adjudicate agrarian reform matters and
of agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of regional trial
courts over all petitions for the determination of just compensation
primary jurisdiction is vested in the DAR to determine in a preliminary
manner the just compensation for the lands taken under the agrarian reform
program, but such determination is subject to challenge before the courts.
In Philippine Veterans Bank v. Court of Appeals, we declared that there is
nothing contradictory between the DARs primary jurisdiction to determine
and adjudicate agrarian reform matters and exclusive original jurisdiction
over all matters involving the implementation of agrarian reform, which
includes the determination of questions of just compensation, and the
original and exclusive jurisdiction of regional trial courts over all petitions
for the determination of just compensation. The first refers to administrative
proceedings, while the second refers to judicial proceedings. In accordance
with settled principles of administrative law, primary jurisdiction is vested
in the DAR to determine in a preliminary manner the just compensation for
the lands taken under the agrarian reform program, but such determination
is subject to challenge before the courts. The resolution of just
compensation cases for the taking of lands under agrarian reform is, after
all, essentially a judicial function. Thus, the trial did not err in taking
cognizance of the case as the determination of just compensation is a
function addressed to the courts of justice.
Same; Same; Same; Presidential Decree No. 27; The seizure of a
landholding did not take place on the date of the effectivity of PD 27 but
would take effect on the payment of just compensation, and where before
the process is completed R.A. No. 6657 took effect, the just compensation
should be determined and the process concluded under the said law.Land
Banks contention that the property was acquired for purposes of agrarian
reform on October 21, 1972, the time of the effectivity of PD 27, ergo just
compensation should be based on the value of the property as of that time
and not at the time of possession in 1993, is likewise erroneous. In Office of
the President, Malacaang, Manila v. Court of Appeals, we ruled that the
seizure of the landholding did not take place on the date of effectivity of PD
131
27 but would take effect on the payment of just compensation. Under the of P30.00 per square meter as just compensation for the States acquisition
factual circumstances of this case, the agrarian reform process is still
of private respondents properties under the land reform program.
incomplete as the just compensation to be paid private respondents has yet
to be settled. Considering the passage of Republic Act No. 6657 (RA 6657)
before the completion of this process, the just compensation should be The facts follow.
determined and the process concluded under the said law. Indeed, RA 6657
is the applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche. On May 14, 1993, private respondents filed a petition before the trial
Same; Same; Same; That just compensation should be determined in court for the determination of just compensation for their agricultural lands
accordance with R.A. 6657, and not PD 27 or EO 228, is especially
imperative considering that just compensation should be the full and fair situated in Arayat, Pampanga, which were acquired by the government
equivalent of the property taken from the owner by the expropriator, the pursuant to Presidential Decree No. 27 (PD 27). The petition named as
equivalent being real, substantial, full and ample.It would certainly be
inequitable to determine just compensation based on the guideline provided respondents the DAR and Land Bank. With leave of court, the petition was
by PD 27 and EO 228 considering the DARs failure to determine the just amended to implead as co-respondents the registered tenants of the land.
compensation for a considerable length of time. That just compensation
should be determined in accordance with RA 6657, and not PD 27 or EO
228, is especially imperative considering that just compensation should be After trial, the court rendered the assailed Decision the dispositive
the full and fair equivalent of the property taken from its owner by the
expropriator, the equivalent being real, substantial, full and ample. In this portion of which reads:
case, the trial court arrived at the just compensation due private respondents
for their property, taking into account its nature as irrigated land, location WHEREFORE, judgment is hereby rendered in favor of petitioners and
along the highway, market value, assessors value and the volume and value
of its produce. This Court is convinced that the trial court correctly against respondents, ordering respondents, particularly, respondents
determined the amount of just compensation due private respondents in Department of Agrarian Reform and the Land Bank of the Philippines, to
accordance with, and guided by, RA 6657 and existing jurisprudence. Land
Bank of the Philippines vs. Natividad, 458 SCRA 441, G.R. No. 127198 pay these lands owned by petitioners and which are the subject of
May 16, 2005 acquisition by the State under its land reform program, the amount of

DECISION THIRTY PESOS (P30.00) per square meter, as the just compensation due
for payment for same lands of petitioners located at San Vicente (or
TINGA, J.: Camba), Arayat, Pampanga.

This is a Petition for Review[1] dated December 6, 1996 assailing Respondent Department of Agrarian Reform is also ordered to pay
the Decision[2] of the Regional Trial Court [3] dated July 5, 1996 which petitioners the amount of FIFTY THOUSAND PESOS (P50,000.00) as
ordered the Department of Agrarian Reform (DAR) and petitioner Land Attorneys Fee, and to pay the cost of suit.
Bank of the Philippines (Land Bank) to pay private respondents the amount

132
ADMINLAW CASES
SO ORDERED.[4]
DAR and Land Bank filed separate motions for reconsideration which
[5]
were denied by the trial court in its Order dated July 30, 1996 for
being pro forma as the same did not contain a notice of hearing. Thus, the
prescriptive period for filing an appeal was not tolled. Land Bank
consequently failed to file a timely appeal and the assailed Decision became
final and executory.
Land Bank then filed a Petition for Relief from Order Dated 30 July
1996,[6] citing excusable negligence as its ground for relief. Attached to the
petition for relief were two affidavits of merit claiming that the failure to
include in the motion for reconsideration a notice of hearing was due to
accident and/or mistake.[7] The affidavit of Land Banks counsel of record
notably states that he simply scanned and signed the Motion for
Reconsideration for Agrarian Case No. 2005, Regional Trial Court of
Pampanga, Branch 48, not knowing, or unmindful that it had no notice of
[8]
hearing due to his heavy workload.
The trial court, in its Order[9] of November 18, 1996, denied the
petition for relief because Land Bank lost a remedy in law due to its own
negligence.
In the instant petition for review, Land Bank argues that the failure of
its counsel to include a notice of hearing due to pressure of work constitutes
excusable negligence and does not make the motion for reconsideration pro
forma considering its allegedly meritorious defenses. Hence, the denial of
its petition for relief from judgment was erroneous.
ADMINLAW CASES
According to Land Bank, private respondents should have sought the
reconsideration of the DARs valuation of their properties. Private
respondents thus failed to exhaust administrative remedies when they filed a
petition for the determination of just compensation directly with the trial
court. Land Bank also insists that the trial court erred in declaring that PD
27 and Executive Order No. 228 (EO 228) are mere guidelines in the
determination of just compensation, and in relying on private respondents
evidence of the valuation of the properties at the time of possession in 1993
and not on Land Banks evidence of the value thereof as of the time of
acquisition in 1972.
Private respondents filed a Comment[10] dated February 22, 1997,
averring that Land Banks failure to include a notice of hearing in its motion
for reconsideration due merely to counsels heavy workload, which resulted
in the motion being declared pro forma, does not constitute excusable
negligence, especially in light of the admission of Land Banks counsel that
he has been a lawyer since 1973 and has mastered the intricate art and
technique of pleading.
Land Bank filed a Reply[11] dated March 12, 1997 insisting that equity
considerations demand that it be heard on substantive issues raised in its
motion for reconsideration.
The Court gave due course to the petition and required the parties to
submit their respective memoranda.[12] Both parties complied.[13]
The petition is unmeritorious.
133
 At issue is whether counsels failure to include a notice of hearing
constitutes excusable negligence entitling Land Bank to a relief from
judgment.
Section 1, Rule 38 of the 1997 Rules of Civil Procedure provides:
Sec. 1. Petition for relief from judgment, order, or other proceedings.When
a judgment or final order is entered, or any other proceeding is thereafter
taken against a party in any court through fraud, accident, mistake, or
excusable negligence, he may file a petition in such court and in the same
case praying that the judgment, order or proceeding be set aside.
As can clearly be gleaned from the foregoing provision, the remedy of
relief from judgment can only be resorted to on grounds of fraud, accident,
mistake or excusable negligence. Negligence to be excusable must be one
which ordinary diligence and prudence could not have guarded against.[14]
Measured against this standard, the reason profferred by Land Banks
counsel, i.e., that his heavy workload prevented him from ensuring that the
motion for reconsideration included a notice of hearing, was by no means
excusable.
Indeed, counsels admission that he simply scanned and signed the
Motion for Reconsideration for Agrarian Case No. 2005, Regional Trial
Court of Pampanga, Branch 48, not knowing, or unmindful that it had no
notice of hearing speaks volumes of his arrant negligence, and cannot in any
manner be deemed to constitute excusable negligence.
ADMINLAW CASES
The failure to attach a notice of hearing would have been less odious if
committed by a greenhorn but not by a lawyer who claims to have mastered
the intricate art and technique of pleading.[15]
Indeed, a motion that does not contain the requisite notice of hearing is
nothing but a mere scrap of paper. The clerk of court does not even have the
duty to accept it, much less to bring it to the attention of the presiding judge.
[16]
The trial court therefore correctly considered the motion for
reconsideration pro forma. Thus, it cannot be faulted for denying Land
Banks motion for reconsideration and petition for relief from judgment.
It should be emphasized at this point that procedural rules are designed
to facilitate the adjudication of cases. Courts and litigants alike are enjoined
to abide strictly by the rules. While in certain instances, we allow a
relaxation in the application of the rules, we never intend to forge a weapon
for erring litigants to violate the rules with impunity. The liberal
interpretation and application of rules apply only in proper cases of
demonstrable merit and under justifiable causes and circumstances. While it
is true that litigation is not a game of technicalities, it is equally true that
every case must be prosecuted in accordance with the prescribed procedure
to ensure an orderly and speedy administration of justice. Party litigants and
their counsel are well advised to abide by, rather than flaunt, procedural
rules for these rules illumine the path of the law and rationalize the pursuit
of justice.[17]
Aside from ruling on this procedural issue, the Court shall also resolve
the other issues presented by Land Bank, specifically as regards private
134
respondents alleged failure to exhaust administrative remedies and the
question of just compensation.
Land Bank avers that private respondents should have sought the
reconsideration of the DARs valuation instead of filing a petition to fix just
compensation with the trial court.
The records reveal that Land Banks contention is not entirely true. In
fact, private respondents did write a letter [18] to the DAR Secretary objecting
to the land valuation summary submitted by the Municipal Agrarian Reform
Office and requesting a conference for the purpose of fixing just
compensation. The letter, however, was left unanswered prompting private
respondents to file a petition directly with the trial court.
[19]
At any rate, in Philippine Veterans Bank v. Court of Appeals, we
declared that there is nothing contradictory between the DARs primary
jurisdiction to determine and adjudicate agrarian reform matters and
exclusive original jurisdiction over all matters involving the implementation
of agrarian reform, which includes the determination of questions of just
compensation, and the original and exclusive jurisdiction of regional trial
courts over all petitions for the determination of just compensation. The first
refers to administrative proceedings, while the second refers to judicial
proceedings.
In accordance with settled principles of administrative law, primary
jurisdiction is vested in the DAR to determine in a preliminary manner the
just compensation for the lands taken under the agrarian reform program,
but such determination is subject to challenge before the courts. The
ADMINLAW CASES
resolution of just compensation cases for the taking of lands under agrarian
reform is, after all, essentially a judicial function.[20]
Thus, the trial did not err in taking cognizance of the case as the
determination of just compensation is a function addressed to the courts of
justice.
Land Banks contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD
27, ergo just compensation should be based on the value of the property as
of that time and not at the time of possession in 1993, is likewise erroneous.
In Office of the President, Malacaang, Manila v. Court of Appeals, [21] we
ruled that the seizure of the landholding did not take place on the date of
effectivity of PD 27 but would take effect on the payment of just
compensation.
Under the factual circumstances of this case, the agrarian reform
process is still incomplete as the just compensation to be paid private
respondents has yet to be settled. Considering the passage of Republic Act
No. 6657 (RA 6657)[22] before the completion of this process, the just
compensation should be determined and the process concluded under the
said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228
having only suppletory effect, conformably with our ruling in Paris v.
Alfeche.[23]
Section 17 of RA 6657 which is particularly relevant, providing as it
does the guideposts for the determination of just compensation, reads as
follows:
135
Sec. 17. Determination of Just Compensation.In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farm-workers and by the Government to the property
as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional
factors to determine its valuation.
It would certainly be inequitable to determine just compensation based
on the guideline provided by PD 27 and EO 228 considering the DARs
failure to determine the just compensation for a considerable length of time.
That just compensation should be determined in accordance with RA 6657,
and not PD 27 or EO 228, is especially imperative considering that just
compensation should be the full and fair equivalent of the property taken
from its owner by the expropriator, the equivalent being real, substantial,
full and ample.[24]
In this case, the trial court arrived at the just compensation due private
respondents for their property, taking into account its nature as irrigated
land, location along the highway, market value, assessors value and the
volume and value of its produce. This Court is convinced that the trial court
correctly determined the amount of just compensation due private
respondents in accordance with, and guided by, RA 6657 and existing
jurisprudence.
WHEREFORE, the petition is DENIED. Costs against petitioner.
ADMINLAW CASES
SO ORDERED.
G.R. No. 140529. September 6, 2001.*
JOSE P. LOPEZ, JR., petitioner, vs. OFFICE OF THE OMBUDS-
MAN, HON. ANIANO A. DESIERTO and HON. MARGARITO P.
GERVACIO, JR. in their official capacities as Ombudsman and Deputy
Ombudsman for Mindanao, respectively, and the Sandi-ganbayan,
respondents.
Remedial Law; Mandamus; Generally the performance of an official act or
duty which necessarily involves the exercise of discretion or judgment
cannot be compelled by mandamus; Rule does not apply in cases where
there is gross abuse of discretion, manifest injustice, or palpable excess of
authority.This Court has held that, while as a general rule, the
performance of an official act or duty, which necessarily involves the
exercise of discretion or judgment, cannot be compelled by mandamus, this
rule does not apply in cases where there is gross abuse of discretion,
manifest injustice, or palpable excess of authority. Thus, in Angchangco,
Jr. vs. Ombudsman and Roque vs. Office of the Ombudsman the writ was
issued in said instances.
Same; Same; Right to a speedy disposition of cases not limited to the
accused in criminal proceedings but extends to all parties in all cases,
including civil and administrative cases, and in all proceedings, including
judicial and quasi-judicial hearings; Any party to a case may demand
expeditious action on all officials who are tasked with the administration of
justice.The constitutional right to a speedy disposition of cases is not
limited to the accused in criminal proceedings but extends to all parties in
all cases, including civil and administrative cases, and in all proceedings,
including judicial and quasi-judicial hearings. Hence, under the
Constitution, any party to a case may demand expeditious action on all
officials who are tasked with the administration of justice.
Same; Same; The right to a speedy disposition of a case, like the right to
speedy trial, is deemed violated only when the proceedings is attended by
vexatious, capricious and oppressive delays; Concept of speedy disposition
is a relative term and must necessarily be a flexible concept.The right to a
speedy disposition of a case, like the right to speedy trial, is deemed
violated only when the proceedings is attended by vexatious, capricious,
and oppressive delays; or when unjustified postponements of the trial are
asked for and secured, or even without cause or justifiable motive a long
period of time is allowed to elapse without the party having his case tried.
136
Equally applicable is the balancing test used to determine whether a Before us is a Petition for Mandamus seeking: 1) the dismissal of
defendant has been denied his right to a speedy trial, or a speedy disposition
Ombudsman Case No. OMB-3-93-2793 (now Criminal Cases Nos. 25247-
of a case for that matter, in which the conduct of both the prosecution and
the defendant is weighed, and such factors as the length of the delay, the 25226); and 2) the issuance of a clearance in favor of petitioner Jose P.
reasons for such delay, the assertion or failure to assert such right by the
Lopez, Jr.
accused, and the prejudice caused by the delay. The concept of speedy
disposition is a relative term and must necessarily be a flexible concept.
Same; Same; Prosecution not bound by the findings of the Commission on The facts as narrated in the memorandum of petitioner are:
Audit and it must rely on its own independent judgment in the
determination of probable cause.True, the prosecution is not bound by the
findings of the COA and it must rely on its own independent judgment in 1. The petitioner is presently the Administrative Officer of the Department
the determination of probable cause. However, we find that the cases are not of Education, Culture and Sports (DECS), Region XII, Cotabato City.
sufficiently complex to justify the length of time for their resolution.
Neither can the long delay in resolving the case under preliminary
investigation be justified on the basis of the number of informations filed Because of the exigency of the service, the petitioner temporarily stays in
before the Sandiganbayan nor of the transactions involved.
Same; Same; Delay in this case disregarded the Ombudsmans duty as Cotabato City although he is a resident of Paraaque City.
mandated by the Constitution and Republic Act No. 6770, to enforce the
criminal liability of government officers or employees in every case where 2. On June 30, 1959, the petitioner started working with the DECS as a
the evidence warrants in order to promote efficient service to the people.
Verily, the delay in this case disregarded the Ombudsmans duty, as classroom teacher. Through hard work, exemplary performance and
mandated by the Constitution and Republic Act No. 6770, to enforce the continuous studies, he was promoted and assigned to different positions
criminal liability of government officers or employees in every case where
the evidence warrants in order to promote efficient service to the people. such as Special Education Teacher; Child and Youth Specialist; 2 nd Lt., 36
The failure of said office to resolve the complaints that have been pending Battalion Combat Team, Philippine Army (Reserved Force); Asst. Director
for almost four years is clearly violative of this mandate and the rights of
petitioner as a public official. In such event, petitioner is entitled to the and concurrent Director, Child and Youth Research Center (now a defunct
dismissal of the cases filed against him. Lopez, Jr. vs. Office of the office); and finally, he was appointed as Administrative Officer V, DECS-
Ombudsman, 364 SCRA 569, G.R. No. 140529 September 6, 2001
Region XII, Cotabato City.
DECISION
3. Among the tasks of the petitioner as Administrative Officer V is to
GONZAGA-REYES, J.: determine whether certain expenses are necessary in the attainment of the
objectives of the DECS-Region XII and to pass upon, review and evaluate
documents and other supporting papers submitted to him in relation to his
duties.

137
ADMINLAW CASES
4. Between 1992 and 1993, DECS-Region XII ordered several pieces of
laboratory equipment and apparati requested by different school divisions of
the region.
5. The concerned officers of DECS-Region XII submitted to the petitioner
the documents covering the transactions.
6. After careful scrutiny of the documents submitted to him, the petitioner
affixed his signature on the disbursements vouchers that were accompanied
by Purchase Orders, Sales Invoices, Delivery/Memorandum Receipts and
proof that the transactions were post audited by the COA Resident Auditor
who found them in order.
7. Disregarding the findings of the COA Resident Auditor - DECS Region
XII, Cotabato City, who post audited the transactions and found them in
order, for reasons of his own, the COA Regional Director formed a Special
Audit Team to investigate and audit the transactions.
8. Without seeking the presence of the concerned officials and employees of
DECS Region XII, the COA Special Audit Team conducted an audit of the
transactions.
9. On December 20, 1993, the members of the COA Special Audit Team
submitted to the COA Regional Director-Region XII, their Joint Affidavit
claiming alleged deficiencies in the transactions of DECS Region XII
implicating thereto the petitioner and some concerned officials and
employees of DECS-Region XII.
ADMINLAW CASES
10. Dispensing conducting an exit conference and inviting the petitioner to
clarify the allegations of the COA Special Audit Team in their Joint
Affidavit-Complaint, in post-haste the COA Regional Directors indorsed it
to the Office of the Ombudsman-Mindanao for preliminary investigation.
11. The Office of Ombudsman-Mindanao docketed the complaint as Case
No. 3-93-27791, entitled Commission on Audit vs. Makil Pundaodaya, et
al., for Falsification of Documents by Public Officers.
12. In her Order dated March 1, 1994, Graft Investigation Officer (GIO)
Marie Dinah Tolentino directed the petitioner to submit a Counter-Affidavit
without informing him of his constitutional right to counsel.
13. On April 14, 1994, without the assistance of counsel, the petitioner
wrote the Office of the Ombudsman-Mindanao requesting for an extension
of ten (10) days from April 19, 1994 to submit his Counter-Affidavit.
14. On April 19, 1994, Atty. Edgardo A. Camello, counsel for Makil
Pundaodaya and the other respondents in Case No. OMB-3-93-8791 filed a
Motion for Extension of Time to submit their Counter-Affidavits.
15. On April 22, 1994, without the assistance of counsel, the petitioner
submitted to the Office of Ombudsman-Mindanao his Counter-Affidavit he
personally prepared denying specifically each and every criminal act
attributed to him by the Commission on Audit.
16. Although the petitioner did not submit any written statement authorizing
Atty. Camello to represent him in Case No. OMB 3-93-8791, the Office of
138
the Ombudsman-Mindanao erroneously assumed or deliberately made to the transactions investigated. In addition, he also submitted to the Office of
appear that he was represented by said attorney. As a consequence thereof, the Ombudsman-Mindanao a Motion for Reconsideration or
the Office of Ombudsman-Mindanao did not notify him of the progress of Reinvestigation reiterating the allegations mentioned in his letter dated June
the preliminary investigation. In fact, it did not issue any order directing 8, 1999. Unfortunately, said Motion for Reconsideration or Reinvestigation
COA, Region XII to furnish him with a copy of the latters Reply-Affidavit, was not acted upon by the Office of the Ombudsman-Mindanao by giving
which explained why petitioner could not be expected to submit a Rejoinder the excuse that its Resolution was already forwarded to Ombudsman
to rebut the issues raised in said Reply-Affidavit; to summon and compel Aniano Desierto.[1]
witnesses to appear and testify before the Graft Investigation Officer or to
bring books, documents and other records relative to the transactions under On the other hand, the facts as narrated in the Memorandum of the

their control and to secure the attendance or presence of any absent or Office of the Ombudsman are as follows:

recalcitrant witness.
Criminal Cases Nos. 25247 to 25276 stemmed from a special audit

17. More than four (4) years after he submitted his Counter-Affidavit, the conducted by the Commission on Audit (COA), Region XII relative to the

petitioner was surprised that, without preliminary investigation and purchase by the Department of Education, Culture and Sports (DECS),

clarificatory question asked, on July 17, 1998, the Office of the Region XII Office, Cotabato City of school equipment and laboratory

Ombudsman-Mindanao terminated the preliminary investigation apparati. The report on the special audit was received by the Office of the

recommending that he, together with the other respondents in Case No. Ombudsman, Mindanao on December 22, 1993. Finding the audit report

OMB 3-93-9791, be prosecuted for violation of Sec. 3(e) and (g) of the sufficient to conduct a preliminary investigation the same was docketed as

Anti-Graft and Corrupt Practices Act. Case No. OMB-3-93-2791.

18. Within the reglementary period, without the assistance of counsel, the In an Order dated March 1, 1994, Graft Investigation Officer (GIO) Marie

petitioner sent a letter to the Office of the Ombudsman-Mindanao dated Dinah Tolentino directed the concerned public officials, among whom was

June 8, 1999 seeking the reconsideration of the Resolution in Case No. herein petitioner, to submit their Counter-Affidavits and controverting

OMB 33-93-2791 wherein he stressed that he was deprived of due process evidences within ten days from receipt of the Order and to furnish a copy of

and that there was inordinate delay in the resolution of the preliminary their counter-Affidavits to the complainant. The latter was given the same

investigation; and there was no exit conference wherein he could have period of ten (10) days to file their reply to the Counter-Affidavits.

explained to the Graft Investigation Officer his exculpatory participation in

139
ADMINLAW CASES
On April 19, 1994 the Office of the Ombudsman, Mindanao received a
pleading denominated as APPEARANCE With Motion for Extension of
Time to Submit Counter-Affidavits from Atty. Edgardo A. Camello, counsel
for the respondents in Case No. OMB-3-93-2791. The Office of the
Ombudsman, Mindanao granted the motion for extension and gave the
respondents until May 4, 1994 within which to submit their Counter-
Affidavits.
On May 10, 1994 the Office of the Ombudsman, Mindanao received the
Counter-Affidavits of the respondents.
On August 2, 1994 the Office of the Ombudsman, Mindanao was
informed through the letter of COA Director Eugenio G. Fernandez that the
COA was not furnished by the respondents in Case No. OMB-3-93-2791 of
their Counter-Affidavits.
Subsequently, GIO Tolentino issued an Order dropping Alimot Lao
Arumpac from the case in view of his death. The COA on the other hand
was directed to submit its Reply-Affidavit within ten days from receipt of
the Order.
On January 11, 1995 the Office of the Ombudsman, Mindanao received a
telegram from COA, Region XII Office requesting that it be allowed until
February 29, 1995 within which to submit its Reply-Affidavit on the ground
that the audit team leader and members who conducted the special audit of
DECS, Region XII Office were preparing for their annual audit report.
ADMINLAW CASES
On February 29, 1995 the Office of the Ombudsman, Mindanao received
the Reply-Affidavit of COA.
In a Resolution dated July 17, 1998 GIO Rachelle L. Ladrera recommended
the filing of thirty (30) Informations against petitioner, Makil U.
Pundaodaya, Jose T. Navera, Rogelio de los Reyes, Daud M. Adiong,
Napoleon O. Cedeno, Laga S. Mangelen and Mama S. Macoming. The said
recommendation was approved by public respondents Deputy Ombudsman
for Mindanao Margarito P. Gervacio on February 27, 1999, and by the
Honorable Ombudsman on April 30, 1999.
The thirty Informations docketed as Criminal Cases Nos. 25247 to 25276
were filed with the Sandiganbayan and raffled to the respondent court on
May 5, 1999.
On July 27, 1999 petitioner filed with the respondent court a motion for the
reduction of the bail. The motion was approved by the respondent court in
an Order dated August 4, 1999.[2]
In his Memorandum, petitioner presents before this Court the sole
issue of: Whether or not there was undue and unjustifiable delay on the part
of the Ombudsman in resolving the complaint filed against the petitioner
which violated his constitutional right to a speedy disposition of the
Complaint against him; and whether or not such undue and unjustifiable
delay in resolving the Complaint against the petitioner would warrant its
dismissal.[3] Petitioners main argument is that the complaint against
petitioner, Case No. OMB 3-93-2793, was filed with the Office of the
Ombudsman-Mindanao on December 10, 1993 and was resolved only on
140
April 30, 1998,[4] resulting in a delay of 4 years, 4 months and 10 days. In
addition, petitioner argues that he was deprived of due process because he
did not engage a certain Atty. Edgardo Camello who filed an Appearance
with Motion for Extension of Time to Submit Counter-Affidavits on behalf
of the respondents in Case No. OMB-3-93-2791; that he was not advised by
the Graft Investigation Officer of his right to attorney; and that he filed his
counter-affidavit without the assistance of counsel. On the other hand,
respondent Office of the Ombudsman argues that petitioners cannot, by this
special civil action for mandamus, compel the ombudsman to dismiss the
criminal charges filed against them, since such dismissal involves a
discretionary, not a ministerial, duty.
First, we shall discuss the propriety of mandamus as a remedy, an
issue which is not novel. This Court has held that, while as a general rule,
the performance of an official act or duty, which necessarily involves the
exercise of discretion or judgment, cannot be compelled by mandamus, this
rule does not apply in cases where there is gross abuse of discretion,
[5]
manifest injustice, or palpable excess of authority. Thus, in Angchangco,
Jr. vs. Ombudsman[6] and Roque vs. Office of the Ombudsman [7] the writ was
issued in said instances.
Second, we shall determine if the exceptions cited apply to this
case. The Office of the Ombudsman narrates that the verified audit report of
the COA special audit team was received on December 22, 1993, and
finding the same sufficient in form and substance was docketed as OMB
Case No. 34-93-2791. On the basis thereof, a preliminary investigation was
conducted. On March 1, 1994, the respondents were ordered to file their
ADMINLAW CASES
counter-affidavits. On May 10, 1994, the Office of the Ombudsman
received the counter-affidavits of respondents. On February 29, 1995, the
Office of the Ombudsman received the reply-affidavit of COA. In a
Resolution dated July 17, 1998, graft investigation officer Rachelle L.
Ladrera recommended the filing of thirty (30) informations against
petitioner, Makil U. Pundaodaya, Jose T. Navera, Rogelio de los Reyes,
Daud M. Adiong, Napoleon O. Cedeno, Laga S. Mangelen and Mama S.
Macoming. The said recommendation was approved by Deputy
Ombudsman for Mindanao Margarito P. Gervacio on February 27, 1999,
and by Ombudsman Aniano Desierto on April 30, 1999. The informations
were filed with the Sandiganbayan on May 5, 1999. In its memorandum, the
Office of the Ombudsman justified the delay in the conduct of the
preliminary investigation and subsequently, in the filing of the informations
by stating that:
Records of Case No. OMB 3-93-2791 will show that petitioner, thru his
counsel, filed on April 19, 1994 with the Office of the Ombudsman,
Mindanao for an extension of time to file his Counter-Affidavit. Petitioner
submitted his Counter-Affidavit only on May 11, 1994.
However, in a letter dated August 2, 1994 the Office of the Ombudsman,
Mindanao was informed by complainant COA that it was not furnished with
a copy of the Counter-Affidavits of the respondents in Case No. OMB-3-93-
2791 in complete disregard of the Order of GIO Tolentino.
Hence, the Office of the Ombudsman, Mindanao furnished the COA with a
copy of the Counter-Affidavits and ordered the same office to submit its
141
reply thereto within ten (10) days. It filed its Reply-Affidavit on February
28, 1995.
It will be noted that the Office of the Ombudsman, Mindanao directed the
COA to furnish the respondents in Case No. OMB 3-93-2791 with a copy of
their Reply-Affidavit to afford the latter an opportunity to controvert the
allegations contained therein. Petitioner however, and his other co-
respondents did not file any pleading with, or notified the Office of the
Ombudsman, Mindanao that they were waiving their right to refute the
contents of the Reply-Affidavit. Thus, it is clear that petitioners averment
that this case has been pending for more than six (6) years has no basis.
It should also be considered that there were several transactions involved in
Case No. OMB 3-93-2791. This fact is proven by the thirty (30)
Informations filed before the respondent court. Added to this is the fact that
from the time the July 17, 1998 Resolution was approved by public
respondent Deputy Ombudsman Gervacio in his office in Mindanao the
records of the case still has to be sent to Manila for the review of the
Ombudsman. The basic rule therefore that in applying the constitutional
guarantee of the right to speedy disposition of cases particular regard must
also be take on the facts and circumstances peculiar to each case, finds
meaning herein.[8]
We find for petitioner.
Article III of the Constitution provides that:
ADMINLAW CASES
Sec. 16. All persons shall have the right to a speedy disposition of their
cases before all judicial, quasi-judicial, or administrative bodies.
The constitutional right to a speedy disposition of cases is not limited
to the accused in criminal proceedings but extends to all parties in all cases,
including civil and administrative cases, and in all proceedings, including
judicial and quasi-judicial hearings.[9] Hence, under the Constitution, any
party to a case may demand expeditious action on all officials who are
tasked with the administration of justice.[10]
However, the right to a speedy disposition of a case, like the right to
speedy trial, is deemed violated only when the proceedings is attended by
vexatious, capricious, and oppressive delays; or when unjustified
postponements of the trial are asked for and secured, or even without cause
or justifiable motive a long period of time is allowed to elapse without the
party having his case tried. Equally applicable is the balancing test used to
determine whether a defendant has been denied his right to a speedy trial, or
a speedy disposition of a case for that matter, in which the conduct of both
the prosecution and the defendant is weighed, and such factors as the length
of the delay, the reasons for such delay, the assertion or failure to assert such
right by the accused, and the prejudice caused by the delay. The concept of
speedy disposition is a relative term and must necessarily be a flexible
concept.[11]
In this case, the preliminary investigation was resolved close to four
(4) years from the time all the counter and reply affidavits were submitted
to the Office of the Ombudsman. After the last reply-affidavit was filed on
February 28, 1995, it was only on July 17, 1998 that a resolution was issued
142
recommending the filing of the corresponding criminal informations against
the petitioner and the others. It took eight months or on February 27, 1999
for Deputy Ombudsman Margarito P. Gervacio, Jr. to approve the same and
close to another year or on April 30, 1999 for Ombudsman Aniano Desierto
to approve the recommendation. During this interval, no incidents presented
themselves for resolution and the delay could only be attributed to the
inaction on the part of the investigating officials. Indeed, we find that
without cause or justifiable motive, a long period of time was allowed to
elapse at the preliminary investigation stage before the informations were
filed.
True, the prosecution is not bound by the findings of the COA and it
must rely on its own independent judgment in the determination of probable
[12]
cause. However, we find that the cases are not sufficiently complex to
justify the length of time for their resolution. Neither can the long delay in
resolving the case under preliminary investigation be justified on the basis
of the number of informations filed before the Sandiganbayan nor of the
transactions involved. The thirty informations consist of sixteen (16) counts
of violations of Section 3 (g) of RA 3019 relative to the overpricing and
lack of public bidding of laboratory apparatus and school equipment; while
the fourteen (14) counts are for violations of Section 3 (e) of the same law
relative to the certification in the inspection reports that the subject items
have already been delivered and received, when in fact they have not yet
been actually delivered and received, in order to facilitate payment to the
suppliers. There is no statement that voluminous documentary and
testimonial evidence were involved. On the contrary, the Office
Ombudsman itself claimed in its memorandum filed before this Court that
ADMINLAW CASES
the Complaint and the Counter-Affidavits submitted by the complainant and
the accused respectively, as well as the documents on hand were sufficient
to establish the existence of probable cause for violation of Section 3 (e)
and (g) of RA 3019. Hence, a clarificatory hearing was no longer
conducted.Indeed, it appears that the COA special audit team had already
come up and provided the Office of the Ombudsman with the facts and
figures on the alleged overpricing, lack of public bidding and irregular
inspection reports, so much so that a delay of almost four years in
terminating the preliminary investigation is not justified.
Verily, the delay in this case disregarded the Ombudsmans duty, as
mandated by the Constitution and Republic Act No. 6770, to enforce the
criminal liability of government officers or employees in every case where
the evidence warrants in order to promote efficient service to the people.
[13]
The failure of said office to resolve the complaints that have been
pending for almost four years is clearly violative of this mandate and the
rights of petitioner as a public official. In such event, petitioner is entitled to
the dismissal of the cases filed against him.
In Tatad vs. Sandiganbayan,[14] this Court dismissed the informations
pending before the Sandiganbayan, after finding the delay of three years in
the termination of the preliminary investigation by the Tanodbayan to be
violative of the constitutional right of the accused to a speedy disposition of
cases. It was held therein:
xxx. A delay of close to three (3) years can not be deemed reasonable or
justifiable in the light of the circumstances obtaining in the case at bar. We
are not impressed by the attempt of the Sandiganbayan to sanitize the long
143

delay by indulging in the speculative assumption that the delay may be due
to a painstaking and gruelling scrutiny by the Tanodbayan as to whether the
evidence presented during the preliminary investigation merited prosecution
of a former high ranking government official. In the first place, such a
statement suggests a double standard of treatment, which must be
emphatically rejected. Secondly, three out of the five charges against the
petitioner were for his alleged failure to file his sworn statement of assets
and liabilities required by Republic Act No. 3019, which certainly did not
involve complicated legal and factual issues necessitating such painstaking
and gruelling scrutiny as would justify a delay of almost three years in
terminating the preliminary investigation. The other two charges relating to
the alleged bribery and alleged giving of unwarranted benefits to a relative,
while presenting more substantial legal and factual issues, certainly do not
warrant or justify the period of three years, which it took the Tanodbayan to
resolve the case.
Similarly, we hold that the circumstances obtaining in the instant case
do not warrant or justify the length of time, that is four years, it took the
Ombudsman to resolve the preliminary investigation. What glares from the
pleadings of both the petitioner and the public respondent Ombudsman is
that from the submission of the last reply-affidavit, there was an
unexplained interval or inactivity of close to four years, prior to the issuance
of the resolution finding probable cause and directing the filing of the
corresponding informations.
Lastly, petitioner prays for the dismissal of Ombudsman Case No.
OMB-3-93-2791, and this Court, applying the ruling in the Roque case,
ADMINLAW CASES
[15]
citing Tatad,[16]likewise resolves to directly dismiss the informations
already filed before the Sandiganbayan against petitioner in the interest of
the speedy disposition of cases and considering that the long and
unexplained delay in the resolution of the criminal complaints against
petitioner was not corrected by the eventual filing of the informations.
WHEREFORE, the Petition for Mandamus is GRANTED and
Ombudsman Case No. OMB-3-93-2791 is accordingly DISMISSED. The
Office of the Ombudsman is further directed to issue the corresponding
clearance in favor of petitioner.
SO ORDERED.
G.R. No. 159145. April 29, 2005.*
DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD (DARAB) of the DEPARTMENT OF AGRARIAN REFORM
(DAR), REPRESENTED by DAR SECRETARY ROBERTO M.
PAGDANGANAN, petitioner, vs. JOSEFINA S. LUBRICA, in her
capacity as Assignee of the rights and interest of FEDERICO SUNTAY,
respondent.
Agrarian Relations; Department of Agrarian Reform Adjudication Board
(DARAB); Administrative Law; Jurisdictions; Certiorari; Words and
Phrases; The DARAB does not have jurisdiction over petitions for
certiorari; Jurisdiction, or the legal power to hear and determine a cause or
causes of action, must exist as a matter of lawthe authority to issue writs
of certiorari, prohibition, and mandamus involves the exercise of original
jurisdiction which must be expressly conferred by the Constitution or by
law.This Court affirms the ruling of the Court of Appeals that the
DARAB does not have juris-diction over Land Banks petition for
certiorari. Jurisdiction, or the legal power to hear and determine a cause or
causes of action, must exist as a matter of law. It is settled that the authority
to issue writs of certiorari, prohibition, and mandamus involves the exercise
of original jurisdiction which must be expressly conferred by the
Constitution or by law. It is never derived by implication. Indeed, while the
power to issue the writ of certiorari is in some instance conferred on all
144
courts by constitutional or statutory provisions, ordinarily, the particular
courts which have such power are expressly designated.
Same; Same; Same; Same; Same; In the absence of a specific statutory
grant of jurisdiction to issue the said extraordinary writ of certiorari, the
DARAB, as a quasi-judicial body with only limited jurisdiction, cannot
exercise jurisdiction over a petition for certiorarineither the quasi-judicial
authority of the DARAB nor its rulemaking power justifies such self-
conferment of authority.Pursuant to Section 17 of Executive Order (E.O.)
No. 229 and Section 13 of E.O. No. 129-A, the DARAB was created to act
as the quasi-judicial arm of the DAR. With the passage of R.A. No. 6657,
the adjudicatory powers and functions of the DAR were further delineated
when, under Section 50 thereof, it was vested with the primary jurisdiction
to determine and adjudicate agrarian reform matters and exclusive original
jurisdiction over all matters involving the implementation of agrarian
reform except those falling under the exclusive jurisdiction of the
Department of Agriculture, Department of Environment and Natural
Resources and the Special Agrarian Courts. The same provision granted the
DAR the power to summon witnesses, administer oaths, take testimony,
require submission of reports, compel the production of books and
documents and answers to interrogatories and issue subpoena and subpoena
duces tecum, and enforce its writs through sheriffs or other duly deputized
officers, and the broad power to adopt a uniform rule of procedure to
achieve a just, expeditious and inexpensive determination of cases before it.
Section 13 of E.O. No. 129-A also authorized the DAR to delegate its
adjudicatory powers and functions to its regional offices. To this end, the
DARAB adopted its Rules of Procedure, where it delegated to the RARADs
and PARADs the authority to hear, determine and adjudicate all agrarian
cases and disputes, and incidents in connection therewith, arising within
their assigned territorial jurisdiction. In the absence of a specific statutory
grant of jurisdiction to issue the said extraordinary writ of certiorari, the
DARAB, as a quasi-judicial body with only limited jurisdiction, cannot
exercise jurisdiction over Land Banks petition for certiorari. Neither the
quasi-judicial authority of the DARAB nor its rule-making power justifies
such self-conferment of authority.
Same; Same; Same; Same; Same; The quantum of judicial or quasi-judicial
powers which an administrative agency may exercise is defined in the
enabling act of such agency.In general, the quantum of judicial or quasi-
judicial powers which an administrative agency may exercise is defined in
the enabling act of such agency. In other words, the extent to which an
administrative entity may exercise such powers depends largely, if not
ADMINLAW CASES
wholly, on the provisions of the statute creating or empowering such
agency. The grant of original jurisdiction on a quasi-judicial agency is not
implied. There is no question that the legislative grant of adjudicatory
powers upon the DAR, as in all other quasi-judicial agencies, bodies and
tribunals, is in the nature of a limited and special jurisdiction, that is, the
authority to hear and determine a class of cases within the DARs
competence and field of expertise. In conferring adjudicatory powers and
functions on the DAR, the legislature could not have intended to create a
regular court of justice out of the DARAB, equipped with all the vast
powers inherent in the exercise of its jurisdiction. The DARAB is only a
quasi-judicial body, whose limited jurisdiction does not include authority
over petitions for certiorari, in the absence of an express grant in R.A. No.
6657, E.O. No. 229 and E.O. No. 129-A.
Same; Same; Same; Same; Same; The supervisory authority of the DARAB
over its delegates, namely, the Regional Agrarian Reform Adjudicators
(RARADs) and Provincial Agrarian Reform Adjudicators (PARADs),
should be exercised within the context of administrative supervision and/or
control.DARAB takes exception to the general rule that jurisdiction over
special civil actions must be expressly conferred by law before a court or
tribunal can take cognizance thereof. It believes that this principle is
applicable only in cases where the officials/entities contemplated to be
subject thereof are not within the administrative power/competence, or in
any manner under the control or supervision, of the issuing authority. This
Court is not persuaded. The function of a writ of certiorari is to keep an
inferior court within the bounds of its jurisdiction or to prevent it from
committing such a grave abuse of discretion amounting to excess of
jurisdiction. In the instant case, the RARAD issued the order of finality and
the writ of execution upon the belief that its decision had become final and
executory, as authorized under Section 1, Rule XII of the DARAB Rules of
Procedure. It is worth noting that in its petition, DARAB maintains that in
preventing the RARAD from implementing its decision, it merely
exercised its residual power of supervision, to insure that the RARAD
acted within the bounds of delegated authority and/or prevent/avoid her
from committing grave and serious disservice to the Program. DARABs
action, therefore, is a rectification of what it perceived as an abuse of the
RARADs jurisdiction. By its own admission, DARAB took upon itself the
power to correct errors of jurisdiction which is ordinarily lodged with the
regular courts by virtue of express constitutional grant or legislative
enactments. This Court recognizes the supervisory authority of the DARAB
over its delegates, namely, the RARADs and PARADs, but the same should
145
be exercised within the context of administrative supervision and/or control. Before this Court is an appeal by certiorari under Rule 45 of the 1997
In the event that the RARADs or PARADs act beyond its adjudicatory
Rules of Civil Procedure, seeking the reversal of the Decision[1] of the Court
functions, nothing prevents the aggrieved party from availing of the
extraordinary remedy of certiorari, which is ordinarily within the of Appeals in CA-G.R. SP No. 66710 granting herein respondents petition
jurisdiction of the regular courts.
for prohibition and its Resolution[2] denying herein petitioners motion for
Same; Same; Same; Same; That the statutes allowed the DARAB to adopt
to its own rules of procedure does not permit it with unbridled discretion to reconsideration.
grant itself jurisdiction ordinarily conferred only by the Constitution or by
law.That the statutes allowed the DARAB to adopt its own rules of
procedure does not permit it with unbridled discretion to grant itself This Court adopts the appellate courts narration of facts.
jurisdiction ordinarily conferred only by the Constitution or by law.
Procedure, as distinguished from jurisdiction, is the means by which the On August 4, 2000, Federico Suntay, now deceased, filed a petition for
power or authority of a court to hear and decide a class of cases is put into
action. Rules of procedure are remedial in nature and not substantive. They fixing and payment of just compensation under Presidential Decree No. 27
cover only rules on pleadings and practice. against the Department of Agrarian Reform (DAR), the DAR Regional
Same; Same; Parties; Prohibition; The DARAB is composed of the senior
officials of the Department of Agrarian Reform (DAR), who are guided by Director for Region IV and the Land Bank of the Philippines (Land Bank).
the States main policy in agrarian reform when resolving disputes before [3]
Docketed as DARAB Case No. V-0405-0001-00, the case was filed
the DARAB, and its interest in the case is not purely legal but also a matter
of governanceit cannot be strictly considered as a nominal party which before the Office of the Regional Agrarian Reform Adjudicator (RARAD)
must refrain from taking an active part in the prohibition proceedings before and raffled to Adjudicator Conchita Mias. Subject of the case was Suntays
the Court of Appeals.While the Court of Appeals held that the DARAB
should not have participated in the proceedings before said court by filing a landholdings covering a total area of 948.1911 hectares situated in
comment in CA-G.R. SP No. 66710, this Court considers satisfactory the Sablayan, Occidental Mindoro and embraced under Transfer Certificate of
explanation of the DARAB that it has a peculiar interest in the final
outcome of this case. As DARAB pointed out, while it is only an adjunct of, Title T-31. The DAR and Land Bank determined its value at Four Million
it is at the same time not totally independent from it. The DARAB is Two Hundred Fifty-One Thousand One Hundred Forty-One Pesos and
composed of the senior officials of the DAR, who are guided by the States
main policy in agrarian reform when resolving disputes before the DARAB. 68/100 (P4,251,141.68) or Four Thousand Four Hundred Ninety-Seven
The DARABs interest in the case is not purely legal but also a matter of Pesos and 50/100 (P4,497.50) per hectare, which valuation according to
governance; thus, it cannot be strictly considered as a nominal party which
must refrain from taking an active part in the proceedings. Department of Suntay, was unconscionably low and tantamount to taking of property
Agrarian Reform Adjudication Board (DARAB) vs. Lubrica, 457 SCRA without due process of law.[4]
800, G.R. No. 159145 April 29, 2005

DECISION After summary administrative proceedings, the RARAD rendered

a Decision[5] on January 24, 2001 in favor of Suntay, ordering Land Bank to
TINGA, J.: pay the former the amount of One Hundred Fifty-Seven Million Five
Hundred Forty-One Thousand Nine Hundred Fifty-One Pesos & 30/100

146
ADMINLAW CASES
(P157,541,951.30) as just compensation for the taking of a total of 948.1911
hectares of Suntays properties. Land Bank sought reconsideration of the
RARAD decision for not being supported by clear and convincing evidence
and for its conclusions which are contrary to law. However, in
[6]
an Order dated March 14, 2001, the RARAD denied Land Banks motion.
Land Bank received a copy of the order of denial on March 26, 2001.[7]
the special agrarian court was filed beyond the fifteen-day reglementary
period in violation of Section 11, Rule XIII of the DARAB Rules of
Procedure.[13] In its July 10, 2001 Order,[14] the RARAD denied LBPs
motion for reconsideration of the order of finality. On July 18, 2001, the
RARAD issued a Writ of Execution,[15] directing the Regional Sheriff of
DARAB-Region IV to implement its January 24, 2001 Decision.

On April 20, 2001, Land Bank filed a petition for just Thus, Land Bank filed a Petition for Certiorari with Prayer for the
compensation[8] with the Regional Trial Court (RTC) of San Jose, Issuance of Temporary Restraining Order/Preliminary Injunction[16]before
Occidental Mindoro against Suntay, DAR, and RARAD. The petition, the DARAB on September 12, 2001 against Suntay and RARAD. The
docketed as Agrarian Case No. R-1241, prayed that just compensation for petition, docketed as DSCA No. 0252, prayed for the nullification of the
the taking of Suntays landholdings be declared in the amount of Four following issuances of the RARAD: [1] the January 24,
Million Two Hundred Fifty One Thousand, One Hundred Forty-One Pesos 2001 Decision directing Land Bank to pay Suntay just compensation in the
(P4,251,141.00). Suntay moved to dismiss the petition on the grounds of amount of P157,541,951.30; [2] the Order dated May 22, 2001 declaring
lack of capacity to sue, lack of cause of action, and res judicata. After Land the finality of the aforesaid Decision; [3] the July 10, 2001 Order denying
Bank filed its comment on Suntays motion to dismiss, the RTC, sitting as a Land Banks motion for reconsideration; and [4] the Writ of Execution dated
special agrarian court, dismissed on August 6, 2001 Land Banks petition for July 18, 2001. On September 12, 2001, the DARAB issued
[9] [17]
failure to pay the docket fees within the reglementary period. The special an Order enjoining the RARAD from momentarily implementing its
agrarian court also denied Land Banks Motion for Reconsideration for January 24, 2001 Decision and directing the parties to attend the hearing for
[10]
being pro-forma. Thereafter, Land Bank appealed the order of dismissal the purpose of determining the propriety of issuing a preliminary/permanent
to the Court of Appeals by filing a Notice of Appeal with the special injunction.
agrarian court.[11]
On September 20, 2001, Josefina Lubrica, the successor-in-interest of
While the petition for just compensation was pending with the special Suntay, filed with the Court of Appeals a Petition for Prohibition,
agrarian court, upon motion of Suntay, the RARAD issued an Order[12]on [18]
docketed as CA-G.R. SP No. 66710. The petition, impleading DARAB
May 22, 2001, declaring its January 24, 2001 Decision as final and and Land Bank as respondents, sought to enjoin DARAB from further
executory after noting that Land Banks petition for just compensation with proceeding with DSCA No. 0252, mainly on the theory that Republic Act

147
ADMINLAW CASES
(R.A.) No. 6657, which confers adjudicatory functions upon the DAR, does
not grant DAR jurisdiction over special civil actions for certiorari. On the
same day, the Court of Appeals granted Lubricas prayer for a temporary
restraining order.[19] This notwithstanding, DARAB issued a Writ of
[20]
Preliminary Injunction on October 3, 2001, directing RARAD not to
implement its January 24, 2001 Decision and the other orders in relation
thereto, including the Writ of Execution.
[21]
On October 8, 2001, DARAB filed a Comment in CA-G.R. SP No.
66710, arguing that the writ of certiorari/injunction was issued under its
power of supervision over its subordinates/delegates like the PARADs and
RARADs to restrain the execution of a decision which had not yet attained
finality. In an omnibus motion filed on October 10, 2001, Lubrica sought to
nullify the Writ of Preliminary Injunction issued by DARAB in DSCA No.
comment only when specifically and expressly directed to do so. The
appellate court also ruled that DARABs exercise of jurisdiction over the
petition for certiorari had no constitutional or statutory basis. It rejected
DARABs contention that the issuance of the writ of certiorari arose from its
power of direct and functional supervision over the RARAD. In sum, the
Court of Appeals declared that DARAB was without jurisdiction to take
cognizance of DSCA No. 0252 and issued a Writ of Prohibition, perpetually
enjoining DARAB from proceeding with DSCA No. 0252 and ordering its
dismissal.
Hence, the instant petition, in which DARAB assigns the following
errors to the Court of Appeals:
The Honorable Court of Appeals erred when it ruled:

0252 and to cite the DARAB for contempt.[22] Land Bank also filed
1. THAT THE PETITIONER (DARAB), BEING A FORMAL PARTY,
its Comment[23] on October 15, 2001, raising the prematurity of Lubricas
SHOULD NOT HAVE FILED COMMENT TO THE PETITION AND
petition for prohibition. It contended that the issue of whether or not
INSTEAD, IT SHOULD HAVE BEEN CO-RESPONDENT LAND BANK,
DARAB can take cognizance of Land Banks petition for certiorari may be
THE FINANCIAL INTERMEDIARY OF CARP;
elevated to the Office of the DAR Secretary, in accordance with the doctrine
of exhaustion of administrative remedies. Land Bank also questioned
2. THAT PETITIONER HAS NO JURISDICTION OVER DSCA 0252
Lubricas personality to file the petition for prohibition considering that she
WHICH IS A PETITION FOR CERTIORARI; AND
never intervened in the proceedings before the RARAD.

3. THAT WRIT OF PRELIMINARY INJUNCTION ISSUED BY DARAB

The Court of Appeals rendered the assailed Decision[24] on August 22,
IN DSCA 0252 WAS NULL AND VOID FOR HAVING BEEN ISSUED
2002. The appellate court ruled that petitioner DARAB had no personality
IN VIOLATION OF THE TEMPORARY RESTRAINING ORDER IT
to file a comment on Lubricas petition for prohibition filed with the Court
ISSUED.[25]
of Appeals because DARAB was a mere formal party and could file a

148
ADMINLAW CASES
 This Court affirms the ruling of the Court of Appeals that the DARAB
does not have jurisdiction over Land Banks petition for certiorari.
Jurisdiction, or the legal power to hear and determine a cause or
causes of action, must exist as a matter of law.[26] It is settled that the
authority to issue writs of certiorari, prohibition, and mandamus involves
the exercise of original jurisdiction which must be expressly conferred by
[27]
the Constitution or by law. It is never derived by implication. Indeed,
while the power to issue the writ of certiorari is in some instance conferred
on all courts by constitutional or statutory provisions, ordinarily, the
[28]
particular courts which have such power are expressly designated.
Pursuant to Section 17 of Executive Order (E.O.) No. 229 and Section
13 of E.O. No. 129-A, the DARAB was created to act as the quasi-judicial
arm of the DAR. With the passage of R.A. No. 6657, the adjudicatory
powers and functions of the DAR were further delineated when, under
Section 50 thereof, it was vested with the primary jurisdiction to determine
and adjudicate agrarian reform matters and exclusive original jurisdiction
over all matters involving the implementation of agrarian reform except
those falling under the exclusive jurisdiction of the Department of
Agriculture, Department of Environment and Natural Resources and the
Special Agrarian Courts. The same provision granted the DAR the power to
summon witnesses, administer oaths, take testimony, require submission of
reports, compel the production of books and documents and answers to
interrogatories and issue subpoena and subpoena duces tecum, and enforce
its writs through sheriffs or other duly deputized officers, and the broad
power to adopt a uniform rule of procedure to achieve a just, expeditious
ADMINLAW CASES
and inexpensive determination of cases before it. [29] Section 13 of E.O. No.
129-A also authorized the DAR to delegate its adjudicatory powers and
functions to its regional offices.
To this end, the DARAB adopted its Rules of Procedure, where it
delegated to the RARADs and PARADs the authority to hear, determine and
adjudicate all agrarian cases and disputes, and incidents in connection
therewith, arising within their assigned territorial jurisdiction. [30] In the
absence of a specific statutory grant of jurisdiction to issue the said
extraordinary writ of certiorari, the DARAB, as a quasi-judicial body with
only limited jurisdiction, cannot exercise jurisdiction over Land Banks
petition for certiorari. Neither the quasi-judicial authority of the DARAB
nor its rule-making power justifies such self-conferment of authority.
In general, the quantum of judicial or quasi-judicial powers which an
administrative agency may exercise is defined in the enabling act of such
agency. In other words, the extent to which an administrative entity may
exercise such powers depends largely, if not wholly, on the provisions of the
statute creating or empowering such agency.[31] The grant of original
jurisdiction on a quasi-judicial agency is not implied. There is no question
that the legislative grant of adjudicatory powers upon the DAR, as in all
other quasi-judicial agencies, bodies and tribunals, is in the nature of a
limited and special jurisdiction, that is, the authority to hear and determine a
class of cases within the DARs competence and field of expertise. In
conferring adjudicatory powers and functions on the DAR, the legislature
could not have intended to create a regular court of justice out of the
DARAB, equipped with all the vast powers inherent in the exercise of its
149
jurisdiction. The DARAB is only a quasi-judicial body, whose limited
jurisdiction does not include authority over petitions for certiorari, in the
absence of an express grant in R.A. No. 6657, E.O. No. 229 and E.O. No.
129-A.
In addition, Rule XIII, 11 of the DARAB Rules of Procedure allows a
party who does not agree with the RARADs preliminary valuation in land
compensation cases fifteen (15) days from receipt of notice to bring the
matter to the proper special agrarian court, thus:
SECTION 11. Land Valuation and Preliminary Determination and Payment
of Just Compensation. The decision of the Adjudicator on land valuation
and preliminary determination and payment of just compensation shall not
be appealable to the Board but shall be brought directly to the Regional
Trial Courts designated as Special Agrarian Courts within fifteen (15) days
from receipt of the notice thereof. Any party shall be entitled to only one
motion for reconsideration.
In Philippine Veterans Bank vs. Court of Appeals,[32] this Court
affirmed the dismissal of a landowners petition for judicial determination of
just compensation for its failure to file the petition within the fifteen-day
reglementary period provided under Rule XIII, 11 of the DARAB Rules of
Procedure.
In the instant case, Land Bank received a copy of the RARAD order
denying its motion for reconsideration on March 26, 2001. Land Bank filed
the petition for just compensation with the special agrarian court only on
April 20, 2001, which is doubtlessly beyond the fifteen-day reglementary
ADMINLAW CASES
period. Thus, the RARAD Decision had already attained finality in
accordance with the afore-quoted rule, notwithstanding Land Banks
recourse to the special agrarian court.
DARAB takes exception to the general rule that jurisdiction over
special civil actions must be expressly conferred by law before a court or
tribunal can take cognizance thereof. It believes that this principle is
applicable only in cases where the officials/entities contemplated to be
subject thereof are not within the administrative power/competence, or in
any manner under the control or supervision, of the issuing authority.
This Court is not persuaded. The function of a writ of certiorari is to
keep an inferior court within the bounds of its jurisdiction or to prevent it
from committing such a grave abuse of discretion amounting to excess of
jurisdiction.[33] In the instant case, the RARAD issued the order of finality
and the writ of execution upon the belief that its decision had become final
and executory, as authorized under Section 1, Rule XII of the DARAB
Rules of Procedure. It is worth noting that in its petition, DARAB maintains
that in preventing the RARAD from implementing its decision, it merely
exercised its residual power of supervision, to insure that the RARAD acted
within the bounds of delegated authority and/or prevent/avoid her from
committing grave and serious disservice to the Program.[34] DARABs action,
therefore, is a rectification of what it perceived as an abuse of the RARADs
jurisdiction. By its own admission, DARAB took upon itself the power to
correct errors of jurisdiction which is ordinarily lodged with the regular
courts by virtue of express constitutional grant or legislative enactments.
150
 This Court recognizes the supervisory authority of the DARAB over
its delegates, namely, the RARADs and PARADs, but the same should be
exercised within the context of administrative supervision and/or control. In
the event that the RARADs or PARADs act beyond its adjudicatory
functions, nothing prevents the aggrieved party from availing of the
extraordinary remedy of certiorari, which is ordinarily within the
jurisdiction of the regular courts.
That the statutes allowed the DARAB to adopt its own rules of
procedure does not permit it with unbridled discretion to grant itself
jurisdiction ordinarily conferred only by the Constitution or by law.
Procedure, as distinguished from jurisdiction, is the means by which the
power or authority of a court to hear and decide a class of cases is put into
action. Rules of procedure are remedial in nature and not substantive. They
cover only rules on pleadings and practice.[35]
While the Court of Appeals held that the DARAB should not have
participated in the proceedings before said court by filing a comment in
CA-G.R. SP No. 66710, this Court considers satisfactory the explanation of
the DARAB that it has a peculiar interest in the final outcome of this case.
As DARAB pointed out, while it is only an adjunct of, it is at the same time
not totally independent from it. The DARAB is composed of the senior
officials of the DAR, who are guided by the States main policy in agrarian
reform when resolving disputes before the DARAB. The DARABs interest
in the case is not purely legal but also a matter of governance; thus, it
cannot be strictly considered as a nominal party which must refrain from
taking an active part in the proceedings.
ADMINLAW CASES
WHEREFORE, the instant petition is DENIED. No costs.
SO ORDERED.
No. L-77663. April 12,1988.*
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT,
petitioner, vs. HON. EMMANUEL G. PEA, as Presiding Judge, RTC,
NCJR, Br. CLII, Pasig, Metropolitan Manila, and YEUNG CHUN
KAM, YEUNG CHUN HO and ARCHIE CHAN represented by YIM
KAM SHING, respondents.
Presidential Commission on Good Government; Jurisdiction; Courts;
Regional Trial Courts have no jurisdiction over the Presidential
Commission on Good Government; Court upholds the primacy of
administrative jurisdiction as vested in the commission and holds that
jurisdictions over all sequestration cases fall within the exclusive and
original jurisdiction of the Sandiganbayan, subject to review exclusively by
the Supreme Court.This special civil action for certiorari, prohibition and
mandamus with preliminary injunction and/or restraining order seeks to set
aside the orders, dated February 16 and March 5, 1987, rendered by
respondent trial judge on grounds of lack of jurisdiction and grave abuse of
discretion. The main issue is whether regional trial courts have jurisdiction
over the petitioner Presidential Commission on Good Governmnent
(hereinafter referred to as the Commission) and properties sequestered and
placed in its custodia legis in the exercise of its powers under Executive
Orders Nos, 1, 2 and 14, as amended, and whether said regional trial courts
may interfere with and restrain or set aside the orders and actions of the
Commission, The Court holds that regional trial courts do not have such
jurisdiction over the Commission and accordingly grants the petition. To
eliminate all doubts, the Court upholds the primacy of administrative
jurisdiction as vested in the Commission and holds that jurisdiction over all
sequestration cases of ill-gotten wealth, assets and properties under the past
discredited regime fall within the exclusive and original jurisdiction of the
Sandiganbayan, subject to review exclusively by this Court.
Same; Same; Same; Same; Issue of jurisdiction squarely raised.On the
issue of jurisdiction squarely raised, as above indicated, the Court sustains
petitioners stand and holds that regional trial courts and the Court of
Appeals for that matter have no jurisdiction over the Presidential
Commission on Good Government in the exercise of its powers under the
applicable Executive Orders and Article XVIII, section 26 of the
151
Constitution and therefore may not interfere with and restrain or set aside
the orders and actions of the Commission.
Under section 2 of the Presidents Executive Order No. 14 issued on May 7,
1986, all cases of the Commission regarding the Funds, Moneys, Assets,
and Properties Illegally Acquired or Misappropriated by Former President
Ferdinand Marcos, Mrs. Imelda Romualdez Marcos, their Close Relatives,
Subordinates, Business Associates, Dummies, Agents, or Nominees,
whether civil or criminal, are lodged within the exclusive and original
jurisdiction of the Sandiganbayan and all incidents arising from, incidental
to, or related to, such cases necessarily fall likewise under the
Sandiganbayans exclusive and original jurisdiction. subject to review on
certiorari exclusively by the Supreme Court,
Same; Same; Same; Same; Same; Courts ruling at bar fully supported.
The Constitution and the applicable Executive Orders and established legal
principles and jurisprudence fully support the Courts ruling at bar.
Same; Same; Powers of the Commission as stressed in the Baseco case.
As stressed in Baseco, So that it might ascertain the facts germane to its
objectives, it [the Commission] was granted power to conduct
investigations; require submission of evidence by subpoena ad
testificandum and duces tecum; administer oaths; punish for contempt. It
was given power also to promulgate such rules and regulations as may be
necessary to carry out the purposes of (its creation)."
Same; Same; Powers and authority vested in the Commission by the
President confirmed in the Provisional (Freedom) Constitution.These
ample powers and authority vested in the Commission by the President in
the exercise of legislative power granted her in the Provisional (Freedom)
Constitution were confirmed in said Constitution and in the 1987
Constitution. Thus, the Freedom Constitution (Proc. No. 3) mandated that
The President shall give priority to measures to achieve the mandate of the
people to: x x x (d) recover illgotten properties amassed by the leaders and
supporters of the previous regime and protect the interest of the people
through orders of sequestration or freezing of assets or accounts.
Same; Same; The 1987 Constitution likewise confirmed these powers and
authority vested in the commission.The Constitution overwhelmingly
ratified by the people in the February 2, 1987 plebiscite likewise expressly
confirmed that Sec. 26. The authority to issue sequestration or freeze
orders under Proclamation No, 3 dated March 25, 1986 in relation to the
recovery of ill-gotten wealth shall remain operative for not more than
eighteen months after the ratification of this Constitution. However, in the
national interest, as certified by the President, the Congress may extend said
ADMINLAW CASES
period. A sequestration or freeze order shall be issued only upon showing of
a prima facie case. The order and the list of the sequestered or frozen
properties shall forthwith be registered with the proper court. For orders
issued before the ratification of this Constitution, the corresponding judicial
action or proceeding shall be filed within six months from its ratification.
For those issued after such ratification, the judicial action or proceeding
shall be commenced within six months from the issuance thereof. The
sequestration or freeze order is deemed automatically lifted if no judicial
action or proceeding is commenced as herein provided.
Same; Same; Commission exercises quasi-judicial functions; It is a co-equal
body with Regional Trial Courts and co-equal bodies have no power to
control the other.As can be readily seen from the foregoing discussion of
the duties and functions and the power and authority of the Commission, it
exercises quasi-judicial functions. In the exercise of quasi-judicial
functions, the Commission is a co-equal body with regional trial courts and
co-equal bodies have no power to control the other. The Solicitor General
correctly submits that the lack of jurisdiction of regional trial courts over
quasi-judicial agencies is recognized in section 9, paragraph 3 of Batas
Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980), which
otherwise vests exclusive appellate jurisdiction in the Court of Appeals over
all final judgments, decisions, resolutions, orders, or awards of regional trial
courts and quasi-judicial agencies, instrumentalities, boards or
commissions. Presidential Commission on Good Government vs. Pea, 159
SCRA 556, No. L-77663 April 12, 1988
TEEHANKEE, C.J.:
This special civil action for certiorari, prohibition and mandamus with
preliminary injunction and/or restraining order seeks to set aside the orders,
dated February 16 and March 5, 1987, rendered by respondent trial judge on
grounds of lack of jurisdiction and grave abuse of discretion. The main
issue is whether regional trial courts have jurisdiction over the petitioner
Presidential Commission on Good Government (hereinafter referred to as
the Commission) and properties sequestered and placed in its custodia legis
in the exercise of its powers under Executive Orders Nos. 1, 2 and 14, as
amended, and whether said regional trial courts may interfere with and
152
restrain or set aside the orders and actions of the Commission. The Court
holds that regional trial courts do not have such jurisdiction over the
Commission and accordingly grants the petition. To eliminate all doubts, the
Court upholds the primacy of administrative jurisdiction as vested in the
Commission and holds that jurisdiction over all sequestration cases of ill-
gotten wealth, assets and properties under the past discredited regime fall
within the exclusive and original jurisdiction of the Sandiganbayan, subject
to review exclusively by this Court. *
The antecedent facts are:
On March 25, 1986, the Commission issued an order freezing the assets,
effects, documents and records of two export garment manufacturing firms
denominated as American Inter-fashion Corporation and De Soleil Apparel
Manufacturing Corporation. Said firms had both been organized by joint
venture agreement on July 2,1984 with the approval of the Garments &
Textile Export Board. Two-thirds or 67% of the stock of both corporations
were subscribed by so-called Local Investors represented by Renato Z.
Francisco and Atty. Gregorio R. Castillo and one-third or 33% thereof were
subscribed by the so-called Hongkong Investors, namely respondents Yeung
Chun Kam and Yeung Chun Ho. The Commission appointed Ms. Noemi L.
Saludo as Officer-in-Charge (OIC) of the said corporations with full
authority to manage and operate the same. On June 27, 1986, the
Commission designated the OIC, Saludo, and Mr.Yeung Chun Ho private
respondent herein, as authorized signatories to effect deposits and
withdrawals of the funds of the two corporations. On September 4, 1986,
the Commission designated Mr. Yim Kam Shing as co-signatory, in the
ADMINLAW CASES
absence of Mr. Yeung Chun Ho and Mr. Marcelo de Guzman, in the absence
of Ms. Saludo. However, in a memorandum dated February 3, 1987, and
addressed to depository banks of the said two corporations, Ms. Saludo
revoked the authorizations previously issued upon finding that Mr. Yim
Kam Shing was a Hongkong Chinese national staying in the country on a
mere tourist visa, and designated James Dy as her co-signatory and Enrico
Reyes Santos as the other authorized signatory with Teresita Yu as the
latter's co-signatory. The said memorandum was approved by then
Commissioner Mary Concepcion Bautista of the Commission.
On February 11, 1987, the OIC withdrew the amount of P400,000.00, more
or less, from the Metropolitan Bank and Trust Company against the
accounts of the said corporations for payment of the salaries of the staff,
employees and laborers of the same for the period from February 1 to 15 of
1987. On February 13, 1987, respondents Yeung Chun Kam Yeung Chun
Ho and Archie Chan who are all in Hongkong, instituted through Yim Kam
Shing an action for damages with prayer for a writ of preliminary injunction
against the said bank, the Commission, then Commissioner Mary
Concepcion Bautista and the OIC, Saludo, docketed as Civil Case No.
54298 of Branch 152 of the Regional Trial Court at Pasig, Metro Manila,
presided by respondent judge, and questioning the aforesaid revocation of
the authorization as signatory previously granted to Mr. Yim Kam Shing as
private respondents' representative. On February 16, 1987, respondent judge
issued ex-parte the questioned temporary restraining order enjoining the
bank, its attorneys, agents or persons acting in their behalf "from releasing
any funds of American Inter-fashion Corporation without the signature of
plaintiff Yim Kam Shing and to desist from committing any other acts
153
complained of ..." and the Commission "from enforcing the questioned
memorandum dated February 3, 1987" (Annex "J" Petition).
On February 20, 1987, the Commission filed a motion to dismiss with
opposition to plaintiffs' (private respondents herein) prayer for a writ of
preliminary injunction on the ground that the trial court has no jurisdiction
over the Commission or over the subject of the case and that assuming
arguendo its jurisdiction, it acted with grave abuse of discretion since
private respondents as 33% minority shareholders are not entitled to any
restraining order or preliminary injunction. On March 5, 1987, respondent
judge issued the other assailed order denying the Commission's motion to
dismiss and granting private respondents prayer for a writ of preliminary
injunction on a P10,000 bond (Annex "L," Petition). On March 20, 1987,
the Commission filed the petition at bar questioning the jurisdiction of
respondent judge's court over it and praying for (a) the nullification of the
aforesaid February 16 and March 5, 1987 orders and (b) the issuance of a
writ of prohibition ordering the respondent judge to cease and desist from
proceeding with the said case.
On March 24, 1987, the Court issued a temporary restraining order,
"ordering respondent judge to cease and desist from enforcing his orders
dated February 16 and March 5, 1987 and from proceeding with Civil Case
No. 54298 ... subject to the condition that the amounts that the petitioner
may withdraw from the accounts of (the sequestered corporations) with the
Metropolitan Bank and Trust Company, Inc., shall be limited to the
'necessary operating expenses of the two companies and for the payment of
the salaries, wages and allowances of the companies" staff, employees and
ADMINLAW CASES
laborers" ... and that the proceeds and income received shall likewise in due
course be deposited with the said companies' accounts with the said
Metropolitan Bank and Trust Company, Inc."
On the issue of jurisdiction squarely raised, as above indicated, the Court
sustains petitioner's stand and holds that regional trial courts and the Court
of Appeals for that matter have no jurisdiction over the Presidential
Commission on Good Government in the exercise of its powers under the
applicable Executive Orders and Article XVIII, section 26 of the
Constitution and therefore may not interfere with and restrain or set aside
the orders and actions of the Commission. Under section 2 of the President's
Executive Order No. 14 issued on May 7, 1986, all cases of the
Commission regarding "the Funds, Moneys, Assets, and Properties Illegally
Acquired or Misappropriated by Former President Ferdinand Marcos, Mrs.
Imelda Romualdez Marcos, their Close Relatives, Subordinates, Business
Associates, Dummies, Agents, or Nominees" 1 whether civil or criminal, are
lodged within the "exclusive and original jurisdiction of the
2
Sandiganbayan" and all incidents arising from, incidental to, or related to,
such cases necessarily fall likewise under the Sandiganbayan's exclusive
and original jurisdiction, subject to review on certiorari exclusively by the
Supreme Court. 3
The Constitution and the applicable Executive Orders and established legal
principles and jurisprudence fully support the Court's ruling at bar.
1. The very first Executive Order issued by President Corazon C. Aquino
after her assumption of office and the ouster of deposed President Ferdinand
E. Marcos on February 25, 1986 was Executive Order No. 1 issued on
154
February 28, 1986 creating the Presidential Commission on Good
Government, charging it with the task of assisting the President in regard to
the "recovery of all ill-gotten wealth accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates and
close associates, whether located in the Philippines or abroad, including the
takeover or sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through nominees,
by taking undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship." 4
In the discharge of its vital task "to recover the tremendous wealth
plundered from the people by the past regime in the most execrable thievery
perpetrated in all history," 5 or "organized pillage" (to borrow a phrase from
the articulate Mr. Blas Ople 6 ), the Commission was vested with the ample
power and authority
(a) x x x
(b) to sequester or place or cause to be placed under its
control or possession any building or office wherein any
ill-gotten wealth or properties may be found, and any
records pertaining thereto, in order to prevent their
destruction, concealment or disappearance which would
frustrate or hamper the investigation or otherwise prevent
the Commission from accomplishing its task.
(c) to provisionally takeover in the public interest or to
prevent the disposal or dissipation of business enterprises
ADMINLAW CASES
and properties taken over by the government of the
Marcos Administration or by entities or persons close to
former President Marcos, until the transactions leading to
such acquisition by the latter can be disposed of by the
appropriate authorities.
(d) to enjoin or restrain any actual or threatened
commission of acts by any person or entity that may
render moot and academic, or frustrate or otherwise make
ineffectual the efforts of the Commission to carry out its
task under this Order. ... 7
As stressed in Baseco "So that it might ascertain the facts germane to its
objectives, it [the Commission] was granted power to conduct
investigations; require submission of evidence by subpoena ad
testificandum and duces tecum; administer oaths; punish for contempt. It
was given power also to promulgate such rules and regulations as may be
necessary to carry out the purposes of (its creation)." 8
2. These ample powers and authority vested in the Commission by the
President in the exercise of legislative power granted her in the Provisional
(Freedom) Constitution 9 were confirmed in said Constitution and in the
1987 Constitution. Thus, the Freedom Constitution (Proc. No. 3) mandated
that 'The President shall give priority to measures to achieve the mandate of
the people to: .. (d) recover ill-gotten properties amassed by the leaders and
supporters of the previous regime and protect the interest of the people
through orders of sequestration or freezing of assets or accounts. ..." 10 The
155
Constitution overwhelmingly ratified by the people in the February 2, 1987
plebiscite likewise expressly confirmed that:
Sec. 26. The authority to issue sequestration or freeze
orders under Proclamation No. 3 dated March 25, 1986 in
relation to the recovery of ill- gotten wealth shall remain
operative for not more than eighteen months after the
ratification of this Constitution. However, in the national
interest, as certified by the President, the Congress may
extend said period.
A sequestration or freeze order shall be issued only upon
showing of a prima facie case. The order and the list of
the sequestered or frozen properties shall forthwith be
registered with the proper court. For orders issued before
the ratification of this Constitution, the corresponding
judicial action or proceeding shall be filed within six
months from its ratification. For those issued after such
ratification, the judicial action or proceeding shall be
commenced within six months from the issuance thereof.
The sequestration or freeze order is deemed automatically
lifted if no judicial action or proceeding is commenced as
herein provided. 11
3. As can be readily seen from the foregoing discussion of the duties and
functions and the power and authority of the Commission, it exercises
quasi-judicial functions. In the exercise of quasi-judicial functions, the
ADMINLAW CASES
Commission is a co-equal body with regional trial courts and "co-equal
bodies have no power to control the other." 12 The Solicitor General
correctly submits that the lack of jurisdiction of regional trial courts over
quasi-judicial agencies is recognized in section 9, paragraph 3 of Batas
Pambansa Blg. 129 (the Judiciary Reorganization Act of 1980), which
otherwise vests exclusive appellate jurisdiction in the Court of Appeals over
all final judgment, decisions, resolutions, orders, or awards of regional trial
courts and quasi judicial agencies, instrumentalities, boards or commissions.
But as already indicated hereinabove, the Court of Appeals is not vested
with appellate or supervisory jurisdiction over the Commission. Executive
Order No. 14, which defines the jurisdiction over cases involving the ill-
gotten wealth of former President Marcos, his wife, Imelda, members of
their immediate family, close relatives, subordinates, close and/or business
associates, dummies, agents and nominees, specifically provides in section
2 that "The Presidential Commission on Good Government shall file all
such cases, whether civil or criminal, with the Sandiganbayan which shall
have exclusive and original jurisdiction thereof." Necessarily, those who
wish to question or challenge the Commission's acts or orders in such cases
must seek recourse in the same court, the Sandiganbayan, which is vested
with exclusive and original jurisdiction. The Sandiganbayan's decisions and
final orders are in turn subject to review on certiorari exclusively by this
Court.
4. Having been charged with the herculean task of bailing the country-out of
the financial bankruptcy and morass of the previous regime and returning to
the people what is rightfully theirs, the Commission could ill-afford to be
impeded or restrained in the performance of its functions by writs or
156
injunctions emanating from tribunals co-equal to it and inferior to this
Court. Public policy dictates that the Commission be not embroiled in and
swamped by legal suits before inferior courts all over the land, since the
loss of time and energy required to defend against such suits would defeat
the very purpose of its creation. Hence, section 4(a) of Executive Order No.
1 has expressly accorded the Commission and its members immunity from
suit for damages in that: "No civil action shall lie against the Commission or
any member thereof for anything done or omitted in the discharge of the
task contemplated by this order."
The law and the courts frown upon split jurisdiction and the resultant
multiplicity of actions. To paraphrase the leading case of Rheem of the
Phil., Inc. vs. Ferrer, et al, 12-a to draw a tenuous jurisdiction line is to
undermine stability in litigations. A piecemeal resort to one court and
another gives rise to multiplicity of suits, To force the parties to shuttle from
one court to another to secure full determination of their suit is a situation
gravely prejudicial to the administration of justice. The time lost, the effort
wasted, the anxiety augmented, additional expenses incurred, the irreparable
injury to the public interest are considerations which weigh heavily
against split jurisdiction.
Civil Case No. 54298 pending before respondent judge is expressly
denominated as one "for damages with prayer for a writ of preliminary
injunction" (Annex "I," petition) filed by private respondents against the
Commission and then Commissioner Mary Concepcion Bautista. The said
case is clearly barred by the aforequoted immunity provision of Executive
Order No. 1, as buttressed by section 4(b) thereof which further provides
ADMINLAW CASES
that: "No member or staff of the Commission shall be required to testify or
produce evidence in any judicial, legislative or administrative proceeding
concerning matters within its official cognizance."
Executive Order No. 1 thus effectively withholds jurisdiction over cases
against the Commission from all lower courts, including the Court of
Appeals, except the Sandiganbayan in whom is vested original and
exclusive jurisdiction and this Court. Early on, in special civil actions
questioning challenged acts of the Commission, its submittal that the cited
Executive Order bars such actions in this Court was given short shrift
because this Court, as the third great department of government vested with
the judicial power and as the guardian of the Constitution, cannot be
deprived of its certiorari jurisdiction to pass upon and determine alleged
violations of the citizens' constitutional and legal rights under the Rule of
Law.
5. The rationale of the exclusivity of such jurisdiction is readily understood.
Given the magnitude of the past regime's "organized pillage" and the
ingenuity of the plunderers and pillagers with the assistance of the experts
and best legal minds available in the market, it is a matter of sheer necessity
to restrict access to the lower courts, which would have tied into knots and
made impossible the Commission's gigantic task of recovering the
plundered wealth of the nation, whom the past regime in the process had
saddled and laid prostrate with a huge $27 billion foreign debt that has since
ballooned to $28.5 billion.
To cite an example as recorded in Baseco, "in the ongoing case filed by the
government to recover from the Marcoses valuable real estate holdings in
157
New York and the Lindenmere estate in Long Island, former PCGG
chairman Jovito Salonga has revealed that their names do not appear on any
title to the property. Every building in New York is titled in the name of a
Netherlands Antilles Corporation, which in turn is purportedly owned by
three Panamanian corporations, with bearer shares. This means that the
shares of this corporation can change hands any time, since they can be
transferred, under the law of Panama, without previous registration on the
books of the corporation. One of the first documents that we discovered
shortly after the February revolution was a declaration of trust handwritten
by Mr. Joseph Bernstein on April 4, 1982 on a Manila Peninsula Hotel
stationery stating that he would act as a trustee for the benefit of President
Ferdinand Marcos and would act solely pursuant to the instructions of
Marcos with respect to the Crown Building; in New York." 13 Were it not for
this stroke of good fortune, it would have been impossible, legally and
technically, to prove and recover this ill-gotten wealth from the deposed
President and his family, although their ownership of these fabulous real
estate holdings were a matter of public notoriety
Hence, the imperative need for the Government of the restored Republic as
its first official act to create the Commission as an administrative and quasi-
judicial commission to recover the ill-gotten wealth "amassed from vast
resources of the government by the former President, his immediate family,
14
relatives and close associates."
This is the only possible and practical way to enable the Commision to
begin to do its formidable job. Thus, in the fifties in an analogous case, the
Court taking cognizance of the trend to vest jurisdiction in administrative
ADMINLAW CASES
commissions and boards the power to resolve specialized disputes ruled that
Congress in requiring the Industrial Court's intervention in the resolution of
labor-management controversies likely to cause strikes or lockouts meant
such jurisdiction to be exclusive, although it did not so expressly state in the
law. The court held that 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 of the regulatory statute administered. 15
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. For example, the Court
in the case of Ebon vs. de Guzman 16 noted that the lawmaking authority, in
restoring to the labor arbiters and the NLRC their jurisdiction to award all
kinds of damages in labor cases, as against the previous P.D. amendment
splitting their jurisdiction with the regular courts, "evidently..... had second
thoughts about depriving the Labor Arbiters and the NLRC of the
jurisdiction to award damages in labor cases because that setup would mean
duplicity of suits, splitting the cause of action and possible conflicting
findings and conclusions by two tribunals on one and the same claim."
158
6. The Court recently had occasion to stress once more, in G.R. No.
82218, Reyes vs. Caneba March 17, 1988, that "(T)he thrust of the related
doctrines of primary administrative jurisdiction and exhaustion of
administrative remedies is that courts must allow administrative agencies to
carry out their functions and discharge their responsibilities within the
specialized areas of their respective competence. Acts of an administrative
agency must not casually be overturned by a court, and a court should as a
rule not substitute its judgment for that of the administrative agency acting
within the perimeters of its own competence." Applying these fundamental
doctrines to the case at bar, the questions and disputes raised by respondents
seeking to controvert the Commission's finding of prima facie basis for the
issuance of its sequestration orders as well as the interjection of the claims
of the predecessor of American Inter-fashion and De Soleil Corporations,
viz. Glorious Sun Phil., headed by Nemesis Co are all questions that he
within the primary administrative jurisdiction of the Commission that
cannot be prematurely brought up to clog the court dockets without first
resorting to the exhaustion of the prescribed administrative remedies. The
administrative procedure and remedies for contesting orders of
sequestration issued by the Commission are provided for in its rules and
regulations. Thus, the person against whom a writ of sequestration is
directed may request the lifting thereof, in writing; after due hearing
or motu proprio for good cause shown, the Commission may lift the writ
unconditionally or subject to such conditions as it may deem necessary,
taking into consideration the evidence and the circumstances of the case.
The resolution of the Commission is appealable to the President of the
Philippines. The Commission conducts a hearing, after due notice to the
parties concerned to ascertain whether any particular asset, property or
ADMINLAW CASES
enterprise constitutes ill-gotten wealth. The Commission's order of
sequestration is not final, at the proper time, the question of ownership of
the sequestered properties shall be exclusively determined in the
Sandiganbayan, whose own decisions in turn are subject to review
exclusively by the Supreme Court.
It should be emphasized here, as again stressed by the Court in the recent
case of Republic, et al. vs. De los Angeles, et al., G.R. No. L-30240, March
25, 1988, that "it is well-recognized principle that purely administrative and
discretionary function may not be interfered with by the courts. In general,
courts have no supervising power over the proceedings and actions of the
administrative departments of government. This is generally true with
respect to acts involving the exercise of judgment or discretion, and
findings of fact. There should be no thought of disregarding the traditional
line separating judicial and administrative competence, the former being
entrusted with the determination of legal questions and the latter being
limited as a result of its expertise to the ascertainment of the decisive facts."
This is specially true in sequestration cases affected by the Commission for
the recovery of the nation' s plundered wealth that may affect the nation's
very survival, in the light of the constitutional mandate that such
sequestration or freeze orders "shall be issued only upon showing of a
prima facie case" 17 and the settled principle that findings by administrative
or quasi-judicial agencies like the Commission are entitled to the greatest
respect and are practically binding and conclusive, like the factual findings
of the trial and appellate courts, save where they are patently arbitrary or
capricious or are not supported by substantial evidence.
159
7. The Solicitor General has herein picturesquely submitted its "more
than prima facie evidence" for its sequestration and provisional take-over of
the subject assets and properties as follows:
... the subject sequestered assets are completely owned
and/or completely utilized and/or otherwise taken over by
the Marcoses, with due 'compensation' to their co-
participants in terms of tacitly agreed upon 'mutual
benefits,' for their personal benefits and selfish economic
interests, including particularly the salting, stashing and
secreting of dollars abroad, cum loculo et pera as witness
the following, by way of summarizing PCGG's
submission, ... as supported by more than prima facie
evidence:
ADMINLAW CASES
The fun: Glorious Sun, Phils., headed by Nemesio G. Co
and with private respondents herein holding 40% of the
shares of stock, soon after its incorporation on June 8,
1977, engaged in dollar salting, among other business
unlawful manipulations. This was unearthed by the
Garments and Textiles Export Board (GTEB) in January
1984. At that time, in the reign of Marcos, it had been
decreed that the matter of dollar salting was the exclusive
domain of the so-called 'Binondo Central Bank,' and any
other person or en entity found engaging therein was
guilty of 'economic sabotage,' more so where the
'saboteurs' are aliens like the herein private respondents
who are otherwise known as the 'Hongkong investors.
The squeeze: GTEB, under the Ministry of Trade, under
then .Minister Roberto V. Ongpin, on April 27,1984
choked the lifeliness of Glorious Sun in terms of
cancelling its export quotas, export authorizations, and
license to maintain bonded warehouses and of
disqualifying its 'major stockholders and officers from
engaging in exports.' With protestations of innocence,
Glorious Sun on May 25, 1984 even had the temerity to
file a Petition with the Supreme Court (G.R. No. 67180).
How did Glorious Sun extricate itself from the
tightening .screws let loose upon its neck by the then
reigning Ceasar with his apparently legal contretemps?
160
 Easy: Give unto Ceasar what is Ceasar's. In July, 1984,
herein private respondents came up with two (2) joint
venture agreements. and within the month, respondents
themselves withdrew their Petition in G.R. No. 67180.
Pursuant to the two (2) joint venture agreements,
American Inter-Fashion Co. was incorporated on August
22, 1984 and De Soleil on September 3, 1984, in each of
which herein private respondents, the Hongkong
investors, held 33% of the shares of stock while the
'Filipino investors' held 67%.
The sting:
In August, 1984, the GTEB informed
Glorious Sun, Phils., that the substantial
portion of the latter's cancelled export
quotas had been awarded to American
Inter-Fashion and De Soleil. But while
the Yeung brothers control only 33% of
the two corporations, they, however,
operated and managed said corporation
and utilized 100% of their export quota
allocations. The Yeung brothers paid
the nominees of the Filipino investors
controlling 67%, the amount of $3.75
per dozen as royalty for the utilization
of the 67% export quota of said two
ADMINLAW CASES
corporations. It may also be stated that
even before the export quota allocations
were awarded to American Inter-
Fashion and De Soleil Glorious Sun,
Phils., despite the GTEB decision,
Annex A hereof, was allowed to ship
out garments worth US $1,261,794.00
under its [previously cancelled] quota
from April 27 to May 30,1984. And on
petition of a foreign buyer, Generra
Sports Company of Seattle,
Washington, Glorious Sun, Phils., was
allowed to fin its 3rd and 4th fashion-
quarter orders of 186,080 pieces valued
at about US $1,159,531.00. As a result,
Glorious Sun, Phils. continued to
operate its bonded manufacturing
warehouse ordered closed by the GTEB
(Please see GTEB Comment dated June
4, 1984 in G.R. No. 67180.). (pp. 9-10,
Consolidated Reply, May 15, 1987).
The end of the fun: All was fun that ended in fun for all
the participants in the fun, the squeeze and the sting, until
of course the EDSA Revolution, when PCGG shortly
sequestered the subject assets and provisionally took over
the conservation thereof pursuant to law (Secs. 2 & 3,
161
 Executive Order No. 1 and related issuances) and
pursuant to the very Baseco case cited ironically in the
Motion at bar. Again, with protestations of innocence, the
herein private respondents through their counsel and now
Congressman Francisco Sumulong with the game
temerity have gone to the courts and other forum (Civil
Case No. 54298 entitled Yeung Chun Kam et al. vs.
PCGG, et al., RTC, Branch 151, Pasig, Metro Manila:
SEC Case No. 003144 entitled Yeung Chun Kam et al. vs.
PCGG, et al., Securities and Exchange Commission) just
as Nemesio Co allegedly President and owner of Glorious
Sun, through counsel Benjamin C. Santos, has gone to the
courts with the same protestations of innocence and equal
temerity (Civil Cases Nos. 86-37220 and 86-37221 before
RTC, Branches 33 and 36, Manila; Civil Cases Nos. 761-
87 and 762-87, Metropolitan Trial Court, Branch 56,
Malabon;Civil Case No. 54911, RTC, Branch 151 Pasig,
Metro Manila) and with his own 'brand' of private army to
boot, resorted to the midnight plunder of the subject
sequestered assets under a "midnight" writ (issued in Civil
Case No. 54911 by Judge Eutropio Migrio). Obviously,
the herein private respondent as well as Nemesio Co
18
would like to continue their fun.
Such proliferation of suits filed against the Commission in the trial courts,
and gross disregard of the Commission's primacy of administrative
jurisdiction has of course compelled the Commission to question in turn in
ADMINLAW CASES
this Court and obtain restraining orders against the lower courts' usurpation
of jurisdiction, in the following pending cases:
1. G.R. No. 79901 (PCGG v. Hon. Eutropio Migrio
Executive Judge, Regional Trial Court of Pasig and
Glorious Sun Fashion Manufacturing Co., Inc. and
Nemesio Co )
2. G.R. No. 80072 (PCGG v. Emilio Opinion, Presiding
Judge of the Metropolitan Trial Court, Branch 56,
Malabon, Metro Manila; Glorious Sun Fashion
Manufacturing Co., Inc. and Nemesio Co )
3. G.R. No. 80121 (PCGG v. Hon. Maximo M. Japzon as
Presiding Judge of the Regional Trial Court, Branch 36,
Manila; Glorious Sun Fashion Garments Manufacturing
Co., Inc. and Nemesio Co.)
4. G.R. No. 80281 (PCGG v. Hon. Felix Barbers as
Presiding Judge of the Regional Trial Court, Branch 33,
Manila, Deputy Sheriff Salvador A. Pueca and Glorious
Sun Fashion Garments Manufacturing Co., Inc. and
Nemesio Co )
5. G.R. No. 80395 (PCGG v. Hon. Emiho C. Opinion as
Presiding Judge of Branch 56 of the Metropolitan Trial
Court, Malabon, Metro Manila; Glorious Sun Garments
Manufacturing Co., Inc. and Nemesio Co)
162
Going back to the pre-EDSA squeeze and scam, it need only be added that
everything at the time seemingly ended to everybody's satisfaction.
Nemesio Co's Glorious Sun, Phil. notwithstanding the GTEB's closure
order, continued to operate its bonded warehouse and to ship out millions of
dollars of garments under its supposedly cancelled export quotas and
peremptorily withdrew on August 20, 1984 19 its petition in G.R. No. 67180
from this Court . The two new substitute corporations American Inter-
Fashion Co. and De Soleil cropped out of nowhere to take over the factories
and export quotas and it was of public notoriety, particularly in the trade,
that the family had taken over.
8. This is the thrust of the complaint filed on July 16, 1987 [well ahead of
the Constitutional deadline of August 2, 1987]by the Solicitor General on
behalf of the Commission representing Plaintiff Republic of the Philippines
docketed as Civil Case No. 0002, PCGG-3, with the Sandiganbayan, against
therein defendants Ferdinand E. Marcos, Imelda R. Marcos, Imelda (Imee)
R. Marcos, Tomas Manotoc, Irene R. Marcos Araneta, Gregorio Ma.
Araneta III and Ferdinand R. Marcos, Jr., for reversion, reconveyance,
restitution, accounting and damages, involving, among others, the subject
matter of the petition at bar, namely, American Inter-Fashion and De Soleil
Corporations, together with their assets, shares of stocks, effects, evidence
and records, which the Commission avers, based on documents in its
possession, were "illegally acquired by said defendants in unlawful concert
with one another and with gross abuse of power and authority. ... 20
The
Commission correctly submits that "questions on whether or not the
Plaintiff Republic of the Philippines is entitled to reversion, reconveyance,
restitution, accounting or damages in respect of the above-subject matter is
ADMINLAW CASES
for the Sandiganbayan to resolve" not in any of the scattershot cases that
respondents have filed in the various courts of the land.
The Court has so held in various cases, among them, Ofelia Trinidad vs.
PCGG, et al., G.R. No. 77695, June 16, 1987, wherein We pointed out that
"The Supreme Court is not a trier of facts: it cannot conceivably go over
all the minute evidence that may be presented by the PCGG. What is
significant is that this Court believes that in the instant case no abuse, much
less a grave abuse of discretion has been exercised by the PCGG,"
and Agro-Industrial Foundation Colleges of Southern Philippines, et al. vs.
Regional XI Operating Team No. Five and/or the PCGG, G.R. No. 78116,
July 28, 1987, wherein We ruled that the parties affected "may raise their
defenses at the appropriate time and before the proper forum [the
Sandiganbayan]. They will have their day in court."
9. What has not been appreciated by respondents and others similarly
situated is that the provisional remedies (including the encompassing and
rarely availed of remedy of provisional takeover) granted to the
Commission in pursuing its life-and-death mission to recover from a well-
entrenched plundering regime of twenty years, the ill-gotten wealth which
rightfully belongs to the Republic although pillaged and plundered in the
name of dummy or front companies, in several known instances carried out
with the bold and mercenary, if not reckless, cooperation and assistance of
members of the bar as supposed nominees, the full extent of which has yet
to be uncovered, are rooted in the police power of the State, the most
pervasive and the least limitable of the powers of Government since it
represents "the power of sovereignty, the power to govern men and things
163
within the limits of its domain."21 Police power has been defined as the
power inherent in the State "to prescribe regulations to promote the health,
morals, education, good order or safety, and general welfare of the
people." 22 Police power rests upon public necessity and upon the right of
23
the State and of the public to self-protection. " Salus populi suprema est
lex" the welfare of the people is the supreme law. For this reason, it is
coextensive with the necessities of the case and the safeguards of public
interest. Its scope expands and contracts with changing needs. 24 "It may be
said in a general way that the police power extends to all the great public
needs. It may be put forth in aid of what is sanctioned by usage, or held by
the prevailing morality or strong and preponderant opinion to be greatly and
immediately necessary to the public welfare." 25
That the public interest and the general welfare are subserved by
sequestering the purported ill-gotten assets and properties and taking over
stolen properties of the government channeled to dummy or front
companies is stating the obvious. The recovery of these ill-gotten assets and
properties would greatly aid our financially crippled government and hasten
our national economic recovery, not to mention the fact that they rightfully
belong to the people. While as a measure of self-protection, if, in the
interest of general welfare, police power, may be exercised to protect
citizens and their businesses in financial and economic matters, it may
similarly be exercised to protect the government itself against potential
financial loss and the possible disruption of governmental functions. Police
power as the power of self-protection on the part of the community that the
principle of self-defense bears to the individual. 26 Truly, it may be said that
even more than self-defense, the recovery of ill-gotten wealth and of the
ADMINLAW CASES
government's own properties involves the material and moral survival of the
nation, marked as the past regime was by the obliteration of any line
between private funds and the public treasury and abuse of unlimited power
and elimination of any accountability in public office, as is a matter of
public record and knowledge.
10 Despite all the complexities and difficulties, the original Commission
created under Executive Order No. 1 headed by its first chairman, now
Senate President Jovito R. Salonga, and composed of Hon. Ramon Diaz, the
incumbent chairman, now Associate Justice Pedro L. Yap of this Court,
Hon. Raul Daza, now a ranking member of the House of Representatives,
and Hon.. Mary Concepcion Bautista, now chairman of the Human Rights
Commission, and the present Commission headed by Chairman Ramon
Diaz have produced unprecedented positive results for which they fully
deserve the inadequately expressed ( at times ) appreciation and gratitude
of the nation. The report as of the end of 1987 of Chairman Ramon Diaz
shows the great extent of the Commission's accomplishments despite its
limited resources, but fortunately bolstered by the spontaneous and
welcome assistance of friendly foreign governments and lawyers, in the
brief period of less than two years since its creation and which are regarded
yet as the tip of the iceberg:
PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT SUMMARY OF
ACCOMPLISHMENTS As of January 05, 1988
164
 1. CASH & OTHER CASH ITEMS Deposits) 1,492,951.00

Funds turned over to Contribution to CARP 140,000,000.00

the treasury Gen. Fund 592,350,799.00 Sub-Total P1,117,803,314.00

Proceeds of Sale of

Princeton Property with 2. OTHER RECOVERED FUNDS

PNBNew York 20,500,000.00 Government Funds in TRB/

Proceeds of New Jersey National Treasury

Settlement 9,669,781.00 (Casino Funds) 1,138,000,000.00

Proceeds of Auction Sale 17,231,429.00 T-Bills delivered to the

Proceeds of Sale of office of the President 100,020,000.00

Paintings 8,879,500.00 Funds from Filbakers 59,884,453.00

SBTC (1st payment Seq. T/Ds) 250,000,000.00 P1,297,904,453.00

UPCB Bal of Profit Sharing 77,678,854.00 3. RECEIVABLES

Other Cash Items Projected Proceeds of Sale

(Certificate of Time of knick-knacks and

165
ADMINLAW CASES
 Furnitures from Hachensach
in Olympic Towers 20,720,000.00
Projected Proceeds of New York
Properties (Lindenmere,
Olympic Towers Apartments,
Makiki Properties) $9.0M 184,500,000.00
SBTC Certificates of Time
Deposits 731,407,842.00
Sub-total P936,627,842.00
4. FUNDS HELD IN TRUST
Funds with the Treasury 71,975,722.00
Funds with PNB-Ortigas 52,535,298.00
Sub-Total P124,511,020.00
ADMINLAW CASES
GRAND TOTAL P3,476,846,629.00
5. JEWELRY
Estimated Value P250 M
6. COMPANIES WHICH WERE AFFECTED
BY SEQUESTRATION ORDER INCLUDING
RADION AND TV STATIONS
297 Companies were subject to
sequestration (including those
whose sequestrations was lifted and those surrendered
companies
by J.Y. Campos and those holding
companies whose investments in
shares were affected by Writs of
166
 Sequestration) 12 Condominium units

Offices of R.S. Benedicto, E. Garcia, etc.

74 Companies have available 2 National Art and Museum Centers

financial statements with 2 Fishponds

estimated total assets of P44B

223 Companies still without 8. SEQUESTERED LANDS (INCLUDING

financial statements IMPROVEMENTS)

18 TV Stations were sequestered

38 Radio Stations were sequestered 450 parcels of land (including

improvements) have been issued

7. REAL PROPERTIES (BUILDING AND with specific Writs of Sequestration

IMPROVEMENTS) of which only 148 have an area of

19,276,970.76 sq. m.

Coconut Palace

13 Houses and improvements 23 Haciendas of which 13 haciendas

167
ADMINLAW CASES
 constituting RSB Farms, Inc. have
an area of 27,859,207.00 sq m.
9. SURRENDERED LANDS BY JOSE YAO CAMPOS
Total area in sq. m. of all surrendered
properties 19,684,435.45 sq. m.
Disposed to DAR (202 IRC titles) with
total area of 13,997,529 sq. m.
Remaining balance of 75 titles recommended for
disposal, with total area of 5,686,906.45 sq. m.
OTHER INFORMATION:
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81 Sequestered Vehicles
29 Sequestered Aircrafts
13 Sequestered Vessels
11. A final word about the alleged misdeeds of the OIC which the Solicitor
General has denounced as false and unfounded. 27 Such alleged misdeeds,
even if taken as true for the nonce, do not and cannot detract from the
Commission's accomplishments in the unselfish service of the nation,
rendered with integrity and honor and without the least taint of scandal and
self-interest (in welcome contrast to the past regime's rape and plunder sub-
silentio of the nation!). In our free and democratic space now, with full
restoration of a free press and the people's liberties, it should be
acknowledged with some sort of appreciation that any such misdeeds on the
part of the Commission's representative or agents have been subjected to
full public exposure and the erring parties dismissed and replaced.
ACCORDINGLY, the writs of certiorari and prohibition shall issue. The
orders of respondent Judge dated February 16, 1987 and March 5, 1987 are
hereby set aside as null and void. Respondent Judge is ordered to cease and
desist from any further proceeding in Civil Case No. 54298 which is hereby
ordered DISMISSED. This decision is IMMEDIATELY EXECUTORY, **
Yap, Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Gancayco, Padilla,
Bidin, Sarmiento and Cortes, JJ., concur.
168
Grio-Aquino, J., took no part. enable them to legislate . . . . It is well-established principle of this
parliamentary law, that either house may institute any investigation having
Sabio vs. Gordon reference to its own organization, the conduct or qualification of its
members, its proceedings, rights, or privileges or any matter affecting the
G.R. No. 174177. October 17, 2006.*
public interest upon which it may be important that it should have exact
information, and in respect to which it would be competent for it to
PHILCOMSAT HOLDINGS CORPORATION, PHILIP G.
legislate. The right to pass laws, necessarily implies the right to obtain
BRODETT, LUIS K. LOKIN, JR., ROBERTO V. SAN JOSE, DELFIN
information upon any matter which may become the subject of a law. It is
P. ANGCAO, ROBERTO L. ABAD, ALMA KRISTINA ALOBBA, and
essential to the full and intelligent exercise of the legislative function . . . .
JOHNNY TAN, petitioners, vs. SENATE COMMITTEE ON
In American legislatures the investigation of public matters before
GOVERNMENT CORPORATIONS and PUBLIC ENTERPRISES, its
committees, preliminary to legislation, or with the view of advising the
MEMBERS and CHAIRMAN, the HONORABLE SENATOR
house appointing the committee is, as a parliamentary usage, well
RICHARD GORDON and SENATE COMMITTEE ON PUBLIC
established as it is in England, and the right of either house to compel
SERVICES, its Members and Chairman, the HONORABLE
witnesses to appear and testify before its committee, and to punish for
SENATOR JOKER P. ARROYO, respondents.
disobedience has been frequently enforced . . . .The right of inquiry, I think,

Congress; Power of Inquiry; The Congress power of inquiry has been extends to other matters, in respect to which it may be necessary, or may be

recognized in foreign jurisdictions long before it reached our shores through deemed advisable to apply for legislative aid.

McGrain v. Daugherty, 273 U.S. 135, 47 S. Ct. 319, 71 L. Ed. 380, 50

Same; Same; What was implicit under the 1935 Constitution, as influenced
A.L.R. 1 (1927), cited in Arnault v. Nazareno, 87 Phil. 29 (1950).The
by American jurisprudence, became explicit under the 1973 and 1987
Congress power of inquiry has been recognized in foreign jurisdictions
Constitutions.Remarkably, in Arnault, this Court adhered to a similar
long before it reached our shores through McGrain v. Daugherty, cited in
theory. Citing McGrain, it recognized that the power of inquiry is an
Arnault v. Nazareno, 87 Phil. 29 (1950). In those earlier days, American
essential and appropriate auxiliary to the legislative function, thus:
courts considered the power of inquiry as inherent in the power to legislate.
Although there is no provision in the Constitution expressly investing
The 1864 case of Briggs v. MacKellar, 2 Abb. Pr. 30 (N.Y. 1864), explains
either House of Congress with power to make investigations and exact
the breath and basis of the power, thus: Where no constitutional limitation
testimony to the end that it may exercise its legislative functions advisedly
or restriction exists, it is competent for either of the two bodies composing
and effectively, such power is so far incidental to the legislative function as
the legislature to do, in their separate capacity, whatever may be essential to

169
ADMINLAW CASES
to be implied. In other words, the power of inquirywith process to
enforce itis an essential and appropriate auxiliary to the legislative
function. A legislative body cannot legislate wisely or effectively in the
absence of information respecting the conditions which the legislation is
intended to affect or change; and where the legislation body does not itself
possess the requisite informationwhich is not infrequently truerecourse
must be had to others who possess it. Dispelling any doubt as to the
Philippine Congress power of inquiry, provisions on such power made their
maiden appearance in Article VIII, Section 12 of the 1973 Constitution.
Then came the 1987 Constitution incorporating the present Article VI,
Section 12. What was therefore implicit under the 1935 Constitution, as
influenced by American jurisprudence, became explicit under the 1973 and
1987 Constitutions.
Same; Same; The 1987 Constitution recognizes the power of investigation,
not just of Congress, but also of any of its committees.Notably, the
1987 Constitution recognizes the power of investigation, not just of
Congress, but also of any of its committee. This is significant because it
constitutes a direct conferral of investigatory power upon the committees
and it means that the mechanisms which the Houses can take in order to
effectively perform its investigative function are also available to the
committees.
Same; Same; Presidential Commission on Good Government (PCGG);
Executive Order No. 1; Section 4(b) of E.O. 1 is directly repugnant with
Article VI, Section 21 of the Constitutionit exempts the Presidential
Commission on Good Government (PCGG) members and staff from the
ADMINLAW CASES
Congress power of inquiry.It can be said that the Congress power of
inquiry has gained more solid existence and expansive construal. The
Courts high regard to such power is rendered more evident in Senate v.
Ermita, where it categorically ruled that the power of inquiry is broad
enough to cover officials of the executive branch. Verily, the Court
reinforced the doctrine in Arnault that the operation of government, being
a legitimate subject for legislation, is a proper subject for investiga-tion
and that the power of inquiry is co-extensive with the power to legislate.
Considering these jurisprudential instructions, we find Section 4(b) directly
repugnant with Article VI, Section 21. Section 4(b) exempts the PCGG
members and staff from the Congress power of inquiry. This cannot be
countenanced. Nowhere in the Constitution is any provision granting such
exemption. The Congress power of inquiry, being broad, encompasses
everything that concerns the administration of existing laws as well as
proposed or possibly needed statutes. It even extends to government
agencies created by Congress and officers whose positions are within the
power of Congress to regulate or even abolish. PCGG belongs to this class.
Same; Same; Same; Same; Section 4(b) of E.O. 1 is also inconsistent with
Article XI, Section 1 of the Constitution; Public officers are but the servants
of the people, and not their rulers.Section 4(b) is also inconsistent with
Article XI, Section 1 of the Constitution stating that: Public office is a
public trust. Public officers and employees must at all times be accountable
to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives. The
provision presupposes that since an incumbent of a public office is invested
with certain powers and charged with certain duties pertinent to sovereignty,
170
the powers so delegated to the officer are held in trust for the people and are
to be exercised in behalf of the government or of all citizens who may need
the intervention of the officers. Such trust extends to all matters within the
range of duties pertaining to the office. In other words, public officers are
but the servants of the people, and not their rulers.
Same; Same; Same; Same; Section 4(b), being in the nature of an immunity,
is inconsistent with the principle of public accountability.Section 4(b),
being in the nature of an immunity, is inconsistent with the principle of
public accountability. It places the PCGG members and staff beyond the
reach of courts, Congress and other administrative bodies. Instead of
encouraging public accountability, the same provision only institutionalizes
irresponsibility and non-accountability. In Presidential Commission on
Good Government v. Pea, 159 SCRA 558 (1988), Justice Florentino P.
Feliciano characterized as obiter the portion of the majority opinion
barring, on the basis of Sections 4(a) and (b) of E.O. No. 1, a civil case for
damages filed against the PCGG and its Commissioners.
Same; Same; Same; Same; Policy of Transparency; Right to Information;
Section 4(b) also runs counter to Article II, Section 28, and Article III,
Section 7 of the Constitution, which twin provisions seek to promote
transparency in policy-making and in the operations of the government, as
well as provide the people sufficient information to enable them to exercise
effectively their constitutional rights.Section 4(b) also runs counter to the
following constitutional provisions ensuring the peoples access to
information: Article II, Section 28: Subject to reasonable conditions
prescribed by law, the State adopts and implements a policy of full public
ADMINLAW CASES
disclosure of all its transactions involving public interest. Article III,
Section 7: The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to documents,
and papers pertaining to official acts, transactions, or decisions, as well as to
government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by law.
These twin provisions of the Constitution seek to promote transparency in
policy-making and in the operations of the government, as well as provide
the people sufficient information to enable them to exercise effectively their
constitutional rights. Armed with the right information, citizens can
participate in public discussions leading to the formulation of government
policies and their effective implementation. In Valmonte v. Belmonte, Jr.,
170 SCRA 256 (1989), the Court explained that an informed citizenry is
essential to the existence and proper functioning of any democracy.
Same; Same; Same; Same; The conduct of inquiries in aid of legislation is
not only intended to benefit Congress but also the citizenry.Consequently,
the conduct of inquiries in aid of legislation is not only intended to benefit
Congress but also the citizenry. The people are equally concerned with this
proceeding and have the right to participate therein in order to protect their
interests. The extent of their participation will largely depend on the
information gathered and made known to them. In other words, the right to
information really goes hand-in-hand with the constitutional policies of full
public disclosure and honesty in the public service. It is meant to enhance
the widening role of the citizenry in governmental decision-making as well
as in checking abuse in the government. The cases of Taada v. Tuvera, 136
SCRA 27 (1985), and Legaspi v. Civil Service Commission, 150 SCRA 530
171
(1987), have recognized a citizens interest and personality to enforce a
public duty and to bring an action to compel public officials and employees
to perform that duty.
Same; Same; Same; Same; Constitutional Law; A statute may be declared
unconstitutional because it is not within the legislative power to enact, or it
creates or establishes methods or forms that infringe constitutional
principles, or its purpose or effect violates the Constitution or its basic
principles.A statute may be declared unconstitutional because it is not
within the legislative power to enact; or it creates or establishes methods or
forms that infringe constitutional principles; or its purpose or effect violates
the Constitution or its basic principles. As shown in the above discussion,
Section 4(b) is inconsistent with Article VI, Section 21 (Congress power of
inquiry), Article XI, Section 1 (principle of public accountability), Article
II, Section 28 (policy of full disclosure) and Article III, Section 7 (right to
public information).
Same; Same; Same; Same; The Constitution is the highest law of the land,
the basic and paramount law to which all other laws must conform and to
which all persons, including the highest officials of the land, must defer.
Jurisprudence is replete with decisions invalidating laws, decrees, executive
orders, proclamations, letters of instructions and other executive issuances
inconsistent with the Constitution. In Pelaez v. Auditor General, 15 SCRA
569 (1965), the Court considered repealed Section 68 of the Revised
Administrative Code of 1917 authorizing the Executive to change the seat
of the government of any subdivision of local governments, upon the
approval of the 1935 Constitution. Section 68 was adjudged incompatible
ADMINLAW CASES
and inconsistent with the Constitutional grant of limited executive
supervision over local governments. In Islamic Dawah Council of the
Philippines, Inc. v. Office of the Executive Secretary, 405 SCRA 497
(2003), the Court declared Executive Order No. 46, entitled Authorizing
the Office on Muslim Affairs to Undertake Philippine Halal Certification,
void for encroaching on the religious freedom of Muslims. In The Province
of Batangas v. Romulo, the Court declared some provisions of the General
Appropriations Acts of 1999, 2000 and 2001 unconstitutional for violating
the Constitutional precept on local autonomy. And in Ople v. Torres, 293
SCRA 141 (1998), the Court likewise declared unconstitutional
Administrative Order No. 308, entitled Adoption of a National
Computerized Identification Reference System, for being violative of the
right to privacy protected by the Constitution. These Decisions, and many
others, highlight that the Constitution is the highest law of the land. It is
the basic and paramount law to which all other laws must conform and to
which all persons, including the highest officials of the land, must defer. No
act shall be valid, however noble its intentions, if it conflicts with the
Constitution. Consequently, this Court has no recourse but to declare
Section 4(b) of E.O. No. 1 repealed by the 1987 Constitution.
Same; Same; The conferral of the legislative power of inquiry upon any
committee of Congress must carry with it all powers necessary and proper
for its effective discharge.Article VI, Section 21 grants the power of
inquiry not only to the Senate and the House of Representatives, but also to
any of their respective committees. Clearly, there is a direct conferral of
power to the committees.Father Bernas, in his Commentary on the 1987
Constitution, correctly pointed out its significance: It should also be noted
172
that the Constitution explicitly recognizes the power of investigation not
just of Congress but also of any of its committees. This is significant
because it constitutes a direct conferral of investigatory power upon the
committees and it means that the means which the Houses can take in order
to effectively perform its investigative function are also available to the
Committees. This is a reasonable conclusion. The conferral of the
legislative power of inquiry upon any committee of Congress must carry
with it all powers necessary and proper for its effective discharge.
Otherwise, Article VI, Section 21 will be meaningless. The indispensability
and usefulness of the power of contempt in a legislative inquiry is
underscored in a catena of cases, foreign and local.
Same; Same; Bill of Rights; The Congress, in common with all the other
branches of the Government, must exercise its powers subject to the
limitations placed by the Constitution on governmental action, more
particularly in the context of this case, the relevant limitations of the Bill of
Rights.One important limitation on the Congress power of inquiry is that
the rights of persons appearing in or affected by such inquiries shall be
respected. This is just another way of saying that the power of inquiry must
be subject to the limitations placed by the Constitution on government
action. As held in Barenblatt v. United States, the Congress, in common
with all the other branches of the Government, must exercise its powers
subject to the limitations placed by the Constitution on governmental action,
more particularly in the context of this case, the relevant limitations of the
Bill of Rights.
ADMINLAW CASES
Same; Same; Same; Right to Privacy; Zones of privacy are recognized and
protected in our laws.Zones of privacy are recognized and protected in
our laws. Within these zones, any form of intrusion is impermissible unless
excused by law and in accordance with customary legal process. The
meticulous regard we accord to these zones arises not only from our
conviction that the right to privacy is a constitutional right and the right
most valued by civilized men, but also from our adherence to the Universal
Declaration of Human Rights which mandates that, no one shall be
subjected to arbitrary interference with his privacy and everyone has the
right to the protection of the law against such interference or attacks.
Same; Same; Same; Same; The Bill of Rights provides at least two
guarantees that explicitly create zones of privacy.Our Bill of Rights,
enshrined in Article III of the Constitution, provides at least two guarantees
that explicitly create zones of privacy. It highlights a persons right to be
let alone or the right to determine what, how much, to whom and when
information about himself shall be disclosed. Section 2 guarantees the
right of the people to be secure in their persons, houses, papers and effects
against unreasonable searches and seizures of whatever nature and for any
purpose. Section 3 renders inviolable the privacy of communication and
correspondence and further cautions that any evidence obtained in
violation of this or the preceding section shall be inadmissible for any
purpose in any proceeding.
Same; Same; Same; Same; In evaluating a claim for violation of the right to
privacy, a court must determine whether a person has exhibited a reasonable
expectation of privacy and, if so, whether that expectation has been violated
173
by unreasonable government intrusion.In evaluating a claim for violation
of the right to privacy, a court must determine whether a person has
exhibited a reasonable expectation of privacy and, if so, whether that
expectation has been violated by unreasonable government intrusion.
Applying this determination to these cases, the important inquiries are: first,
did the directors and officers of Philcomsat Holdings Corporation exhibit a
reasonable expectation of privacy?; and second, did the government violate
such expectation? The answers are in the negative. Petitioners were invited
in the Senates public hearing to deliberate on Senate Res. No. 455,
particularly on the anomalous losses incurred by the Philippine Overseas
Telecommunications Corporation (POTC), Philippine Communications
Satellite Corporation (PHILCOMSAT), and Philcomsat Holdings
Corporations (PHC) due to the alleged improprieties in the operations by
their respective board of directors. Obviously, the inquiry focus on
petitioners acts committed in the discharge of their duties as officers and
directors of the said corporations, particularly Philcomsat Holdings
Corporation. Consequently, they have no reasonable expectation of privacy
over matters involving their offices in a corporation where the government
has interest. Certainly, such matters are of public concern and over which
the people have the right to information.
Same; Same; Same; Same; Presidential Commission on Good Government;
The right to privacy is not absolute where there is an overriding compelling
state interest; Under the present circumstances, the alleged anomalies in the
PHILCOMSAT, PHC and POTC, ranging in millions of pesos, and the
conspiratorial participation of the PCGG and its officials are compelling
reasons for the Senate to exact vital information from the directors and
ADMINLAW CASES
officers of Philcomsat Holding Corporation, as well as from the Chairman
and Commissioners to aid it in crafting the necessary legislation to prevent
corruption and formulate remedial measures and policy determination
regarding PCGGs efficacy.This goes to show that the right to privacy is
not absolute where there is an overriding compelling state interest. In Morfe
v. Mutuc, 22 SCRA 424 (1968), the Court, in line with Whalen v. Roe, 429
U.S. 589 (1977), employed the rational basis relationship test when it held
that there was no infringement of the individuals right to privacy as the
requirement to disclosure information is for a valid purpose, i.e., to curtail
and minimize the opportunities for official corruption, maintain a standard
of honesty in public service, and promote morality in public administration.
In Valmonte v. Belmonte, 170 SCRA 256 (1989), the Court remarked that as
public figures, the Members of the former Batasang Pambansa enjoy a more
limited right to privacy as compared to ordinary individuals, and their
actions are subject to closer scrutiny. Taking this into consideration, the
Court ruled that the right of the people to access information on matters of
public concern prevails over the right to privacy of financial transactions.
Under the present circumstances, the alleged anomalies in the
PHILCOMSAT, PHC and POTC, ranging in millions of pesos, and the
conspiratorial participation of the PCGG and its officials are compelling
reasons for the Senate to exact vital information from the directors and
officers of Philcomsat Holdings Corporations, as well as from Chairman
Sabio and his Commissioners to aid it in crafting the necessary legislation
to prevent corruption and formulate remedial measures and policy
determination regarding PCGGs efficacy. There being no reasonable
expectation of privacy on the part of those directors and officers over the
174
subject covered by Senate Res. No. 455, it follows that their right to privacy
has not been violated by respondent Senate Committees.
Same; Same; Same; Self-Incrimination; The right against self-incrimination
may be invoked by the directors and officers of Phil-comsat Holding
Corporation only when the incriminating question is being asked, since they
have no way of knowing in advance the nature or effect of the questions to
be asked of them.Anent the right against self-incrimination, it must be
emphasized that this right may be invoked by the said directors and
officers of Philcomsat Holdings Corporation only when the incriminating
question is being asked, since they have no way of knowing in advance the
nature or effect of the questions to be asked of them. That this right may
possibly be violated or abused is no ground for denying respondent Senate
Committees their power of inquiry. The consolation is that when this power
is abused, such issue may be presented before the courts. At this juncture,
what is important is that respondent Senate Committees have sufficient
Rules to guide them when the right against self-incrimination is invoked.
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Same; Same; Separation of Powers; The Senate Rules of Procedure
Governing Inquiries in Aid of Legislation provide that the filing or
pendency of any prosecution of criminal or administrative action should not
stop or abate any inquiry to carry out a legislative purpose.The same
directors and officers contend that the Senate is barred from inquiring into
the same issues being litigated before the Court of Appeals and the
Sandiganbayan. Suffice it to state that the Senate Rules of Procedure
Governing Inquiries in Aid of Legislation provide that the filing or
pendency of any prosecution of criminal or administrative action should not
stop or abate any inquiry to carry out a legislative purpose.
Same; Same; The unremitting obligation of every citizen is to respond to
subpoena, to respect the dignity of the Congress and its Committees, and to
testify fully with respect to matters within the realm of proper investigation.
Let it be stressed at this point that so long as the constitutional rights of
witnesses, like Chairman Sabio and his Commissioners, will be respected
by respondent Senate Committees, it their duty to cooperate with them in
their efforts to obtain the facts needed for intelligent legislative action. The
unremitting obligation of every citizen is to respond to subpoenae, to
respect the dignity of the Congress and its Committees, and to testify fully
with respect to matters within the realm of proper investigation. Sabio vs.
Gordon, 504 SCRA 705, G.R. No. 174177 October 17, 2006
DECISION
SANDOVAL-GUTIERREZ, J.:
175
Two decades ago, on February 28, 1986, former President Corazon C.
Aquino installed her regime by issuing Executive Order (E.O.) No.
1,1 creating the Presidential Commission on Good Government (PCGG).
She entrusted upon this Commission the herculean task of recovering the
ill-gotten wealth accumulated by the deposed President Ferdinand E.
Marcos, his family, relatives, subordinates and close associates. 2 Section 4
(b) of E.O. No. 1 provides that: "No member or staff of the Commission
shall be required to testify or produce evidence in any judicial,
legislative or administrative proceeding concerning matters within its
official cognizance." Apparently, the purpose is to ensure PCGG's
unhampered performance of its task.3
Today, the constitutionality of Section 4(b) is being questioned on the
ground that it tramples upon the Senate's power to conduct legislative
inquiry under Article VI, Section 21 of the 1987 Constitution, which reads:
The Senate or the House of Representatives or any of its respective
committees may conduct inquiries in aid of legislation in
accordance with its duly published rules of procedure. The rights
of persons appearing in or affected by such inquiries shall be
respected.
The facts are undisputed.
On February 20, 2006, Senator Miriam Defensor Santiago introduced
Philippine Senate Resolution No. 455 (Senate Res. No. 455),4 "directing an
inquiry in aid of legislation on the anomalous losses incurred by the
Philippines Overseas Telecommunications Corporation (POTC), Philippine
Communications Satellite Corporation (PHILCOMSAT), and
PHILCOMSAT Holdings Corporation (PHC) due to the alleged
improprieties in their operations by their respective Board of Directors."
The pertinent portions of the Resolution read:
WHEREAS, in the last quarter of 2005, the representation and
entertainment expense of the PHC skyrocketed to P4.3 million, as
compared to the previous year's mere P106 thousand;
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WHEREAS, some board members established wholly owned PHC
subsidiary called Telecommunications Center, Inc. (TCI), where
PHC funds are allegedly siphoned; in 18 months, over P73 million
had been allegedly advanced to TCI without any accountability
report given to PHC and PHILCOMSAT;
WHEREAS, the Philippine Star, in its 12 February 2002 issue
reported that the executive committee of Philcomsat has
precipitately released P265 million and granted P125 million loan
to a relative of an executive committee member; to date there have
been no payments given, subjecting the company to an estimated
interest income loss of P11.25 million in 2004;
WHEREAS, there is an urgent need to protect the interest of the
Republic of the Philippines in the PHC, PHILCOMSAT, and
POTC from any anomalous transaction, and to conserve or salvage
any remaining value of the government's equity position in these
corporations from any abuses of power done by their respective
board of directors;
WHEREFORE, be it resolved that the proper Senate
Committee shall conduct an inquiry in aid of legislation, on the
anomalous losses incurred by the Philippine Overseas
Telecommunications Corporation (POTC), Philippine
Communications Satellite Corporation (PHILCOMSAT), and
Philcomsat Holdings Corporations (PHC) due to the alleged
improprieties in the operations by their respective board of
directors.
Adopted.
(Sgd) MIRIAM DEFENSOR SANTIAGO
On the same date, February 20, 2006, Senate Res. No. 455 was submitted to
the Senate and referred to theCommittee on Accountability of Public
Officers and Investigations and Committee on Public Services. However, on
March 28, 2006, upon motion of Senator Francis N. Pangilinan, it was
transferred to the Committee on Government Corporations and Public
Enterprises.5
176
On May 8, 2006, Chief of Staff Rio C. Inocencio, under the authority of
Senator Richard J. Gordon, wrote Chairman Camilo L. Sabio of the PCGG,
one of the herein petitioners, inviting him to be one of the resource persons
in the public meeting jointly conducted by the Committee on Government
Corporations and Public Enterprises and Committee on Public Services.
The purpose of the public meeting was to deliberate on Senate Res. No.
455.6
On May 9, 2006, Chairman Sabio declined the invitation because of prior
commitment.7 At the same time, he invoked Section 4(b) of E.O. No.
1 earlier quoted.
On August 10, 2006, Senator Gordon issued a Subpoena Ad
Testificandum,8 approved by Senate President Manuel Villar, requiring
Chairman Sabio and PCGG Commissioners Ricardo Abcede, Nicasio
Conti, Tereso Javier and Narciso Nario to appear in the public hearing
scheduled on August 23, 2006 and testify on what they know relative to the
matters specified in Senate Res. No. 455. Similar subpoenae were issued
against the directors and officers of Philcomsat Holdings Corporation,
namely: Benito V. Araneta, Philip J. Brodett, Enrique L. Locsin, Manuel D.
Andal, Roberto L. Abad, Luis K. Lokin, Jr., Julio J. Jalandoni, Roberto V.
San Jose, Delfin P. Angcao, Alma Kristina Alloba and Johnny Tan.9
Again, Chairman Sabio refused to appear. In his letter to Senator Gordon
dated August 18, 2006, he reiterated his earlier position, invoking Section
4(b) of E.O. No. 1. On the other hand, the directors and officers of
Philcomsat Holdings Corporation relied on the position paper they
previously filed, which raised issues on the propriety of legislative inquiry.
Thereafter, Chief of Staff Ma. Carissa O. Coscolluela, under the authority of
Senator Gordon, sent another notice10 to Chairman Sabio requiring him to
appear and testify on the same subject matter set on September 6, 2006. The
notice was issued "under the same authority of the Subpoena Ad
Testificandum previously served upon (him) last 16 August 2006."
Once more, Chairman Sabio did not comply with the notice. He sent a
letter11 dated September 4, 2006 to Senator Gordon reiterating his reason for
declining to appear in the public hearing.
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This prompted Senator Gordon to issue an Order dated September 7, 2006
requiring Chairman Sabio and Commissioners Abcede, Conti, Javier and
Nario to show cause why they should not be cited in contempt of the
Senate. On September 11, 2006, they submitted to the Senate their
Compliance and Explanation,12 which partly reads:
Doubtless, there are laudable intentions of the subject inquiry
in aid of legislation. But the rule of law requires that even the best
intentions must be carried out within the parameters of the
Constitution and the law. Verily, laudable purposes must be carried
out by legal methods. (Brillantes, Jr., et al. v. Commission on
Elections, En Banc [G.R. No. 163193, June 15, 2004])
On this score, Section 4(b) of E.O. No. 1 should not be ignored as
it explicitly provides:
No member or staff of the Commission shall be
required to testify or produce evidence in any judicial
legislative or administrative proceeding concerning
matters within its official cognizance.
With all due respect, Section 4(b) of E.O. No. 1 constitutes a
limitation on the power of legislative inquiry, and a recognition by
the State of the need to provide protection to the PCGG in order to
ensure the unhampered performance of its duties under its charter.
E.O. No. 1 is a law, Section 4(b) of which had not been amended,
repealed or revised in any way.
To say the least, it would require both Houses of Congress and
Presidential fiat to amend or repeal the provision in controversy.
Until then, it stands to be respected as part of the legal system in
this jurisdiction. (As held in People v. Veneracion, G.R. Nos.
119987-88, October 12, 1995: Obedience to the rule of law forms
the bedrock of our system of justice. If judges, under the guise of
religious or political beliefs were allowed to roam unrestricted
beyond boundaries within which they are required by law to
exercise the duties of their office, then law becomes meaningless. A
government of laws, not of men excludes the exercise of broad
discretionary powers by those acting under its authority. Under
177
 this system, judges are guided by the Rule of Law, and ought to
'protect and enforce it without fear or favor,' 4 [Act of Athens
(1955)] resist encroachments by governments, political parties, or
even the interference of their own personal beliefs.)
xxxxxx
Relevantly, Chairman Sabio's letter to Sen. Gordon dated August
19, 2006 pointed out that the anomalous transactions referred to in
the P.S. Resolution No. 455 are subject of pending cases before the
regular courts, the Sandiganbayan and the Supreme Court (Pending
cases include: a. Samuel Divina v. Manuel Nieto, Jr., et al., CA-
G.R. No. 89102; b. Philippine Communications Satellite
Corporation v. Manuel Nieto, et al.; c. Philippine Communications
Satellite Corporation v. Manuel D. Andal, Civil Case No. 06-095,
RTC, Branch 61, Makati City; d. Philippine Communications
Satellite Corporation v. PHILCOMSAT Holdings Corporation, et
al., Civil Case No. 04-1049) for which reason they may not be able
to testify thereon under the principle of sub judice. The laudable
objectives of the PCGG's functions, recognized in several cases
decided by the Supreme Court, of the PCGG will be put to naught
if its recovery efforts will be unduly impeded by a legislative
investigation of cases that are already pending before the
Sandiganbayan and trial courts.
In Bengzon v. Senate Blue Ribbon Committee, (203 SCRA 767,
784 [1991]) the Honorable Supreme Court held:
"[T]he issues sought to be investigated by the
respondent Committee is one over which jurisdiction had
been acquired by the Sandiganbayan. In short, the issue
has been pre-empted by that court. To allow the
respondent Committee to conduct its own investigation of
an issue already before the Sandigabayan would not only
pose the possibility of conflicting judgments between a
legislative committee and a judicial tribunal, but if the
Committee's judgment were to be reached before that of
the Sandiganbayan, the possibility of its influence being
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made to bear on the ultimate judgment of the
Sandiganbayan can not be discounted.
xxxxxx
IT IS IN VIEW OF THE FOREGOING
CONSIDERATIONS that the Commission decided not to attend
the Senate inquiry to testify and produce evidence thereat.
Unconvinced with the above Compliance and Explanation, the Committee
on Government Corporations and Public Enterprises and the Committee on
Public Services issued an Order13 directing Major General Jose Balajadia
(Ret.), Senate Sergeant-At-Arms, to place Chairman Sabio and his
Commissioners under arrest for contempt of the Senate. The Order bears
the approval of Senate President Villar and the majority of the
Committees' members.
On September 12, 2006, at around 10:45 a.m., Major General Balajadia
arrested Chairman Sabio in his office at IRC Building, No. 82 EDSA,
Mandaluyong City and brought him to the Senate premises where he was
detained.
Hence, Chairman Sabio filed with this Court a petition for habeas
corpus against the Senate Committee on Government Corporations and
Public Enterprises and Committee on Public Services, their Chairmen,
Senators Richard Gordon and Joker P. Arroyo and Members. The case was
docketed as G.R. No. 174340.
Chairman Sabio, Commissioners Abcede, Conti, Nario, and Javier, and the
PCGG's nominees to Philcomsat Holdings Corporation, Manuel Andal and
Julio Jalandoni, likewise filed a petition for certiorari and prohibition
against the same respondents, and also against Senate President Manuel
Villar, Senator Juan Ponce Enrile, the Sergeant-at-Arms, and the entire
Senate. The case was docketed as G.R. No. 174318.
Meanwhile, Philcomsat Holdings Corporation and its officers and directors,
namely: Philip G. Brodett, Luis K. Lokin, Jr., Roberto V. San Jose, Delfin P.
Angcao, Roberto L. Abad, Alma Kristina Alobba and Johnny Tan filed a
petition for certiorari and prohibition against the Senate Committees on
178
Government Corporations and Public Enterprisesand Public Services, their
Chairmen, Senators Gordon and Arroyo, and Members. The case was
docketed as G.R. No. 174177.
In G.R. No. 174340 (for habeas corpus) and G.R. No. 174318 (for certiorari
and prohibition) Chairman Sabio, Commissioners Abcede, Conti, Nario,
and Javier; and the PCGG's nominees Andal and Jalandoni alleged: first,
respondent Senate Committees disregarded Section 4(b) of E.O. No. 1
without any justifiable reason; second, the inquiries conducted by
respondent Senate Committees are not in aid of legislation; third, the
inquiries were conducted in the absence of duly published Senate Rules of
Procedure Governing Inquiries in Aid of Legislation; and fourth, respondent
Senate Committees are not vested with the power of contempt.
In G.R. No. 174177, petitioners Philcomsat Holdings Corporation and its
directors and officers alleged: first, respondent Senate Committees have no
jurisdiction over the subject matter stated in Senate Res. No. 455;second,
the same inquiry is not in accordance with the Senate's Rules of Procedure
Governing Inquiries in Aid of Legislation; third, the subpoenae against the
individual petitioners are void for having been issued without
authority; fourth, the conduct of legislative inquiry pursuant to Senate Res.
No. 455 constitutes undue encroachment by respondents into justiciable
controversies over which several courts and tribunals have already acquired
jurisdiction; and fifth, the subpoenae violated petitioners' rights to privacy
and against self-incrimination.
In their Consolidated Comment, the above-named respondents
countered: first, the issues raised in the petitions involve political questions
over which this Court has no jurisdiction; second, Section 4(b) has been
repealed by the Constitution; third, respondent Senate Committees are
vested with contempt power; fourth, Senate's Rules of Procedure Governing
Inquiries in Aid of Legislation have been duly published; fifth, respondents
have not violated any civil right of the individual petitioners, such as
their (a) right to privacy; and (b) right against self-incrimination; and sixth,
the inquiry does not constitute undue encroachment into justiciable
controversies.
During the oral arguments held on September 21, 2006, the parties were
directed to submit simultaneously their respective memoranda within a non-
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extendible period of fifteen (15) days from date. In the meantime, per
agreement of the parties, petitioner Chairman Sabio was allowed to go
home. Thus, his petition for habeas corpushas become moot. The parties
also agreed that the service of the arrest warrants issued against all
petitioners and the proceedings before the respondent Senate Committees
are suspended during the pendency of the instant cases.14
Crucial to the resolution of the present petitions is the fundamental issue of
whether Section 4(b) of E.O. No. 1 is repealed by the 1987 Constitution.
On this lone issue hinges the merit of the contention of Chairman Sabio and
his Commissioners that their refusal to appear before respondent Senate
Committees is justified. With the resolution of this issue, all the other issues
raised by the parties have become inconsequential.
Perched on one arm of the scale of justice is Article VI, Section 21 of the
1987 Constitution granting respondent Senate Committees the power of
legislative inquiry. It reads:
The Senate or the House of Representatives or any of its
respective committees may conduct inquiries in aid of
legislation in accordance with its duly published rules of
procedure. The rights of persons appearing in or affected by
such inquiries shall be respected.
On the other arm of the scale is Section 4(b) of E.O. No.1 limiting such
power of legislative inquiry by exempting all PCGG members or staff from
testifying in any judicial, legislative or administrative proceeding, thus:
No member or staff of the Commission shall be required to
testify or produce evidence in any judicial, legislative or
administrative proceeding concerning matters within its
official cognizance.
To determine whether there exists a clear and unequivocal repugnancy
between the two quoted provisions that warrants a declaration that Section
4(b) has been repealed by the 1987 Constitution, a brief consideration of the
Congress' power of inquiry is imperative.
179
The Congress' power of inquiry has been recognized in foreign jurisdictions
long before it reached our shores through McGrain v. Daugherty,15 cited
in Arnault v. Nazareno.16 In those earlier days, American courts considered
the power of inquiry as inherent in the power to legislate. The 1864 case
of Briggs v. MacKellar17explains the breath and basis of the power, thus:
Where no constitutional limitation or restriction exists, it is
competent for either of the two bodies composing the legislature to
do, in their separate capacity, whatever may be essential to enable
them to legislate.It is well-established principle of this
parliamentary law, that either house may institute any
investigationhaving reference to its own organization, the conduct
or qualification of its members, its proceedings, rights, or
privileges or any matter affecting the public interest upon
which it may be important that it should have exact
information, and in respect to which it would be competent for
it to legislate. The right to pass laws, necessarily implies the
right to obtain information upon any matter which may
become the subject of a law. It is essential to the full and
intelligent exercise of the legislative function.In American
legislatures the investigation of public matters before
committees, preliminary to legislation, or with the view of
advising the house appointing the committee is, as a
parliamentary usage, well established as it is in England, and
the right of either house to compel witnesses to appear and testify
before its committee, and to punish for disobedience has been
frequently enforced.The right of inquiry, I think, extends to other
matters, in respect to which it may be necessary, or may be deemed
advisable to apply for legislative aid.
Remarkably, in Arnault, this Court adhered to a similar theory. Citing
McGrain, it recognized that the power of inquiry is "an essential and
appropriate auxiliary to the legislative function," thus:
Although there is no provision in the "Constitution expressly
investing either House of Congress with power to make
investigations and exact testimony to the end that it may exercise
its legislative functions advisedly and effectively, such power is so
far incidental to the legislative function as to be implied. In other
words, the power of inquiry with process to enforce it is an
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essential and appropriate auxiliary to the legislative function. A
legislative body cannot legislate wisely or effectively in the
absence of information respecting the conditions which the
legislation is intended to affect or change; and where the
legislation body does not itself possess the requisite information
which is not infrequently true recourse must be had to
others who possess it."
Dispelling any doubt as to the Philippine Congress' power of inquiry,
provisions on such power made their maiden appearance in Article VIII,
Section 12 of the 1973 Constitution.18 Then came the 1987 Constitution
incorporating the present Article VI, Section 12. What was therefore
implicit under the 1935 Constitution, as influenced by American
jurisprudence, became explicit under the 1973 and 1987 Constitutions.19
Notably, the 1987 Constitution recognizes the power of investigation, not
just of Congress, but also of "any of its committee." This is significant
because it constitutes a direct conferral of investigatory power upon the
committees and it means that the mechanisms which the Houses can take in
order to effectively perform its investigative function are also available to
the committees.20
It can be said that the Congress' power of inquiry has gained more solid
existence and expansive construal. The Court's high regard to such power is
rendered more evident in Senate v. Ermita,21 where it categorically ruled
that"the power of inquiry is broad enough to cover officials of the
executive branch." Verily, the Court reinforced the doctrine in Arnault
that "the operation of government, being a legitimate subject for
legislation, is a proper subject for investigation" and that "the power of
inquiry is co-extensive with the power to legislate."
Considering these jurisprudential instructions, we find Section 4(b) directly
repugnant with Article VI, Section 21. Section 4(b) exempts the PCGG
members and staff from the Congress' power of inquiry. This cannot be
countenanced. Nowhere in the Constitution is any provision granting such
exemption. The Congress' power of inquiry, being broad, encompasses
everything that concerns the administration of existing laws as well as
proposed or possibly needed statutes.22 It even extends "to government
agencies created by Congress and officers whose positions are within
180
the power of Congress to regulate or even abolish."23 PCGG belongs to
this class.
Certainly, a mere provision of law cannot pose a limitation to the broad
power of Congress, in the absence of any constitutional basis.
Furthermore, Section 4(b) is also inconsistent with Article XI, Section 1 of
the Constitution stating that: "Public office is a public trust. Public officers
and employees must at all times be accountable to the people, serve them
with utmost responsibility, integrity, loyalty, and efficiency, act with
patriotism and justice, and lead modest lives."
The provision presupposes that since an incumbent of a public office is
invested with certain powers and charged with certain duties pertinent to
sovereignty, the powers so delegated to the officer are held in trust for the
people and are to be exercised in behalf of the government or of all
citizens who may need the intervention of the officers. Such trust
extends to all matters within the range of duties pertaining to the office.
In other words, public officers are but the servants of the people, and
not their rulers.24
Section 4(b), being in the nature of an immunity, is inconsistent with the
principle of public accountability. It places the PCGG members and staff
beyond the reach of courts, Congress and other administrative bodies.
Instead of encouraging public accountability, the same provision only
institutionalizes irresponsibility and non-accountability. In Presidential
Commission on Good Government v. Pea,25 Justice Florentino P. Feliciano
characterized as "obiter" the portion of the majority opinion barring, on the
basis of Sections 4(a) and (b) of E.O. No. 1, a civil case for damages filed
against the PCGG and its Commissioners. He eloquently opined:
The above underscored portions are, it is respectfully submitted,
clearly obiter. It is important to make clear that the Court is
not here interpreting, much less upholding as valid and
constitutional, the literal terms of Section 4 (a), (b) of Executive
Order No.1. If Section 4 (a) were given its literal import as
immunizing the PCGG or any member thereof from civil liability
"for anything done or omitted in the discharge of the task
contemplated by this Order," the constitutionality of Section 4 (a)
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would, in my submission, be open to most serious doubt. For so
viewed, Section 4 (a) would institutionalize the irresponsibility and
non-accountability of members and staff of the PCGG, a notion
that is clearly repugnant to both the 1973 and 1987 Constitution
and a privileged status not claimed by any other official of the
Republic under the 1987 Constitution. x x x.
xxxxxx
It would seem constitutionally offensive to suppose that a
member or staff member of the PCGG could not be required to
testify before the Sandiganbayan or that such members were
exempted from complying with orders of this Court.
Chavez v. Sandiganbayan26 reiterates the same view. Indeed, Section 4(b)
has been frowned upon by this Court even before the filing of the present
petitions.
Corollarily, Section 4(b) also runs counter to the following constitutional
provisions ensuring the people's access to information:
Article II, Section 28
Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full public
disclosure of all its transactions involving public interest.
Article III, Section 7
The right of the people to information on matters of
public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to
government research data used as basis for policy
development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
181
These twin provisions of the Constitution seek to promote transparency in
policy-making and in the operations of the government, as well as provide
the people sufficient information to enable them to exercise effectively their
constitutional rights. Armed with the right information, citizens can
participate in public discussions leading to the formulation of government
policies and their effective implementation. In Valmonte v. Belmonte,
Jr.27 the Court explained that an informed citizenry is essential to the
existence and proper functioning of any democracy, thus:
An essential element of these freedoms is to keep open a
continuing dialogue or process of communication between the
government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that
the government may perceive and be responsive to the people's
will. Yet, this open dialogue can be effective only to the extent that
the citizenry is informed and thus able to formulate its will
intelligently. Only when the participants in the discussion are
aware of the issues and have access to information relating thereto
can such bear fruit.
Consequently, the conduct of inquiries in aid of legislation is not only
intended to benefit Congress but also the citizenry. The people are equally
concerned with this proceeding and have the right to participate therein in
order to protect their interests. The extent of their participation will largely
depend on the information gathered and made known to them. In other
words, the right to information really goes hand-in-hand with the
constitutional policies of full public disclosure and honesty in the public
service. It is meant to enhance the widening role of the citizenry in
governmental decision-making as well as in checking abuse in the
government.28 The cases of Taada v. Tuvera29 and Legaspi v. Civil Service
Commission30 have recognized a citizen's interest and personality to enforce
a public duty and to bring an action to compel public officials and
employees to perform that duty.
Section 4(b) limits or obstructs the power of Congress to secure from
PCGG members and staff information and other data in aid of its power to
legislate. Again, this must not be countenanced. In Senate v. Ermita,31 this
Court stressed:
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To the extent that investigations in aid of legislation are generally
conducted in public, however, any executive issuance tending to
unduly limit disclosures of information in such investigations
necessarily deprives the people of information which, being
presumed to be in aid of legislation, is presumed to be a matter
of public concern. The citizens are thereby denied access to
information which they can use in formulating their own opinions
on the matter before Congress opinions which they can then
communicate to their representatives and other government
officials through the various legal means allowed by their freedom
of expression.
A statute may be declared unconstitutional because it is not within the
legislative power to enact; or it creates or establishes methods or forms
that infringe constitutional principles; or its purpose or effect violates the
Constitution or its basic principles.32 As shown in the above discussion,
Section 4(b) is inconsistent withArticle VI, Section 21 (Congress' power of
inquiry), Article XI, Section 1 (principle of public accountability),Article
II, Section 28 (policy of full disclosure) and Article III, Section 7 (right to
public information).
Significantly, Article XVIII, Section 3 of the Constitution provides:
All existing laws, decrees, executive orders, proclamations, letters
of instructions, and other executive issuances not
inconsistent with this Constitution shall remain operative until
amended, repealed, or revoked.
The clear import of this provision is that all existing laws, executive orders,
proclamations, letters of instructions and other executive issuances
inconsistent or repugnant to the Constitution are repealed.
Jurisprudence is replete with decisions invalidating laws, decrees, executive
orders, proclamations, letters of instructions and other executive issuances
inconsistent with the Constitution. In Pelaez v. Auditor General,33 the Court
considered repealed Section 68 of the Revised Administrative Code of 1917
authorizing the Executive to change the seat of the government of any
subdivision of local governments, upon the approval of the 1935
Constitution. Section 68 was adjudged incompatible and inconsistent with
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the Constitutional grant of limited executive supervision over local
governments. In Islamic Da'wah Council of the Philippines, Inc., v. Office
of the Executive Secretary,34 the Court declared Executive Order No. 46,
entitled "Authorizing the Office on Muslim Affairs to Undertake Philippine
Halal Certification," void for encroaching on the religious freedom of
Muslims. InThe Province of Batangas v. Romulo,35 the Court declared some
provisions of the General Appropriations Acts of 1999, 2000 and 2001
unconstitutional for violating the Constitutional precept on local autonomy.
And in Ople v. Torres,36 the Court likewise declared unconstitutional
Administrative Order No. 308, entitled "Adoption of a National
Computerized Identification Reference System," for being violative of the
right to privacy protected by the Constitution.
These Decisions, and many others, highlight that the Constitution is the
highest law of the land. It is "the basic and paramount law to which all
other laws must conform and to which all persons, including the highest
officials of the land, must defer. No act shall be valid, however noble its
intentions, if it conflicts with the Constitution."37 Consequently, this
Court has no recourse but to declare Section 4(b) of E.O. No. 1 repealed by
the 1987 Constitution.
Significantly, during the oral arguments on September 21, 2006, Chairman
Sabio admitted that should this Court rule that Section 4(b) is
unconstitutional or that it does not apply to the Senate, he will answer the
questions of the Senators, thus:
CHIEF JUSTICE PANGANIBAN:
Okay. Now, if the Supreme Court rules that Sec. 4(b) is
unconstitutional or that it does not apply to the Senate,
will you answer the questions of the Senators?
CHAIRMAN SABIO:
Your Honor, my father was a judge, died being a judge. I
was here in the Supreme Court as Chief of Staff of Justice
Feria. I would definitely honor the Supreme Court and the
rule of law.
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CHIEF JUSTICE PANGANIBAN:
You will answer the questions of the Senators if we say
that?
CHAIRMAN SABIO:
Yes, Your Honor. That is the law already as far as I am
concerned.
With his admission, Chairman Sabio is not fully convinced that he and his
Commissioners are shielded from testifying before respondent Senate
Committees by Section 4(b) of E.O. No. 1. In effect, his argument that the
said provision exempts him and his co-respondent Commissioners from
testifying before respondent Senate Committees concerning Senate Res. No.
455 utterly lacks merit.
Incidentally, an argument repeated by Chairman Sabio is that respondent
Senate Committees have no power to punish him and his Commissioners
for contempt of the Senate.
The argument is misleading.
Article VI, Section 21 provides:
The Senate or the House of Representatives or any of its
respective committees may conduct inquiries in aid of
legislation in accordance with its duly published rules of
procedure. The rights of persons appearing in or affected by
such inquiries shall be respected.
It must be stressed that the Order of Arrest for "contempt of Senate
Committees and the Philippine Senate" wasapproved by Senate President
Villar and signed by fifteen (15) Senators. From this, it can be concluded
that the Order is under the authority, not only of the respondent Senate
Committees, but of the entire Senate.
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At any rate, Article VI, Section 21 grants the power of inquiry not only to
the Senate and the House of Representatives, but also to any of their
respective committees. Clearly, there is a direct conferral of power to the
committees. Father Bernas, in his Commentary on the 1987 Constitution,
correctly pointed out its significance:
It should also be noted that the Constitution explicitly recognizes
the power of investigation not just of Congress but also of "any of
its committees." This is significant because it constitutes a direct
conferral of investigatory power upon the committees and it
means that the means which the Houses can take in order to
effectively perform its investigative function are also available
to the Committees.38
This is a reasonable conclusion. The conferral of the legislative power of
inquiry upon any committee of Congress must carry with it all powers
necessary and proper for its effective discharge. Otherwise, Article VI,
Section 21 will be meaningless. The indispensability and usefulness of the
power of contempt in a legislative inquiry is underscored in a catena of
cases, foreign and local.
In the 1821 case of Anderson v. Dunn,39 the function of the Houses of
Congress with respect to the contempt power was likened to that of a court,
thus:
But the court in its reasoning goes beyond this, and though the
grounds of the decision are not very clearly stated, we take them to
be: that there is in some cases a power in each House of
Congress to punish for contempt; that this power is analogous
to that exercised by courts of justice, and that it being the well
established doctrine that when it appears that a prisoner is
held under the order of a court of general jurisdiction for a
contempt of its authority, no other court will discharge the
prisoner or make further inquiry into the cause of his
commitment. That this is the general ruleas regards the relation
of one court to another must be conceded.
In McGrain,40 the U.S. Supreme Court held: "Experience has shown that
mere requests for such information are often unavailing, and also that
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information which is volunteered is not always accurate or complete; so
some means of compulsion is essential to obtain what is needed."
The Court, in Arnault v. Nazareno,41 sustained the Congress' power of
contempt on the basis of this observation.
In Arnault v. Balagtas,42 the Court further explained that the contempt
power of Congress is founded upon reason and policy and that the power of
inquiry will not be complete if for every contumacious act, Congress has to
resort to judicial interference, thus:
The principle that Congress or any of its bodies has the power to
punish recalcitrant witnesses is founded upon reason and policy.
Said power must be considered implied or incidental to the
exercise of legislative power. How could a legislative body
obtain the knowledge and information on which to base
intended legislation if it cannot require and compel the
disclosure of such knowledge and information if it is impotent
to punish a defiance of its power and authority? When the
framers of the Constitution adopted the principle of separation
of powers, making each branch supreme within the realm of its
respective authority, it must have intended each department's
authority to be full and complete, independently of the other's
authority or power. And how could the authority and power
become complete if for every act of refusal, every act of
defiance, every act of contumacy against it, the legislative body
must resort to the judicial department for the appropriate
remedy, because it is impotent by itself to punish or deal
therewith, with the affronts committed against its authority or
dignity.43
In Negros Oriental II Electric Cooperative, Inc. v. Sangguniang
Panlungsod of Dumaguete,44 the Court characterized contempt power as a
matter of self-preservation, thus:
The exercise by the legislature of the contempt power is a matter
of self-preservation as that branch of the government vested with
the legislative power, independently of the judicial branch, asserts
its authority and punishes contempts thereof. The contempt power
of the legislature is, therefore, sui generis x x x.
184
Meanwhile, with respect to G.R. No. 174177, the petition of Philcomsat
Holdings Corporation and its directors and officers, this Court holds that the
respondent Senate Committees' inquiry does not violate their right to
privacy and right against self-incrimination.
One important limitation on the Congress' power of inquiry is that "the
rights of persons appearing in or affected by such inquiries shall be
respected." This is just another way of saying that the power of inquiry
must be "subject to the limitations placed by the Constitution on
government action." As held in Barenblatt v. United States,45 "the
Congress, in common with all the other branches of the Government,
must exercise its powers subject to the limitations placed by the
Constitution on governmental action, more particularly in the context
of this case, the relevant limitations of the Bill of Rights."
First is the right to privacy.
Zones of privacy are recognized and protected in our laws.46 Within these
zones, any form of intrusion is impermissible unless excused by law and in
accordance with customary legal process. The meticulous regard we accord
to these zones arises not only from our conviction that the right to privacy is
a "constitutional right" and "theright most valued by civilized men,"47 but
also from our adherence to the Universal Declaration of Human Rights
which mandates that, "no one shall be subjected to arbitrary interference
with his privacy" and "everyone has the right to the protection of the law
against such interference or attacks."48
Our Bill of Rights, enshrined in Article III of the Constitution, provides at
least two guarantees that explicitly create zones of privacy. It highlights a
person's "right to be let alone" or the "right to determine what, how much,
to whom and when information about himself shall be disclosed."49 Section
2 guarantees "the right of the people to be secure in their persons,
houses, papers and effects against unreasonable searches and seizures
of whatever nature and for any purpose." Section 3 renders inviolable
the "privacy of communication and correspondence" and further cautions
that "any evidence obtained in violation of this or the preceding section
shall be inadmissible for any purpose in any proceeding."
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In evaluating a claim for violation of the right to privacy, a court must
determine whether a person has exhibited a reasonable expectation of
privacy and, if so, whether that expectation has been violated by
unreasonable government intrusion.50 Applying this determination to these
cases, the important inquiries are: first, did the directors and officers of
Philcomsat Holdings Corporation exhibit a reasonable expectation of
privacy?; andsecond, did the government violate such expectation?
The answers are in the negative. Petitioners were invited in the Senate's
public hearing to deliberate on Senate Res. No. 455, particularly "on the
anomalous losses incurred by the Philippine Overseas
Telecommunications Corporation (POTC), Philippine Communications
Satellite Corporation (PHILCOMSAT), and Philcomsat Holdings
Corporations (PHC) due to the alleged improprieties in the operations
by their respective board of directors." Obviously, the inquiry focus on
petitioners' acts committed in the discharge of their duties as officers and
directors of the said corporations, particularly Philcomsat Holdings
Corporation. Consequently, they have no reasonable expectation of
privacy over matters involving their offices in a corporation where the
government has interest. Certainly, such matters are of public concern
and over which the people have the right to information.
This goes to show that the right to privacy is not absolute where there is an
overriding compelling state interest. In Morfe v. Mutuc,51 the Court, in line
with Whalen v. Roe,52 employed the rational basis relationship test when it
held that there was no infringement of the individual's right to privacy as the
requirement to disclosure information is for a valid purpose, i.e., to curtail
and minimize the opportunities for official corruption, maintain a standard
of honesty in public service, and promote morality in public
administration.53 In Valmonte v. Belmonte,54the Court remarked that as
public figures, the Members of the former Batasang Pambansa enjoy a
more limited right to privacy as compared to ordinary individuals, and
their actions are subject to closer scrutiny. Taking this into consideration,
the Court ruled that the right of the people to access information on matters
of public concern prevails over the right to privacy of financial transactions.
Under the present circumstances, the alleged anomalies in the
PHILCOMSAT, PHC and POTC, ranging in millions of pesos, and the
conspiratorial participation of the PCGG and its officials are compelling
reasons for the Senate to exact vital information from the directors and
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officers of Philcomsat Holdings Corporations, as well as from Chairman
Sabio and his Commissioners to aid it in crafting the necessary legislation
to prevent corruption and formulate remedial measures and policy
determination regarding PCGG's efficacy. There being no reasonable
expectation of privacy on the part of those directors and officers over the
subject covered by Senate Res. No. 455, it follows that their right to privacy
has not been violated by respondent Senate Committees.
Anent the right against self-incrimination, it must be emphasized that this
right maybe invoked by the said directors and officers of Philcomsat
Holdings Corporation only when the incriminating question is being
asked, since they have no way of knowing in advance the nature or
effect of the questions to be asked of them."55That this right
may possibly be violated or abused is no ground for denying respondent
Senate Committees their power of inquiry. The consolation is that when this
power is abused, such issue may be presented before the courts. At this
juncture, what is important is that respondent Senate Committees have
sufficient Rules to guide them when the right against self-incrimination is
invoked. Sec. 19 reads:
Sec. 19. Privilege Against Self-Incrimination
A witness can invoke his right against self-incrimination only
when a question tends to elicit an answer that will incriminate him
is propounded to him. However, he may offer to answer any
question in an executive session.
No person can refuse to testify or be placed under oath or
affirmation or answer questions before an incriminatory question is
asked. His invocation of such right does not by itself excuse him
from his duty to give testimony.
In such a case, the Committee, by a majority vote of the members
present there being a quorum, shall determine whether the right has
been properly invoked. If the Committee decides otherwise, it shall
resume its investigation and the question or questions previously
refused to be answered shall be repeated to the witness. If the latter
continues to refuse to answer the question, the Committee may
punish him for contempt for contumacious conduct.
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The same directors and officers contend that the Senate is barred from
inquiring into the same issues being litigated before the Court of Appeals
and the Sandiganbayan. Suffice it to state that the Senate Rules of
Procedure Governing Inquiries in Aid of Legislation provide that the filing
or pendency of any prosecution of criminal or administrative action should
not stop or abate any inquiry to carry out a legislative purpose.
Let it be stressed at this point that so long as the constitutional rights of
witnesses, like Chairman Sabio and his Commissioners, will be respected
by respondent Senate Committees, it their duty to cooperate with them in
their efforts to obtain the facts needed for intelligent legislative action. The
unremitting obligation of every citizen is to respond to subpoenae, to
respect the dignity of the Congress and its Committees, and to testify fully
with respect to matters within the realm of proper investigation.
In fine, PCGG Chairman Camilo Sabio and Commissioners Ricardo
Abcede, Narciso Nario, Nicasio Conti, and Tereso Javier; and Manuel
Andal and Julio Jalandoni, PCGG's nominees to Philcomsat Holdings
Corporation, as well as its directors and officers, must comply with
the Subpoenae Ad Testificandum issued by respondent Senate Committees
directing them to appear and testify in public hearings relative to Senate
Resolution No. 455.
WHEREFORE, the petition in G.R. No. 174340 for habeas
corpus is DISMISSED, for being moot. The petitions in G.R Nos. 174318
and 174177 are likewise DISMISSED.
Section 4(b) of E.O. No. 1 is declared REPEALED by the 1987
Constitution. Respondent Senate Committees' power of inquiry relative to
Senate Resolution 455 is upheld. PCGG Chairman Camilo L. Sabio and
Commissioners Ricardo Abcede, Narciso Nario, Nicasio Conti and Tereso
Javier; and Manuel Andal and Julio Jalandoni, PCGG's nominees to
Philcomsat Holdings Corporation, as well as its directors and officers,
petitioners in G.R. No. 174177, are ordered to comply with
the Subpoenae Ad Testificandum issued by respondent Senate Committees
directing them to appear and testify in public hearings relative to Senate
Resolution No. 455.
SO ORDERED.
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