SECOND DIVISION G.R. No. L-32166 October 18, 1977 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs.HON.

MAXIMO A. MACEREN CFI, Sta. Cruz, Laguna, JOSE BUENAVENTURA, GODOFREDO REYES, BENJAMIN REYES, NAZARIO AQUINO and CARLO DEL ROSARIO, accused-appellees. AQUINO, J.: This is a case involving the validity of a 1967 regulation, penalizing electro fishing in fresh water fisheries, promulgated by the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the Fisheries Commission. On March 7, 1969 Jose Buenaventura, Godofredo Reyes, Benjamin Reyes, Nazario Aquino and Carlito del Rosario were charged by a Constabulary investigator in the municipal court of Sta. Cruz, Laguna with having violated Fisheries Administrative Order No. 84-1. It was alleged in the complaint that the five accused in the morning of March 1, 1969 resorted to electro fishing in the waters of Barrio San Pablo Norte, Sta. Cruz by "using their own motor banca, equipped with motor; with a generator colored green with attached dynamo colored gray or somewhat white; and electrocuting device locally known as sensored with a somewhat webbed copper wire on the tip or other end of a bamboo pole with electric wire attachment which was attached to the dynamo direct and with the use of these devices or equipments catches fish thru electric current, which destroy any aquatic animals within its cuffed reach, to the detriment and prejudice of the populace" (Criminal Case No. 5429). Upon motion of the accused, the municipal court quashed the complaint. The prosecution appealed. The Court of First Instance of Laguna affirmed the order of dismissal (Civil Case No. SC-36). The case is now before this Court on appeal by the prosecution under Republic Act No. 5440. The lower court held that electro fishing cannot be penalize because electric current is not an obnoxious or poisonous substance as contemplated in section I I of the Fisheries Law and that it is not a substance at all but a form of energy conducted or transmitted by substances. The lower court further held that, since the law does not clearly prohibit electro fishing, the executive and judicial departments cannot consider it unlawful. As legal background, it should be stated that section 11 of the Fisheries Law prohibits "the use of any obnoxious or poisonous substance" in fishing. Section 76 of the same law punishes any person who uses an obnoxious or poisonous substance in fishing with a fine of not more than five hundred pesos nor more than five thousand, and by imprisonment for not less than six months nor more than five years. It is noteworthy that the Fisheries Law does not expressly punish .electro fishing." Notwithstanding the silence of the law, the Secretary of Agriculture and Natural Resources, upon the recommendation of the Commissioner of Fisheries, promulgated Fisheries Administrative Order No. 84 (62 O.G. 1224), prohibiting electro fishing in all Philippine waters. The order is quoted below: +.wph!1 SUBJECT: PROHIBITING ELECTRO FISHING IN ALL WATERS +.wph!1 OF THE PHILIPPINES. Pursuant to Section 4 of Act No. 4003, as amended, and Section 4 of R.A. No. 3512, the following rules and regulations regarding the prohibition of electro fishing in all waters of the Philippines are promulgated for the information and guidance of all concerned.+.wph!1 SECTION 1. Definition. Words and terms used in this Order 11 construed as follows: (a) Philippine waters or territorial waters of the Philippines' includes all waters of the Philippine Archipelago, as

defined in the t between the United States and Spain, dated respectively the tenth of December, eighteen hundred ninety eight and the seventh of November, nineteen hundred. For the purpose of this order, rivers, lakes and other bodies of fresh waters are included. (b) Electro Fishing. Electro fishing is the catching of fish with the use of electric current. The equipment used are of many electrical devices which may be battery or generator-operated and from and available source of electric current. (c) 'Persons' includes firm, corporation, association, agent or employee. (d) 'Fish' includes other aquatic products. SEC. 2. Prohibition. It shall be unlawful for any person to engage in electro fishing or to catch fish by the use of electric current in any portion of the Philippine waters except for research, educational and scientific purposes which must be covered by a permit issued by the Secretary of Agriculture and Natural Resources which shall be carried at all times. SEC. 3. Penalty. Any violation of the provisions of this Administrative Order shall subject the offender to a fine of not exceeding five hundred pesos (P500.00) or imprisonment of not extending six (6) months or both at the discretion of the Court. SEC. 4. Repealing Provisions. All administrative orders or parts thereof inconsistent with the provisions of this Administrative Order are hereby revoked. SEC. 5. Effectivity. This Administrative Order shall take effect six (60) days after its publication in the Office Gazette. On June 28, 1967 the Secretary of Agriculture and Natural Resources, upon the recommendation of the Fisheries Commission, issued Fisheries Administrative Order No. 84-1, amending section 2 of Administrative Order No. 84, by restricting the ban against electro fishing to fresh water fisheries (63 O.G. 9963). Thus, the phrase "in any portion of the Philippine waters" found in section 2, was changed by the amendatory order to read as follows: "in fresh water fisheries in the Philippines, such as rivers, lakes, swamps, dams, irrigation canals and other bodies of fresh water." The Court of First Instance and the prosecution (p. 11 of brief) assumed that electro fishing is punishable under section 83 of the Fisheries Law (not under section 76 thereof), which provides that any other violation of that law "or of any rules and regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred pesos (P200), or in t for not more than six months, or both, in the discretion of the court." That assumption is incorrect because 3 of the aforequoted Administrative Order No. 84 imposes a fm of not exceeding P500 on a person engaged in electro fishing, which amount the 83. It seems that the Department of Fisheries prescribed their own penalty for swift fishing which penalty is less than the severe penalty imposed in section 76 and which is not Identified to the at penalty imposed in section 83. Had Administrative Order No. 84 adopted the fighter penalty prescribed in on 83, then the crime of electro fishing would be within the exclusive original jurisdiction of the inferior court (Sec. 44 [f], Judiciary Law; People vs. Ragasi, L-28663, September 22, We have discussed this pre point, not raised in the briefs, because it is obvious that the crime of electro fishing which is punishable with a sum up to P500, falls within the concurrent original jurisdiction of the inferior courts and the Court of First instance (People vs. Nazareno, L-40037, April 30, 1976, 70 SCRA 531 and the cases cited therein).

And since the instant case was filed in the municipal court of Sta. Cruz, Laguna, a provincial capital, the order of d rendered by that municipal court was directly appealable to the Court, not to the Court of First Instance of Laguna (Sec. 45 and last par. of section 87 of the Judiciary Law; Esperat vs. Avila, L-25992, June 30, 1967, 20 SCRA 596). It results that the Court of First Instance of Laguna had no appellate jurisdiction over the case. Its order affirming the municipal court's order of dismissal is void for lack of motion. This appeal shall be treated as a direct appeal from the municipal court to this Court. (See People vs. Del Rosario, 97 Phil. 67). In this appeal, the prosecution argues that Administrative Orders Nos. 84 and 84-1 were not issued under section 11 of the Fisheries Law which, as indicated above, punishes fishing by means of an obnoxious or poisonous substance. This contention is not well-taken because, as already stated, the Penal provision of Administrative Order No. 84 implies that electro fishing is penalized as a form of fishing by means of an obnoxious or poisonous substance under section 11. The prosecution cites as the legal sanctions for the prohibition against electro fishing in fresh water fisheries (1) the rule-making power of the Department Secretary under section 4 of the Fisheries Law; (2) the function of the Commissioner of Fisheries to enforce the provisions of the Fisheries Law and the regulations Promulgated thereunder and to execute the rules and regulations consistent with the purpose for the creation of the Fisheries Commission and for the development of fisheries (Sec. 4[c] and [h] Republic Act No. 3512; (3) the declared national policy to encourage, Promote and conserve our fishing resources (Sec. 1, Republic Act No. 3512), and (4) section 83 of the Fisheries Law which provides that "any other violation of" the Fisheries Law or of any rules and regulations promulgated thereunder "shall subject the offender to a fine of not more than two hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court." As already pointed out above, the prosecution's reference to section 83 is out of place because the penalty for electro fishing under Administrative order No. 84 is not the same as the penalty fixed in section 83. We are of the opinion that the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries exceeded their authority in issuing Fisheries Administrative Orders Nos. 84 and 84-1 and that those orders are not warranted under the Fisheries Commission, Republic Act No. 3512. The reason is that the Fisheries Law does not expressly prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries are powerless to penalize it. In other words, Administrative Orders Nos. 84 and 84-1, in penalizing electro fishing, are devoid of any legal basis. Had the lawmaking body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in the old Fisheries Law. That law punishes (1) the use of obnoxious or poisonous substance, or explosive in fishing; (2) unlawful fishing in deepsea fisheries; (3) unlawful taking of marine molusca, (4) illegal taking of sponges; (5) failure of licensed fishermen to report the kind and quantity of fish caught, and (6) other violations. Nowhere in that law is electro fishing specifically punished. Administrative Order No. 84, in punishing electro fishing, does not contemplate that such an offense fails within the category of "other violations" because, as already shown, the penalty for electro fishing is the penalty next lower to the penalty for fishing with the use of obnoxious or poisonous substances, fixed in section 76, and is not the same as the penalty for "other violations" of the law and regulations fixed in section 83 of the Fisheries Law. The lawmaking body cannot delegate to an executive official the power to declare what acts should constitute an offense. It can authorize the issuance of regulations and the imposition of the penalty provided for in the law itself. (People vs. Exconde 101 Phil. 11 25, citing 11 Am. Jur. 965 on p. 11 32).

Originally, Administrative Order No. 84 punished electro fishing in all waters. Later, the ban against electro fishing was confined to fresh water fisheries. The amendment created the impression that electro fishing is not condemnable per se. It could be tolerated in marine waters. That circumstances strengthens the view that the old law does not eschew all forms of electro fishing. However, at present, there is no more doubt that electro fishing is punishable under the Fisheries Law and that it cannot be penalized merely by executive revolution because Presidential Decree No. 704, which is a revision and consolidation of all laws and decrees affecting fishing and fisheries and which was promulgated on May 16, 1975 (71 O.G. 4269), expressly punishes electro fishing in fresh water and salt water areas. That decree provides: +.wph!1 SEC. 33. Illegal fishing, dealing in illegally caught fish or fishery/aquatic products . It shall he unlawful for any person to catch, take or gather or cause to be caught, taken or gathered fish or fishery/aquatic products in Philippine waters with the use of explosives, obnoxious or poisonous substance, or by the use of electricity as defined in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: ... The decree Act No. 4003, as amended, Republic Acts Nos. 428, 3048, 3512 and 3586, Presidential Decrees Nos. 43, 534 and 553, and all , Acts, Executive Orders, rules and regulations or parts thereof inconsistent with it (Sec. 49, P. D. No. 704). The inclusion in that decree of provisions defining and penalizing electro fishing is a clear recognition of the deficiency or silence on that point of the old Fisheries Law. It is an admission that a mere executive regulation is not legally adequate to penalize electro fishing. Note that the definition of electro fishing, which is found in section 1 (c) of Fisheries Administrative Order No. 84 and which is not provided for the old Fisheries Law, is now found in section 3(d) of the decree. Note further that the decree penalty electro fishing by "imprisonment from two (2) to four (4) years", a punishment which is more severe than the penalty of a time of not excluding P500 or imprisonment of not more than six months or both fixed in section 3 of Fisheries Administrative Order No. 84. An examination of the rule-making power of executive officials and administrative agencies and, in particular, of the Secretary of Agriculture and Natural Resources (now Secretary of Natural Resources) under the Fisheries Law sustains the view that he ex his authority in penalizing electro fishing by means of an administrative order. Administrative agent are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes (People vs. Exconde 101 Phil. 1125; Director of Forestry vs. Mu;oz, L-24796, June 28, 1968, 23 SCRA 1183, 1198; Geukeko vs. Araneta, 102 Phil. 706, 712). The lawmaking body cannot possibly provide for all the details in the enforcement of a particular statute (U.S. vs. Tupasi Molina, 29 Phil. 119, 125, citing U.S. vs. Grimaud 220 U.S. 506; Interprovincial Autobus Co., Inc. vs. Coll. of Internal Revenue, 98 Phil. 290, 295-6). 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 nondeleption of legislative, powers. Administrative regulations or "subordinate legislation calculated to promote the public interest are necessary because of "the growing complexity of modem life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the law" Calalang vs. Williams, 70 Phil. 726; People vs. Rosenthal and Osme;a, 68 Phil. 328). Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By

such regulations, of course, the law itself cannot be extended. (U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the d of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969, 29 SCRA 350). The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it his been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax A 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see of Internal Revenue vs. Villaflor 69 Phil. 319, Wise & Co. vs. Meer, 78 Phil. 655, 676; Del March vs. Phil. Veterans Administrative, L-27299, June 27, 1973, 51 SCRA 340, 349). There is no question that the Secretary of Agriculture and Natural Resources has rule-making powers. Section 4 of the Fisheries law provides that the Secretary "shall from time to time issue instructions, orders, and regulations consistent" with that law, "as may be and proper to carry into effect the provisions thereof." That power is now vested in the Secretary of Natural Resources by on 7 of the Revised Fisheries law, Presidential December No. 704. Section 4(h) of Republic Act No. 3512 empower the Co of Fisheries "to prepare and execute upon the approval of the Secretary of Agriculture and Natural Resources, forms instructions, rules and regulations consistent with the purpose" of that enactment "and for the development of fisheries." Section 79(B) of the Revised Administrative Code provides that "the Department Head shall have the power to promulgate, whenever he may see fit do so, all rules, regulates, orders, memorandums, and other instructions, not contrary to law , to regulate the proper working and harmonious and efficient administration of each and all of the offices and dependencies of his Department, and for the strict enforcement and proper execution of the laws relative to matters under the jurisdiction of said Department; but none of said rules or orders shall prescribe penalties for the violation thereof, except as expressly authorized by law." Administrative regulations issued by a Department Head in conformity with law have the force of law (Valerie vs. Secretary of culture and Natural Resources, 117 Phil. 729, 733; Antique Sawmills, Inc. vs. Zayco, L- 20051, May 30, 1966, 17 SCRA 316). As he exercises the rule-making power by delegation of the lawmaking body, it is a requisite that he should not transcend the bound demarcated by the statute for the exercise of that power; otherwise, he would be improperly exercising legislative power in his own right and not as a surrogate of the lawmaking body. Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution." As noted by Justice Fernando, "except for constitutional officials who can trace their competence to act to the fundamental law itself, a public office must be in the statute relied upon a grant of power before he can exercise it." "department zeal may not be permitted to outrun the authority conferred by statute." (Radio Communications of the Philippines, Inc. vs. Santiago, L-29236, August 21, 1974, 58 SCRA 493, 496-8). "Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided in the law. This is so because statutes are usually couched in general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the law are oftentimes left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law." The rule or regulation should be within the scope of the statutory authority granted by the legislature to the administrative agency. (Davis, Administrative Law, p. 194, 197, cited in Victories Milling Co., Inc. vs. Social Security Commission, 114 Phil. 555, 558). In case of discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of the basic law (People vs.

Lim, 108 Phil. 1091). This Court in its decision in the Lim case, supra, promulgated on July 26, 1960, called the attention of technical men in the executive departments, who draft rules and regulations, to the importance and necessity of closely following the legal provisions which they intend to implement so as to avoid any possible misunderstanding or confusion. The rule is that the violation of a regulation prescribed by an executive officer of the government in conformity with and based upon a statute authorizing such regulation constitutes an offense and renders the offender liable to punishment in accordance with the provisions of the law (U.S. vs. Tupasi Molina, 29 Phil. 119, 124). In other words, a violation or infringement of a rule or regulation validly issued can constitute a crime punishable as provided in the authorizing statute and by virtue of the latter (People vs. Exconde 101 Phil. 1125, 1132). It has been held that "to declare what shall constitute a crime and how it shall be punished is a power vested exclusively in the legislature, and it may not be delegated to any other body or agency" (1 Am. Jur. 2nd, sec. 127, p. 938; Texas Co. vs. Montgomery, 73 F. Supp. 527). In the instant case the regulation penalizing electro fishing is not strictly in accordance with the Fisheries Law, under which the regulation was issued, because the law itself does not expressly punish electro fishing. The instant case is similar to People vs. Santos, 63 Phil. 300. The Santos case involves section 28 of Fish and Game Administrative Order No. 2 issued by the Secretary of Agriculture and Natural Resources pursuant to the aforementioned section 4 of the Fisheries Law. Section 28 contains the proviso that a fishing boat not licensed under the Fisheries Law and under the said administrative order may fish within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military reservations authorities of the United States only upon receiving written permission therefor, which permission may be granted by the Secretary upon recommendation of the military or naval authorities concerned. A violation of the proviso may be proceeded against under section 45 of the Federal Penal Code. Augusto A. Santos was prosecuted under that provision in the Court of First Instance of Cavite for having caused his two fishing boats to fish, loiter and anchor without permission from the Secretary within three kilometers from the shoreline of Corrigidor Island. This Court held that the Fisheries Law does not prohibit boats not subject to license from fishing within three kilometers of the shoreline of islands and reservations over which jurisdiction is exercised by naval and military authorities of the United States, without permission from the Secretary of Agriculture and Natural Resources upon recommendation of the military and naval authorities concerned. As the said law does not penalize the act mentioned in section 28 of the administrative order, the promulgation of that provision by the Secretary "is equivalent to legislating on the matter, a power which has not been and cannot be delegated to him, it being expressly reserved" to the lawmaking body. "Such an act constitutes not only an excess of the regulatory power conferred upon the Secretary but also an exercise of a legislative power which he does not have, and therefore" the said provision "is null and void and without effect". Hence, the charge against Santos was dismiss. A penal statute is strictly construed. While an administrative agency has the right to make ranks and regulations to carry into effect a law already enacted, that power should not be confused with the power to enact a criminal statute. An administrative agency can have only the administrative or policing powers expressly or by necessary implication conferred upon it. (Glustrom vs. State, 206 Ga. 734, 58 Second 2d 534; See 2 Am. Jr. 2nd 129-130). Where the legislature has delegated to executive or administrative officers and boards authority to promulgate

rules to carry out an express legislative purpose, the rules of administrative officers and boards, which have the effect of extending, or which conflict with the authority granting statute, do not represent a valid precise of the rule-making power but constitute an attempt by an administrative body to legislate (State vs. Miles, Wash. 2nd 322, 105 Pac. 2nd 51). In a prosecution for a violation of an administrative order, it must clearly appear that the order is one which falls within the scope of the authority conferred upon the administrative body, and the order will be scrutinized with special care. (State vs. Miles supra). The Miles case involved a statute which authorized the State Game Commission "to adopt, promulgate, amend and/or repeal, and enforce reasonable rules and regulations governing and/or prohibiting the taking of the various classes of game. Under that statute, the Game Commission promulgated a rule that "it shall be unlawful to offer, pay or receive any reward, prize or compensation for the hunting, pursuing, taking, killing or displaying of any game animal, game bird or game fish or any part thereof." Beryl S. Miles, the owner of a sporting goods store, regularly offered a ten-down cash prize to the person displaying the largest deer in his store during the open for hunting such game animals. For that act, he was charged with a violation of the rule Promulgated by the State Game Commission. It was held that there was no statute penalizing the display of game. What the statute penalized was the taking of game. If the lawmaking body desired to prohibit the display of game, it could have readily said so. It was not lawful for the administrative board to extend or modify the statute. Hence, the indictment against Miles was quashed. The Miles case is similar to this case. WHEREFORE, the lower court's decision of June 9, 1970 is set aside for lack of appellate jurisdiction and the order of dismissal rendered by the municipal court of Sta. Cruz, Laguna in Criminal Case No. 5429 is affirmed. Costs de oficio. SO ORDERED.

EN BANC G.R. No. 101279 August 6, 1992 PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner, vs.HON. RUBEN D. TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents. GRIO-AQUINO, J.: This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private employment agencies of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, the task of processing and deploying such workers. PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA, to engaged in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over the business of deploying such Hong Kong-bound workers. In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers going to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily suspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine Overseas Employment Administration shall take over the processing and deployment of household workers bound for Hong Kong, subject to guidelines to be issued for said purpose. In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regional offices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers to Hong Kong on a regional basis. For compliance. (Emphasis ours; p. 30, Rollo.) Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers. Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to Hong Kong. Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary government processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the temporary suspension of recruitment by private employment agencies for said skill and host market, the following guidelines and mechanisms shall govern the implementation of said policy. I. Creation of a joint POEA-OWWA Household Workers Placement Unit (HWPU) An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall take charge of the various operations involved in the Hong Kong-DH industry segment: The HWPU shall have the following functions in coordination with appropriate units and other entities concerned:

1. 2. 3. 4. 5.

Negotiations with and Accreditation of Hong Kong Recruitment Agencies Manpower Pooling Worker Training and Briefing Processing and Deployment Welfare Programs

II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or Principals Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with the HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong. xxx xxx xxx X. Interim Arrangement All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July 1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed with the HWPU. Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong kong a list of their accepted applicants in their pool within the last week of July. The last day of acceptance shall be July 31 which shall then be the basis of HWPU in accepting contracts for processing. After the exhaustion of their respective pools the only source of applicants will be the POEA manpower pool. For strict compliance of all concerned. (pp. 31-35, Rollo.) On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of employment contracts of domestic workers for Hong Kong. TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and deployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which have been attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts Processing Branch up to 15 August 1991 only. Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme which requires prior accreditation which the POEA. Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache, Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who failed to have themselves accredited in Hong Kong may proceed to the POEA-OWWA Household Workers Placement Unit in Manila for accreditation before their recruitment and processing of DHs shall be allowed. Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off period shall submit this list of workers upon accreditation. Only those DHs in said list will be allowed processing outside of the HWPU manpower pool. For strict compliance of all concerned. (Emphasis supplied, p. 36, Rollo.) On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA circulars and to prohibit their implementation for the following reasons:

1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing said circulars; 2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and oppressive; and 3. that the requirements of publication and filing with the Office of the National Administrative Register were not complied with. There is no merit in the first and second grounds of the petition. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities. Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this title. (Emphasis ours.) On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services, is broad and farranging for: 1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the power and duty: "2. To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas , . . ." (Art. 15, Labor Code, Emphasis supplied). (p. 13, Rollo.) 2. It assumed from the defunct Overseas Employment Development Board the power and duty: 3. To recruit and place workers for overseas employment of Filipino contract workers on a government to government arrangement and in such other sectors as policy may dictate . . . (Art. 17, Labor Code.) (p. 13, Rollo.) 3. From the National Seamen Board, the POEA took over: 2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment; and secure the best possible terms of employment for contract seamen workers and secure compliance therewith. (Art. 20, Labor Code.) The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid.). It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or

by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218). The Solicitor General, in his Comment, aptly observed: . . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope or area of petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong Kong till after the establishment of the "mechanisms" that will enhance the protection of Filipino domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either for Hongkong and other countries and all other classes of Filipino workers for other countries. Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement and documentation fees, travel fees and other charges committed by private employment agencies recruiting and deploying domestic helpers to Hongkong. [They are reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today, is affected with public interest. xxx xxx xxx The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by private employment agencies are hereby "temporarily suspended effective July 1, 1991." The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to Hongkong only. xxx xxx xxx . . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong resulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulous practice of private employment agencies victimizing applicants for employment as domestic helpers for Hongkong and not the whole recruitment business in the Philippines. (pp. 62-65, Rollo.) The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government. Nevertheless, they are legally invalid, defective and unenforceable for lack of power publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide: Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazatte, unless it is otherwise provided. . . . (Civil Code.) Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation. (Emphasis supplied, Labor Code, as amended.)

Sec. 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified copies of every rule adopted by it . Rules in force on the date of effectivity of this Code which are not filed within three (3) months shall not thereafter be the basis of any sanction against any party or persons. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.) Sec. 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them. (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987). Once, more we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that: . . . Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. (p. 447.) Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. (p. 448.) We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the content of the laws. (p. 448.) For lack of proper publication, the administrative circulars in question may not be enforced and implemented. WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and POEA Memorandum Circulars Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication and filing under the aforementioned laws of the land. SO ORDERED.

SECOND DIVISION G.R. No. L-64279 April 30, 1984 ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners, vs.JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City Branch 129, acting for REGIONAL TRIAL COURT of Camarines Norte, now presided over by JUDGE NICANOR ORIO, Daet Branch 40; DRA. BELLA S. MIRANDA, ARNULFO V. ZENAROSA, ET AL., respondents. AQUINO, J.: At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of Presidential Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by the government of carabaos transported from one province to another. Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the evening of April 2, 1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia, Batangas, as the destination. They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under the Revised Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a permit to transport large cattle issued under the authority of the provincial commander; and (3) three certificates of inspection, one from the Constabulary command attesting that the carabaos were not included in the list of lost, stolen and questionable animals; one from the LIvestock inspector, Bureau of Animal Industry of Libmanan, Camarines Sur and one from the mayor of Sipocot. In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud, Camarines Norte, were confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander, and by Doctor Bella S. Miranda, provincial veterinarian. The confiscation was basis on the aforementioned Executive Order No. 626-A which provides "that henceforth, no carabao, regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to another. The carabaos or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case of carabaos" (78 OG 3144). Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the Vinzons municipal nursery (Annex 1). The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the carabaos allegedly valued at P70,000 and damages of P92,000. The replevin order could not be executed by the sheriff. In his order of April 25, 1983 Judge Domingo Medina Angeles, who heard the case at Daet and who was later transferred to Caloocan City, dismissed the case for lack of cause of action. The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and pursuant to Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court. We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted, it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the Revised Administrative Code. The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said penalties binding on the persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central Bank of the Phils., 104 Phil. 573; Balbuna vs. Secretary of Education, 110 Phil. 150.) The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las mismas por el Gobierno en uso de su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)

Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No. 20 and sentenced to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court because the circular was published in the Official Gazette three months after his conviction. He was not bound by the circular. That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision or sanction makes it a penal statute. Justice and fairness dictate that the public must be informed of that provision by means of publication in the Gazette before violators of the executive order can be bound thereby. The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills vs. Social Security System , 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal regulation. Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should be published in the Official Gazette. It provides that "every order or document which shag prescribe a penalty shall be deemed to have general applicability and legal effect." Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised Administrative Code provides that even bureau "regulations and orders shall become effective only when approved by the Department Head and published in the Official Gazette or otherwise publicly promulgated". (See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.) In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of the Public Affairs Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans could not have been expected to be cognizant of such an executive order. It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not in order. The recipients of the carabaos should return them to the Pesigans. However, they cannot transport the carabaos to Batangas because they are now bound by the said executive order. Neither can they recover damages. Doctor Miranda and Zenarosa acted in good faith in ordering the forfeiture and dispersal of the carabaos. WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed and set aside. Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite documents, to the petitioners, who as owners are entitled to possess the same, with the right to dispose of them in Basud or Sipocot, Camarines Sur. No costs. SO ORDERED.

SECOND DIVISION G.R. No. L-36130 January 17, 1985 LA SUERTE CIGAR AND CIGARETTE FACTORY, BATAAN CIGAR AND CIGARETTE FACTORY, INC., LA PERLA INDUSTRIES, INC., PIONEER TOBACCO CORPORATION, INSULAR-YEBANA TOBACCO CORPORATION, LAS BUENAS FABRICA DE CIGARILLOS, INC., LA DICHA CIGAR & CIGARETTE FACTORY, CONSOLIDATED TOBACCO INDUSTRIES OF THE PHILIPPINES, INC., LA CAMPANA FABRICA DE TABACOS, INC., ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION, FORTUNE TOBACCO CORPORATION, BAGUMBUHAY CIGAR AND CIGARETTE FACTORY, STANDARD CIGARETTE MANUFACTURING CO., INC., and D.L. TERUEL TOBACCO CO., INC., petitioners, vs.COURT OF TAX APPEALS and HON. MISAEL P. VERA, in his capacity as Commissioner of Internal Revenue, respondents. G.R. No. L-36131 January 17, 1985 ALHAMBRA INDUSTRIES, INC., LA FLOR DE LA ISABELA, INCORPORADA and COLUMBIA TOBACCO COMPANY, INC., petitioners, vs.COURT OF TAX APPEALS and HON. MISAEL P. VERA, in his capacity as Commissioner of Internal Revenue, respondents. CUEVAS, J.: Petition for Review on certiorari of the decisions 1 of the Court of Tax Appeals in CTA Cases Nos. 2048 and 2031, denying petitioners' claims for the refund of P1,606,509.83 imposed and collected by respondent Commissioner of Internal Revenue as tobacco inspection fees on cigars and cigarettes manufactured for domestic sale and/or consumption. These two cases were heard jointly by the Court of Tax Appeals the parties being represented by one and the same counsel and involving as they do, the same legal issues. The amounts involved are not disputed. On August 22, 1967, respondent Commissioner of Internal Revenue issued Memorandum Circular No. 30-67 2 requiring the inspection of (a) all locally produced leaf tobacco and partially manufactured tobacco intended for domestic sale, for factory use or for export; (b) all manufactured products of tobacco contemplated in Sec. 194(m) of the Tax Code intended for domestic sale; and (c) all imported foreign leaf tobacco and partially manufactured tobacco for domestic sale or factory use, and the collection of the corresponding inspection fees. Pursuant to said Memorandum respondent collected from petitioners, over the latter's vehement protests, the following inspection fees: (a) 199,632.19 during the period from September 1967 to April 1969, in CTA Case No. 2031; (b) 1,406,877.64 during the period from September 1967 to August 1969, in CTA Case No. 2048. Petitioners in two separate cases, sought the refund of the aforementioned inspection fees collected from them CTA Case No. 2031 was submitted by petitioners for summary judgment. In a decision dated November 28, 1970, CTA denied the claim for the refund of the amount of P199,632.19. Before the finality of the said decision, however, petitioners moved for a reconsideration thereby praying that in case of a denial, CTA Case No. 2031 be reopened for the reception of evidence in support of their argument that there was no inspection made by the BIR nor were inspection labels affixed to the boxes and packages containing the cigars and cigarettes which would warrant the imposition and collection of the disputed tobacco inspection fees. On September 28, 1971, the CTA granted petitioners' motion to reopen but denied the motion for reconsideration. Said court likewise ordered that CTA Cases Nos. 2048 and 2031 be heard jointly. After hearing, the CTA on December 15, 1972 denied both claims. Petitioners contend that the CTA erred: I

IN REACHING A CONCLUSION CONTRARY TO PETITIONERS' POSITION THAT INSPECTION FEES COLLECTED FROM THEM BY RESPONDENT ON THE CIGARS AND CIGARETTES MANUFACTURED BY THEM FOR DOMESTIC SALE OR CONSUMPTION WERE SO COLLECTED ILLEGALLY AND HENCE, SHOULD BE REFUNDED TO THEM; II IN REFUSING TO HOLD THAT RESPONDENT COMMISSIONER'S REVENUE MEMORANDUM CIRCULAR WHICH PURPORTS TO DECLARE PETITIONERS LIABLE FOR THE AFORESAID INSPECTION FEES, AND IN VIRTUE OF WHICH, THE SAID FEES WERE COLLECTED, IS WITHOUT ANY BINDING FORCE AND EFFECT ON THE LATTER, BECAUSE OF THE ADMITTED FACT THAT IT IS NOT A REGULATION PROMULGATED BY THE SECRETARY OF FINANCE, AS REQUIRED BY SECTION 4(j) AND 338 OF THE NIRC, AND FURTHER, BECAUSE OF THE EQUALLY ADMITTED FACT THAT IT HAS NEVER BEEN PUBLISHED IN THE OFFICIAL GAZETTE, AS REQUIRED NOT ONLY BY ART. 2 OF THE CIVIL CODE, BUT ALSO BY SEC. 79(b) OF THE REVISED ADMINISTRATIVE CODE; III IN DISREGARDING THE FACT BORNE OUT BY UNDISPUTED EVIDENCE THAT NO INSPECTION OF THE CIGARS AND CIGARETTES AFOREMENTIONED WAS ACTUALLY CONDUCTED FOR WHICH REASON NO COLLECTION OF INSPECTION FEES WAS LEGALLY WARRANTED; and IV IN FAILING TO HOLD THAT THE PROVISIONS OF THE TOBACCO INSPECTION LAW (SEC. 6[c]) UNDER WHICH THE SAID REVENUE MEMORANDUM CIRCULAR PURPORTS TO DECLARE PETITIONERS' CIGAR AND CIGARETTES FOR DOMESTIC SALE OR CONSUMPTION SUBJECT TO INSPECTION AND THE PAYMENT OF INSPECTION FEES, REFER ALONE TO LEAF TOBACCO FOR DOMESTIC SALE OR FACTORY USE, NOT TO CIGARS AND CIGARETTES FOR DOMESTIC CONSUMPTION, AND HENCE, THE SAID MEMORANDUM CIRCULAR IS ULTRA VIRES AND VOID. Section 6(c) of Act 2613 (Tobacco Inspection Law), before its amendment by Republic Act No. 3 1, provides: Sec. 6. The Commissioner of Internal Revenue shall have the power and it shall be his duty: ... xxx xxx xxx (c) To require, whenever it shall be deemed expedient, the inspection of and affixture of inspection labels to tobacco removed from the province before such removal or to tobacco for domestic sale or factory use. As amended, (by RA 31) said Section 6, Republic Act No. 31 (October 1, 1946) now reads: Sec. 6. The Commissioner of Internal Revenue shall have the power and it shall be his duty: xxx xxx xxx (c) To require, whenever it shall be deemed expedient, the inspection of and affixture of inspection labels to tobacco removed from province of its origin to another or other provinces before such removal or to tobacco for domestic sale or factory use. (Emphasis supplied) The amendatory bill (House Bill No. 735) which later on became Republic Act No. 31, carried the following explanatory note: EXPLANATORY NOTE

Under Section 6 of the Tobacco Inspection Law (Act No. 2613), the Collector of Internal Revenue is authorized to promulgate rules relative to the classification, marking and packaging of leaf tobacco for domestic sale or for exportation in order to insure the use of leaf tobacco of good quality and its handling under sanitary conditions. Section 1 of the attached bill seeks to extend this regulatory power of the Collector of Internal Revenue to leaf tobacco intended for factory use. xxx xxx xxx xxx xxx xxx Under the present law only leaf and manufactured tobacco for export to the United States are subject to inspection. Under the proposed amendment, the standard type and packing of all leaf and manufactured tobacco for export to any foreign country will come under the regulatory power of the Collector of Internal Revenue. (Emphasis supplied) It was petitioners' contention that the amendatory portion reading "or to tobacco for domestic sale or factory use" in Sec. 6(c) of Act 2613, refers to leaf tobacco whether for local sale or factory use and does not include cigars and cigarettes for domestic sale or consumption. We do not agree. Prior to the amendment of said Act, Sec. 6 and 7 thereof, already covered the inspection of leaf tobacco, partially manufactured tobacco or local sale and leaf tobacco and its products for export. If the intention of Congress was to apply the amendment to those items already covered by Act 2613, then the word "leaf" should have been easily included to modify the term "tobacco". The omission of the word "leaf" is a clear indication that Congress intended to include within the purview of the law a new item; namely, manufactured tobacco products for domestic sale and imported tobacco for factory use. As aptly held by the CTA: xxx xxx xxx Petitioners' contention that the phrase 'tobacco for domestic sale' refers to leaf tobacco alone is restrictive, misleading, and against sound statutory construction. Webster's New International Dictionary 2nd Edition, p. 2653 defines tobacco as the leaves of the tobacco plant, prepared by drying and various manufacturing processes, and use either for smoking or chewing, or as snuff, or the manufactured products from tobacco leave smoking or chewing tobacco cigar cigarette etc . collectively From the above definition, it is clear that the word "tobacco" refers both to leaf and manufactured tobacco such as cigars, and cigarettes It is to be noted that either Section 6(c) of Act No. 2613 or the amendatory law does not make a distinction as to the meaning of the word "tobacco". Since our la g body used the word tobacco in the general sense without any qualification, this Court is powerless to give it a restrictive meaning. xxx xxx xxx If Congress of the Philippines really intended to restrict the meaning of the word 'tobacco' under Republic Act No. 31, which took effect on October 1, 1946, in order to limit the scope of the term tobacco under the law originally passed in 1916 and its implementing Regulations Nos. 17 and 47, it could have easily inserted the word "leaf" to modify "tobacco" contained in the amendatory law. An examination of Sections 6(a), 6(b) and 7, supra, reveals that, if our lawmaking body intended to limit the coverage of said sections to either leaf or manufactured tobacco, it qualified the word 'tobacco' with such antecedent words. In Section 6(c) of Act 2613, as amended, no such qualification was made by Congress, thereby showing the broad scope and meaning of the word tobacco. For

the Court to adopt petitioners' construction that tobacco means 'leaf tobacco' would be engaging in unauthorized judicial legislation by rewriting the law and inserting words and phrases not found in it. xxx xxx xxx Settled is the rule that where the law does not distinguish, we should not distinguish.
3

The validity and efficacy of Revenue Memorandum Circular No. 30-67 is now being assailed by petitioners on the ground that it is not a regulation promulgated by the Secretary of Finance (now Minister of Finance) and that it has never been published in the Official Gazette as required by the Civil Code and the Revised Administrative Code. As herein earlier mentioned, the word "leaf", although used to modify the term "tobacco" only in the Explanatory Note to then House Bill No. 735 was omitted when the Bill was signed into law (RA 31). However, when General Circular No. V-27 dated October 29, 1946 was issued by then Collector of Internal Revenue Bibiano L. Meer to implement the provisions of Sections 6, 7 and 14 of Act 2613 (Tobacco Inspection Law), the word "leaf" was erroneously included therein, causing damage to the financial stability of the Government as the inspection fees due on cigars and cigarettes for domestic sale and imported leaf and partially manufactured tobacco for factory use were not collected for more than twenty (20) years. Such error was only discovered when an Assistant Chief of the Tobacco Inspection Service of the BIR appeared in a public hearing of the Joint Legislative-Executive Tax Commission. As a result thereof, the Philippine Tobacco Board, a policy making body of the National Government on Tobacco Authority, adopted Resolution No. 2-67 interpreting the phrase "tobacco for domestic sale" as referring to wholesale disposal of tobacco products by cigar and cigarettes factories to its dealers while the phrase "tobacco for factory use" meant "imported leaf tobacco" intended for use by cigar and cigarette factories in the manufacture of tobacco products. The approval of this Resolution on May 31, 1967 prompted respondent Commissioner to promulgate Memorandum Circular No. 30-67 which was approved by then Secretary of Finance Eduardo Z. Romualdez and the effectivity of which is specifically dated September 1, 1967 and not contingent on its publication in the Official Gazette. Thus, the assailed Revenue Memorandum Circular was issued to rectify the error in General Circular No. V-27 and to interpret the phrase "tobacco for domestic sale or factory use" with the view of arresting huge losses of tobacco inspection fees which were not collected and imposed since the said Circular (No. V-27) took effect. Furthermore, the questioned Revenue Memorandum Circular was also issued to apprise those concerned of the construction and interpretation which should be accorded to Act No. 2613, as amended, and which respondent is duty bound to enforce. It is an opinion on how the law should be construed and there was no attempt whatsoever to enlarge or restrict the meaning of the law. The basis for the issuance of said Memorandum Circular was so stated in Resolution No. 2-67 of the Tobacco Board, wherein petitioners as members of the Manila Tobacco Association, Inc. were duly represented, the pertinent portions of which read: xxx xxx xxx WHEREAS, tills original recommendation of Mr. Hernandez was perfectly in accordance with eating law, more particularly Sec. 1 of Republic Act No. 31 which took effect since September 25, 1946, but perhaps thru oversight by the former Commissioners and officers of the Tobacco Inspection Service the property and legality of effecting the inspection of tobacco products for local sales and imported leaf tobacco for factory use might have overlooked resulting in huge losses of tobacco inspection fees ... (Emphasis supplied) As admitted by counsel for petitioners, the latter were each furnished with a copy of the Revenue Memorandum Circular in question and the purpose of the law, that is to inform or notify those who may be affected, has been substantially complied with. Since it was further admitted by petitioners that said Memorandum is but a "Memorandum Circular for purposes of the internal administration of the BIR and not a regulation within the contemplation of Sections 4 and 338 of the NIRC and Section 79(b) of the Revised Administrative Code", said circular needs no publication in the Official Gazette as erroneously argued by the petitioners.

Section 79(b) of the Revised Administrative Code so provides: Chiefs, of bureaus or offices, may, however, be authorized to promulgate circulars or information or instructions for the government of the officers and employees in the interior administration of the business of each bureau or office, and in such case said circular shall not be required to be published. When an administrative agency renders an opinion by means of a circular or Memorandum, it merely interprets a pre-existing law, and no publication is necessary for its validity. 4 Construction by an executive branch of government of a particular law although not binding upon courts must be given weight as the construction come from the branch of the government called upon to implement the law. 5 The promulgation of Revenue Memorandum Circular No. 30-67 being in accordance with the Revised Administrative Code, having been issued by the Commissioner of Internal Revenue with the approval of the Secretary (now Minister) of Finance for the implementation of the Tobacco Inspection Law, has therefore the force and effect of law. Tobacco Inspection fees are undoubtedly National Internal Revenue taxes, they being one of the miscellaneous taxes provided for under the Tax Code. Section 228 (formerly Section 302) of Chapter VII of the Code specifically provides for the collection and manner of payment of the said inspection fees. It is within the power and duty of the Commissioner to collect the same, even without inspection, should tobacco products be removed clandestinely or surreptitiously from the establishment of the wholesaler, manufacturer or redrying plant and from the customs custody in case of imported leaf tobacco. Errors, omissions or flaws committed by BIR inspectors and representatives while in the performance of their duties cannot be set up as estoppel nor estop the Government from collecting a tax legally due. 6 Tobacco inspection fees are levied and collected for purposes of regulation and control and also as a source of revenue since fifty percentum (50%) of said fees shall accrue to the Tobacco Inspection Fee Fund created by Sec. 12 of Act No. 2613, as amended and the other fifty percentum to the Cultural Center of the Philippines. (Sec. 88, Chapter VII, NIRC) Under the circumstances, a refund of the tobacco inspection fees collected from petitioners is not legally warranted. As disclosed by the records, the party-litigants agreed that Mr. Vicente Chua's, (Production Manager of La Suerte Cigar & Cigarette Factory) testimony shall be considered as the Procedure of inspection followed in all factories of petitioners, thus: 7 ... before the cigarettes were removed from the factory, they were invoiced by the revenue agents assigned there to check on the number of cases of cigarettes to be removed; revenue agents checked the quantity of cigarettes manufactured, quantity of cigarettes removed, strip stamps affixed; and early in the morning before the start of the operation, the revenue agents checked the cigarette bobbins strip stamps and saw to it that cigarettes removed were properly recorded in the books. From the testimonies of other witnesses for petitioners, it was shown that revenue agents and tobacco inspectors "saw to it that an raw materials for use in the manufacture of the finished products were duly recorded; and in the process of manufacture, all tobacco products found unfit for sales were segregated by the factory employees thru the supervision of the revenue agents." The CTA held that the foregoing belie petitioners' assertions that no actual inspection was conducted to justify the collection of the tobacco inspection fees. The findings of the Tax Court are duly supported by evidence. We find no cogent reason to disturb the same. They are therefore binding on this Court. Accordingly, the petition for review is hereby DISMISSED. Costs against petitioners. SO ORDERED.

EN BANC [G.R. No. 127838. January 21, 1999]CIVIL SERVICE COMMISSION, petitioner, vs. JOSE J. LUCAS, respondent. SYNOPSIS On May 26, 1992, Raquel Linatok, an assistant information officer at the Department of Agriculture, filed with the Office of the Secretary of the Department of Agriculture an affidavit-complaint against respondent Jose Lucas, a photographer of the same agency for misconduct. The complaint stemmed from the alleged act of Jose Lucas of touching and caressing complainants thigh running down to her ankle. After a formal investigation by the Board of Personnel Inquiry, it issued a resolution finding respondent guilty of simple misconduct and recommending a penalty of suspension for one month and one day. The CSC, however, found him guilty of grave misconduct and imposed on him the penalty of dismissal from the service. The Court of Appeals set aside the CSC resolution and reinstated that of the board and ruled that respondent was denied due process as he came to know of the modification of the charge against him only when he received notice of the CSC resolution dismissing him from the service. In its petition to the Supreme Court, petitioner contended that a formal charges in an administrative case need not be drafted with the precision of an information in a criminal prosecution. The Supreme Court held that administrative proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process in investigations and hearings. It sustained the ruling of the Court of Appeals that respondent was denied due process as he was charged with simple misconduct, but the CSC deprived him of his right to due process by convicting him of grave misconduct. SYLLABUS 1. ADMINISTRATIVE LAW; CIVIL SERVICE COMMISSION; GUIDELINE DISTINGUISHING SIMPLE AND GRAVE MISCONDUCT. There is an existing guideline of the CSC distinguishing simple and grave misconduct. In the case of Landrito vs. Civil Service Commission, we held that in grave misconduct as distinguished from simple misconduct, the elements of corruption, clear intent to violate the law or flagrant disregard of established rule, must be manifest. which is obviously lacking in respondents case. 2. CONSTITUTIONAL LAW; DUE PROCESS; BASIC PRINCIPLES; ADMINISTRATIVE PROCEEDINGS NOT EXEMPT THEREFROM. We sustain the ruling of the Court of Appeals that: (a) a basic requirement of due process is that a person must be duly informed of the charges against him and that (b) a person can not be convicted of a crime with which he was not charged. Administrative proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process in investigations and proceedings. 3. ADMINISTRATIVE LAW; ADMINISTRATIVE PROCEEDINGS; CIRCUMSTANCES IN CASE AT BAR NOT CONSTITUTIVE OF GRAVE MISCONDUCT; LENGTH OF SERVICE NOTED IN CASE AT BAR. Of course, we do not in any way condone respondents act. Even in jest, he had no right to touch complainants leg. However, under the circumstances, such act is not constitutive of grave misconduct, in the absence of proof that respondent was maliciously motivated. We note that respondent has been in the service for twenty (20) years and this is his first offense. PARDO, J.: The petition for review on certiorari before the Court assails the decision of the Court of Appeals[1] which set aside the resolution of the Civil Service Commission[2] and reinstated that of the Board of Personnel Inquiry (BOPI for brevity), Office of the Secretary, Department of Agriculture,[3] suspending respondent for one month, for simple misconduct. To provide a factual backdrop of the case, a recital of the facts is necessary. On May 26, 1992, Raquel P. Linatok, an assistant information officer at the Agricultural Information Division, Department of Agriculture (DA for brevity), filed with the office of the Secretary, DA, an affidavitcomplaint against respondent Jose J. Lucas, a photographer of the same agency, for misconduct. Raquel described the incident in the following manner: While standing before a mirror, near the office door of Jose J. Lucas, Raquel noticed a chair at her right side

which Mr. Jose Lucas, at that very instant used to sit upon. Thereafter, Mr. Lucas bent to reach for his shoe. At that moment she felt Mr. Lucas hand touching her thigh and running down his palm up to her ankle. She was shocked and suddenly faced Mr. Lucas and admonished him not to do it again or she will kick him. But Lucas touched her again and so she hit Mr. Lucas. Suddenly Mr. Lucas shouted at her saying lumabas ka na at huwag na huwag ka nang papasok dito kahit kailan A verbal exchange then ensued and respondent Lucas grabbed Raquel by the arm and shoved her towards the door causing her to stumble, her both hands protected her face from smashing upon the door. Mr. Lucas, bent on literally throwing the affiant out of the office, grabbed her the second time while she attempted to regain her posture after being pushed the first time. x x x while doing all this, Mr. Lucas shouted at the affiant, saying, labas, huwag ka nang papasok dito kahit kailan.[4] On June 8, 1992, the Board of Personnel Inquiry, DA, issued a summons requiring respondent to answer the complaint, not to file a motion to dismiss, within five (5) days from receipt. On June 17, 1992, respondent Lucas submitted a letter to Jose P. Nitullano, assistant head, BOPI, denying the charges. According to Lucas, he did not touch the thigh of complainant Linatok, that what transpired was that he accidentally brushed Linatoks leg when he reached for his shoes and that the same was merely accidental and he did not intend nor was there malice when his hand got in contact with Linatoks leg. On May 31, 1993, after a formal investigation by the BOPI, DA, the board issued a resolution finding respondent guilty of simple misconduct[5] and recommending a penalty of suspension for one (1) month and one (1) day. The Secretary of Agriculture approved the recommendation. In due time, respondent appealed the decision to the Civil Service Commission (CSC). On July 7, 1994, the CSC issued a resolution finding respondent guilty of grave misconduct and imposing on him the penalty of dismissal from the service.[6] Respondent moved for reconsideration but the CSC denied the motion. Then, respondent appealed to the Court of Appeals. On October 29, 1996, the Court of Appeals promulgated its decision setting aside the resolution of the CSC and reinstating the resolution of the BOPI, DA, stating thus: It is true that the Civil Service Act does not define grave and simple misconduct. There is, however, no question that these offenses fall under different categories. This is clear from a perusal of memorandum circular No. 49-89 dated August 3, 1989 (also known as the guidelines in the application of penalties in administrative cases) itself which classifies administrative offenses into three: grave, less grave and light offenses. The charge of grave misconduct falls under the classification of grave offenses while simple misconduct is classified as a less grave offense. The former is punishable by dismissal while the latter is punishable either by suspension (one month and one day to six months), if it is the first offense; or by dismissal, if it is the second. Thus, they should be treated as separate and distinct offenses.[7] The Court of Appeals further ruled that a basic requirement of due process on the other hand is that a person must be duly informed of the charges against him (Felicito Sajonas vs. National Labor Relations Commission, 183 SCRA 182). In the instant case however, Lucas came to know of the modification of the charge against him only when he received notice of the resolution dismissing him from the service.[8] Hence, this petition. The issues are (a) whether respondent Lucas was denied due process when the CSC found him guilty of grave misconduct on a charge of simple misconduct, and (b) whether the act complained of constitutes grave misconduct. Petitioner anchors its position on the view that the formal charge against a respondent in an administrative case need not be drafted with the precision of an information in a criminal prosecution. It is sufficient that he is apprised of the substance of the charge against him; what is controlling is the allegation of the acts complained of, and not the designation of the offense.[9] We deny the petition. As well stated by the Court of Appeals, there is an existing guideline of the CSC distinguishing simple and grave misconduct. In the case of Landrito vs. Civil Service Commission, we held that in grave misconduct as distinguished from simple misconduct, the elements of corruption, clear intent to violate the law or

flagrant disregard of established rule, must be manifest,[10] which is obviously lacking in respondents case. Respondent maintains that as he was charged with simple misconduct, the CSC deprived him of his right to due process by convicting him of grave misconduct. We sustain the ruling of the Court of Appeals[11] that: (a) a basic requirement of due process is that a person must be duly informed of the charges against him[12] and that (b) a person can not be convicted of a crime with which he was not charged.[13] Administrative proceedings are not exempt from basic and fundamental procedural principles, such as the right to due process in investigations and hearings.[14] The right to substantive and procedural due process is applicable in administrative proceedings.[15] Of course, we do not in any way condone respondents act. Even in jest, he had no right to touch complainants leg. However, under the circumstances, such act is not constitutive of grave misconduct, in the absence of proof that respondent was maliciously motivated. We note that respondent has been in the service for twenty (20) years and this is his first offense. IN VIEW WHEREOF, the Court hereby DENIES the petition for review on certiorari and AFFIRMS the decision of the Court of Appeals in CA-G. R. SP No. 37137. No costs. SO ORDERED.

EN BANC G.R. No. 96266 July 18, 1991 ERNESTO M. MACEDA, petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents. G.R. No. 96349 July 18, 1991 EUGENIO O. ORIGINAL, IRENEO N. AARON, JR., RENE LEDESMA, ROLANDO VALLE, ORLANDO MONTANO, STEVE ABITANG, NERI JINON, WILFREDO DELEONIO, RENATO BORRO, RODRIGO DE VERA, ALVIN BAYUANG, JESUS MELENDEZ, NUMERIANO CAJILIG JR., RUFINO DE LA CRUZ AND JOVELINO G. TIPON, petitioners, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents. G.R. No. 96284 July 18,1991 CEFERINO S. PAREDES, JR., petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL, INC. AND PETROPHIL CORPORATION, respondents. RESOLUTION MEDIALDEA, J.:p In G.R. No. 96266, petitioner Maceda seeks nullification of the Energy Regulatory Board (ERB) Orders dated December 5 and 6, 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow him substantial cross-examination, in effect, allegedly, a denial of due process. The facts of the case are as follows: Upon the outbreak of the Persian Gulf conflict on August 2, 1990, private respondents oil companies filed with the ERB their respective applications on oil price increases (docketed as ERB Case Nos. 90-106, 90-382 and 90384, respectively). On September 21, 1990, the ERB issued an order granting a provisional increase of P1.42 per liter. Petitioner Maceda filed a petition for Prohibition on September 26, 1990 (E. Maceda v. ERB, et al., G.R. No. 95203), seeking to nullify the provisional increase. We dismissed the petition on December 18, 1990, reaffirming ERB's authority to grant provisional increase even without prior hearing, pursuant to Sec. 8 of E.O. No. 172, clarifying as follows: What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex-parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 3, paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex-parte and which are subject to the resolution of the main case. Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority-which is of course, the better procedure however, it cannot be stigmatized later if it failed to conduct one. (pp. 129-130, Rollo) (Emphasis supplied) In the same order of September 21, 1990, authorizing provisional increase, the ERB set the applications for hearing with due notice to all interested parties on October 16, 1990. Petitioner Maceda failed to appear at said hearing as well as on the second hearing on October 17, 1990. To afford registered oppositors the opportunity to cross-examine the witnesses, the ERB set the continuation of the hearing to October 24, 1990. This was postponed to November 5, 1990, on written notice of petitioner Maceda. On November 5, 1990, the three oil companies filed their respective motions for leave to file or admit

amended/supplemental applications to further increase the prices of petroleum products. The ERB admitted the respective supplemental/amended petitions on November 6, 1990 at the same time requiring applicants to publish the corresponding Notices of Public Hearing in two newspapers of general circulation (p. 4, Rollo and Annexes "F" and "G," pp. 60 and 62, Rollo). Hearing for the presentation of the evidence-in-chief commenced on November 21, 1990 with ERB ruling that testimonies of witnesses were to be in the form of Affidavits (p. 6, Rollo). ERB subsequently outlined the procedure to be observed in the reception of evidence, as follows: CHAIRMAN FERNANDO: Well, at the last hearing, applicant Caltex presented its evidence-in-chief and there is an understanding or it is the Board's wish that for purposes of good order in the presentation of the evidence considering that these are being heard together, we will defer the cross-examination of applicant Caltex's witness and ask the other applicants to present their evidence-in-chief so that the oppositors win have a better Idea of what an of these will lead to because as I mentioned earlier, it has been traditional and it is the intention of the Board to act on these applications on an industry-wide basis, whether to accept, reject, modify or whatever, the Board win do it on an industry wide basis, so, the best way to have ( sic) the oppositors and the Board a clear picture of what the applicants are asking for is to have all the evidence-in-chief to be placed on record first and then the examination will come later, the cross-examination will come later. . . . (pp. 5-6, tsn., November 23, 1990, ERB Cases Nos. 90-106, 90382 and 90-384). (p. 162, Rollo) Petitioner Maceda maintains that this order of proof deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to cross-examine each of the witnesses of Caltex and Shell. He points out that this relaxed procedure resulted in the denial of due process. We disagree. The Solicitor General has pointed out: . . . The order of testimony both with respect to the examination of the particular witness and to the general course of the trial is within the discretion of the court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the rules is not improper (88 C.J.S. 206-207). Such a relaxed procedure is especially true in administrative bodies, such as the ERB which in matters of rate or price fixing is considered as exercising a quasi-legislative , not quasi-judicial, function As such administrative agency, it is not bound by the strict or technical rules of evidence governing court proceedings (Sec. 29, Public Service Act; Dickenson v. United States, 346, U.S. 389, 98 L. ed. 132, 74 S. St. 152). (Emphasis supplied) In fact, Section 2, Rule I of the Rules of Practice and Procedure Governing Hearings Before the ERB provides that These Rules shall govern pleadings, practice and procedure before the Energy Regulatory Board in all matters of inquiry, study, hearing, investigation and/or any other proceedings within the jurisdiction of the Board. However, in the broader interest of justice, the Board may, in any particular matter, except itself from these rules and apply such suitable procedure as shall promote the objectives of the Order. (pp. 163-164, Rollo) Petitioner Maceda also claims that there is no substantial evidence on record to support the provisional relief. We have, in G.R. Nos. 95203-05, previously taken judicial notice of matters and events related to the oil industry, as follows:

. . . (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4) our trade deficit is at P2.855 Billion as of the first nine months of the year. . . . (p. 150, Rollo) The Solicitor General likewise commented: Among the pieces of evidence considered by ERB in the grant of the contested provisional relief were: (1) certified copies of bins of lading issued by crude oil suppliers to the private respondents; (2) reports of the Bankers Association of the Philippines on the peso-dollar exchange rate at the BAP oil pit; and (3) OPSF status reports of the Office of Energy Affairs. The ERB was likewise guided in the determination of international crude oil prices by traditional authoritative sources of information on crude oil and petroleum products, such as Platt's Oilgram and Petroleum Intelligence Weekly. (p. 158, Rollo) Thus, We concede ERB's authority to grant the provisional increase in oil price, as We note that the Order of December 5, 1990 explicitly stated: in the light, therefore, of the rise in crude oil importation costs, which as earlier mentioned, reached an average of $30.3318 per barrel at $25.551/US $ in September-October 1990; the huge OPSF deficit which, as reported by the Office of Energy Affairs, has amounted to P5.7 Billion (based on filed claims only and net of the P5 Billion OPSF) as of September 30, 1990, and is estimated to further increase to over P10 Billion by end December 1990; the decision of the government to discontinue subsidizing oil prices in view of inflationary pressures; the apparent inadequacy of the proposed additional P5.1 Billion government appropriation for the OPSF and the sharp drop in the value of the peso in relation to the US dollar to P28/US $, this Board is left with no other recourse but to grant applicants oil companies further relief by increasing the prices of petroleum products sold by them. (p. 161, Rollo) Petitioner Maceda together with petitioner Original (G.R. No. 96349) also claim that the provisional increase involved amounts over and above that sought by the petitioning oil companies. The Solicitor General has pointed out that aside from the increase in crude oil prices , all the applications of the respondent oil companies filed with the ERB covered claims from the OPSF. We shall thus respect the ERB's Order of December 5, 1990 granting a provisional price increase on petroleum products premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk for a subsidy on sale to NPC (p. 167, Rollo), since the oil companies are "entitled to as much relief as the fact alleged constituting the course of action may warrant," (Javellana v. D.O. Plaza Enterprises, Inc., G.R. No. L-28297, March 30, 1970, 32 SCRA 261 citing Rosales v. Reyes, 25 Phil. 495; Aguilar v. Rubiato, 40 Phil. 470) as follows: Per Liter Weighted Petron Shell Caltex Average Crude Cost P3.11 P3.6047 P2.9248 P3.1523 Peso Cost Diffn'l 2.1747 1.5203 1.5669 1.8123 Forex Risk Fee -0.1089 -0,0719 -0.0790 -0.0896 Subsidy on Sales to NPC 0.1955 0.0685 0.0590 0.1203 Total Price Increase Applied for P59.3713 P5.1216 P4.4717 P4.9954 Less: September 21 Price Relief

Actual Price Increase P1.42 Actual Tax Reduction: Ad Valorem Tax (per Sept. 1, 1990 price build-up) P1.3333 Specific Tax (per Oct. 5, 1990 price build-up) .6264 .7069 2.1269 Net Price Increase Applied for 2.8685 Nonetheless, it is relevant to point out that on December 10, 1990, the ERB, in response to the President's appeal, brought back the increases in Premium and Regular gasoline to the levels mandated by the December 5, 1990 Order (P6.9600 and P6.3900, respectively), as follows: Product In Pesos Per Liter OPSF Premium Gasoline 6.9600 Regular Gasoline 6.3900 Avturbo 4.9950 Kerosene 1.4100 Diesel Oil 1.4100 Fuel Oil/Feedstock 0.2405 LPG 1.2200 Asphalt 2.5000 Thinner 2.5000 In G.R. No. 96349, petitioner Original additionally claims that if the price increase will be used to augment the OPSF this will constitute illegal taxation. In the Maceda case, (G.R. Nos. 95203-05, supra) this Court has already ruled that "the Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation but is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137. The petitions of E.O. Original et al. (G.R. No. 96349) and C.S. Povedas, Jr. (G.R. No. 96284), insofar as they question the ERB's authority under Sec. 8 of E.O. 172, have become moot and academic. We lament Our helplessness over this second provisional increase in oil price. We have stated that this "is a question best judged by the political leadership" (G.R. Nos. 95203-05, G.R. Nos. 95119-21, supra). We wish to reiterate Our previous pronouncements therein that while the government is able to justify a provisional increase, these findings "are not final, and it is up to petitioners to demonstrate that the present economic picture does not warrant a permanent increase." In this regard, We also note the Solicitor General's comments that "the ERB is not averse to the idea of a presidential review of its decision," except that there is no law at present authorizing the same. Perhaps, as pointed out by Justice Padilla, our lawmakers may see the wisdom of allowing presidential review of the decisions of the ERB since, despite its being a quasi-judicial body, it is still "an administrative body under the Office of the President whose decisions should be appealed to the President under the established principle of exhaustion of administrative remedies," especially on a matter as transcendental as oil price increases which affect the lives of almost an Filipinos. ACCORDINGLY, the petitions are hereby DISMISSED. SO ORDERED.

SECOND DIVISION [G.R. No. 143964. July 26, 2004] GLOBE TELECOM, INC., petitioner, vs. THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A. SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and NESTOR DACANAY, and SMART COMMUNICATIONS, INC. respondents. DECISION TINGA, J.: Telecommunications services are affected by a high degree of public interest.[1] Telephone companies have historically been regulated as common carriers,[2] and indeed, the 1936 Public Service Act has classified wire or wireless communications systems as a public service, along with other common carriers.[3] Yet with the advent of rapid technological changes affecting the telecommunications industry, there has been a marked reevaluation of the traditional paradigm governing state regulation over telecommunications. For example, the United States Federal Communications Commission has chosen not to impose strict common regulations on incumbent cellular providers, choosing instead to let go of the reins and rely on market forces to govern pricing and service terms.[4] In the Philippines, a similar paradigm shift can be discerned with the passage of the Public Telecommunications Act of 1995 (PTA). As noted by one of the laws principal authors, Sen. John Osmea, under prior laws, the government regulated the entry of pricing and operation of all public telecommunications entities. The new law proposed to dismantle gradually the barriers to entry, replace government control on price and income with market instruments, and shift the focus of governments intervention towards ensuring service standards and protection of customers.[5] Towards this goal, Article II, Section 8 of the PTA sets forth the regulatory logic, mandating that a healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and to interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.[6] The statute itself defines the role of the government to promote a fair, efficient and responsive market to stimulate growth and development of the telecommunications facilities and services.[7] The present petition dramatizes to a degree the clash of philosophies between traditional notions of regulation and the au corant trend to deregulation. Appropriately, it involves the most ubiquitous feature of the mobile phone, Short Messaging Service (SMS)[8] or text messaging, which has been transformed from a mere technological fad into a vital means of communication. And propitiously, the case allows the Court to evaluate the role of the National Telecommunications Commission (NTC) in this day and age. The NTC is at the forefront of the government response to the avalanche of inventions and innovations in the dynamic telecommunications field. Every regulatory action it undertakes is of keen interest not only to industry analysts and players but to the public at large. The intensive scrutiny is understandable given the high financial stakes involved and the inexorable impact on consumers. And its rulings are traditionally accorded respect even by the courts, owing traditional deference to administrative agencies equipped with special knowledge, experience and capability to hear and determine promptly disputes on technical matters.[9] At the same time, judicial review of actions of administrative agencies is essential, as a check on the unique powers vested unto these instrumentalities.[10] Review is available to reverse the findings of the specialized administrative agency if the record before the Court clearly precludes the agencys decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence, or both.[11] Review may also be warranted to ensure that the NTC or similarly empowered agencies act within the confines of their legal mandate and conform to the demands of due process and equal protection.[12] Antecedent Facts Globe and private respondent Smart Communications, Inc. (Smart) are both grantees of valid and subsisting legislative franchises,[13] authorizing them, among others, to operate a Cellular Mobile Telephone System (CMTS), utilizing the Global System for Mobile Communication (GSM) technology.[14] Among the inherent services supported by the GSM network is the Short Message Services (SMS),[15] also known colloquially as texting, which has attained immense popularity in the Philippines as a mode of electronic communication. On 4 June 1999, Smart filed a Complaint[16] with public respondent NTC, praying that NTC order the immediate interconnection of Smarts and Globes GSM networks, particularly their respective SMS or texting services. The Complaint arose from the inability of the two leading CMTS providers to effect interconnection.

Smart alleged that Globe, with evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS.[17] On 7 June 1999, NTC issued a Show Cause Order, informing Globe of the Complaint, specifically the allegations therein that, among othersdespite formal request made by Smart to Globe for the interconnection of their respective SMS or text messaging services, Globe, with evident bad faith, malice and to the prejudice of Smart and Globe and the public in general, refused to grant Smarts request for the interconnection of their respective SMS or text messaging services, in violation of the mandate of Republic Act 7925, Executive Order No. 39, and their respective implementing rules and regulations.[18] Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the Complaint was premature, Smarts failure to comply with the conditions precedent required in Section 6 of NTC Memorandum Circular 9-7-93,[19] and its omission of the mandatory Certification of Non-Forum Shopping.[20] Smart responded that it had already submitted the voluminous documents asked by Globe in connection with other interconnection agreements between the two carriers, and that with those voluminous documents the interconnection of the SMS systems could be expedited by merely amending the parties existing CMTS-to-CMTS interconnection agreements.[21] On 19 July 1999, NTC issued the Order now subject of the present petition. In the Order, after noting that both Smart and Globe were equally blameworthy for their lack of cooperation in the submission of the documentation required for interconnection and for having unduly maneuvered the situation into the present impasse,[22] NTC held that since SMS falls squarely within the definition of value-added service or enhanced-service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) the implementation of SMS interconnection is mandatory pursuant to Executive Order (E.O.) No. 59.[23] The NTC also declared that both Smart and Globe have been providing SMS without authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which requires PTEs intending to provide value-added services (VAS) to secure prior approval from NTC through an administrative process. Yet, in view of what it noted as the peculiar circumstances of the case, NTC refrained from issuing a Show Cause Order with a Cease and Desist Order, and instead directed the parties to secure the requisite authority to provide SMS within thirty (30) days, subject to the payment of fine in the amount of two hundred pesos (P200.00) from the date of violation and for every day during which such violation continues.[24] Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition[25] to nullify and set aside the Order and to prohibit NTC from taking any further action in the case. It reiterated its previous arguments that the complaint should have been dismissed for failure to comply with conditions precedent and the nonforum shopping rule. It also claimed that NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised as an issue before it at all. Finally, Globe alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process.[26] The Court of Appeals issued a Temporary Restraining Order on 31 August 1999. In its Memorandum, Globe also called the attention of the appellate court to the earlier decision of NTC pertaining to the application of Isla Communications Co., Inc. (Islacom) to provide SMS, allegedly holding that SMS is a deregulated special feature of the telephone network and therefore does not require the prior approval of NTC.[27] Globe alleged that its departure from its ruling in the Islacom case constitutes a denial of equal protection of the law. On 22 November 1999, a Decision[28] was promulgated by the Former Special Fifth Division of the Court of Appeals[29] affirming in toto the NTC Order. Interestingly, on the same day Globe and Smart voluntarily agreed to interconnect their respective SMS systems, and the interconnection was effected at midnight of that day.[30] Yet, on 21 December 1999, Globe filed a Motion for Partial Reconsideration ,[31] seeking to reconsider only the portion of the Decision that upheld NTCs finding that Globe lacked the authority to provide SMS and its imposition of a fine. Both Smart and NTC filed their respective comments, stressing therein that Globe indeed lacked the authority to provide SMS.[32] In reply, Globe asserted that the more salient issue was whether NTC complied with its own Rules of Practice and Procedure before making the finding of want of authority and imposing the fine. Globe also reiterated that it has been legally operating its SMS system since 1994 and that

SMS being a deregulated special feature of the telephone network it may operate SMS without prior approval of NTC. After the Court of Appeals denied the Motion for Partial Reconsideration,[33] Globe elevated the controversy to this Court. Globe contends that the Court of Appeals erred in holding that the NTC has the power under Section 17 of the Public Service Law[34] to subject Globe to an administrative sanction and a fine without prior notice and hearing in violation of the due process requirements; that specifically due process was denied Globe because the hearings actually conducted dwelt on different issues; and, the appellate court erred in holding that any possible violation of due process committed by NTC was cured by the fact that NTC refrained from issuing a Show Cause Order with a Cease and Desist Order, directing instead the parties to secure the requisite authority within thirty days. Globe also contends that in treating it differently from other carriers providing SMS the Court of Appeals denied it equal protection of the law. The case was called for oral argument on 22 March 2004. Significantly, Smart has deviated from its original position. It no longer prays that the Court affirm the assailed Decision and Order, and the twin rulings therein that SMS is VAS and that Globe was required to secure prior authority before offering SMS. Instead, Smart now argues that SMS is not VAS and that NTC may not legally require either Smart or Globe to secure prior approval before providing SMS. Smart has also chosen not to make any submission on Globes claim of due process violations.[35] As presented during the oral arguments, the central issues are: (1) whether NTC may legally require Globe to secure NTC approval before it continues providing SMS; (2) whether SMS is a VAS under the PTA, or special feature under NTC MC No. 14-11-97; and (3) whether NTC acted with due process in levying the fine against Globe.[36] Another issue is also raised whether Globe should have first filed a motion for reconsideration before the NTC, but this relatively minor question can be resolved in brief. Necessity of Filing Motion for Reconsideration

Islacom for the operation of SMS, NTC declared that the applicable circular for SMS is MC No. 14-11-97.[44] Under this ruling, it is alleged, NTC effectively denominated SMS as a special feature which under MC No. 14-11-97 is a deregulated service that needs no prior authorization from NTC. Globe further contends that NTCs requiring it to secure prior authorization violates the due process and equal protection clauses, since earlier it had exempted the similarly situated Islacom from securing NTC approval prior to its operation of SMS.[45] On the other hand, the assailed NTC Decision invokes the NTC Implementing Rules of the PTA (MC No. 89-95) to justify its claim that Globe and Smart need to secure prior authority from the NTC before offering SMS. The statutory basis for the NTCs determination must be thoroughly examined. Our first level of inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is also the law that governs all public telecommunications entities (PTEs) in the Philippines.[46] Public Telecommunications Act

The PTA has not strictly adopted laissez-faire as its underlying philosophy to promote the telecommunications industry. In fact, the law imposes strictures that restrain within reason how PTEs conduct their business. For example, it requires that any access charge/revenue sharing arrangements between all interconnecting carriers that are entered into have to be submitted for approval to NTC.[47] Each telecommunication category[48] established in the PTA is governed by detailed regulations. Also, international carriers and operators of mobile radio services are required to provide local exchange service in unserved or underserved areas.[49] At the same time, the general thrust of the PTA is towards modernizing the legal framework for the telecommunications services sector. The transmutation has become necessary due to the rapid changes as well within the telecommunications industry. As noted by Senator Osmea in his sponsorship speech: [D]ramatic developments during the last 15 years in the field of semiconductors have drastically changed the telecommunications sector worldwide as well as in the Philippines. New technologies have fundamentally altered the structure, the economics and the nature of competition in the telecommunications business. Voice telephony is perhaps the most popular face of telecommunications, but it is no longer the only one. There are other faces such as data communications, electronic mail, voice mail, facsimile transmission, video conferencing, mobile radio services like trunked radio, cellular radio, and personal communications services, radio paging, and so on. Because of the mind-boggling developments in semiconductors, the traditional boundaries between computers, telecommunications, and broadcasting are increasingly becoming blurred.[50] One of the novel introductions of the PTA is the concept of a value-added service (VAS). Section 11 of the PTA governs the operations of a value-added service provider, which the law defines as an entity which relying on the transmission, switching and local distribution facilities of the local exchange and inter-exchange operators, and overseas carriers, offers enhanced services beyond those ordinarily provided for by such carriers.[51] Section 11 recognizes that VAS providers need not secure a franchise, provided that they do not put up their own network.[52] However, a different rule is laid down for telecommunications entities such as Globe and PLDT. The section unequivocally requires NTC approval for the operation of a value-added service. It reads, viz: Telecommunications entities may provide VAS, subject to the additional requirements that:

Globe deliberately did not file a motion for reconsideration with the NTC before elevating the matter to the Court of Appeals via a petition for certiorari. Generally, a motion for reconsideration is a prerequisite for the filing of a petition for certiorari.[37] In opting not to file the motion for reconsideration, Globe asserted before the Court of Appeals that the case fell within the exceptions to the general rule.[38] The appellate court in the questioned Decision cited the purported procedural defect,[39] yet chose anyway to rule on the merits as well. Globes election to elevate the case directly to the Court of Appeals, skipping the standard motion for reconsideration, is not a mortal mistake. According to Globe, the Order is a patent nullity, it being violative of due process; the motion for reconsideration was a useless or idle ceremony; and, the issue raised purely one of law.[40] Indeed, the circumstances adverted to are among the recognized exceptions to the general rule.[41] Besides, the issues presented are of relative importance and novelty[42] so much so that it is judicious for the Court to resolve them on the merits instead of hiding behind procedural fineries. The Merits

Now, on to the merits of the petition. Deregulation is the mantra in this age of globalization. Globe invokes it in support of its claim that it need not secure prior authority from NTC in order to operate SMS. The claim has to be evaluated carefully. After all, deregulation is not a magic incantation that wards off the spectre of intrusive government with the mere invocation of its name. The principles, guidelines, rules and regulations that govern a deregulated system must be firmly rooted in the law and regulations that institute or implement the deregulation regime.[43] The implementation must likewise be fair and evenhanded. Globe hinges its claim of exemption from obtaining prior approval from the NTC on NTC Memorandum Circular No. 14-11-97 (MC No. 14-11-97). Globe notes that in a 7 October 1998 ruling on the application of a) prior approval of the Commission is secured to ensure that such VAS offerings are not cross-subsidized from the proceeds of their utility operations ; other providers of VAS are not discriminated against in rates nor denied equitable access to their facilities; and separate books of accounts are maintained for the VAS. (Emphasis supplied)[53]

b)

c)

Oddly enough, neither the NTC nor the Court of Appeals cited the above-quoted provision in their respective decisions, which after all, is the statutory premise for the assailed regulatory action. This failure is but a mere indicia of the pattern of ignorance or incompetence that sadly attends the actions assailed in this petition. It is clear that the PTA has left open-ended what services are classified as value-added, prescribing instead a general standard, set forth as a matter of principle and fundamental policy by the legislature.[54] The validity of this standard set by Section 11 is not put into question by the present petition, and there is no need to inquire into its propriety.[55] The power to enforce the provisions of the PTA, including the implementation of the standards set therein, is clearly reposed with the NTC.[56] It can also be gleaned from Section 11 that the requirement that PTEs secure prior approval before offering VAS is tied to a definite purpose, i.e., to ensure that such VAS offerings are not cross-subsidized from the proceeds of their utility operations . The reason is related to the fact that PTEs are considered as public services,[57] and mandated to perform certain public service functions. Section 11 should be seen in relation to E.O. 109, which mandates that international gateway operators shall be required to provide local exchange service,[58] for the purpose of ensuring availability of reliable and affordable telecommunications service in both urban and rural areas of the country.[59] Under E.O. No. 109, local exchange services are to be cross-subsidized by other telecommunications services within the same company until universal access is achieved.[60] Section 10 of the PTA specifically affirms the requirements set by E.O. No. 109. The relevance to VAS is clear: public policy maintains that the offer of VAS by PTEs cannot interfere with the fundamental provision by PTEs of their other public service requirements. More pertinently to the case at bar, the qualification highlights the fact that the legal rationale for regulation of VAS is severely limited. There is an implicit recognition that VAS is not strictly a public service offering in the way that voice-to-voice lines are, for example, but merely supplementary to the basic service. Ultimately, the regulatory attitude of the State towards VAS offerings by PTEs is to treat its provisioning as a business decision subject to the discretion of the offeror , so long as such services do not interfere with mandatory public service requirements imposed on PTEs such as those under E.O. No. 109. Thus, non-PTEs are not similarly required to secure prior approval before offering VAS, as they are not burdened by the public service requirements prescribed on PTEs .[61] Due regard must be accorded to this attitude, which is in consonance with the general philosophy of deregulation expressed in the PTA. The Pertinent NTC Memorandum Circulars

showing, among others, system configuration, mode of operation, method of charging rates, lease agreement with the PTE, etc. (e) The application for registration shall be acted upon by the Commission through an administrative process within thirty (30) days from date of application. (f) PTEs intending to provide value added services are required to secure prior approval by the Commission through an administrative process. (g) VAS providers shall comply strictly with the service performance and other standards prescribed commission. (Emphasis supplied.) Instead of expressly defining what VAS is, the Implementing Rules defines what enhanced services are, namely: a service which adds a feature or value not ordinarily provided by a public telecommunications entity such as format, media conversion, encryption, enhanced security features, computer processing, and the like.[62] Given that the PTA defines VAS as enhanced services, the definition provided in the Implementing Rules may likewise be applied to VAS. Still, the language of the Implementing Rules is unnecessarily confusing. Much trouble would have been spared had the NTC consistently used the term VAS as it is used in the PTA. The definition of enhanced services in the Implementing Rules, while more distinct than that under the PTA, is still too sweeping. Rather than enumerating what possible features could be classified as VAS or enhanced services, the Implementing Rules instead focuses on the characteristics of these features. The use of the phrase the like,[63] and its implications of analogy, presumes that a whole myriad of technologies can eventually be subsumed under the definition of enhanced services. The NTC should not be necessarily faulted for such indistinct formulation since it could not have known in 1995[64] what possible VAS would be available in the future. The definition laid down in the Implementing Rules may validly serve as a guide for the NTC to determine what emergent offerings would fall under VAS. Still, owing to the general nature of the definition laid down in the Implementing Rules, the expectation arises that the NTC would promulgate further issuances defining whether or not a specific feature newly available in the market is a VAS. Such expectation is especially demanded if the NTC is to penalize PTEs who fail to obtain prior approval in accordance with Section 11 of the PTA. To our knowledge, the NTC has yet to come out with an administrative rule or regulation listing which of the offerings in the market today fall under VAS or enhanced services. Still, there is MC No. 14-11-97, entitled Deregulating the Provision of Special Features in the Telephone Network. Globe invokes this circular as it had been previously cited by the NTC as applicable to SMS. On 2 October 1998, Islacom wrote a letter to the NTC, informing the agency that it will be offering the special feature of SMS for its CMTS, and citing therein that the notice was being given pursuant to NTC Memorandum Circular No. 14-11-97.[65] In response, the NTC acknowledged receipt of the letter informing it of Islacoms offering the special feature of SMS for its CMTS, and instructed Islacom to adhere to the provisions of MC No. 14-11-97.[66] The clear implication of the letter is that NTC considers the Circular as applicable to SMS. An examination of MC No. 14-11-97 further highlights the state of regulatory confusion befalling the NTC. The relevant portions thereof are reproduced below: SUBJECT: DEREGULATING THE PROVISION OF SPECIAL FEATURES IN THE TELEPHONE NETWORK.

Next, we examine the regulatory framework devised by NTC in dealing with VAS. NTC relied on Section 420(f) of the Implementing Rules of the PTA (Implementing Rules) as basis for its claim that prior approval must be secured from it before Globe can operate SMS. Section 420 of the Implementing Rules, contained in MC No. 8-9-95, states in full: VALUE ADDED SERVICES (VAS) (a) A non-PTE VAS provider shall not be required to secure a franchise from Congress. (b) A non-PTE VAS provider can utilize its own equipment capable only of routing, storing and forwarding messages in whatever format for the purpose of providing enhanced or augmented telecommunications services. It shall not put up its own network. It shall use the transmission network, toll or local distribution, of the authorized PTES. (c) The provision of VAS shall not in any way affect the cross subsidy to the local exchange network by the international and national toll services and CMTS service. (d) Entities intending to provide value added services only shall submit to the commission application for registration for approval. The application form shall include documents

For the purpose of exempting specific telecommunications service from rate or tariff regulations if the service has sufficient competition to ensure fair and reasonable rates or tariffs, the Commission hereby deregulates the provision of special features inherent to the Telephone Network . Section 1. For the purpose of this Circular, Special Feature shall refer to a feature inherent to the telephone network which may not be ordinarily provided by a Telephone Service Provider such as call

waiting, call forwarding, conference calling, speed dialing, caller ID, malicious call ID, call transfer, charging information, call pick-up, call barring, recorded announcement, no double connect, warm line, wake-up call, hotline, voicemail, and special features offered to customers with PABXs such as direct inward dialing and number hunting, and the like; provided that in the provision of the feature, no law, rule, regulation or international convention on telecommunications is circumvented or violated. The Commission shall periodically update the list of special features in the Telephone Network which, including the charging of rates therefor, shall be deregulated. Section 2. A duly authorized Telephone Service Provider shall inform the Commission in writing of the special features it can offer and the corresponding rates thirty (30) days prior to launch date. xxx Section 4. Authorized Telephone Service Providers shall continue to charge their duly approved rates for special services for 3 months from the effectivity of this circular, after which they may set their own rates. xxx (Emphasis supplied) Just like VAS as defined under the PTA, special features are also not ordinarily provided by the telephone company. Considering that MC No. 14-11-97 was promulgated after the passage of the PTA, it can be assumed that the authors of the Circular were well aware of the regulatory scheme formed under the PTA. Moreover, MC No. 14-11-97 repeatedly invokes the word deregulation, and it cannot be denied that the liberalization ethos was introduced by the PTA. Yet, the net effect of MC No. 14-11-97 is to add to the haze beclouding the NTCs rationale for regulation. The introduction of a new concept, special feature, which is not provided for in the PTA just adds to the confusion, especially in light of the similarities between special features and VAS. Moreover, there is no requirement that a PTE seeking to offer special features must secure prior approval from the NTC. Is SMS a VAS, enhanced service, or a special feature? Apparently, even the NTC is unsure. It had told Islacom that SMS was a special feature, then subsequently held that it was a VAS. However, the pertinent laws and regulations had not changed from the time of the Islacom letter up to the day the Order was issued. Only the thinking of NTC did. More significantly, NTC never required ISLACOM to apply for prior approval in order to provide SMS, even after the Order to that effect was promulgated against Globe and Smart. This fact was admitted by NTC during oral arguments.[67] NTCs treatment of Islacom, apart from being obviously discriminatory, puts into question whether or not NTC truly believes that SMS is VAS. NTC is unable to point out any subsequent rule or regulation, enacted after it promulgated the adverse order against Globe and Smart, affirming the newly-arrived determination that SMS is VAS. In fact, as Smart admitted during the oral arguments, while it did comply with the NTC Order requiring it to secure prior approval, it was never informed by the NTC of any action on its request.[68] While NTC counters that it did issue a Certificate of Registration to Smart, authorizing the latter as a provider of SMS, such Certificate of Registration was issued only on 13 March 2003, or nearly four (4) years after Smart had made its request.[69] This inaction indicates a lack of seriousness on the part of the NTC to implement its own rulings. Also, it tends to indicate the lack of belief or confusion on NTCs part as to how SMS should be treated. Given the abstract set of rules the NTC has chosen to implement, this should come as no surprise. Yet no matter how content the NTC may be with its attitude of sloth towards regulation, the effect may prove ruinous to the sector it regulates. Every party subject to administrative regulation deserves an opportunity to know, through reasonable regulations promulgated by the agency, of the objective standards that have to be met. Such rule is integral to due process, as it protects substantive rights. Such rule also promotes harmony within the service or industry subject to regulation. It provides indubitable opportunities to weed out the most frivolous conflicts with minimum hassle, and certain footing in deciding more substantive claims. If this results in a tenfold in administrative rules and regulations, such price is worth paying if it also results in clarity and consistency in

the operative rules of the game. The administrative process will best be vindicated by clarity in its exercise.[70] In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been duly established. The fault falls squarely on NTC. With the dual classification of SMS as a special feature and a VAS and the varying rules pertinent to each classification, NTC has unnecessarily complicated the regulatory framework to the detriment of the industry and the consumers. But does that translate to a finding that the NTC Order subjecting Globe to prior approval is void? There is a fine line between professional mediocrity and illegality. NTCs byzantine approach to SMS regulation is certainly inefficient. Unfortunately for NTC, its actions have also transgressed due process in many ways, as shown in the ensuing elucidation. Penalized Via a Quasi-Judicial Process, Globe and Smart are Entitled to Corresponding Protections

It is essential to understand that the assailed Order was promulgated by NTC in the exercise of its quasijudicial functions. The case arose when Smart had filed the initial complaint against Globe before NTC for interconnection of SMS.[71] NTC issued a Show Cause Order requiring Globe to answer Smarts charges. Hearings were conducted, and a decision made on the merits, signed by the three Commissioners of the NTC, sitting as a collegial body.[72] The initial controversy may have involved a different subject matter, interconnection, which is no longer contested. It cannot be denied though that the findings and penalty now assailed before us was premised on the same exercise of jurisdiction. Thus, it is not relevant to this case that the process for obtaining prior approval under the PTA and its Implementing Rules is administrative in nature. While this may be so, the assailed NTCs determination and corresponding penalty were rendered in the exercise of quasi-judicial functions. Therefore, all the requirements of due process attendant to the exercise of quasi-judicial power apply to the present case. Among them are the seven cardinal primary rights in justiciable cases before administrative tribunals, as enumerated in Ang Tibay v. CIR.[73] They are synthesized in a subsequent case, as follows: There are cardinal primary rights which must be respected even in proceedings of this character. The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. Not only must there be some evidence to support a finding or conclusion, but the evidence must be substantial. The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.[74] NTC violated several of these cardinal rights due Globe in the promulgation of the assailed Order. First. The NTC Order is not supported by substantial evidence. Neither does it sufficiently explain the reasons for the decision rendered. Our earlier discussion pertained to the lack of clear legal basis for classifying SMS as VAS, owing to the failure of the NTC to adopt clear rules and regulations to that effect. Muddled as the legal milieu governing SMS already is, NTCs attempt to apply its confusing standards in the case of Globe and Smart is even more disconcerting. The very rationale adopted by the NTC in its Order holding that SMS is VAS is short and shoddy. Astoundingly, the Court of Appeals affirmed the rationale bereft of intelligent inquiry, much less comment. Stated in full, the relevant portion of the NTC Order reads: xxx Getting down [to] the nitty-gritty, Globes SMS involves the transmission of data over its CMTS which is Globes basic service. SMS is not ordinarily provided by a CMTS operator like Globe, and since SMS enhances Globes CMTS, SMS fits in to a nicety [sic] with the definition of value-added-service or enhanced-service under NTC Memorandum Circular [8]-9-95 (Rule 001, Item [15]).[75] The Court usually accords great respect to the technical findings of administrative agencies in the fields

of their expertise, even if they are infelicitously worded. However, the above-quoted finding is nothing more than bare assertions, unsupported by substantial evidence.[76] The Order reveals that no deep inquiry was made as to the nature of SMS or what its provisioning entails. In fact, the Court is unable to find how exactly does SMS fits into a nicety with NTC M.C. No. 8-9-95, which defines enhanced services as analogous to format, media conversion, encryption, enhanced security features, computer processing, and the like.[77] The NTC merely notes that SMS involves the transmission of data over [the] CMTS, a phraseology that evinces no causal relation to the definition in M.C. No. 8-9-95. Neither did the NTC endeavor to explain why the transmission of data necessarily classifies SMS as a VAS. In fact, if the transmission of data over [the] CMTS is to be reckoned as the determinative characteristic of SMS, it would seem that this is already sufficiently covered by Globe and Smarts respective legislative franchises.[78] Smart is authorized under its legislative franchise to establish and operate integrated telecommunications/computer/ electronic services for public domestic and international communications,[79] while Globe is empowered to establish and operate domestic telecommunications, and stations for transmission and reception of messages by means of electricity, electromagnetic waves or any kind of energy, force, variations or impulses, whether conveyed by wires, radiated through space or transmitted through other media and for the handling of any and all types of telecommunications services.[80] The question of the proper legal classification of VAS is uniquely technical, tied as at is to the scientific and technological application of the service or feature. Owing to the dearth of substantive technical findings and data from the NTC on which a judicial review may reasonably be premised, it is not opportunely proper for the Court to make its own technical evaluation of VAS, especially in relation to SMS. Judicial fact-finding of the de novo kind is generally abhorred and the shift of decisional responsibility to the judiciary is not favored as against the substantiated and specialized determination of administrative agencies. [81] With greater reason should this be the standard for the exercise of judicial review when the administrative agency concerned has not in the first place come out with a technical finding based on evidence, as in this case. Yet at the same time, this absence of substantial evidence in support of the finding that SMS is VAS already renders reversible that portion of the NTC Order. Moreover, the Order does not explain why the NTC was according the VAS offerings of Globe and Smart a different regulatory treatment from that of Islacom. Indeed, to this day, NTC has not offered any sensible explanation why Islacom was accorded to a less onerous regulatory requirement, nor have they compelled Islacom to suffer the same burdens as Globe and Smart. While stability in the law, particularly in the business field, is desirable, there is no demand that the NTC slavishly follow precedent.[82] However, we think it essential, for the sake of clarity and intellectual honesty, that if an administrative agency decides inconsistently with previous action, that it explain thoroughly why a different result is warranted, or if need be, why the previous standards should no longer apply or should be overturned. [83] Such explanation is warranted in order to sufficiently establish a decision as having rational basis.[84] Any inconsistent decision lacking thorough, ratiocination in support may be struck down as being arbitrary. And any decision with absolutely nothing to support it is a nullity .[85] Second. Globe and Smart were denied opportunity to present evidence on the issues relating to the nature of VAS and the prior approval. Another disturbing circumstance attending this petition is that until the promulgation of the assailed Order Globe and Smart were never informed of the fact that their operation of SMS without prior authority was at all an issue for consideration. As a result, neither Globe or Smart was afforded an opportunity to present evidence in their behalf on that point. NTC asserts that since Globe and Smart were required to submit their respective Certificates of Public Convenience and Necessity and franchises, the parties were sufficiently notified that the authority to operate such service was a matter which NTC could look into. This is wrong-headed considering the governing law and regulations. It is clear that before NTC could penalize Globe and Smart for unauthorized provision of SMS, it must first establish that SMS is VAS. Since there was no express rule or regulation on that question, Globe and Smart would be well within reason if they submitted evidence to establish that SMS was not VAS. Unfortunately, no such opportunity arose and no such arguments were raised simply because Globe and Smart were not aware that the question of their authority to provide SMS was an issue at all. Neither could it be said that the requisite of prior authority was indubitable under the existing rules and regulations. Considering the prior treatment towards

Islacom, Globe (and Smart, had it chosen to do so) had every right to rely on NTCs disposal of Islacoms initiative and to believe that prior approval was not necessary. Neither was the matter ever raised during the hearings conducted by NTC on Smarts petition. This claim has been repeatedly invoked by Globe. It is borne out by the records or the absence thereof. NTC could have easily rebuffed this claim by pointing to a definitive record. Yet strikingly, NTC has not asserted that the matter of Globes authority was raised in any pleading or proceeding. In fact, Globe in its Consolidated Reply before this Court challenged NTC to produce the transcripts of the hearings it conducted to prove that the issue of Globes authority to provide SMS was put in issue. The Court similarly ordered the NTC to produce such transcripts.[86] NTC failed to produce any.[87] The opportunity to adduce evidence is essential in the administrative process, as decisions must be rendered on the evidence presented, either in the hearing, or at least contained in the record and disclosed to the parties affected.[88] The requirement that agencies hold hearings in which parties affected by the agencys action can be represented by counsel may be viewed as an effort to regularize this struggle for advantage within a legislative adversary framework.[89] It necessarily follows that if no evidence is procured pertinent to a particular issue, any eventual resolution of that issue on substantive grounds despite the absence of evidence is flawed. Moreover, if the parties did have evidence to counter the ruling but were wrongfully denied the opportunity to offer the evidence, the result would be embarrassing on the adjudicator. Thus, the comical, though expected, result of a definitive order which is totally unsupported by evidence. To this blatant violation of due process, this Court stands athwart. Third. The imposition of fine is void for violation of due process The matter of whether NTC could have imposed the fine on Globe in the assailed Order is necessarily related to due process considerations. Since this question would also call to fore the relevant provisions of the Public Service Act, it deserves its own extensive discussion. Globe claims that the issue of its authority to operate SMS services was never raised as an issue in the Complaint filed against it by Smart. Nor did NTC ever require Globe to justify its authority to operate SMS services before the issuance of the Order imposing the fine. The Court of Appeals, in its assailed decision, upheld the power of NTC to impose a fine and to make a pronouncement on Globes alleged lack of operational authority without need of hearing, simply by citing the provision of the Public Service Act[90] which enumerates the instances when NTC may act motu proprio. That is Section 17, paragraph (a), which reads thus: Sec. 17. Proceedings of [the National Telecommunications Commission] without previous hearing. The Commission shall have power, without previous hearing, subject to established limitations and exceptions and saving provisions to the contrary: (a) To investigate, upon its own initiative, or upon complaint in writing, any matter concerning any public service as regards matters under its jurisdiction; to require any public service to furnish safe, adequate, and proper service as the public interest may require and warrant; to enforce compliance with any standard, rule, regulation, order or other requirement of this Act or of the Commission, and to prohibit or prevent any public service as herein defined from operating without having first secured a certificate of public convenience or public necessity and convenience, as the case may be, and require existing public services to pay the fees provided for in this Act for the issuance of the proper certificate of public convenience or certificate of public necessity and convenience, as the case may be, under the penalty, in the discretion of the Commission, of the revocation and cancellation of any acquired rights. On the other hand, NTC itself, in the Order, cites Section 21 as the basis for its imposition of fine on Globe. The provision states: Sec. 21. Every public service violating or failing to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission shall be subject to a fine of not exceeding two hundred pesos per day for every day during which such default or violation continues; and the Commission is hereby authorized and empowered to impose such fine, after due notice and hearing. [Emphasis supplied.]

Sections 17 and 21 of the Public Service Act confer two distinct powers on NTC. Under Section 17, NTC has the power to investigate a PTE compliance with a standard, rule, regulation, order, or other requirement imposed by law or the regulations promulgated by NTC, as well as require compliance if necessary. By the explicit language of the provision, NTC may exercise the power without need of prior hearing. However, Section 17 does not include the power to impose fine in its enumeration. It is Section 21 which adverts to the power to impose fine and in the same breath requires that the power may be exercised only after notice and hearing. Section 21 requires notice and hearing because fine is a sanction, regulatory and even punitive in character. Indeed, the requirement is the essence of due process. Notice and hearing are the bulwark of administrative due process, the right to which is among the primary rights that must be respected even in administrative proceedings.[91] The right is guaranteed by the Constitution itself and does not need legislative enactment. The statutory affirmation of the requirement serves merely to enhance the fundamental precept. The right to notice and hearing is essential to due process and its non-observance will, as a rule, invalidate the administrative proceedings.[92] In citing Section 21 as the basis of the fine, NTC effectively concedes the necessity of prior notice and hearing. Yet the agency contends that the sanction was justified by arguing that when it took cognizance of Smarts complaint for interconnection, it may very well look into the issue of whether the parties had the requisite authority to operate such services.[93] As a result, both parties were sufficiently notified that this was a matter that NTC could look into in the course of the proceedings. The parties subsequently attended at least five hearings presided by NTC.[94] That particular argument of the NTC has been previously disposed of. But it is essential to emphasize the need for a hearing before a fine may be imposed, as it is clearly a punitive measure undertaken by an administrative agency in the exercise of its quasi-judicial functions. Inherently, notice and hearing are indispensable for the valid exercise by an administrative agency of its quasi-judicial functions. As the Court held in Central Bank of the Phil. v. Hon. Cloribel:[95] [T]he necessity of notice and hearing in an administrative proceeding depends on the character of the proceeding and the circumstances involved. In so far as generalization is possible in view of the great variety of administrative proceedings, it may be stated as a general rule that notice and hearing are not essential to the validity of administrative action where the administrative body acts in the exercise of executive, administrative, or legislative functions; but where a public administrative body acts in a judicial or quasi-judicial matter, and its acts are particular and immediate rather than general and prospective, the person whose rights or property may be affected by the action is entitled to notice and hearing.[96] The requirement of notice and hearing becomes even more imperative if the statute itself demands it, as in the case of Section 21 of the Public Service Act. As earlier stated, the Court is convinced that prior to the promulgation of the assailed Order Globe was never notified that its authority to operate SMS was put in issue. There is an established procedure within NTC that provides for the steps that should be undertaken before an entity such as Globe could be subjected to a disciplinary measure. Section 1, Rule 10 of the NTC Rules of Procedure provides that any action, the object of which is to subject a holder of a certificate of public convenience or authorization, or any person operating without authority from NTC, to any penalty or a disciplinary or other measure shall be commenced by the filing of a complaint. Further, the complaint should state, whenever practicable, the provisions of law or regulation violated, and the acts or omissions complained of as constituting the offense.[97] While a complaint was indeed filed against Globe by Smart, the lack of Globes authority to operate SMS was not raised in the Complaint, solely predicated as it was on Globes refusal to interconnect with Smart.[98] Under the NTC Rules of Procedure, NTC is to serve a Show Cause Order on the respondent to the complaint, containing therein a statement of the particulars and matters concerning which the Commission is inquiring and the reasons for such actions.[99] The Show Cause Order served on Globe in this case gave notice of Smarts charge that Globe, acting in bad faith and contrary to law, refused to allow the interconnection of their respective SMS systems.[100] Again, the lack of authority to operate SMS was not adverted to in NTCs Show Cause Order. The records also indicate that the issue of Globes authority was never raised in the subsequent hearings on Smarts complaint. Quite noticeably, the respondents themselves have never asserted that the matter of

Globes authority was raised in any pleading or proceeding. In fact, Globe in its Consolidated Reply before this Court challenged NTC to produce the transcripts of the hearings it conducted to prove that the issue of Globes authority to provide SMS was put in issue. It did not produce any transcript. Being an agency of the government, NTC should, at all times, maintain a due regard for the constitutional rights of party litigants.[101] In this case, NTC blindsided Globe with a punitive measure for a reason Globe was not made aware of, and in a manner that contravened express provisions of law. Consequently, the fine imposed by NTC on Globe is also invalid. Otherwise put, since the very basis for the fine was invalidly laid, the fine is necessarily void. Conclusion

In summary: (i) there is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should be made with proper regard for due process and in conformity with the PTA; (ii) the assailed Order violates due process for failure to sufficiently explain the reason for the decision rendered, for being unsupported by substantial evidence, and for imputing violation to, and issuing a corresponding fine on, Globe despite the absence of due notice and hearing which would have afforded Globe the right to present evidence on its behalf. Thus, the Order effectively discriminatory and arbitrary as it is, was issued with grave abuse of discretion and it must be set aside. NTC may not legally require Globe to secure its approval for Globe to continue providing SMS. This does not imply though that NTC lacks authority to regulate SMS or to classify it as VAS. However, the move should be implemented properly, through unequivocal regulations applicable to all entities that are similarly situated, and in an even-handed manner. Concurrently, the Court realizes that the PTA is not intended to constrain the industry within a cumbersome regulatory regime.[102] The policy as pre-ordained by legislative fiat renders the traditionally regimented business in an elementary free state to make business decisions, avowing that it is under this atmosphere that the industry would prosper.[103] It is disappointing at least if the deregulation thrust of the law is skirted deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague, overlapping rules that are implemented haphazardly. By no means should this Decision be interpreted as removing SMS from the ambit of jurisdiction and review by the NTC. The issue before the Court is only the prior approval requirement as imposed on Globe and Smart. The NTC will continue to exercise, by way of its broad grant, jurisdiction over Globe and Smarts SMS offerings, including questions of rates and customer complaints. Yet caution must be had. Much complication could have been avoided had the NTC adopted a proactive position, promulgating the necessary rules and regulations to cope up with the advent of the technologies it superintends. With the persistent advent of new offerings in the telecommunications industry, the NTCs role will become more crucial than at any time before. If NTCs behavior in the present case is but indicative of a malaise pervading this crucial regulatory arm of the State, the Court fears the resultant confusion within the industry and the consuming public. The credibility of an administrative agency entrusted with specialized fields subsists not on judicial doctrine alone, but more so on its intellectual strength, adherence to law, and basic fairness. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated 22 November 1999, as well as its Resolution dated 29 July 2000, and the assailed Order of the NTC dated 19 July 1999 are hereby SET ASIDE. No cost. SO ORDERED.

FIRST DIVISION G.R. No. 73705 August 27, 1987 VICTORIAS MILLING CO., INC., petitioner, vs.OFFICE OF THE PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS and PHILIPPINE PORTS AUTHORITY, respondents. PARAS, J.: This is a petition for review on certiorari of the July 27, 1984 Decision of the Office of the Presidential Assistant For Legal Affairs dismissing the appeal from the adverse ruling of the Philippine Ports Authority on the sole ground that the same was filed beyond the reglementary period. On April 28, 1981, the Iloilo Port Manager of respondent Philippine Ports Authority (PPA for short) wrote petitioner Victorias Milling Co., requiring it to have its tugboats and barges undergo harbor formalities and pay entrance/clearance fees as well as berthing fees effective May 1, 1981. PPA, likewise, requiring petitioner to secure a permit for cargo handling operations at its Da-an Banua wharf and remit 10% of its gross income for said operations as the government's share. To these demands, petitioner sent two (2) letters, both dated June 2, 1981, wherein it maintained that it is exempt from paying PPA any fee or charge because: (1) the wharf and an its facilities were built and installed in its land; (2) repair and maintenance thereof were and solely paid by it; (3) even the dredging and maintenance of the Malijao River Channel from Guimaras Strait up to said private wharf are being done by petitioner's equipment and personnel; and (4) at no time has the government ever spent a single centavo for such activities. Petitioner further added that the wharf was being used mainly to handle sugar purchased from district planters pursuant to existing milling agreements. In reply, on November 3, 1981, PPA Iloilo sent petitioner a memorandum of PPA's Executive Officer, Maximo Dumlao, which justified the PPA's demands. Further request for reconsideration was denied on January 14, 1982. On March 29, 1982, petitioner served notice to PPA that it is appealing the case to the Court of Tax Appeals; and accordingly, on March 31, 1982, petitioner filed a Petition for Review with the said Court, entitled "Victorias Milling Co., Inc. v. Philippine Ports Authority," and docketed therein as CTA Case No. 3466. On January 10, 1984, the Court of Tax Appeals dismissed petitioner's action on the ground that it has no jurisdiction. It recommended that the appeal be addressed to the Office of the President. On January 23, 1984, petitioner filed a Petition for Review with this Court, docketed as G.R. No. 66381, but the same was denied in a Resolution dated February 29, 1984. On April 2, 1984, petitioner filed an appeal with the Office of the President, but in a Decision dated July 27, 1984 (Record, p. 22), the same was denied on the sole ground that it was filed beyond the reglementary period. A motion for Reconsideration was filed, but in an Order dated December 16, 1985, the same was denied ( ibid., pp. 3-21): Hence, the instant petition. The Second Division of this Court, in a Resolution dated June 2, 1986, resolved to require the respondents to comment (ibid., p. 45); and in compliance therewith, the Solicitor General filed his Comment on June 4, 1986 (Ibid., pp. 50-59). In a Resolution of July 2, 1986, petitioner was required to file a reply ( Ibid., p. 61) but before receipt of said resolution, the latter filed a motion on July 1, 1986 praying that it be granted leave to file a reply to respondents' Comment, and an extension of time up to June 30, 1986 within which to file the same. ( Ibid., p. 62). On July 18, 1986, petitioner filed its reply to respondents' Comment ( Ibid., pp. 68-76). The Second Division of this Court, in a Resolution dated August 25, 1986, resolved to give due course to the

petition and to require the parties to file their respective simultaneous memoranda ( Ibid., p. 78). On October 8, 1986, the Solicitor General filed a Manifestation and Rejoinder, stating, among others, that respondents are adopting in toto their Comment of June 3, 1986 as their memorandum; with the clarification that the assailed PPA Administrative Order No. 13-77 was duly published in full in the nationwide circulated newspaper, "The Times Journal", on November 9,1977 (ibid., pp. 79-81). The sole legal issue raised by the petitioner is WHETHER OR NOT THE 30-DAY PERIOD FOR APPEAL UNIDER SECTION 131 OF PPA ADMINISTRATIVE ORDER NO. 1377 WAS TOLLED BY THE PENDENCY OF THE PETITIONS FILED FIRST WITH THE COURT OF TAX APPEALS, AND THEN WITH THIS HONORABLE TRIBUNAL. The instant petition is devoid of merit. Petitioner, in holding that the recourse first to the Court of Tax Appeals and then to this Court tolled the period to appeal, submits that it was guided, in good faith, by considerations which lead to the assumption that procedural rules of appeal then enforced still hold true. It contends that when Republic Act No. 1125 (creating the Court of Tax Appeals) was passed in 1955, PPA was not yet in existence; and under the said law, the Court of Tax Appeals had exclusive appellate jurisdiction over appeals from decisions of the Commissioner of Customs regarding, among others, customs duties, fees and other money charges imposed by the Bureau under the Tariff and Customs Code. On the other hand, neither in Presidential Decree No. 505, creating the PPA on July 11, 1974 nor in Presidential Decree No. 857, revising its charter (said decrees, among others, merely transferred to the PPA the powers of the Bureau of Customs to impose and collect customs duties, fees and other money charges concerning the use of ports and facilities thereat) is there any provision governing appeals from decisions of the PPA on such matters, so that it is but reasonable to seek recourse with the Court of Tax Appeals. Petitioner, likewise, contends that an analysis of Presidential Decree No. 857, shows that the PPA is vested merely with corporate powers and duties (Sec. 6), which do not and can not include the power to legislate on procedural matters, much less to effectively take away from the Court of Tax Appeals the latter's appellate jurisdiction. These contentions are untenable for while it is true that neither Presidential Decree No. 505 nor Presidential Decree No. 857 provides for the remedy of appeal to the Office of the President, nevertheless, Presidential Decree No. 857 empowers the PPA to promulgate such rules as would aid it in accomplishing its purpose. Section 6 of the said Decree provides Sec. 6. Corporate Powers and Duties a. The corporate duties of the Authority shall be: xxx xxx xxx (III) To prescribe rules and regulations, procedures, and guidelines governing the establishment, construction, maintenance, and operation of all other ports, including private ports in the country. xxx xxx xxx Pursuant to the aforequoted provision, PPA enacted Administrative Order No. 13-77 precisely to govern, among others, appeals from PPA decisions. It is now finally settled that administrative rules and regulations issued in accordance with law, like PPA Administrative Order No. 13-77, have the force and effect of law (Valerio vs. Secretary of Agriculture and Natural Resources, 7 SCRA 719; Antique Sawmills, Inc. vs. Zayco, et al., 17 SCRA 316; and Macailing vs. Andrada, 31 SCRA 126), and are binding on all persons dealing with that body. As to petitioner's contention that Administrative Order No. 13-77, specifically its Section 131, only provides for

appeal when the decision is adverse to the government, worth mentioning is the observation of the Solicitor General that petitioner misleads the Court. Said Section 131 provides Sec. 131. Supervisory Authority of General Manager and PPA Board. If in any case involving assessment of port charges, the Port Manager/OIC renders a decision adverse to the government, such decision shall automatically be elevated to, and reviewed by, the General Manager of the authority; and if the Port Manager's decision would be affirmed by the General Manager, such decision shall be subject to further affirmation by the PPA Board before it shall become effective; Provided, however, that if within thirty (30) days from receipt of the record of the case by the General Manager, no decision is rendered, the decision under review shall become final and executory; Provided further, that any party aggrieved by the decision of the General Manager as affirmed by the PPA Board may appeal said decision to the Office of the President within thirty (30) days from receipt of a copy thereof. (Emphasis supplied). From a cursory reading of the aforequoted provision, it is evident that the above contention has no basis. As to petitioner's allegation that to its recollection there had been no prior publication of said PPA Administrative Order No. 13-77, the Solicitor General correctly pointed out that said Administrative Order was duly published in full in the nationwide newspaper, "The Times Journal", on November 9,1977. Moreover, it must be stated that as correctly observed by the Solicitor General, the facts of this case show that petitioner's failure to appeal to the Office of the President on time stems entirely from its own negligence and not from a purported ignorance of the proper procedural steps to take. Petitioner had been aware of the rules governing PPA procedures. In fact, as embodied in the December 16, 1985 Order of the Office of the President, petitioner even assailed the PPA's rule making powers at the hearing before the Court of Tax Appeals. It is axiomatic that the right to appeal is merely a statutory privilege and may be exercised only in the manner and in accordance with the provision of law (United CMC Textile Workers Union vs. Clave, 137 SCRA 346, citing the cases of Bello vs. Fernando, 4 SCRA 138; Aguila vs. Navarro, 55 Phil. 898; and Santiago vs. Valenzuela, 78 Phil. 397). Furthermore, even if petitioner's appeal were to be given due course, the result would still be the same as it does not present a substantially meritorious case against the PPA. Petitioner maintains and submits that there is no basis for the PPA to assess and impose the dues and charges it is collecting since the wharf is private, constructed and maintained at no expense to the government, and that it exists primarily so that its tugboats and barges may ferry the sugarcane of its Panay planters. As correctly stated by the Solicitor General, the fees and charges PPA collects are not for the use of the wharf that petitioner owns but for the privilege of navigating in public waters, of entering and leaving public harbors and berthing on public streams or waters. (Rollo, pp. 056-057). In Compaia General de Tabacos de Filipinas vs. Actg. Commissioner of Customs (23 SCRA 600), this Court laid down the rule that berthing charges against a vessel are collectible regardless of the fact that mooring or berthing is made from a private pier or wharf. This is because the government maintains bodies of water in navigable condition and it is to support its operations in this regard that dues and charges are imposed for the use of piers and wharves regardless of their ownership. As to the requirement to remit 10% of the handling charges, Section 6B-(ix) of the Presidential Decree No. 857 authorized the PPA "To levy dues, rates, or charges for the use of the premises, works, appliances, facilities, or for services provided by or belonging to the Authority, or any organization concerned with port operations." This 10% government share of earnings of arrastre and stevedoring operators is in the nature of contractual compensation to which a person desiring to operate arrastre service must agree as a condition to the grant of the permit to operate.

PREMISES CONSIDERED, the instant petition is hereby DISMISSED. SO ORDERED.

EN BANC G.R. No. L-25018 May 26, 1969 ARSENIO PASCUAL, JR., petitioner-appellee, vs.BOARD OF MEDICAL EXAMINERS, respondent-appellant, SALVADOR GATBONTON and ENRIQUETA GATBONTON, intervenors-appellants. FERNANDO, J.: The broad, all-embracing sweep of the self-incrimination clause, 1 whenever appropriately invoked, has been accorded due recognition by this Court ever since the adoption of the Constitution. 2 Bermudez v. Castillo,3 decided in 1937, was quite categorical. As we there stated: "This Court is of the opinion that in order that the constitutional provision under consideration may prove to be a real protection and not a dead letter, it must be given a liberal and broad interpretation favorable to the person invoking it." As phrased by Justice Laurel in his concurring opinion: "The provision, as doubtless it was designed, would be construed with the utmost liberality in favor of the right of the individual intended to be served." 4 Even more relevant, considering the precise point at issue, is the recent case of Cabal v. Kapunan,5where it was held that a respondent in an administrative proceeding under the Anti-Graft Law 6 cannot be required to take the witness stand at the instance of the complainant. So it must be in this case, where petitioner was sustained by the lower court in his plea that he could not be compelled to be the first witness of the complainants, he being the party proceeded against in an administrative charge for malpractice. That was a correct decision; we affirm it on appeal. Arsenio Pascual, Jr., petitioner-appellee, filed on February 1, 1965 with the Court of First Instance of Manila an action for prohibition with prayer for preliminary injunction against the Board of Medical Examiners, now respondent-appellant. It was alleged therein that at the initial hearing of an administrative case 7 for alleged immorality, counsel for complainants announced that he would present as his first witness herein petitionerappellee, who was the respondent in such malpractice charge. Thereupon, petitioner-appellee, through counsel, made of record his objection, relying on the constitutional right to be exempt from being a witness against himself. Respondent-appellant, the Board of Examiners, took note of such a plea, at the same time stating that at the next scheduled hearing, on February 12, 1965, petitioner-appellee would be called upon to testify as such witness, unless in the meantime he could secure a restraining order from a competent authority. Petitioner-appellee then alleged that in thus ruling to compel him to take the witness stand, the Board of Examiners was guilty, at the very least, of grave abuse of discretion for failure to respect the constitutional right against self-incrimination, the administrative proceeding against him, which could result in forfeiture or loss of a privilege, being quasi-criminal in character. With his assertion that he was entitled to the relief demanded consisting of perpetually restraining the respondent Board from compelling him to testify as witness for his adversary and his readiness or his willingness to put a bond, he prayed for a writ of preliminary injunction and after a hearing or trial, for a writ of prohibition. On February 9, 1965, the lower court ordered that a writ of preliminary injunction issue against the respondent Board commanding it to refrain from hearing or further proceeding with such an administrative case, to await the judicial disposition of the matter upon petitioner-appellee posting a bond in the amount of P500.00. The answer of respondent Board, while admitting the facts stressed that it could call petitioner-appellee to the witness stand and interrogate him, the right against self-incrimination being available only when a question calling for an incriminating answer is asked of a witness. It further elaborated the matter in the affirmative defenses interposed, stating that petitioner-appellee's remedy is to object once he is in the witness stand, for respondent "a plain, speedy and adequate remedy in the ordinary course of law," precluding the issuance of the relief sought. Respondent Board, therefore, denied that it acted with grave abuse of discretion. There was a motion for intervention by Salvador Gatbonton and Enriqueta Gatbonton, the complainants in the administrative case for malpractice against petitioner-appellee, asking that they be allowed to file an answer as intervenors. Such a motion was granted and an answer in intervention was duly filed by them on March 23, 1965 sustaining the power of respondent Board, which for them is limited to compelling the witness to take the stand, to be distinguished, in their opinion, from the power to compel a witness to incriminate himself. They likewise alleged that the right against self-incrimination cannot be availed of in an administrative hearing.

A decision was rendered by the lower court on August 2, 1965, finding the claim of petitioner-appellee to be well-founded and prohibiting respondent Board "from compelling the petitioner to act and testify as a witness for the complainant in said investigation without his consent and against himself." Hence this appeal both by respondent Board and intervenors, the Gatbontons. As noted at the outset, we find for the petitioner-appellee. 1. We affirm the lower court decision on appeal as it does manifest fealty to the principle announced by us in Cabal v. Kapunan. 8 In that proceeding for certiorari and prohibition to annul an order of Judge Kapunan, it appeared that an administrative charge for unexplained wealth having been filed against petitioner under the Anti-Graft Act,9the complainant requested the investigating committee that petitioner be ordered to take the witness stand, which request was granted. Upon petitioner's refusal to be sworn as such witness, a charge for contempt was filed against him in the sala of respondent Judge. He filed a motion to quash and upon its denial, he initiated this proceeding. We found for the petitioner in accordance with the well-settled principle that "the accused in a criminal case may refuse, not only to answer incriminatory questions, but, also, to take the witness stand." It was noted in the opinion penned by the present Chief Justice that while the matter referred to an a administrative charge of unexplained wealth, with the Anti-Graft Act authorizing the forfeiture of whatever property a public officer or employee may acquire, manifestly out proportion to his salary and his other lawful income, there is clearly the imposition of a penalty. The proceeding for forfeiture while administrative in character thus possesses a criminal or penal aspect. The case before us is not dissimilar; petitioner would be similarly disadvantaged. He could suffer not the forfeiture of property but the revocation of his license as a medical practitioner, for some an even greater deprivation. To the argument that Cabal v. Kapunan could thus distinguished, it suffices to refer to an American Supreme Court opinion highly persuasive in character. 10 In the language of Justice Douglas: "We conclude ... that the Self-Incrimination Clause of the Fifth Amendment has been absorbed in the Fourteenth, that it extends its protection to lawyers as well as to other individuals, and that it should not be watered down by imposing the dishonor of disbarment and the deprivation of a livelihood as a price for asserting it." We reiterate that such a principle is equally applicable to a proceeding that could possibly result in the loss of the privilege to practice the medical profession. 2. The appeal apparently proceeds on the mistaken assumption by respondent Board and intervenorsappellants that the constitutional guarantee against self-incrimination should be limited to allowing a witness to object to questions the answers to which could lead to a penal liability being subsequently incurred. It is true that one aspect of such a right, to follow the language of another American decision, 11 is the protection against "any disclosures which the witness may reasonably apprehend could be used in a criminal prosecution or which could lead to other evidence that might be so used." If that were all there is then it becomes diluted.lawphi1.et The constitutional guarantee protects as well the right to silence. As far back as 1905, we had occasion to declare: "The accused has a perfect right to remain silent and his silence cannot be used as a presumption of his guilt." 12 Only last year, in Chavez v. Court of Appeals , 13 speaking through Justice Sanchez, we reaffirmed the doctrine anew that it is the right of a defendant "to forego testimony, to remain silent, unless he chooses to take the witness stand with undiluted, unfettered exercise of his own free genuine will." Why it should be thus is not difficult to discern. The constitutional guarantee, along with other rights granted an accused, stands for a belief that while crime should not go unpunished and that the truth must be revealed, such desirable objectives should not be accomplished according to means or methods offensive to the high sense of respect accorded the human personality. More and more in line with the democratic creed, the deference accorded an individual even those suspected of the most heinous crimes is given due weight. To quote from Chief Justice Warren, "the constitutional foundation underlying the privilege is the respect a government ... must accord to the dignity and integrity of its citizens." 14 It is likewise of interest to note that while earlier decisions stressed the principle of humanity on which this right is predicated, precluding as it does all resort to force or compulsion, whether physical or mental, current judicial opinion places equal emphasis on its identification with the right to privacy. Thus according to

Justice Douglas: "The Fifth Amendment in its Self-Incrimination clause enables the citizen to create a zone of privacy which government may not force to surrender to his detriment." 15 So also with the observation of the late Judge Frank who spoke of "a right to a private enclave where he may lead a private life. That right is the hallmark of our democracy." 16 In the light of the above, it could thus clearly appear that no possible objection could be legitimately raised against the correctness of the decision now on appeal. We hold that in an administrative hearing against a medical practitioner for alleged malpractice, respondent Board of Medical Examiners cannot, consistently with the self-incrimination clause, compel the person proceeded against to take the witness stand without his consent. WHEREFORE, the decision of the lower court of August 2, 1965 is affirmed. Without pronouncement as to costs.

THIRD DIVISION G.R. No. L-80160 June 26, 1989 GOVERNOR FELICISIMO T. SAN LUIS, THE SANGGUNIANG PANLALAWIGAN, PROVINCIAL ENGINEER JUANITO C. RODIL AND PROVINCIAL TREASURER AMADEO C. ROMEY, ALL OF LAGUNA, petitioners, vs.COURT OF APPEALS AND MARIANO L. BERROYA, JR., respondents. CORTES, J.: The instant petition for certiorari and mandamus and/or appeal by certiorari assails the appellate court's ruling that mandamus lies to compel the reinstatement of a quarry superintendent in the provincial government of Laguna who was initially detailed or transferred to another office, then suspended, and finally dismissed following his expose of certain anomalies and irregularities committed by government employees in the province. The background facts, as narrated by the respondent Court of Appeals are: Records show that at all pertinent times, petitioner-appellant (private respondent herein) had been the quarry superintendent in the Province of Laguna since his appointment as such on May 31, 1959. In April and May of 1973, petitioner-appellant denounced graft and corrupt practices by employees of the provincial government of Laguna. Thereafter, the development of events may be briefly encapsulated as follows: a. On July 20, l973, herein respondent-appellee provincial governor (one of the petitioners herein) issued Office Order No. 72 transferring Berroya to the office of the Provincial Engineer. An amended office order invoked LOI 14-B for said transfer. b. Berroya challenged said transfer, and on October 25, 1973, the Civil Service Commission ruled the same violative of Section 32, RA 2260, and ordered that Berroya be reverted to his regular position of quarry superintendent. c. On December 12, 1973, instead of complying with the CSC directive that Berroya be reverted to his regular position, herein respondent-appellee provincial governor suspended Berroya for alleged gross discourtesy, inefficiency and insubordination. On that basis, reconsideration of the CSC directive that Berroya be reverted to the position of quarry superintendent was sought as academic (sic). d. On February 26, 1974 the Civil Service Commission reiterated its October 25, 1973 directive for the immediate reversion of Berroya to his former position, and ruled the one-year suspension illegal. e. Respondent-appellee provincial governor appealed to the Office of the President from the CSC rulings alluded to. f. On May 29, 1974, there issued OP Decision 954, Series of 1974 reversing the CSC rulings without prejudice to the decision of the Local Review Board [which had in fact already sustained the one-year suspension under date of May 6, 1974]. g. On petitioner-appellant's motion for reconsideration, the Office of the President rendered OP Decision 1834, Series of 1976, dated May 19, 1976, setting aside OP Decision 954, declaring the one-year suspension improper, and ordering payment of back salaries to Berroya. h. Respondent-appellant moved for reconsideration of OP Decision 1834 on June 14, 1976. The said motion for reconsideration was denied on November 6, 1978. i. In the interim, respondent-appellant provincial governor issued an Order of April 27, 1977 dismissing Berroya for alleged neglect of duty, frequent unauthorized absences, conduct prejudicial to the best interest of duty and abandonment of office, which order of dismissal was appealed by Berroya to the Civil Service Commission on May 12, 1977. j. On January 23, 1979, the Civil Service Commission resolved said appeal by declaring the dismissal unjustified,

exonerating Berroya of charges, and directing his reinstatement as quarry superintendent. k. On February l4, 1979, respondent-appellee provincial governor sought relief from the CSC decision of January 23, 1979 declaring Berroya's dismissal unjustified. 1. On October 15, 1979, the CSC Merit System Board denied said motion for reconsideration in its Resolution No. 567. m. Thereafter, respondent-appellee provincial governor moved anew to set aside O.P. Decision 1834, Series of 1976-the first motion for reconsideration of which had been denied on November 6, 1978. (ref. #h, supra). The Office of the President dismissed said motion on March 27, 1981. Petitioner-appellant's formal demand for reinstatement to the position of quarry superintendent having been disdained despite the factual antecedents aforestated, he filed, [on May 27, 1980] the antecedent Civil Case No. SC-1834 for mandamus to compel his reversion to the position of quarry superintendent at the Oogong Quarry, with back salaries for the entire period of his suspension and dismissal (exclusive of leaves of absence with pay), and prayed for moral and exemplary damages, attorney's fees and expenses of suit. Respondents-appellees moved to dismiss said petition for mandamus, as amended, and opposed the therein application for preliminary injunctive relief for immediate reinstatement. In an Order of December 1, 1980, the trial court denied the application for preliminary injunctive relief "until after the parties shall have adduced evidence, pro and con the grant of injunctive relief", and similarly deferred its resolution on the motion to dismiss "for lack of merit for the present ... until after the trial." On December 15, 1980, respondents-appellees answered the petition for mandamus and prayed that judgment be rendered1. Dismissing the Complaint and denying the prayer for Preliminary Injunction; 2. Declaring petitioner to have been legally separated or dismissed from the government service; 3. Order petitioner to pay each of them the sum of P 200,000.00 by way of moral damages; P 100,000.00 as exemplary damages and P 10,000.00 as attorney's fees plus P 300.00 each per court appearance; other litigation expenses which may be incurred as may be proved in due course; and to pay the costs of suit [Rollo, pp. 35-37]. During the pendency of the civil case for mandamus, on April 9, 1981 petitioner provincial governor filed a petition for relief from O.P. Decision 1834 with the Office of the President. This was denied on November 27, 1984 on the ground that only one motion for reconsideration of O.P. Decision 1834 was allowed, the petition for relief being the third such motion filed by petitioner. On May 17, 1985, after trial, the court a quo rendered its decision finding the transfer of petitioner- appellant from his position of quarry superintendent to the office of the Provincial Engineer sufficiently warranted. Furthermore, his one-year suspension was found to be proper under LOI 14-B and unassailable upon affirmation by the Local Review Board. His summary dismissal was likewise found to be a justified exercise of the authority granted under LOI 14-B. The trial Court further decided "that none of the respondents should be held personally liable in their private capacity to the petitioner because their actuations are not at all tainted with malice and bad faith" [Rollo, p. 38]. However, although the trial court upheld the validity of Berroya's dismissal, it nevertheless ordered his reinstatement to an equivalent position as a matter of equity. Hence, the dispositive portion of its decision reads as follows:

WHEREFORE, judgment is hereby rendered: 1. Ordering respondents to reinstate petitioner to any position equivalent to that of a quarry superintendent which has been abolished in the present plantilla of the provincial government of Laguna as reorganized pursuant to PD 1136 without diminution in rank and salary; 2. Ordering respondents to pay the back salary of petitioner from April 26, 1977 to September 1, 1977 only and appropriating funds therefor, as soon as this decision becomes final; 3. Dismissing all claims and counterclaims of both parties for other damages including attorney's fees [Rollo, p. 35]. On June 6, 1985, herein private respondent Berroya appealed from the decision of the Regional Trial Court dated May 17, 1985. The appeal was resolved by the respondent Court of Appeals in his favor in a decision which was promulgated on April 30, 1987, the decretal portion of which states: WHEREFORE, the present appeal is accordingly resolved as follows: (a) Petitioner-appellant is ordered to be reinstated to the position of quarry superintendent of the Oogong Quarry in Laguna or to the position which said office may now be called pursuant to the reorganization of the plantilla of the Provincial Government of Laguna under PD 1136, without diminution in rank and salary; (b) Respondents-appellees are ordered to pay the back salary of petitioner-appellant corresponding to the period of suspension and of illegal dismissal from the service, exclusive of that corresponding to leaves of absences with pay; (c) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant the sum of P 50,000.00 as and for moral damages; (d) Respondents-appellants (sic) are ordered, jointly and severally, to pay petitioner-appellant the further sum of P 20,000.00 as and for attorney's fees, plus costs and expenses of suit. The decision of May 17, 1985, in Civil Case No. SC-1748 is accordingly set aside forthwith. With costs against respondents-appellees. SO ORDERED. [Rollo, p. 43.] Petitioners moved to reconsider the decision of the appellate court but their motion was denied. Hence, the instant petition docketed as G.R. No. 80160, which is "both or alternatively an original action for certiorari and mandamus and an appeal by certiorari" [See Rollo, p. 1, et seq.] Another petition for review of the Court of Appeals' decision was filed with this Court on October 8, 1987 docketed as G.R. No. 79985 by the same petitioners. However, in a resolution dated November 16, 1987, the Court noted the manifestation/motion filed by petitioners stating, among other things, that the petition docketed as G.R. No. 79985 be considered withdrawn and the petition dated October 16, 1987 which was filed on October 19, 1987 and docketed as G.R. No. 80160 be considered as the main and real petition [Rollo, p. 50]. Accordingly, the parties were required to submit their respective pleadings in G.R. No. 80160. The petition in G.R. No. 80160 contains the following assignment of errors: First

THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN DENYING PETITIONERS' MOTION FOR RECONSIDERATION BY MEANS OF A MERE MINUTE RESOLUTION, STATING NO LEGAL BASIS THEREFOR, IN GROSS VIOLATION OF THE CONSTITUTION'S EXPRESS MANDATE AND WHEN IT STATED AND HELD IN SAID RESOLUTION "THAT NO NEW REASON HAS BEEN ADDUCED [IN SAID MOTION] TO JUSTIFY A REVERSAL OR MODIFICATION OF [ITS] FINDINGS AND CONCLUSIONS". Second THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE RESPONDENT MARIANO L. BERROYA, JR. DOES NOT FALL UNDER THE CATEGORY OF "NOTORIOUSLY UNDESIRABLE" AND THAT THE "APPLICABILITY OF LOI 14-B TO RESPONDENT BERROYA IS OPEN TO QUESTION AS HE WAS NEVER ASKED TO RESIGN AS BEING NOTORIOUSLY UNDESIRABLE". Third THE RESPONDENT COURT BLATANTLY ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE "RECALL" OF THE DISMISSAL ORDER IS ITSELF ATTENDED BY A TOUCH OF MYSTERY, MENTIONED ONLY IN THE TESTIMONY OF PETITIONER PROVINCIAL GOVERNOR, UNFORTIFIED BY ANY WRITING THEREOF, AND NOT ADVERTED TO IN THE DECEMBER 15, 1980 ANSWER FILED IN THE ANTECEDENT mandamus ACTION, AND IN NOT FINDING THAT RESPONDENT BERROYA COMMITTED ABANDONMENT OF OFFICE. Fourth THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN FINDING THAT THE DECISION OF THE LOCAL BOARD OF REVIEW UNDER LOI 14-B MAY BE REVIEWED UNDER THE CONSTITUTIONAL PREROGATIVE OF THE PRESIDENT TO SUPERVISE LOCAL GOVERNMENT UNITS, WHICH INCLUDES THE AUTHORITY TO REVIEW, MODIFY OR REVERSE DECISION INVOLVING SUSPENSION OF LOCAL OFFICIALS AND EMPLOYEES. Fifth THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN CONCLUDING IN RATHER STRONG LANGUAGE THAT THE "ABOLITION OF THE POSITION OF QUARRY SUPERINTENDENT FROM THE PLANTILLA OF THE PROVINCIAL GOVERNMENT OF LAGUNA MUST BE VIEWED WITH (sic) ABERRATION AND AN ANOMALY, IN THE LIGHT OF UNCONTROVERTED SHOWING THAT QUARRY OPERATIONS AT THE SAME SITE CONTINUE TO DATE, AS WOULD MILITATE AGAINST ATTENDANCE OF GOOD FAITH IN THE ABOLITION OF SAID OFFICE." Sixth THE RESPONDENT COURT ERRED AND GRAVELY ABUSED ITS DISCRETION AS WELL AS EXCEEDED ITS JURISDICTION IN ORDERING THE PAYMENT OF PRIVATE RESPONDENTS BACK SALARIES FOR THE PERIOD OF HIS SUSPENSION AS WELL AS DISMISSAL UNTIL REINSTATEMENT AS QUARRY SUPERINTENDENT, AND IN AWARDING MORAL DAMAGES IN THE SUM OF P50,000.00 AND ATTORNEY'S FEES IN THE SUM OF P20,000.00 IN FAVOR OF THE PRIVATE RESPONDENT BERROYA, AND IN HOLDING ALL THE PETITIONERS HEREIN SOLIDARILY LIABLE FOR THE PAYMENT OF AFORESAID BACK SALARIES AND DAMAGES [Rollo, pp. 13-14]. The first error assigned in the instant petition is not well taken. A thorough perusal of the assailed resolution of the respondent CA denying petitioners' motion for reconsideration reveals clearly its legal basis. Thus, its resolution stating that Considering that the motion for reconsideration of the decision promulgated on April 30, 1987 filed by respondent-appellee merely reiterates the grounds and arguments already discussed, thoroughly analyzed and passed upon by this Court; and that no new reason has been adduced to justify a reversal or modification of the

findings and conclusion of this Court. WHEREFORE, the motion for reconsideration is DENIED for lack of merit [Rollo, p. 45; Emphasis supplied]. constitutes sufficient compliance with the constitutional mandate that no motion for reconsideration of a decision of the court shall be denied without stating the legal basis therefor (1987 Constitution, Art. VIII, Sec. 14, par. 2). The resolution of the remaining assigned errors hinges on a determination of the effect of the decisions rendered in favor of Berroya by two administrative agencies. A. It is worth noting that the issue of legality of the order of suspension by petitioner Governor dated December 12, 1973 had already been passed upon in a decision of the Office of the President (O.P. Decision No. 1834) dated May 19, 1976 reversing its earlier ruling in O.P. Decision No. 954 dated May 29, 1974. The Office of the President categorically ruled as follows: xxx xxx xxx It is not disputed that the Governor, in issuing his Order of Suspension, was exercising an authority legally endowed upon (sic) him by LOI 14-B, but it must not be an unbridled exercise of such authority.... A review of the records discloses that the only act of the governor which was sustained by the Local Review Board was his imposing the suspension on Berroya for alleged discourtesy. This Office is prone to adopt a contrary stand on the matter taking into consideration the circumstances leading to the writing of the so-called "dishonest' statements of the petitioner. It is unfortunate that the Local Review Board took it as an infraction of the Civil Service Rules and Regulations. It must be observed that the said statements were made in the course of a pending case before the Civil Service Commission, and in defense of the position of the petitioner. Although the said statements, by themselves, may be considered as lacking in refinement, still this fact alone does not justify the drastic action taken against the petitioner in this case. . . . In view of the foregoing, this Office rules that the suspension order was unjustified. Considering that respondent Berroya has already served the suspension order and that his suspension was not proper, it is hereby ordered that he be entitled to the payment of his back salaries corresponding to the period of his suspension [Folder of Exhibits, Vol. 1, pp. 102-103]. From this decision of the Office of the President, petitioner Governor filed a petition for reconsideration dated June 14, 1976 which was denied for lack of merit in a resolution of the Office of the President dated November 6, 1978 [Folder of Exhibits, Vol. 1, p. 170]. On July 3, 1979, petitioner governor filed a second petition to reconsider O.P. Decision No. 1834 on the main ground that the disputed decision is null and void ab initio allegedly because Berroya filed his motion for reconsideration of O.P. Decision No. 954 only on July 15, 1975 or after a lapse of one year and forty seven (47) days from the date when the said decision was rendered. The Office of the President denied such petition in a resolution dated March 27, 1981 [Folder of Exhibits, Vol. 1, p. 210] on the strength of Executive Order No. 19, Series of 1966 which empowers said office to act upon petitions for reconsideration, even if filed late, in exceptionally meritorious cases. Said Office further pointed out that upon review of the records of the case, it was shown that Berroya's motion for reconsideration was filed on July 15, 1974 and not on July 15, 1975 as erroneously indicated in O.P. Decision No. 1834 [Folder of Exhibits, Vol. 1, p. 213]. From the foregoing, it can be seen that OP Decision No. 1834 had already attained finality upon denial of the first motion for reconsideration in view of the clear provisions of the applicable law at the time. Executive Order No. 19, Series of 1966, which provides: xxx xxx xxx

5. Petitions for reconsideration filed after the lapse of the aforesaid period (fifteen days from receipt of the decision) shall not be entertained unless the Office of the President, for exceptionally meritorious causes, decides to act thereon, provided that only one petition for reconsideration by any party shall be allowed [Emphasis supplied.] Accordingly, the filing of the second petition for reconsideration could not have stayed the finality of the aforesaid decision. In a last ditch attempt to assail the validity of O.P. Decision No. 1834, a petition for relief was filed by herein petitioners on April 9, 1981, during the pendency of the mandamus case. This petition was finally denied in a resolution of the office dated November 27, 1984. B. On the other hand, the validity of Berroya's dismissal was already passed upon by the Merit Systems Board of the Civil Service Commission in MSB Case No. 40. In a decision promulgated on January 23, 1979, the Merit Systems Board held as follows: After carefully perusing the records of this case, this board is convinced that there is no strong evidence of guilt against Berroya. In fact, there is not even sufficient evidence to maintain the charges against him. Hence, the same does not fall within the scope of Section 40, Presidential Decree No. 807. The record does not show that Berroya is notoriously undesirable. On the contrary, his performance ratings from the period ending December 31, 1969 to the period ending June 30, 1973 are all very satisfactory. Such being the case, he is not notoriously undesirable under the standard laid down by the President, to wit: "the test of being notoriously undesirable is two-fold: whether it is common knowledge or generally known as universally believed to be true or manifest to the world that petitioner committed the acts imputed against him, and whether he had contracted the habit for any of the enumerated misdemeanors". The same are not present in the case of Berroya. On the contrary he should be given recognition for his efforts in exposing the irregularities allegedly committed by some authorities of the Laguna Provincial Government which led to the filing of criminal as well as administrative cases against such officials. Foregoing premises considered, this Board finds the order of dismissal dated April 27, 1977, without justifiable basis. Wherefore, the Board hereby exonerates Engr. Mariano Berroya, Jr. of the charges against him. Consequently, it is hereby directed that he be reinstated to his position as Quarry Superintendent of Laguna immediately, [Folder of Exhibits, Vol. 1, pp. 175-176]. The motion for reconsideration from this decision was denied in a resolution of the Board dated October 15, 1979. This decision was therefore already final when Berroya instituted suit in 1980 to compel petitioner to reinstate him to his former position and to pay his back salaries. Since the decisions of both the Civil Service Commission and the Office of the President had long become final and executory, the same can no longer be reviewed by the courts. It is well-established in our jurisprudence that the decisions and orders of administrative agencies, rendered pursuant to their quasi-judicial authority, have upon their finality, the force and binding effect of a final judgment within the purview of the doctrine of resjudicata [Brillantes v. Castro, 99 Phil. 497 (1956), Ipekdjian Merchadising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72.] The rule of res judicata which forbids the reopening of a matter once judicially determined by competent authority applies as well to the judicial and quasi-judicial acts of public, executive or administrative officers and boards acting within their jurisdiction as to the judgments of courts having general judicial powers [Brillantes v. Castro, supra at 503]. Indeed, the principle of conclusiveness of prior adjudications is not confined in its operation to the judgments of what are ordinarily known as courts, but it extends to all bodies upon whom judicial powers had been conferred. Hence, whenever any board, tribunal or person is by law vested with authority to judicially determine a question, like the Merit Systems Board of the Civil Service Commission and the Office of the President, for instance, such determination, when it has become final, is as conclusive between the same parties litigating for

the same cause as though the adjudication had been made by a court of general jurisdiction [Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, supra at 76]. Furthermore, the trial court's act of reviewing and setting aside the findings of the two administrative bodies was in gross disregard of the basic legal precept that accords finality to administrative findings of facts. The general rule, under the principles of administrative law in force in this jurisdiction, is that decisions of administrative officers shall not be disturbed by the courts, except when the former have acted without or in excess of their jurisdiction, or with grave abuse of discretion. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial] evidence. . . . [Lianga Bay Logging Co., Inc. v. Lopez Enage, G.R. No. L-30637, July 16, 1987,152 SCRA 80]. Finally, the Court cannot ignore the undisputed fact that the decisions rendered by the Office of the President and the Merit Systems Board had attained finality without petitioners having taken any timely legal recourse to have the said decisions reviewed by the courts. On the other hand, Berroya, in order to enforce his right to reinstatement and to back salaries pursuant to these final and executory administrative rulings, instituted a suit for mandamus to compel petitioners to comply with the directives issued by the two administrative agencies. Since private respondent Berroya had established his clear legal right to reinstatement and back salaries under the aforementioned final and executory administrative decisions, it became a clear ministerial duty on the part of the authorities concerned to comply with the orders contained in said decisions [Tanala v. Legaspi, G.R. No. L22537, March 31, 1965,13 SCRA 566 at 574-575]. The established rule is that a writ of mandamus lies to enforce a ministerial duty or "the performance of an act which the law specifically enjoins as a duty resulting from office, trust or station" [Section 3, Rule 65 of the Revised Rules of Court; Lianto v. Mohamad Ali Dimaporo, et al., G.R. No. L-21905, March 31, 1966, 16 SCRA 599]. In this case, the appropriate administrative agencies having determined with finality that Berroya's suspension and dismissal were without just cause, his reinstatement becomes a plain ministerial duty of the petitioner Provincial Governor, a duty whose performance may be controlled and enjoined by mandamus [Ynchausit and Co. v. Wright, 47 Phil. 866 (1925); Tee and Co. v. Wright, 53 Phil. 194 (1929); Gementiza v. Court of Appeals, G.R. Nos. L-41717-33, April 12, 1982,113 SCRA 477; Laganapan v. Asedillo, G.R. No. L-28353, September 30, 1987, 154 SCRA 377]. Thus, this Tribunal upholds the appellate court's judgment for the reinstatement of respondent Berroya and payment of his back salaries corresponding to the period of suspension and of illegal dismissal from service, exclusive of that corresponding to leaves of absences with pay. However, as respondent Berroya can no longer be reinstated because he has already reached the compulsory retirement age of sixty five years on December 7, 1986,** he should be paid his back salaries [Salcedo v. Court of Appeals, G.R. No. L-40846, January 31, 1978, 81 SCRA 408] and also all the retirement and leave privileges that are due him as a retiring employee in accordance with law [Tanala v. Legaspi, supra at 576]. According to settled jurisprudence, Berroya, as an illegally terminated civil service employee is entitled to back salaries limited only to a maximum period of five years Laganapan v. Asedillo, supra; Balquidra v. CFI of Capiz, Branch II, G.R. No. L-40490, October 28, 1977, 80 SCRA 123; Salcedo v. Court of Appeals, supra, Gementiza v. Court of Appeals, supra]. That petitioners Provincial Governor, Provincial Treasurer and Provincial Engineer of Laguna, the Sangguniang Panlalawigan of Laguna and the Province of Laguna, formally impleaded herein,' ** are liable for back salaries in case of illegal termination of a civil service employee finds support in earlier decisions of this Court [Balquidra v. Court of First Instance of Capiz, Branch II, supra; Gementiza v. Court of Appeals, supra; Rama v. Court of Appeals, G.R. Nos. L-44484, 1,44842, L-44894, L-44591, March 16, 1987,148 SCRA 496; Laganapan v. Asedillo, supra]. However, the petitioners Juanito Rodil and Amado Romey must be held liable only in their official capacities as

Provincial Engineer and Provincial Treasurer, respectively since they had been expressly sued by Berroya as such [Petition for mandamus with Preliminary Injunction, Record, Vol. 1, p. 1, et seq.; Gray v. De Vera, G.R. No. L23966, May 22, 1969, 28 SCRA 268]. The same does not hold true for petitioner provincial governor who was found by the appellate court to have acted in bad faith as manifested by his contumacious refusal to comply with the decisions of the two administrative agencies, thus prompting respondent Berroya to secure an indorsement from the Minister of Local Government and Community Development dated November 15, 1979 for his reinstatement [Annex "Y-9", Folder of Exhibits, Vol. 1, p. 207]. The Minister's directive having been ignored, Berroya was compelled to bring an action for mandamus. Where, as in this case, the provincial governor obstinately refused to reinstate the petitioner, in defiance of the orders of the Office of the President and the Ministry of Local Government and in palpable disregard of the opinion of the Civil Service Commission, the appellate court's finding of bad faith cannot be faulted and accordingly, will not be disturbed by this Tribunal Enciso v. Remo, G.R. No. L-23670, September 30, 1969, 29 SCRA 580.] This is in line with our previous ruling in Remo v. Palacio [107 Phil. 803 (1960)] that xxx xxx xxx (i)t having been clearly shown by evidence, that respondent, Deogracias Remo, in his capacity as Mayor of Goa, refused to reinstate the petitioner to his former position in the police force of Goa, despite the orders of Malacanang to do so (Exhs. G and I), and inspite of the opinion of the Secretary of Finance (Exh. H), the respondent Mayor of Goa, willfully acted in bad faith, and therefore, he, as Mayor of Goa, should pay for damages caused to the petitioner, Angel Enciso. [At pp. 807-808.] It is well-settled that when a public officer goes beyond the scope of his duty, particularly when acting tortiously, he is not entitled to protection on account of his office, but is liable for his acts like any private individual [Palma v. Graciano, 99 Phil. 72 (1956)]. Thus, in Mendoza v. De Leon [33 Phil. 508 (1916)], it was held: Nor are officers or agents of the Government charged with the performance of governmental duties which are in their nature legislative or quasi-judicial liable for the consequences of their official acts, unless it be shown that they act wilfully and maliciously and with the express purpose of inflicting injury upon the plaintiff [at 513; Emphasis supplied]. Accordingly, applying the principle that a public officer, by virtue of his office alone, is not immune from damages in his personal capacity arising from illegal acts done in bad faith [Tabuena v. Court of Appeals, G.R. No. L-16290, October 31, 1961, 3 SCRA 413; Correa v. Court of First Instance of Bulacan, G. R. No. L-46096, July 30, 1979, 92 SCRA 312], the Court holds that petitioner Felicisimo T. San Luis, the Provincial Governor of Laguna who has been sued both in his official and private capacities, must be held personally liable to Berroya for the consequences of his illegal and wrongful acts. In this regard, the Court sustains the appellate court's finding that petitioner San Luis must be held liable to Berroya for moral damages since justice demands that the latter be recompensed for the mental suffering and hardship he went through in order to vindicate his right, apart from the back salaries legally due him [Rama v. Court of Appeals, supra at p. 5061]. The appellate court was clearly warranted in awarding moral damages in favor of respondent Berroya because of the obstinacy of petitioner Governor who arbitrarily and without legal justification refused Berroya's reinstatement in defiance of directives of the administrative agencies with final authority on the matter. We agree with the appellate court that the sum of P 50,000.00 for moral damages is a reasonable award considering the mental anguish and serious anxiety suffered by Berroya as a result of the wrongful acts of petitioner Governor in refusing to reinstate him. Finally, as correctly adjudged by respondent court, petitioner San Luis must likewise answer to Berroya for attorney's fees plus costs and expenses of suit, which have been fixed by said court at P 20,000.00, in view of the

wrongful refusal of petitioner provincial governor to afford Berroya his plainly valid and just claim for reinstatement and back salaries [Rollo, p. 42]. WHEREFORE, the assailed decision of the appellate court is hereby MODIFIED as follows: (1) the petitioners, in their official capacities, are ordered to pay private respondent Berroya, his back salaries for a maximum period of five years; (2) since the reinstatement of Berroya can no longer be ordered by reason of his having reached the retirement age, he should instead be paid all the retirement benefits to which he is entitled under the law; and (3) petitioner Felicisimo T. San Luis, in his personal capacity, is further ordered to pay Berroya the sum of P 50,000.00 as and for moral damages, the sum of P 20,000.00 as and for attorney's fees plus costs and other expenses of suit. This decision shall be IMMEDIATELY EXECUTORY. SO ORDERED.

EN BANC G.R. No. 87014-16 September 13, 1989 SALIC B. DUMARPA, MARANAO C. DANGANAN and SAADUDDIN ALAUYA, petitioners, vs.JAMIL DIMAPORO and the COMMISSION ON ELECTIONS, respondents. Nancy H. Madarang for private respondent. NARVASA. J.: By Resolution dated October 28, 1988, 1 the Commission on Elections en banc 2 passed upon and disposed of--(a) two motions for reconsideration filed by Datu Abdulmadid Panondiongan Maruhom and Monabai Panondiongan Balt, from a decision of the Commission (First Division) promulgated July 11, 1988, dismissing their petitions and affirming the proclamation of Jamil Dimaporo as the duly elected municipal mayor of Marogong, Lanao del Sur, and (b) a motion for contempt of the Commission (against) Provincial Fiscal Salic B. Dumarpa, 3rd Assistant Provincial Fiscal Maranao D. Danganan, and Vice-Governor Saaddudin Alauya, all of the Province of Lanao del Sur. As regards the motions for reconsideration, the Resolution declared them to be without merit, and "sustain(ed) the decision of the First Division on all cases." As regards the motion for contempt, said Resolution found the charge to have been duly substantiated, pronounced respondents "Provincial Fiscal Salic Dumarpa, 3rd Assistant Provincial Fiscal Maranao Danganan and Vice-Governor Saaddudin Alauya ... in contempt ... (and) imposed (on them) a Fine of Five Hundred Pesos (P 500.00) each ... 3 It is this aspect of the Resolution and the Order subsequently promulgated on January 12,1989 denying the respondents' motion for reconsideration, that are now challenged in the instant special civil action of certiorari. The facts are not complicated. They have to be gone into in some detail, however, so that the issue, albeit simple, may be more accurately defined. On February 3,1988, Datu Jamil Dimaporo was proclaimed by the Board of Canvassers Mayor-elect of Marogong. The annulment of the proclamation and the canvass on which it was based was sought in two (2) separate petitions filed by defeated mayoralty candidates: one filed on February 15, 1988 by Datu Abdulmadid Panondiongan Maruhom (docketed as SPC No. 88-646), and the other, on February 17, 1988, by Monabai Panondiongan Balt (docketed as SPC Nos. 88-697 and 88-697-A). While these petitions were pending adjudgment by the COMELEC First Division, the Secretary of Local Governments issued on May 1-.9, 1988 a memorandum addressed to the Regional Director, Region XII of the Department of Local Governments, designating Maclis Balt "Officer-in-Charge, Office of the Mayor of Marogong, Lanao del Sur vice Abdullah Imam." The memorandum precisely took account of said petitions. It stated that the designation of the OIC was made "(i)n view of the election controversy that has arisen over the mayoralty race of Marogong, Lanao del Sur, and to ensure that the democratic process is respected throughout the transition period. 5 A copy of this memorandum was furnished Governor Saidamen Pangarungan, among others. He, in turn, issued on May 23, 1988 a memorandum to "All Concerned on the subject, "Lifting of Suspension Order," reading as follows: 6 In view of the designation of OIC-Mayors in the municipalities of Bacolod-Grande and Marogong, Lanao del Sur by the Secretary of Local Governments on different dates pending final resolution by the Commission on Elections of the mayoralty poll disputes therein, the order issued by this Office suspending the processing of vouchers and other financial matters as well as the encashment of pertinent checks for said towns is hereby lifted. All concerned are hereby advised to recognize the said designation of the Secretary of Local Governments.
4

For compliance. Evidently on the strength of the designation of the Secretary of Local Governments and said memorandum of Governor Pangarungan, Maclis Balt assumed the position and discharged the functions of OIC, Office of the Mayor, Marogong. The petitions seeking annulment of Datu Dimaporo's proclamation were ultimately dismissed by the First Division of the COMELEC, by decision rendered on July 11, 1988. Motions for reconsideration thereof were seasonably presented by both petitioners. These were brought up to the Commission en banc for resolution. Datu Dimaporo lost no time in seeking official recognition of his status as mayor-elect of Marogong, as confirmed by the First Division's Decision of July 11, 1988. Under date of July 18, 1988, his counsel, Mangurun Batuampar sent a formal communication to Provincial Governor Saidamen B. Pangarungan, "transmitting .. the 'RESOLUTION' of the Honorable First Division of the Commission on Elections ..," and praying "that communications and other official matters involving the affairs of the Municipality of Marogong, Lanao del Sur be accorded to DATU JAMIL DATU MULOK DIMAPORO whose proclamation was aimed by the Commission on Elections as aforestated." This letter, and other related documents collated by the Office of the Governor, were later referred to the Provincial Fiscal of Lanao del Sur by 3rd Indorsement dated August 1, 1988, of Atty. Sa-Aduden Alauya, "Vice Governor-OIC Governor." The 3rd Indorsement reads as follows: 7 Respectfully forwarded to the Provincial Fiscal, this province, the herein attached basic communication, dated July 18,1988, of Atty. Mangurun Batuampar, counsel of Datu Jamil .. Dimaporo with a xerox copy of the Resolution dated July 11, 1988, of the First Division of the Commission on Elections, and the comment thereto by OIC-Mayor Maclis Balt with a xerox copy of the motion for reconsideration filed in behalf of Monorabai Panondiongan Balt on July 1988, together with the preceding indorsements thereof, for legal opinion as to who between Datu Jamil .. Dimaporo and Maclis Balt should be recognized as the Municipal Mayor and/or OIC-Mayor of Marogong, Lanao del Sur. Early action on the matter is desired. The Provincial Fiscal acted promptly on the request. The opinion sought was communicated to the Vice Governor by 4th Indorsement dated August 5, 1988. It was signed by 3rd Assistant Provincial Fiscal Maranao C. Danganan, with the conformity ("conforme") of Provincial Fiscal Salic B. Dumarpa. The indorsement reads as follows: Respectfully returned to the Honorable Vice Governor-OIC Governor, this province, the herein attached 3rd Indorsement together with its enclosures, with the legal opinion that Datu Maclis Balt is still the Mayor of the Municipality of Marogong, Lanao del Sur, pursuant to Sec. 3, paragraph C, Article IX of the Constitution which mandates that motions for reconsideration from a decision of a Division of the Commission on Elections shall be decided En Banc by the Commission. Considering that a injunction for reconsideration was timely filed by the OIC 8 the decision of the Division is not final and executory. The decision of the Commission En Banc is not yet even final until and after 5 days whenever no restraining order is issued by the Supreme Court. On learning of this legal opinion, Datu Dimaporo filed with the COMELEC en banc a motion to hold Fiscals Dumarpa and Danganan, as well as Vice-Governor Alauya, in contempt. 9 His motion, dated August 22, 1988, inter alia drew attention to the inaccuracy in the 4th Indorsement -- that OIC Maclis Balt had filed a motion for reconsideration of the Decision of the First Division of the COMELEC 10 --and pointed out that the respondents should have known "that M ACLIS BALT has never been a candidate for Mayor in Marogong during the February 1, 1988 local elections and therefore, cannot file a motion for reconsideration in the above-entitled cases not being a party therein." The motion theorized that the act of Vice-Governor Alauya in seeking legal opinion of the Office of the Provincial Fiscal, and the formulation and communication of the requested opinion by Fiscals Dumarpa and Danganan, constituted "indirect contempt as it is clearly an improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice (Sec. 3-d, Rule 71, Revised Rules of Court), and is also an unlawful interference with the processes or proceedings of this Honorable Commission en banc (Sec. 3-c., Rule 71) .. where the above-entitled cases are now pending for decision ..." In exposition of this thesis, the motion made the following assertions:

10. That the aforestated improper conduct ... causes chaos sand confusion among the National, Provincial, Municipal officials and the general public on who is really the legal Mayor of Marogong, Lanao del Sur, considering the conflict of the defendants' legal opinion and the 'Resolution' of the COMELEC Division, as aforesaid, resulting to damage; injury and prejudice not only upon the complainant but to public service, particularly the people of Marogong, Lanao del Sur; 11. That defendants are good lawyers and know very well that resolutions, orders or decisions of this Honorable Commission can only be reviewed by the Supreme Court as indicated in Exhibit '2' (legal opinion), and the issuance of the legal opinion is indeed with evil motive and tainted with malice; 12. That the aforesaid improper conduct of the defendant if not timely corrected by severely punishing them in contempt of this Honorable Commission will be establishing a very bad precedence because such improper conduct amounts to a REVIEW by a Provincial Fiscal of whatever resolution, order or decision of this Honorable Commission. Responses to the motion for contempt were separately filed by the fiscals and by the Vice-Governor. In a pleading entitled 'Vigorous Opposition to Motion ..' dated September 15,1988, 11 Vice- Governor Alauya declared that--1) Datu Maclis Balt as an OIC Mayor of the Municipality (of Marogong) is religiously performing the prescribed duties, powers and responsibilities of the mayor of the town until the final adjudication of the mayoralty election cases, hence, it is not true that defendants' act causes chaos and confusion in said Municipality; 2) in the situation that he had found himself--- confronted by the letter of Datu Dimaporo's counsel requesting recognition by the Office of the Governor as Mayor of Marogong pursuant to the Decision of the COMELEC First Division, the comment of OIC Mayor Balt, and the motion for reconsideration filed by defeated candidate Monarabai Balt and in his desire to act safely and correctly and to be in good faith all along, he indorsed .. (the) documents .. to the Provincial Fiscal in his capacity as a legal counsel of the province in the absence of the Provincial Attorney for legal opinion; 3) said legal opinion has not disputed or contradicted the force and effect of the said resolution (of the First Division) ..; (o)n the contrary, the defendants recognize and respect the force and effect of said resolution and because a motion for reconsideration was timely filed on July 19, 1988, then it has not become final and executory, hence, it is not true that the defendants' act resulted to damage, injury and prejudice upon anybody in said Municipality of Marogong; 4) the opinion .. does not constitute a review of the aforesaid resolution of the .. Comelec First Division in the sense that the defendant-Fiscals did not affirm or reverse said resolution. They did not even say anything against it. They merely opined that because a motion for reconsideration was timely filed, then said resolution has not become final and executory. This is known to any student of law. Actually, these are the off-shoots of the letter of movant's counsel to the Governor ... If the herein defendant did not take such an appropriate action, possibility is not remote that he will be charged of negligence of duty. Suffice it to state that the herein defendant acted honestly, dedicatedly and without any iota of malice or evil motive in his heart and mind. It is hoped with defendant's prayer to Allah that all his action will not help throw this province into blood bath. For their part, the respondent fiscals asserted the following pertinent propositions in their Answer dated September 12, 1988 (in addition to substantially the same arguments set forth in the Vice- Governor's "Opposition" above adverted to): 12 1) in their written opinion, they had "just humbly stated in three sentences the provision of law on the subject of the query of the Office of the Provincial Governor..; that such statements.., briefly stating the provision of the Constitution particularly Sec. 3, paragraph c of Article IX thereof in relation to See. 246 of the Omnibus Election Code, are not directed against the authority, dignity and majesty of the Commission on Elections so as to constitute a contumacious attitude and flouting or arrogant belligerence against it that the act may constitute contempt;

2) said opinion "has no punitive values that could interfere with the process or proceedings of the Commission," and could not be deemed a contempt thereof; and 3) the counsel for the complaint has put down the Commis sion to the level of the Provincial Fiscal in alluding to a conflict of the defendants' opinion and the Resolution of the COMELEC Division, (thus) displaying his apparent oblivion of the bureaucratic set-up and the jurisprudence prevailing in this country. The fiscals also submitted a Memorandum, bearing the same date as their answer, 13 in which, among other things, they expressed the view that since the First Division had assumed jurisdiction over the petitions questioning the proclamation of Datu Dimaporo indeed, "it took the Honorable First Division ..considerable time and effort to resolve the controversy-- the presumption was that the proclamation must have appeared invalid to the First Division, otherwise it "could not have acquired (assumed) jurisdiction over the .. cases because the remedy of the petitioners-appellants was a regular protest before the Regional Trial Court of Lanao del Sur." They "were forced to assume that the proclamation of Jamil Dimaporo was irregular because the First Division heard the petition to annul the said proclamation," and this left them "no other option than affirm the jurisdiction of the First Division over the cases by stating the law sanctioning its authority and that is article IX of the Constitution." In its Resolution of October 28, 1988 anent the contempt incident, the Commission en banc condemned the fiscal's conception of "the First Division's jurisdiction of the pre- proclamation controversy" as a "distortion of the law and jurisprudence." It said: "The propriety and legality of proclamations already made or about to be made are precisely the issues in pre-proclamation controversies over which the Commission has exclusive jurisdiction. It is a rule so consistent and well established in this jurisdiction that even the Commission itself cannot disturb a proclamation made by a Board of Canvassers without notice and hearing. This rule we hold respondents bound by judicial notice." Stressing that under the law "it is solely the Commission that can suspend or annul any proclamation made," the Resolution pointed out that the respondents Alauya, Dumarpa and Danganan in effect did was to suspend the effects of the proclamation of intervenor Dimaporo made by the Municipal Board of Canvassers of Marogong, to prevent him from discharging the duties of his office, and pave the way for the appointment of or assumption to office by an Officer-in-Charge, who is the wife of one of the parties to the instant petitions' which are acts constituting 'unauthorized and illegal assumption of powers that pertain exclusively to the Commission, an unlawful interference with its processes and proceedings, and improper conduct that tends directly or indirectly to impede, obstruct or degrade the administration of justice in this case." Brushing aside, too, the respondents' argument "that they were merely seeking and rendering an opinion ... and therefore the same was not directed against the authority and dignity of the Commission" as being "devoid of merit," the Resolution declared the respondents guilty of contempt and sentenced each of them to pay a fine of P 500.00. The fiscals and the Vice-Governor filed a motion for reconsideration dated November 9, 1988, depositing at the same time "the amount of One Thousand Five Hundred (P l,500.00) with the Provincial Election Supervisor in Marawi City as and by way of penalty if finally adjudged guilty without prejudice to ventilate their rights in the appropriate forum ." 14 They stated among other things that-1) Acting Gov. Alauya was faced with a case needing 'urgent action because both parties are claiming the fund releases of Marogong and the tension between the protagonists in SPC Nos. 88-646, 88-697 and 88-697-A has reached its boiling point so volatile that without settling the legal issue the mayorship of Marogong could have been contested by the sound of guns and thus a resultant bloodshed." Thus, "his act of referring the legal controversy to the legal adviser of the province" was, to him, "the most appropriate under the circumstances;" .. (and the) act of not implementing the decision of the Commission, if at all such decision is due for implementation, is at all mistake and, which act did not constitute contempt (citing Asociacion de Agricultores de Talisay-Silay, Inc. v. Talisay-Silay Mining Co., Inc., 88 SCRA 294); 2) no suspension of the effects of Dimaporo's proclamation was or could have been effected by them since Dimaporo had never "enjoyed the powers and functions appurtenant to the Office of the mayor," had never been paid his salary as mayor, and had not as yet "been accorded recognition as elected mayor .. by the provincial and national government; indeed, "long before the query for legal opinion was lodged, Balt was already designated as Officer-in-Charge;

3) the fiscals had merely performed "a legal duty reposed upon them when they rendered the questioned legal opinion," a duty they could not have refused without incurring liability "for dereliction of a defined duty;" and 4) with or without the fiscal's opinion, "Maclis Balt would still (have) continue(d) discharging the duties of the mayor, at least, until October 28,1988 (when the Resolution of the COMELEC en banc was promulgated). By Resolution dated January 12, 1989 the COMELEC en banc not only denied the motion for reconsideration, but also "rebuked' the movants "for insisting upon an erroneous legal position." According to the COMELEC --Normally, there is nothing objectionable in seeking a legal opinion and in rendering it. But what transpired in connection with these cases were not innocent acts that were intended to guide official action. Rather, they were a deliberate contrivance that were meant to undetermine the efficacy of official acts of the Commission from the municipal board of canvassers to the First Division of the Commission and even the Commission en banc which had not in any way issued any restraining order to suspend the proclamation of the winning candidate. If clarification had to be made in connection with the proclamation and the decision of the First Division, it should have been sought in the Commission itself, for movants knew, or should have known, that the Commission has exclusive jurisdiction over pre-proclamation controversies. That they attempted to settle the matter among themselves demonstrates the intention to effect disobedience to and defiance of the lawful acts and orders of the Commission. The convicted contemners have instituted the instant special civil action of certiorari in this Court to bring about the nullification of the Resolution of October 28, 1988 "as regards the findings for contempt." Required to comment in behalf of the public respondent, 15 the Office of the Solicitor General begged to "be discharged from the duty to ... (do so as it) maintains a position different from that taken by respondent COMELEC ." 16 This Court granted the request and accorded to "the respondent COMELEC itself a period of ten (10) days from notice within which to file the required comment, if it so desires." 17 Respondent Datu Dimaporo has not done so, despite notice. The COMELEC filed its own comment on July 25,1989. The COMELEC counsel submits that the facts "manifest the firm resolve (on petitioners') part to delay, if not totally prevent, the assumption of office by private respondent Dimaporo .., a scheme to shroud with doubt the validity and force of a proclamation while trifling with public respondent's discretion on when to annul a proclamation or suspend its effects;" that the only perceived purpose of the request for opinion was "to provide an aura of legality to the continuity in office of the designated officer-in-charge, to the exclusion of the proclaimed winner in the election;" that "from an overview of the acts of petitioners and the situation in which all parties found themselves thereafter, petitioners' pretensions to good faith recede to a wantonly subtle interference with matters within the exclusive competence of public respondent," and that petitioners' acts were in fact "a deliberate interference with the process or proceedings before respondent Commission ..." Upon the facts above narrated at some length, the Court is constrained to nullify and set aside the conviction by the COMELEC en banc of the petitioners for contempt. The essential accusation against the petitioners was that the rendition by the petitioner fiscals of a legal opinion upon request of petitioner Vice Governor had caused "chaos and confusion among the National, Provincial, Municipal officials and the general public on who is really the legal Mayor of Marogong, Lanao del Sur, considering the conflict of the defendants' legal opinion and the 'Resolution' of the COMELEC Division, as aforesaid, resulting to damage, injury and prejudice not only upon the complainant but to public service, particularly the people of Marogong, Lanao del Sur." 18 This was implicitly sustained by the COMELEC when it ruled that-- 19 What respondents Alauya, Dumarpa and Danganan in effect did was to suspend the effects of the proclamation of intervenor Dimaporo made by the Municipal Board of Canvassers of Marogong, to prevent him from discharging the duties of his office, and pave the way for the appointment of or assumption to office by an Officer-in-Charge, who is the wife of one of the parties to the instant petitions.

The trouble is, there is nothing in the challenged Resolutions of the COMELEC en banc, or anywhere else in the record, for that matter, to demonstrate the actuality of the alleged (1) "chaos and confusion among the National, Provincial, Municipal officials and the general public," or (2) "suspension of the effects of the proclamation of intervenor Dimaporo ..(in order to) pave the way for the appointment of or assumption to office by an Officer-inCharge," or (3) that the latter 'is the wife of one of the parties to the instant petitions;" or (4) that the legal opinion was "a deliberate contrivance .. meant to undermine the efficacy of official acts of the Commission from the municipal board of canvassers to the First Division of the Commission and even the Commission en banc which had not in any way issued any restraining order to suspend the proclamation of the winning candidate." On the other hand, there are the facts asserted by the petitioners--- never denied or disputed by respondents --that as of the time that the fiscal's opinion was solicited and even thereafter, Datu Dimaporo had never yet "enjoyed the powers and functions appurtenant to the Office of the mayor," had never been paid his salary as mayor, and had not as yet "been accorded recognition as elected mayor ... by the provincial and national government; and that indeed, "long before the query for legal opinion was lodged, (Maclis) Balt .. (had been) already designated as Officer-in-Charge" and since then and during an the time material to the inquiry, had been discharging the functions of mayor of Marogong. It thus appears that the Resolution in question not only lacks factual foundation of any sort but is contradicted by such of the relevant facts as may be discerned from the record. It appears furthermore that the Fiscals are being sanctioned for rendering an opinion that in the view of the COMELEC en banc was "a distortion of law and jurisprudence." But what is it in that legal opinion that the COMELEC deemed so offensive to its authority and dignity as to move it to punish its authors? That opinion was rendered in answer to the inquiry of the Acting Governor as to whether or not, in view of the judgment by the First Division of the COMELEC upholding the proclamation by the Board of Canvassers of Datu Dimaporo as MayorElect of Marogong, the duly designated OIC Mayor, therefore acting as such, Datu Maclis Balt, could still be recognized as the Mayor of the Municipality. The inquiry had been made necessary in view of the conflict in claims to the mayoralty then being asserted by both Datu Dimaporo and Datu Balt, which conflict had to be swiftly and legally resolved to prevent its resolution by arms and bloodshed. The fiscals' opinion was based on "Sec. 3, paragraph C, Article IX of the Constitution which mandates that motions for reconsideration from a decision of a Division of the Commission on Elections shall be decided En Banc by the Commission." They declared that since "a motion for reconsideration was timely filed by the OIC, the decision of the Division is not final and executory. The decision of the Commission En Banc is not yet even final until and after 5 days whenever no restraining order is issued by the Supreme Court." The Court, quite frankly, sees in the text of the opinion nothing even remotely resembling an affront to the COMELEC, or a criticism of the First Division's judgment. On the contrary, the opinion simply paraphrases --- correctly, it would appear the COMELEC's own Rules of Procedure 20 on the subject it addresses. But even if, as the questioned Resolution declares, the views therein expressed are clearly wrong, it cannot for that reason alone be considered contumacious otherwise, liability for contempt would invariably attach to every declared instance of orders or judgments rendered without or in excess of jurisdiction or with grave abuse of discretion, or otherwise attended by serious error of one kind or another. The absurdity of such a rule or policy need not be belabored. Nor may the Acting Governor be faulted for consulting the lawyers of the province as to the effects of a judgment on the authority and actuations of municipal or provincial officials, or the fiscals for advising him on such matters. The law implicitly authorizes the former to seek such advice and expressly imposes upon the latter the duty to give it on request. Section 1682, first paragraph, of the Revised Administrative Code provides: SEC. 1682. Duty of fiscal as legal adviser of province and provincial subdivisions .-The provincial fiscal shall be the legal adviser of the provincial government and its officers, including district health officers, and of the mayor and council of the various municipalities and municipal districts of the province. As such he shall, when so requested, submit his opinion in writing upon any legal question submitted to him by any such officer or body pertinent to the duties thereof. Thus, all that the respondent fiscals did was perform a duty specifically enjoined by law, for the failure or refusal to do which they could appropriately have been called to account. It may be that the opinion they submitted was erroneous, though this is by no means certain and is not here fully inquired into, there being no need to do so. As already observed, it cannot, on the ground of error alone and absent any indication in the

record that it was prompted by a deliberate intent to affront the Commission or ignore or belittle its judgment and orders, be considered contumacious. The Court is somewhat intrigued by the statement in the challenged Resolution which "... hold(s) respondents bound by judicial notice" to the rule "... that even the Commission itself cannot disturb a proclamation made by a Board of Canvassers without notice and hearing." Interpreted in consonance with its context, the statement would appear to charge the respondents with judicial notice of the cited rule. But surely it could not have been meant to be taken in that sense because the rule of judicial notice binds only courts acting as such and, moreover, it is doubtful if the precept referred to is a proper subject of judicial notice. One would, however, be hard put to give the statement any other meaning that would not in one way or another contradict the ordinary intendment of its language. The respondent Commission would have it that if need was felt for any clarification in connection with the proclamation and the Resolution in question, it should have been sought with said Commission itself since the petitioners knew, or should have known, that it has exclusive jurisdiction over pre-proclamation controversies. It fails to explain, however, how the Acting Governor could have done this, not being a party to that particular controversy. And even had that step been feasible, it does not appear that said respondent has jurisdiction to render an advisory opinion or declaratory judgment. The power to hold in contempt, it has time and again been held, must be exercised, not on the vindictive, but on the preservative principle. 21 It is not to be meted out of pique, or from an imperial sense of the nature and functions of judicial office. What appears to be an honest difference of opinion has been blown up into something that it is not --- a direct and confrontational challenge to the puissance and prerogatives of the Commission. In a word, petitioners have been found in contempt because, to put it baldly, their opinion did not sit well with the Commission and failed to conform to its own views. Judicial sensibilities should not become too tender or self-protective. All things considered, the contempt ruling here cannot be justified on the preservative principle, there being no clear showing, either in the terms of the allegedly contumacious opinion or from the circumstances that led to its issuance, of any intent to denigrate the authority of the respondent Commission or erode the faith and respect due its decisions, orders or other actuations. Said ruling is, therefore, REVERSED and SET ASIDE, and petitioners are absolved of the contempt charge. No costs. SO ORDERED.

EN BANC

G.R. No. 89425 February 25, 1992 REPUBLIC OF THE PHILIPPINES (represented by the Presidential Commission on Good Government), petitioner, vs.SANDIGANBAYAN, Second Division, and REBECCO PANLILIO, respondents.

NARVASA, C.J.: In the special civil action of certiorari and prohibition at bar, this Court is asked "to categorically draw the distinctions between i) the Sandiganbayan's exclusive jurisdiction to determine the judicial question of ownership over sequestered properties and ii) the incidents of the exercise by the PCGG of its purely administrative and executive functions as conservator of sequestered properties." It is theorized "that EOs [Executive Orders] 1, 2, 14 and 14-A have never been intended to convert the Sandiganbayan into a super-commission, reviewer, supervisor, much less an overseer of the PCGG" and give it the power to "strike down even mere administrative and conservatory acts of thePCGG . . ." This action originated from a writ issued on May 31, 1986 by Commissioner Mary Concepcion Bautista of the Presidential Commission on Good Government (PCGG), placing three (3) firms under sequestration: (a) Silahis International Hotel, (b) Hotel Properties, Inc., and (c) Philroad Construction Corporation. 1 This was followed slightly more than a year later by the filing by the PCGG with the Sandiganbayan of a complaint involving said companies and one other, Philippine Village Hotel. The complaint was for "reversion, reconveyance, restitution, accounting and damages;" named twelve (12) persons as defendants: Rebecco Panlilio, Ferdinand E. Marcos, Imelda R. Marcos, Modesto Enriquez, Trinidad Diaz-Enriquez, Erlinda Enriquez-Panlilio, Leandro Enriquez, Don Ferry, Roman A. Cruz, Jr., Guillermo Gastrock, Ernesto Abalos, and Gregorio R. Castillo; and claimed, essentially, that said corporations, "together with their assets, shares of stocks, effects, evidence and records," had been "illegally acquired by the defendants in unlawful concert with one another and with gross abuse of power and authority." 2 The defendants took issue with this claim in the answer filed by them in due course. 3 On July 28, 1989, the PCGG issued a Mission Order (No. AD-89-51) creating a so-called "Management Committee" headed by one Antonio Villanueva and authorizing it, among other things, to "completely take-over the management and operations of Silahis International Hotel, preparatory to calling a Special Stockholders' Meeting in accordance with Sec. 3, Article II of the By-Laws in relation to Presidential Memorandum dated June 26, l986." 4 The mission order stated that the take-over was meant "to protect the interest of the government" in view of "the state of labor/management situation, brought about by the presence of undesirable elements of dubious intentions causing the occurrence of incidents of violence and undue disruption of the business operations of the hotel . . ." On the strength thereof the Management Committee took over the management and operations of the Silahis Hotel. Rebecco Panlilio forthwith filed with the Sandiganbayan a "Motion for Injunction with Application for Restraining Order" under date of August 3, 1989. The motion alleged that such a take-over was not within the scope of the writ of sequestration; that despite its sequestered status, the Silahis Hotel had "achieved a business turn-around at the start of last year and business since then . . . become profitable;" that on July 18, 1989, as a result of a deadlock in CBA negotiations with the union representing its employees, the union declared a strike, but there were on-going negotiations for settlement of the controversy; that the take-over authorized by the mission order was effected with abusive and unnecessary force; and that in truth there was no legal or factual basis for the take-over. 5 The PCGG for its part, asserted that it had acted in the exercise of its "primary administrative jurisdiction" and hence, the Sandiganbayan had no jurisdiction over the sequestration and takeover of Silahis Hotel. Panlilio's motion was heard by the Sandiganbayan on August 11, 1989 after which, on August 14, 1989, the Sandiganbayan (Second Division) promulgated a resolution "enjoining the PCGG, its Management Committee, or

any of its officers, agents or representatives from further implementing Mission Order No. AD-89-51 or from calling any Special Stockholders' Meeting, effective upon receipt (t)hereof and until further orders . . .," since "otherwise, the Court will be tolerating, if not condoning, an apparent violation of the rights of . . . defendantmovant, not justified by demonstrably tenable grounds, (petitioner being) oblivious of its mandated powers as a conservator, caretaker, watchdog or overseer, and in derogation of this Court's jurisdiction and authority as clearly outlined in the cases of BASECO and PEA (G.R. Nos. 75885 and 77663, respectively) . . ." The Sandiganbayan stated that defendant-movant Panlilio had "presented documentary evidence (Exhibits 1 to 3Motion) tending to show that the takeover of the management and operation of the Silahis International Hotel was not due to any disposal or dissipation of its assets, as in fact the Hotel is a highly viable and productive, enterprise despite the fact of its sequestration," and that "the PCGG . . . (had) not presented countervailing evidence . . . but on the contrary, had admitted . . . the factual basis for the issuance of Mission Order No. AD89-51, which is . . . that there was labor unrest among the employees . . .," insisting merely that it had acted and was acting "in the exercise of its primary administrative jurisdiction " and that the Sandiganbayan had "no jurisdiction over the factual and legal issues involved in the instant incident ." 6 That resolution of August 14, 1989 was challenged before this Court on August 16, 1989, through a petition for "certiorari, prohibition with urgent prayer for the issuance of writ of preliminary injunction and temporary restraining order" filed in behalf of the Republic, represented by the PCGG. The Court required the respondents to file comment thereon, in a Resolution dated August 22, 1989. Before respondents could file their comment, petitioner PCGG presented on August 29, 1989 a "Second Urgent Motion for Issuance of a Temporary Restraining Order" (in reiteration of the application incorporated in its petition). Acting thereon, this Court promulgated a Resolution on September 5, 1989 which, after observing that a) The motion sets out particular facts demonstrating dissipation on no mean scale of the funds of the (sequestered) Silahis International Hotel by "the respondent Panlilio's group," which controls said corporation . . .; and b) Concededly, these facts could justify the action sought to be taken by the PCGG, i.e., the immediate takeover of the management and operation of the Silahis Hotel with a view to the preservation and prevention of dissipation and wastage of its funds . . . (but) as the Solicitor General acknowledges, with commendable candor, these "facts have not been presented at the Sandiganbayan during the hearing . . . because a thorough examination of the books of accounts of Silahis Hotel had not been completed yet at that time;" (hence, it is) neither reasonable nor fair to set aside or prevent enforcement of the injunctive order dated August 14, 1989 of the Sandiganbayan (Second Division) on the basis of facts not presented or brought to be proved before it . . ., (while on the other hand) it is needful for the petitioner to be accorded full opportunity to adopt and carry out the measures it deems proper to prevent dissipation and loss of property and assets over which it lays claim, resolved: 1) to refer said urgent motion to the Sandiganbayan "to be considered by the later as a motion for reconsideration of the Order dated August 14,1989" and 2) to "direct said Court to forthwith schedule a hearing, with notice to all the parties, for the purpose of receiving the evidence of the petitioner in proof of the facts set forth in the motion and such others as it may deem material and relevant, as well as such proofs as the respondents may themselves wish to submit on the issue and thereafter, and with all deliberate dispatch, receive such evidence and on the basis thereof, resolve whether or not it will maintain, or lift or modify the Order of August 14, 1989, and then report the action thus taken to this Court as soon as possible." 7 The Sandiganbayan thereupon scheduled on September 15, 1989 a hearing for the reception of PCGG's evidence, conformably with this Court's Resolution of September 5, 1989 although as it was to point out later, "the evidence appearing in the attachments to . . . (its petition with this Court) had already been submitted (by the PCGG) at the formal resumption of hearing" on August 25, 1989," contrary to its subsequent claim that "a thorough examination of the books of accounts of Silahis Hotel had not been completed yet at that time." 8 In

any event, the matter was heard on September 15, 18 and 20, 1989. PCGG "presented additional testimonial evidence thru . . . Commissioner David Castro and rested its case with the admission of Exhibits I to K, inclusive, with sub-markings (and) defendant Panlilio presented testimonial evidence thru Jocelyn Zuluaga, Chief Accountant of the Silahis Hotel . . . after which (he) rested anew with the admission of Exhibits 6 to 12, inclusive. . . ." 9 The Sandiganbayan thereafter resolved the incident in a Resolution promulgated on October 27, 1989, a copy of which it transmitted to this Court on October 30, 1989. In that resolution the Sandiganbayan set forth the following conclusions, to wit: 1. Mission Order No. AD-89-51 contains no averment whatever "that defendant Panlilio had committed acts of dissipation of the hotel's assets which would justify the takeover," the ground explicitly stated therein being, "the state of labor/management situation, brought about by the presence of undesirable elements of dubious intentions causing the occurrence of incidents of violence and undue disruption of the business operations of the hotel." 2. The strike was however "finally settled on August 19, 1989, with defendant Panlilio and the union agreeing on the latter being granted a total economic package of P19.35 Million." Moreover, "hotel operations during the strike were not seriously affected thereby, with room occupancy averaging 76% daily compared to 77% for 1988." 3. No dissipation of corporate assets has been committed, PCGG's evidence to establish that fact being "completely off-tangent, self-serving, concocted and incredible, if not illogical." 4. Silahis' continuing compliance with its agreement with Hotel Properties, Inc. (HPI) in 1985 "cannot be deemed to constitute dissipation," both firms being "under sequestration and (hence) the interests of the Government . . . are fully and adequately protected," and said compliance never having been "questioned or objected to by PCGG or its Fiscal Agents/Asset Monitors" in either corporation. On the other hand, "(b)etween July 31, 1989 to August 18, 1989, or in less than three (3) weeks, PCGG's representatives had incurred guest check expenses amounting to P149,001.49 . . . (or) P7,400.00 daily." 5. Five (5) vital facts are established by Panlilio's proofs, without denial by PCGG, viz.: a. Both Silahis and HPI are sequestered corporations; b. PCGG had ASSET MONITORS in both corporations; c. PCGG is furnished copies of Silahis' annual financial statements; d. All payments by Silahis to HPI are coursed thru the head of Silahis Asset Monitors; and e. All said payments "are in accordance with the specified schedule of payments reflected in the Agreement between HPI and Silahis." 6. There is no evidence of any irregularity in "the grant of cash advances to Silahis' officers," this "being common business practice among corporate firms;" besides the cash advances "are not substantial enough to warrant jumping to the conclusion that corporate assets were being dissipated. 7. That Silahis' assets were "being carefully protected and nurtured pending judicial determination and disposition" is shown by the fact that it (a) had made payments to HPI totalling P60,000,000.00 as of December 31, 1988, and the additional amount of P26,000,000.00 as of June, 1989; (b) had undertaken capital improvements and renovations during the same period amounting to P29,400,000.00 without incurring additional or new loan obligations or defaulting on obligations due; and (e) had "even managed to settle its on-going strike by granting a total economic package of P19,500,000.00 to the hotel union . . ."

Upon these factual premises, the Sandiganbayan, as it had in its Resolution of August 14, 1989, 10 asserted its "authority and jurisdiction . . . invoked by defendant-movant, contrary to the denial thereof by the PCGG and counsel for plaintiff," and in the exercise thereof ruled as follows: 1) that "Mission Order No. AD-89-51 is . . . null and void ab initio;" 2) that "the takeover of the management and operation by the PCGG's Management Committee of the Silahis International Hotel on July 31, 1989 is . . . arbitrary and illegal;" and 3) that "the PCGG and said Management Committee are . . . to divest themselves of any participation and/or involvement hereafter in the management and operation of said Hotel, except as provided for under the guidelines enunciated in the BASECO and PEA cases." PCGG then sought leave to file, as it did file on November 23, 1989, an "Urgent Supplemental Petition" for certiorari and prohibition assailing the Sandiganbayan's Resolution of October 27, 1989 essentially because . . . instead of confining itself to the Order of this Honorable Court dated September 5, 1989, directing "it to resolve whether or not it will maintain, lift or modify (its) Order of August 14, 1989," rendered a Resolution determining and upholding its jurisdiction over the preservation of the sequestered asset and thus resolving the very issue raised in the petition filed by PCGG before this Honorable Supreme Court, and worse, even declaring the subject Mission Order void ab initio, which declaration is based not only on inferences that are manifestly mistaken and/or on misapprehension of facts, but also significantly on a misappreciation of the law . . ." On this Court's requirement, comment was submitted by the private respondents on February 9, 1990 on the "Urgent Supplemental Petition" and a reply to said comment, by the PCGG. To the reply a rejoinder was, by this Court's leave, filed by the private respondents. The Solicitor General subsequently presented a "Withdrawal of Appearance with Reservation" dated December 3, 1990; and by Resolution dated January 17, 1991, this Court resolved to allow said withdrawal of appearance in the case at bar (and in others specified in the withdrawal), "with the reservation, conformably with PD No. 478, Executive Order No. 292, as well as the doctrine laid down in " Orbos vs. Civil Service Commission, et al .," G.R. No. 92561, September 12, 1990, to submit his comment/observation on incidents/matters pending with this court, if called for by circumstances in the interest of the government, or whenever so required by this Court." The PCGG's complaint that the Sandiganbayan had gone beyond the task assigned to it by this Court in the Resolution of September 5, 1989 when it declared itself to be possessed of jurisdiction to determine the validity of Mission Order No. 89-51 and did declare the same to be void, is somewhat puzzling. A reading of the Sandiganbayan's Resolution of October 27, 1989 shows that it is merely a substantial reaffirmation of its earlier Resolution of August 14, 1989. In that Resolution of August 14, 1989, the Sandiganbayan (a) overruled the PCGG's theory that it had acted and was acting "in the exercise of its primary administrative jurisdiction and that . . . (the Sandiganbayan) has no jurisdiction over the factual and legal issues involved in the instant incident, and (b) declared that Mission Order No. AD-89-51 had no factual or legal basis to support it since the PCGG had "not presented any countervailing evidence to refute the evidence" of dissipation of assets by which said Mission Order might be justified, or of the absence of a labor unrest among the employees of the Silahis Hotel. These are basically the same dispositions made in the Resolution of October 27, 1989, after the Sandiganbayan had, at this Court's behest, received evidence which the PCGG had represented it had been unable to present at the time of the hearing before the Sandiganbayan of Panlilio's motion for injunction or temporary restraining order. The specific instruction to the Sandiganbayan was to "receive such evidence and on the basis thereof, resolve whether or not it will maintain, or lift or modify the Order of August 14, 1989 . . ." 11 Now, in this Resolution of October 27, 1989, the Sandiganbayan after receiving additional proofs of the PCGG and of Panlilio, and studying, analyzing and weighing them, determined to " maintain" its Order of August 14, 1989, but modified it in the sense that it spelled out in greater detail its reasons for holding itself to be vested with jurisdiction to act on and adjudicate the matters pending before it as well as the evidentiary foundations for its factual

conclusions. In both resolutions there was a clear declaration of the lack of basis of Mission Order No. 89-51, except only that what was implicit in the Resolution of August 14, 1989 was made explicit in the Resolution of October 22, 1989, i.e., that said mission order was null and void because there was no factual or legal basis therefor. The PCGG insists that under the law 12 the Sandiganbayan has no jurisdiction to review its acts of sequestration or provisional take-over of property or assets it is charged with recovering as illegally acquired by former President Marcos, his immediate family, relatives, subordinates and close associates. It opines that it may administer the properties placed under its custodia legis, and its acts "may not be interfered with by the courts;" this, in accordance with the "well-recognized principle adverted to in PCGG vs.Pea, 13 " that purely administrative and discretionary functions may not be interfered with by the courts," a principle that holds "specially true" in the administrative "sequestration cases affected by the Commission . . ." 14 Pea, it seems, has been misread. For Pea was quick to add that while "the findings by administrative or quasijudicial 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," those findings may and should be reviewed and reversed or nullified " where they are patently arbitrary or capricious or are not supported by substantial evidence." 15 In other words, neither in Pea nor in any other case did this Court ever say that orders of sequestration, seizure or take-over of the PCGG or other acts done in the exercise of its so-called "primary administrative jurisdiction" are beyond judicial review, or beyond the power of the courts to reverse or nullify. It is true, of course, that those acts are entitled to much respect, the findings and conclusions motivating and justifying them should be accorded great weight "like the factual findings of the trial and appellate courts," and such findings and conclusions of the PCGG may not be superseded and substituted by the judgment of the courts. But obviously the principle does not and cannot sanction arbitrary, whimsical, capricious or oppressive exercise of power and discretion on the part of the PCGG, or its performance of acts without or in excess of its authority and competence under the law. And in accordance with applicable law, review of those acts, and correction or invalidation thereof, when called for, can only be undertaken by the Sandiganbayan, which has exclusive original jurisdiction over all cases regarding the "funds, moneys, assets and properties illegally acquired or misappropriated by former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business associates, dummies, agents or nominees," this being the doctrine laid down in Pea, viz.: . . . all cases of the Commission regarding the "Funds, Moneys, Assets and Properties Illegally Acquired or Misappropriated by Former President Ferdinand E. 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 Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court. There can be no doubt that such incidents as arise or result from or are otherwise connected with or related to any such action instituted in the Sandiganbayan include acts of sequestration, seizure, or provisional take-over of particular property. The rule is in nowise altered by the fact that the sequestration, seizure or take-over preceded the commencement of action in the Sandiganbayan involving the property subject thereof. It may not be amiss to stress that Pea is entirely consistent with Baseco v. PCGG, 150 SCRA 181 (1987) which requires that sequestration, etc., in order to be valid must have factual basis and must accord due process to the parties thereby affected that said remedies are not meant to create a permanent situation as regards the property subject thereof, or divest ownership or rights, that they are in fact merely provisional and temporary and subsist only until ownership is finally judicially determined. Given the character of the present proceeding, review of the disputed factual findings of the Sandiganbayan as if on ordinary writ of error is beyond the competence of this Court, which is bound by such findings. This Court has consistently ruled that it is not a trier of facts, and the only question it can consider here is whether in making those findings, the Sandiganbayan acted without or in excess of its jurisdiction, or with equivalent grave abuse of

discretion. 16 The record clearly shows that the parties, the PCGG, as well as private respondent had full opportunity to disclose their evidence, develop and present their arguments, if not before the issuance of the first Sandiganbayan Resolution of August 14, 1989, afterwards when at the Court's behest the issue was reheard as if upon a motion for reconsideration; and the later Resolution of October 27, 1989 shows with equal clarity that said tribunal exhaustively studied, assessed and evaluated such evidence and arguments in reaching the same conclusions as in its earlier disposition. It may be, as the PCGG contends, that the Sandiganbayan erred in its weighing of the evidence as supportive of private respondent's contentions rather than those of said petitioner. But simple error, without more, does not qualify as grave abuse of discretion correctible in a special civil action of certiorari. What has been stated and ruled makes it unnecessary to take up the last motion in the record, whereby private respondent, invoking this Court's ruling in PCGG vs. International Copra Export Corporation , 17 would also have this proceeding dismissed as already moot and academic on the ground that the failure of the PCGG to implead Silahis International, Inc. and Hotel Properties, Inc. in Civil Case No. 014 of the Sandiganbayan within the sixmonth period fixed in Article XVIII, Section 26 of the Constitution, had the effect of automatically lifting the sequestration on those firms. WHEREFORE, the petition and supplemental petition are DISMISSED, without pronouncement as to costs.

SECOND DIVISION G.R. No. L-45402 April 30, 1987 ROMEO DABUET, GAMIK BARTOLOME, SALVADOR ABESAMIS and MARIANO MALONZO, and ROCHE PRODUCTS LABOR UNION, petitioners, vs.ROCHE PHARMACEUTICALS, INC., ERIC MENTHA, REYNALDO FORMELOZA, and the OFFICE OF THE PRESIDENT, respondents.

back wages from the time of their suspension until actually reinstated, without loss of seniority rights. The respondent company was, likewise, ordered to extend to the petitioners all fringe benefits to which they are entitled had they not been dismissed. 5 The respondent company filed a motion for reconsideration of the decision, and on 16 November 1976, the Office of the President granted the motion and reversed its previous decision of 27 April 1976. It ruled that, while the petitioners' dismissal was not for just and valid cause, no unfair labor practice had been committed. Consequently, it directed that petitioners be paid only separation pay in an amount double those awarded by the compulsory arbitrator and Secretary of Labor. 6 Hence, the present recourse to this Court. The determinative issue raised in the petition is whether or not the respondent company, in terminating the employment of the petitioners without just and lawful cause, committed an unfair labor practice. We have carefully examined the records of the case and we are convinced that the respondent company had committed unfair labor practice in dismissing the petitioners without just and valid cause. In Republic Savings Bank vs. CIR, 7 where the dismissed employees had written a letter decried by the Bank as patently libelous for alleging immorality, nepotism and favoritism on the part of the Bank president, thus amounting to behavior necessitating their dismissal, the Court declared: ... Assuming that the workers acted in their individual capacities when they wrote the letter-charge they were nonetheless protected for they were engaged in concerted activity, in the exercise of their right to selforganization that includes concerted activity for mutual aid and protection, interference with which constitutes an unfair labor practice under section 4(a) (1). This is the view of some members of this Court. For, as has been aptly stated, the joining in protests or demands, even by a small group of employees, if in furtherance of their interests as such, is a concerted activity protected by the Industrial Peace Act. It is not necessary that union activity be involved or that collective bargaining be contemplated. Where, as in this case, the letter written by and for the union addressed to management referred to employee grievances and/or, labor-management issues and the employees concerned were all officers of the union, then seeking a renegotiation of the collective bargaining agreement, a fact which respondent company does not deny, there should, all the more, be a recognition of such letter as an act for the mutual aid, protection and benefit of the employees concerned. This recognition, in turn, should extend to petitioners' execution of an affidavit in support of the charge of slander against private respondent, Eric Mentha, for calling the union's lawyer, who prepared the letter, and the contents thereof as "stupid." Breach of trust and confidence, the grounds alleged for herein petitioners' dismissal, "must not be indiscriminately used as a shield to dismiss an employee arbitrarily. For who can stop the employer from filing an the charges in the books for the simple exercise of it, and then hide behind the pretext of loss of confidence which can be proved by mere preponderance of evidence." 8 Besides, there is nothing in the record to show that the charge of perjury filed by private respondents against the petitioners has prospered in any conclusive manner. We, thus, hold that respondent company's act in dismissing the Petitioners, who then constituted the remaining and entire officialdom of the Roche Products Labor Union, after the union's president and vice-president had been earlier dismiss and when the collective bargaining agreement in the company was about to be renegotiated, was an unfair labor practice under Sec. 4(a) (1) of the Industrial Peace Act. Their dismissal, under the circumstances, amounted to interference with, and restraint or coercion of, the petitioners in the exercise of their right to engage in concerted activities for their mutual aid and protection As the respondent company was guilty of unfair labor practice, reinstatement of the dismissed employees should follow as a matter of right. It is an established rule that an employer who commits an unfair labor practice may be required to reinstate, with full back wages, the workers affected by such act, the amount not to exceed back wages for three (3) years. 9

PADILLA, J.: This is a petition for review of the decision of the Office of the President in NLRC Case No. C-5190, ordering the respondent Roche Pharmaceuticals, Inc. to pay the individual petitioners separation pay, in lieu of reinstatement with back wages. The facts of the case which led to the filing of this petition are, as follows: On 1 March 1973, herein individual petitioners who were an officers of the Roche Products Labor Union, the labor organization existing in the firm, and with whom the respondent company had a collective bargaining agreement which was due for re-negotiation that month, wrote the respondent company expressing the grievances of the union and seeking a formal conference with management regarding the previous dismissal of the union's president and vice-president. A meeting was, accordingly, arranged and set for 12 March 1973. At said meeting, however, instead of discussing the problems affecting the labor union and management, Mr. Eric Mentha, the company's general manager, allegedly berated the petitioners for writing said letter and called the letter and the person who prepared it as "stupid." Feeling that he was the one alluded to, since he had prepared the letter, counsel for the labor union filed a case for grave slander against Mr. Mentha. The charge was based on the affidavit executed by the petitioners. The company and Mentha, in turn, filed a complaint for perjury against petitioners alleging that their affidavit contained false statements. The respondent company, furthermore, construed the execution by petitioners of the affidavit as an act of breach of trust and confidence and inimical to the interest of the company, for which they were suspended. Subsequently, the respondent company filed with the NLRC a petition for clearance to terminate their employment. The petitioners filed an opposition thereto and, at the same time, filed charges of unfair labor practice, union busting, and harassment against the company, Eric Mentha, and Reynaldo Formeloza, the company's Finance/Administrative Manager. 1 After due proceedings, the compulsory arbitrator found that the petitioners' dismissal was without justifiable cause, but that there was no unfair labor practice committed and directed that petitioners be paid separation pay. 2 Petitioners filed a motion for reconsideration and/or appeal to the NLRC which agreed with the findings of the arbitrator that the petitioners' dismissal was without just and valid cause. However, it disagreed with the arbitrator on the relief granted. The NLRC ordered the reinstatement of the petitioners with two (2) months salary as back wages. 3 Both parties appealed to the Secretary of Labor who set aside the decision of the NLRC and entered another one ordering the payment of severance pay only. 4 The petitioners appealed to the Office of the President, and on 27 April 1976, the latter rendered a decision finding the respondents guilty of unfair labor practice and directing the reinstatement of the petitioners with

The respondents claim however, that the Supreme Court has no jurisdiction to take cognizance of the instant petition. They contend that pursuant to Art. 222, (should be Art. 223) of the Labor Code. the Office of the President is the final appellate authority within the adjudicative machinery for handling labor disputes and no law, order or regulation provides for any appeal therefrom to the Supreme Court. To be sure, Art. 223 of the Labor Code. while providing ex.pressly that decisions of the Secretary of Labor may be appealed to the Office of the president, does not provide for review of the decisions Of the Office of the President by the Supreme Court. This does not mean, however, that the power Of judicial review does not extend to decisions of the Office of the President. In San Miguel Corp. vs. Secretary of Labor , 10 where the same issue was the Court categorically decisive that there is an underlying power in the courts to scrutinize the acts of agencies exercising quasi-judicial or legislative power on questions of law and jurisdiction even though no right of review is given by the statute. The Court therein said: Yanglay raised a jurisdictional question which was not brought up by respondent public officials. He contends that this Court has no jurisdiction to review the decisions of the NLRC and the Secretary of labor 'under the principle of separation of powers' and that judicial review is not provided for in Presidential Decree No. 21. That contention is a flagrant error. "It is generally understood that as to administrative agencies exercising quasijudicial or legislative power there is an underlying power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though no right of review is given by statute" (73 C.J.S. 506, note 56). The purpose of judicial review is to keep the administrative agency within its jurisdiction and protect substantial rights of parties affected by its decisions' (73 C.J.S. 504, Sec. 166). It is part of the system of checks and balances which restricts the separation of powers and forestalls arbitrary and unjust adjudications. Judicial review is proper in case of lack of jurisdiction, grave abuse of discretion, error of law, fraud or collusion (Timbancaya vs. Vicente, 62 O.G. 9424; Macatangay vs. Secretary of Public Works and Communications, 63 O.G. 11236; Ortua vs. Singson Encarnacion, 59 Phil. 440). In Macailing vs. Andrada, 11 the Court also ruled that judicial review of administrative decisions is available even if the statute does not provide for judicial review. The Court said: In the matter of judicial review of administrative decisions, some statutes especially provide for such judicial review; others are silent. Mere silence, however, does not necessarily imply that judicial review is unavailable. Modes of judicial review vary according to the statutes; appeal petition for review or a writ of certiorari No general rule applies to all the various administrative agencies. Where the law stands mute, the accepted view is that the extraordinary remedies in the Rules of Court are still available. Accordingly, we restate that this Court, in the exercise of its power of judicial review, may review decisions of the Office of the President on questions of law and jurisdiction, when properly raised. This does not mean judicial supremacy over the Office of the President but the performance by this Court of a duty specifically enjoined upon it by the Constitution, 12 as part of a system of checks and balances. The checkered circumstances under which the decisions in this case were made, notably, that two varying rulings were rendered by different officials of the Office of the President, within a short period of time, also constrained us to review the case on a question of law. WHEREFORE, the judgment appealed from should be, as it is, hereby reversed and set aside and another one entered, ordering the respondent company to reinstate the petitioners to their former positions, with three (3) years back wages and without loss of seniority rights. The respondent company is further directed to extend to said petitioners fringe benefits they are entitled to had they not been dismissed. In the event that reinstatement is no longer feasible, the respondent company should pay, in addition, severance pay of one (1) month for every year of service based upon the highest salary eceived.

SO ORDERED.

SECOND DIVISION G.R. No. L-43825 May 9, 1988 CONTINENTAL MARBLE CORP. and FELIPE DAVID, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION (NLRC); ARBITRATOR JOSE T. COLLADO and RODITO NASAYAO, respondents. Benito P. Fabie for petitioners. Narciso C. Parayno, Jr. for respondents.

Acting on the motions, the respondent Commission, in a resolution dated 7 May 1976, dismissed the appeal on the ground that the decision appealed from is final, unappealable and immediately executory, and ordered the herein petitioners to comply with the decision of the voluntary arbitrator within 10 days from receipt of the resolution. 5 The petitioners are before the Court in the present recourse. As prayed for, the Court issued a temporary restraining order, restraining herein respondents from enforcing and/or carrying out the questioned decision and resolution. 6 The issue for resolution is whether or not the private respondent Rodito Nasayao was employed as plant manager of petitioner Continental Marble Corporation with a monthly salary of P3,000.00 or 25% of its monthly income, whichever is greater, as claimed by said respondent, or entitled to receive only an amount equivalent to 25% of net profits, if any, that the company would realize, as contended by the petitioners. The respondent arbitrator found that the agreement between the parties was for the petitioner company to pay the private respondent, Rodito Nasayao, a monthly salary of P3,000.00, and, consequently, ordered the company to pay Rodito Nasayao the amount of P9,000.00 covering a period of three (3) months, that is, May, June and July 1974. The respondent Rodito Nasayao now contends that the judgment or award of the voluntary arbitrator is final, unappealable and immediately executory, and may not be reviewed by the Court. His contention is based upon the provisions of Art. 262 of the Labor Code, as amended. The petitioners, upon the other hand, maintain that "where there is patent and manifest abuse of discretion, the rule on unappealability of awards of a voluntary arbitrator becomes flexible and it is the inherent power of the Courts to maintain the people's faith in the administration of justice." The question of the finality and unappealability of a decision and/or award of a voluntary arbitrator had been laid to rest in Oceanic Bic Division (FFW) vs. Romero, 7 and reiterated in Mantrade FMMC Division Employees and Workers Union vs. Bacungan . 8 The Court therein ruled that it can review the decisions of voluntary arbitrators, thusWe agree with the petitioner that the decisions of voluntary arbitrators must be given the highest respect and as a general rule must be accorded a certain measure of finality. This is especially true where the arbitrator chosen by the parties enjoys the first rate credentials of Professor Flerida Ruth Pineda Romero, Director of the U.P. Law Center and an academician of unquestioned expertise in the field of Labor Law. It is not correct, however, that this respect precludes the exercise of judicial review over their decisions. Article 262 of the Labor Code making voluntary arbitration awards final, inappealable, and executory except where the money claims exceed P l 00,000.00 or 40% of paid-up capital of the employer or where there is abuse of discretion or gross incompetence refers to appeals to the National Labor Relations Commission and not to judicial review. Inspite of statutory provisions making 'final' the decisions of certain administrative agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice, or erroneous interpretation of the law were brought to our attention. There is no provision for appeal in the statute creating the Sandiganbayan but this has not precluded us from examining decisions of this special court brought to us in proper petitions. ... The Court further said: A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial capacity. There is no reason why herdecisions involving interpretation of law should be beyond this Court's review. Administrative officials are presumed to act in accordance with law and yet we do hesitate to pass upon their work where a question of law is involved or where a showing of abuse of authority or discretion in their official acts is properly raised in petitions for certiorari. The foregoing pronouncements find support in Section 29 of Republic Act No. 876, otherwise known as the Arbitration Law, which provides:

PADILLA, J.: In this petition for mandamus, prohibition and certiorari with preliminary injunction, petitioners seek to annul and set aside the decision rendered by the respondent Arbitrator Jose T. Collado, dated 29 December 1975, in NLRC Case No. LR-6151, entitled: "Rodito Nasayao, complainant, versus Continental Marble Corp. and Felipe David, respondents," and the resolution issued by the respondent Commission, dated 7 May 1976, which dismissed herein petitioners' appeal from said decision. In his complaint before the NLRC, herein private respondent Rodito Nasayao claimed that sometime in May 1974, he was appointed plant manager of the petitioner corporation, with an alleged compensation of P3,000.00, a month, or 25% of the monthly net income of the company, whichever is greater, and when the company failed to pay his salary for the months of May, June, and July 1974, Rodito Nasayao filed a complaint with the National Labor Relations Commission, Branch IV, for the recovery of said unpaid varies. The case was docketed therein as NLRC Case No. LR-6151. Answering, the herein petitioners denied that Rodito Nasayao was employed in the company as plant manager with a fixed monthly salary of P3,000.00. They claimed that the undertaking agreed upon by the parties was a joint venture, a sort of partnership, wherein Rodito Nasayao was to keep the machinery in good working condition and, in return, he would get the contracts from end-users for the installation of marble products, in which the company would not interfere. In addition, private respondent Nasayao was to receive an amount equivalent to 25% of the net profits that the petitioner corporation would realize, should there be any. Petitioners alleged that since there had been no profits during said period, private respondent was not entitled to any amount. The case was submitted for voluntary arbitration and the parties selected the herein respondent Jose T. Collado as voluntary arbitrator. In the course of the proceedings, however, the herein petitioners challenged the arbitrator's capacity to try and decide the case fairly and judiciously and asked him to desist from further hearing the case. But, the respondent arbitrator refused. In due time, or on 29 December 1975, he rendered judgment in favor of the complainant, ordering the herein petitioners to pay Rodito Nasayao the amount of P9,000.00, within 10 days from notice. 1 Upon receipt of the decision, the herein petitioners appealed to the National Labor Relations Commission on grounds that the labor arbiter gravely abused his discretion in persisting to hear and decide the case notwithstanding petitioners' request for him to desist therefrom: and that the appealed decision is not supported by evidence. 2 On 18 March 1976, Rodito Nasayao filed a motion to dismiss the appeal on the ground that the decision of the voluntary arbitrator is final, unappealable, and immediately executory; 3 and, on 23 March 1976, he filed a motion for the issuance of a writ of execution. 4

Sec. 29. Appeals An appeal may be taken from an order made in a proceeding under this Act, or from a judgment entered upon an award through certiorari proceedings, but such appeals shall be limited to questions of law. The proceedings upon such an appeal, including the judgment thereon shall be governed by the Rules of Court in so far as they are applicable. The private respondent, Rodito Nasayao, in his Answer to the petition, 9 also claims that the case is premature for non-exhaustion of administrative remedies. He contends that the decision of the respondent Commission should have been first appealed by petitioners to the Secretary of Labor, and, if they are not satisfied with his decision, to appeal to the President of the Philippines, before resort is made to the Court. The contention is without merit. The doctrine of exhaustion of administrative remedies cannot be invoked in this case, as contended. In the recent case of John Clement Consultants, Inc. versus National Labor Relations Commission, 10 the Court said: As is well known, no law provides for an appeal from decisions of the National Labor Relations Commission; hence, there can be no review and reversal on appeal by higher authority of its factual or legal conclusions. When, however, it decides a case without or in excess of its jurisdiction, or with grave abuse of discretion, the party thereby adversely affected may obtain a review and nullification of that decision by this Court through the extraordinary writ of certiorari. Since, in this case, it appears that the Commission has indeed acted without jurisdiction and with grave abuse of discretion in taking cognizance of a belated appeal sought to be taken from a decision of Labor Arbiter and thereafter reversing it, the writ of certiorari will issue to undo those acts, and do justice to the aggrieved party. We also find no merit in the contention of Rodito Nasayao that only questions of law, and not findings of fact of a voluntary arbitrator may be reviewed by the Court, since the findings of fact of the voluntary arbitrator are conclusive upon the Court. While the Court has accorded great respect for, and finality to, findings of fact of a voluntary arbitrator 11 and administrative agencies which have acquired expertise in their respective fields, like the Labor Department and the National Labor Relations Commission, 12 their findings of fact and the conclusions drawn therefrom have to be supported by substantial evidence. ln that instant case, the finding of the voluntary arbitrator that Rodito Nasayao was an employee of the petitioner corporation is not supported by the evidence or by the law. On the other hand, we find the version of the petitioners to be more plausible and in accord with human nature and the ordinary course of things. As pointed out by the petitioners, it was illogical for them to hire the private respondent Rodito Nasayao as plant manager with a monthly salary of P3,000.00, an amount which they could illafford to pay, considering that the business was losing, at the time he was hired, and that they were about to close shop in a few months' time. Besides, there is nothing in the record which would support the claim of Rodito Nasayao that he was an employee of the petitioner corporation. He was not included in the company payroll, nor in the list of company employees furnished the Social Security System. Most of all, the element of control is lacking. In Brotherhood Labor Unity Movement in the Philippines vs. Zamora, 13 the Court enumerated the factors in determining whether or not an employer-employee relationship exists, to wit: In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called "control test" that is the most important element (Investment Planning Corp. of the Phils. vs. The Social Security System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra, and Rosario Brothers, Inc. v. Ople, 131 SCRA 72). <re||an1w> In the instant case, it appears that the petitioners had no control over the conduct of Rodito Nasayao in the

performance of his work. He decided for himself on what was to be done and worked at his own pleasure. He was not subject to definite hours or conditions of work and, in turn, was compensated according to the results of his own effort. He had a free hand in running the company and its business, so much so, that the petitioner Felipe David did not know, until very much later, that Rodito Nasayao had collected old accounts receivables, not covered by their agreement, which he converted to his own personal use. It was only after Rodito Nasayao had abandoned the plant following discovery of his wrong- doings, that Felipe David assumed management of the plant. Absent the power to control the employee with respect to the means and methods by which his work was to be accomplished, there was no employer-employee relationship between the parties. Hence, there is no basis for an award of unpaid salaries or wages to Rodito Nasayao. WHEREFORE, the decision rendered by the respondent Jose T. Collado in NLRC Case No. LR-6151, entitled: "Rodito Nasayao, complainant, versus Continental Marble Corp. and Felipe David, respondents," on 29 December 1975, and the resolution issued by the respondent National Labor Relations Commission in said case on 7 May 1976, are REVERSED and SET ASIDE and another one entered DISMISSING private respondent's complaints. The temporary restraning order heretofore isued by the Court is made permanent. Without costs. SO ORDERED.

SECOND DIVISION G.R. No. L-62255 January 30, l986 ALFREDO BAGSICAN, petitioner, vs.HONORABLE COURT OF APPEALS, PEDRO AGOT and LECATEDRA AGOT, respondents. Ruben A. Puertollano for petitioner. Malcolm T. Enerio for private respondents.

the filing by the petitioner of a complaint for Reinstatement with Damages, 1 against herein private respondents before the Court of Agrarian Relations. After trial, judgment was rendered in favor of the petitioner with the disposition as herein earlier stated. From the aforesaid judgment, private respondents appealed to the defunct Court of Appeals which reversed and set aside the decision appealed from. 2 Petitioner now comes before Us through the instant petition contending among other things, that (1) the Court of Appeals erred in adopting the "preponderance of evidence rule" instead of the mere "substantial evidence rule" in the resolution of the instant case, the same being an agrarian case; (2) the Court of Appeals cannot disturb the findings of fact of the Court of Agrarian Relations on the mere issue of credibility of witnesses; and (3) that the judgment of the Court of Appeals is based on a misapprehension of facts, We find merit in petitioner's submittal that in agrarian cases, all that is required is mere "substantial evidence". That has been the consistent ruling of this Court in a long line of cases. 3 This substantial evidence rule was later incorporated in P.D. 946 which took effect on June 17, 1976 and has been expressly made applicable to agrarian cases. Section 18 of the said decree provides: The Court of Appeals shall affirm the decision or order or the portions thereof appealed from if the findings ** of fact in the said decision or order are supported by substantial evidence as basis thereof, and the conclusions stated therein are not clearly against the law and jurisprudence. . . Under this rule, all that the appellate court has to do, insofar as the evidence is concerned, is to find out if the decision is supported by substantial evidence. 4 So much so that, the findings of fact of the Court of Agrarian Relations, if supported by substantial evidence, are conclusive on the appellate tribunal. 5 Substantial evidence does not necessarily import preponderant evidence, as is required in an ordinary civil case. It has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, for the appellate court cannot substitute its own judgment or criteria for that of the trial court in determining wherein lies the weight of evidence or what evidence is entitled to belief. 6 In the case at bar, the trial court ordered the reinstatement of the petitioner on the basis of the following findings of fact: There is abundance of undenied evidence that the late Juan Bagsican, father of the herein plaintiff, during his lifetime, was a former tenant of a portion of the big tract of land owned by the late Severo Jonson, defendant's father. The Court, after careful examination of the evidence on record, lends more credence to plaintiff's undisturbed claim, substantially corroborated by his witness, that he succeeded and is in continuous possesion and cultivation of his parents' landholding. This started sometime in 1940, the year his mother died, who succeeded also as tenant on the landholding after the death of her spouse, Juan Bagsican (plaintiff's father) who died earlier than his mother. After his mother's death, he succeeded and cultivated the landholding and was able to plant 267 coco trees, bananas, fruit trees, cassava, etc., but during the lifetime of his mother, he had however, planted 30 coco trees. When these trees became fruit bearing in 1948, which coincidentally was the year the big tract of land was partitioned among the heirs of the late Severo Jonson, plaintiff shared the harvest with the defendant Locatedra Jonson Agot at a 60-50 sharing ratio since he was the one who planted the coco trees (tsn, pp. 4-8, August 8, 1975; and tsn, pp. 2-4, August 21, 1975). The records disclose that after the estate of the late Severo Jonson was partitioned in 1948, the tenanted landholding of the herein plaintiff became the share or is now owned by the herein defendant Lecatedra Jonson Agot which is not denied by the latter, and as testified to by Felicisima Jonson, brother of the defendant Lecatedra Jonson Agot (tsn, p. 2, August 21, 1975).

CUEVAS, J.:p Petition for review of the Decision of the then Court of Appeals in CA-G.R. No. 10054-CAR, entitled "Alfredo Bagsican, Plaintiff-Appellee, vs. Pedro Agot and Lecatedra Agot, Defendants-Appellants", which reversed and set aside the decision of the defunct Court of Agrarian Relations-Branch 111, Ozamis City, the dispositive portion of which reads as follows: WHEREFORE, IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered: (1) Declaring the plaintiff herein, Alfredo Bagsican, the lawful tenant on the coconut landholding in question, situated at Buntawan, Oroquieta City; (2) Ordering the defendants to reinstate immediately plaintiff thereon; (3) Ordering the defendants to pay, as damages, to plaintiff the following: (a) The sum of Eighty Pesos (P80.00) for the last quarter of the year 1973 and P80.00 every quarter thereafter until reinstated; (b) the sum of Twenty-Five Pesos (P25.00) as actual expenses for transportation and meals. (4) Dismissing all other claims and counterclaims for lack of proof. Subject matter of the instant controversy is a 4-hectare landholding situated at Buntawan, Oroquieta City. It forms part of a big tract of land consisting of 114 hectares, more or less, originally owned by the late Severo Jonson, father of private respondent Lecatedra Jonson Agot. The aforementioned 4-hectare landholding was originally worked on and tenanted by Juan Bagsican, father of the herein petitioner Alfredo Bagsican. After Juan's death, his wife, assisted by the herein petitioner, continued tenanting the aforesaid landholding. Petitioner's mother on the other hand died in 1940, and from then on herein petitioner continued in working and tenanting the landholding in question thereby planting an additional 267 coconut trees, bananas, fruit trees, cassava and other root crops. Severo Jonson died sometime in 1948. The big tract of land was then partitioned among his children and the portion being worked on and tenanted by the petitioner was alloted to Lecatedra Jonson Agot, the herein appellee. After the partition, herein petitioner nevertheless continued with his occupation and tenancy of the questioned landholding thereby delivering to herein private respondent her share as an owner, on a 50-50 sharing basis, until September, 1973 when he was ejected therefrom by the herein private respondent that culminated in

Such quantum of evidence cannot be washed away by a mere denial of the existence of tenancy relationship as that set up by the private respondents who claimed that petitioner was never a tenant of theirs in the land folding in question. The observation and conclusion of the trial court that said cassava is bereft of merit appeared to be well taken, since the persons who testified to be tenants on the said landholding, separately described areas and boundaries different from that admitted by the parties 7 and more so when their individual description materially differs from each other. 8 The respondent court also took notice of said deficiency in private respondent's evidence, but it rationalized its stand on this point in the following manner: The supposed discrepancies in the statement of boundaries are understandable. Various new acquisitions had been made re: the share of the other heirs. At any rate, this will indicate that the defense witnesses were not iii collusion with one another. Anent private respondent's assertion that it was Julio Lagamon and Brigido Lagamon, father and son, respectively, who had been tenanting the landholding in dispute, We find the trial court's finding on the said subject, which runs thus: This confirm the belief of the court that these two tenants, namely: Julio Lagamon and Brigido Lagamon, father and son, respectively, are tenanting other portions of defendant's land other than the land in question. This is buttressed by the fact that Julio Lagamon, father-in-law of the herein plaintiff became a tenant of the defendant only sometime in 1949 after the marriage of his daughter to the herein plaintiff (now petitioner). It could be informed that this Julio Lagamon came to know of the defendant Lecatedra Jonson Agot only after this marriage for prior to this period, he was arriving in Buenavista, Pagadian City which is located in Zamboanga del Sur. (TSN, p. 38-40, Hearing of October 24, 1975). to be likewise supported by the evidence on record and very much in accord with logic and ordinary human experience. Finally, with respect to petitioner's motive in filing the instant case, We quote with approval the court's findings and observations on said issue. And it runs thus: The court cannot sustain defendants' view that plaintiff's motive in filing this case is retaliatory in nature due to the former's criminal complaint against the latter's son, because, as so decided in Overo vs. Caret, et al ., CAG.R. No. 43940-R, October 27, 1971, the plaintiff..... like any man of ordinary intelligence, would not resort to filing an action in Court for his reinstatement as a tenant had there been no justifiable reason therefore. Man is presumed to take ordinary care of his concerns. Indeed, it would be contrary to human nature if the herein plaintiff would venture on an expensive litigation, Poor as they are, and face the rigors of trial if they have not been done any wrong. Even if defendants' view were true, the same could not defeat a right which is protected by law. Besides, plaintiff has substantially shown that he was indeed ejected by the herein defendants as testified to by Felicisima Jonson (TSN, pp. 4-5, August 21, 1975). IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and that of the Court of Agrarian Relations is hereby REINSTATED. No pronouncement as to costs, SO ORDERED.

SECOND DIVISION G.R. No. 142571 May 5, 2006

jurisprudential principle on the matter, the same is hereby AFFIRMED. SO ORDERED. Only petitioner NIA came to this Court via this petition for review raising the following issues for resolution: the court of appeals erred in affirming the ruling of the regional trial court denying petitioners motion to dismiss (annex "c" hereof) which averred, among other things, that respondent failed to exhaust administrative remedies available to him under the law. the court of appeals erred in declaring that petitioner is liable to respondent for the alleged work at petitioners project though the alleged assignment was done in violation of existing rules and regulations. The Court finds the petition meritorious. Petitioner raised the issue of non-exhaustion of administrative remedies in its appeal before the CA, on account of respondents failure to file his claim before the Commission on Audit (COA) prior to instituting a complaint for collection of sum of money with the RTC. Instead of addressing the question, however, the CA discussed NIAs separate and distinct corporate personality from the government or the State, which is a non-issue. What the CA failed to rule upon is, given the fact that NIA is a government entity vested with a separate corporate personality from the State, whether NIA, being a government entity disbursing public funds or tax-payers money is subject to the jurisdiction of COA such that any claim for collection of sum of money against it, specially in this instance where it is not covered by any written contract, must be initially lodged before the COA. The issue should have been resolved in the affirmative. Among the powers vested upon COA as provided for in Section 26, Presidential Decree No. 1445, are the following: SECTION 26. General jurisdiction. The authority and powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other self-governing boards, commissions, agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government. [Emphasis supplied.] COA, as one of the three (3) independent constitutional commissions, is specifically vested with the power, authority and duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust by the government, or any of its subdivisions, agencies or instrumentalities. To ensure the effective discharge of its functions, COA has been empowered, subject to the limitations imposed by Article IX(D) of the 1987 Constitution, to define the scope of its audit and examination and establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties. 2 In the instant case, when determining the regularity of disbursement of public funds by the petitioner NIA for the alleged services rendered by respondent in the widening project involving a portion of Binahaan River in Barangay Cansamada, Dagami, Leyte more specifically, from station 16 + 400 to station 16 + 900 thereof, the

NATIONAL IRRIGATION ADMINISTRATION, Petitioner, vs.LEONCIO C. ENCISO, Respondent. DECISION GARCIA, J.: The instant petition for review on certiorari under Rule 45 of the Rules of Court seeks to nullify and set aside the Decision dated March 20, 2000 1 of the Court of Appeals (CA) in CA-G.R. CV No. 59681 affirming an earlier decision of the Regional Trial Court (RTC) of Makati City, Branch 141, in its Civil Case No. 94-005, an action for a sum of money with damages thereat commenced by the respondent against the herein petitioner, its Administrator and its Assistant Administrator for Systems and Operations and Equipment Management. Succinctly summarized by the Court of Appeals in the assailed decision are the following undisputed facts: Records show that in 1984, defendant-appellant [petitioner] National Irrigation Administration (NIA) commenced the widening of the Binahaan River in Brgy. Cansamada, Dagami, Leyte. This project was divided into small sections costing not more than P50,000.00 each so as not to require public bidding. However, pre-bidding was nevertheless conducted by NIA and participated in by different contractors to determine the possible lowest bid which shall serve as the cost of the project. With this arrangement, contractors are assigned to work on specific sections without formal contracts. When the works for the assigned sections are completed to NIAs satisfaction, NIA will then prepare the requisite contract and other pertinent documents so that the contractor can collect payment. Plaintiff-appellant [respondent] Enciso, doing business as a contractor under the name LCE Construction, worked on a portion of the river from "station 16 + 400 to station 16 + 900". His first billing of P227,165.90 was paid by NIA. However, his second and final billing of P259,154.01 was denied on the ground that the work done on the right side of the river was not accomplished. [Words in bracket supplied.] Respondent finally instituted a complaint for collection of a sum of money with damages and attorneys fees with the RTC of Makati City, thereat docketed as Civil Case No. 94-005 and eventually raffled to Branch 141 thereof. Petitioner and co-defendants filed a motion to dismiss on grounds of non-exhaustion of administrative remedies and lack of cause of action. The RTC denied the motion and proceeded to trial. In a decision dated February 27, 1998, the RTC rendered judgment for respondent, as plaintiff, holding petitioner, as defendant, liable, thus: WHEREFORE, judgment is hereby rendered ordering defendant National Irrigation Administration to pay plaintiff the sum of P259,154.01 with legal rate of interest of 12% per annum effective on 1 August 1985 until fully paid; P50,000.00, as and for attorneys fees; and the costs of suit. SO ORDERED. Both parties went up to the Court of Appeals (CA). For its part, petitioner contended that the trial court erred in denying its motion to dismiss and thereafter holding it liable to respondent. On the other hand, respondent interposed that the trial court erred in failing to hold petitioners co-defendants personally liable for damages and in adjudging petitioner NIA solely liable based on the face value of the work accomplished in 1985. The CA, however, found no reversible error in the appealed decision and affirmed it as follows: 1avvphil.net WHEREFORE, finding no reversible error in the appealed decision which is in accord with the evidence and

accounting and auditing principles, rules and regulations set by COA must be taken into consideration. In this light, it is highly doubtful whether respondent may compel petitioner NIAs officers to release payment of his claims without any previously approved contract for the supposed river-widening project in violation of existing COA rules and regulations, without subjecting said official to administrative and/or personal liabilities and/or accountabilities. Be that as it may, for the supposed refusal or failure by the concerned public officials to act over respondents money claim or even the mere inaction for an unreasonable period, the proper and immediate remedy of the respondent was to file his claim with the COA, such inaction or refusal to pay being tantamount to disallowance of the claim. Only after COA has ruled on the claim, may the injured party invoke judicial intervention by bringing the matter to this Court on petition for certiorari. Exhaustion of administrative remedies is a doctrine of long standing and courts have clear guidelines on the matter. Paat vs. Court of Appeals3 wrote: This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. This doctrine of exhaustion of administrative remedies was not without its practical and legal reasons, for one thing, availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. It is no less true to state that the courts of justice for reasons of comity and convenience will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency concerned every opportunity to correct its error and to dispose of the case. However, we are not amiss to reiterate that the principle of exhaustion of administrative remedies as tested by a battery of cases is not an ironclad rule. This doctrine is a relative one and its flexibility is called upon by the peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is a violation of due process, (2) when the issue involved is purely a legal question, (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the administrative agency concerned, (5) when there is irreparable injury, (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it would amount to a nullification of a claim, (9) when the subject matter is a private land in land case proceedings, (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention. Petitioner had timely raised this ground to dismiss the action before the RTC, and since there is no showing that respondents case falls under any one of the accepted exceptions, petitioners motion to dismiss should have been granted, forthwith dismissing the case for lack of cause of action. Anent the second issue, the legality or regularity of petitioners payment of respondents claim may be best addressed in a proper case before the COA, considering that there might be factual matters involved therein, which is definitely not within the province of the present petition for review on certiorari. WHEREFORE, the petition is hereby GRANTED. The appealed decision is hereby REVERSED and SET ASIDE, and respondents Complaint before the RTC is DISMISSED for lack of cause of action, with costs against respondent. SO ORDERED.

EN BANC

WHEREAS, the issuance of permits or licenses prior to business operation is a form of regulation which is not provided in the charter of nor included among the powers of the PCA; WHEREAS, the Governing Board of PCA has determined to follow and further support the deregulation policy and effort of the government to promote free enterprise; NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator, coconut product processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the latter shall no longer issue any form of license or permit as condition prior to establishment or operation of such mills or plants; RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges. ADOPTED this 24th day of March 1993, at Quezon City. 3 The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated coconut processing plants, prompting petitioner to appeal to the Office of the President of the Philippines on April 26, 1993 not to approve the resolution in question. Despite follow-up letters sent on May 25 and June 2, 1993, petitioner received no reply from the Office of the President. The "certificates of registration" issued in the meantime by the PCA has enabled a number of new coconut mills to operate. Hence this petition. Petitioner alleges: I RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY. II ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF SUBSTANTIVE DUE PROCESS OF LAW. III IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826 AND PCA ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991. On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this petition should be denied on the ground that petitioner has a pending appeal before the Office of the President. Respondent accuses petitioner of forum-shopping in filing this petition and of failing to exhaust available administrative remedies before coming to this Court. Respondent anchors its argument on the general rule that one who brings an action under Rule 65 must show that one has no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law. I.

G.R. No. 110526 February 10, 1998 ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner, vs.PHILIPPINE COCONUT AUTHORITY, respondent.

MENDOZA, J.: At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut Authority in which it declares that it will no longer require those wishing to engage in coconut processing to apply to it for a license or permit as a condition for engaging in such business. Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this suit for certiorari and mandamus against respondent Philippine Coconut Authority (PCA) to invalidate the latter's Board Resolution No. 018-93 and the certificates of registration issued under it on the ground that the resolution in question is beyond the power of the PCA to adopt, and to compel said administrative agency to comply instead with the mandatory provisions of statutes regulating the desiccated coconut industry, in particular, and the coconut industry, in general. As disclosed by the parties' pleadings, the facts are as follows: On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for the establishment of new desiccated coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants would violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to operate in areas considered "congested" under the administrative order. 1 On November 6, 1992, the trial court issued a temporary restraining order and, on November 25, 1992, a writ of preliminary injunction, enjoining the PCA from processing and issuing licenses to Primex Products, Inc., Coco Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting of a bond in the amount of P100,000.00. 2 Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of the PCA issued on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the Philippine Coconut Authority from all regulation of the coconut product processing industry. While it continues the registration of coconut product processors, the registration would be limited to the "monitoring" of their volumes of production and administration of quality standards. The full text of the resolution reads: RESOLUTION NO. 018-93POLICY DECLARATION DEREGULATINGTHE ESTABLISHMENT OF NEW COCONUTPROCESSING PLANTS WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective regulations and unnecessary bureaucratic red tapes; WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of coconut oils pursuant to Presidential Decree No. 1960, the lifting of export and commodity clearances under Executive Order No. 1016, and relaxation of regulated capacity for the desiccated coconut sector pursuant to Presidential Memorandum of February 11, 1988, has become a centerpiece of the present dispensation;

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The

resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands as a bar to an action which is not yet complete 4 and it is clear, in the case at bar, that after its promulgation the resolution of the PCA abandoning regulation of the desiccated coconut industry became effective. To be sure, the PCA is under the direct supervision of the President of the Philippines but there is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers and functions of the PCA which requires rules and regulations issued by it to be approved by the President before they become effective. In any event, although the APCD has appealed the resolution in question to the Office of the President, considering the fact that two months after they had sent their first letter on April 26, 1993 they still had to hear from the President's office, meanwhile respondent PCA was issuing certificates of registration indiscriminately to new coconut millers, we hold that petitioner was justified in filing this case on June 25, 1993. 5 Indeed, after writing the Office of the President on April 26, 1993 6 petitioner sent inquiries to that office not once, but twice, on May 26, 1993 7 and on June 2, 1993, 8 but petitioner did not receive any reply. II. We now turn to the merit of the present petition. The Philippine Coconut Authority was originally created by P.D. 232 on June 30, 1973, to take over the powers and functions of the Coconut Coordinating Council, the Philippine Coconut Administration and the Philippine Coconut Research Institute. On June 11, 1978, by P.D. No. 1468, it was made "an independent public corporation . . . directly reporting to, and supervised by, the President of the Philippines," 9 and charged with carrying out the State's policy "to promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth." 10 through a regulatory scheme set up by law. 11 Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of new coconut processing plants and, four months later, phased out some of the existing ones in view of overproduction in the coconut industry which resulted in cut-throat competition, underselling and smuggling of poor quality products and ultimately in the decline of the export performance of coconut-based commodities. The establishment of new plants could be authorized only upon determination by the PCA of the existence of certain economic conditions and the approval of the President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided: Sec. 1. Prohibition. Except as herein provided, no government agency or instrumentality shall hereafter authorize, approve or grant any permit or license for the establishment or operation of new desiccated coconut processing plants, including the importation of machinery or equipment for the purpose. In the event of a need to establish a new plant, or expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant, the Philippine Coconut Authority may, upon proper determination of such need and evaluation of the condition relating to: a. the existing market demand; b. the production capacity prevailing in the country or locality; c. the level and flow of raw materials; and d. other circumstances which may affect the growth or viability of the industry concerned, authorize or grant the application for, the establishment or expansion of capacity, relocation or upgrading of efficiencies of such desiccated coconut processing plant, subject to the approval of the President. On December 6, 1982, a phase-out of some of the existing plants was ordered by the government after finding

that "a mere freeze in the present capacity of existing plants will not afford a viable solution to the problem considering that the total available limited market is not adequate to support all the existing processing plants, making it imperative to reduce the number of existing processing plants." 12 Accordingly, it was ordered: 13 Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be necessary to reduce the number of existing desiccated coconut processing plants to a level which will insure the survival of the remaining plants. The Authority is hereby directed to determine which of the existing processing plants should be phased out and to enter into appropriate contracts with such plants for the above purpose. It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the establishment and operation of additional DCN plants, in view of the increased demand for desiccated coconut products in the world's markets, particularly in Germany, the Netherlands and Australia. Even then, the opening of new plants was made subject to "such implementing guidelines to be set forth by the Authority" and "subject to the final approval of the President." The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of 1991, inter alia authorized the opening of new plants in "non-congested areas only as declared by the PCA" and subject to compliance by applicants with "all procedures and requirements for registration under Administrative Order No. 003, series of 1981 and this Order." In addition, as the opening of new plants was premised on the increased global demand for desiccated coconut products, the new entrants were required to submit sworn statements of the names and addresses of prospective foreign buyers. This form of "deregulation" was approved by President Aquino in her memorandum, dated February 11, 1988, to the PCA. Affirming the regulatory scheme, the President stated in her memorandum: It appears that pursuant to Executive Order No. 826 providing measures for the protection of the Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions relating to: (a) the existing market demands; (b) the production capacity prevailing in the country or locality; (c) the level and flow of raw materials; and (d) other circumstances which may affect the growth or viability of the industry concerned and that the result of such evaluation favored the expansion of production and market of desiccated coconut products. In view hereof and the favorable recommendation of the Secretary of Agriculture, the deregulation of the Desiccated Coconut Industry as recommended in Resolution No. 058-87 adopted by the PCA Governing Board on October 28, 1987 (sic) is hereby approved. 14 These measures the restriction in 1982 on entry into the field, the reduction the same year of the number of the existing coconut mills and then the lifting of the restrictions in 1987 were adopted within the framework of regulation as established by law "to promote the rapid integrated development and growth of the coconut and other palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in, and beneficiaries of, such development and growth." 15 Contrary to the assertion in the dissent, the power given to the Philippine Coconut Authority and before it to the Philippine Coconut Administration "to formulate and adopt a general program of development for the coconut and other palm oils industry" 16 is not a roving commission to adopt any program deemed necessary to promote the development of the coconut and other palm oils industry, but one to be exercised in the context of this regulatory structure. In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned resolution which allows not only the indiscriminate opening of new coconut processing plants but the virtual dismantling of the regulatory infrastructure whereby, forsaking controls theretofore placed in its keeping, the PCA limits its function to the innocuous one of "monitoring" compliance by coconut millers with quality standards and volumes of production. In effect, the PCA would simply be compiling statistical data on these matters, but in case of violations of standards there would be nothing much it would do. The field would be left without an umpire who would retire to the bleachers to become a mere spectator. As the PCA provided in its Resolution No. 018-93: NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth, PCA shall no longer require any

coconut oil mill, coconut oil refinery, coconut desiccator, coconut product processor/factory, coconut fiber plant or any similar coconut processing plant to apply with PCA and the latter shall no longer issue any form of license or permit as condition prior to establishment or operation of such mills or plants; RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the aforementioned coconut product processors for the purpose of monitoring their volumes of production, administration of quality standards with the corresponding service fees/charges. The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate under the law "to promote the accelerated growth and development of the coconut and other palm oil industry." 17 The issue rather is whether it can renounce the power to regulate implicit in the law creating it for that is what the resolution in question actually is. Under Art. II, 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To formulate and adopt a general program of development for the coconut and other palm oil industry in all its aspects." By limiting the purpose of registration to merely "monitoring volumes of production [and] administration of quality standards" of coconut processing plants, the PCA in effect abdicates its role and leaves it almost completely to market forces how the coconut industry will develop. Art. II, 3 of P.D. No. 1468 further requires the PCA: (h) To regulate the marketing and the exportation of copra and its by-products by establishing standards for domestic trade and export and, thereafter, to conduct an inspection of all copra and its by-products proposed for export to determine if they conform to the standards established; Instead of determining the qualifications of market players and preventing the entry into the field of those who are unfit, the PCA now relies entirely on competition with all its wastefulness and inefficiency to do the weeding out, in its naive belief in survival of the fittest. The result can very well be a repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting in cut-throat competition, underselling, the production of inferior products and the like, which badly affected the foreign trade performance of the coconut industry. Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory provisions, particularly those of P.D. No. 1644, to wit: Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the marketing and export of copra, coconut oil and their by-products, in furtherance of the steps being taken to rationalize the coconut oil milling industry. Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority may initiate and implement such measures as may be necessary to attain the rationalization of the coconut oil milling industry, including, but not limited to, the following measures: (a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their by-products; (b) Prescription of quality standards; (c) Establishment of maximum quantities for particular periods and particular markets; (d) Inspection and survey of export shipments through an independent international superintendent or surveyor. In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with, and be guided by, the recommendation of the coconut farmers, through corporations owned or controlled by them through the Coconut Industry Investment Fund and the private corporation authorized to be organized under Letter of

Instructions No. 926. and the Revised Coconut Code (P.D. No. 1468), Art. II, 3, to wit: (m) Except in respect of entities owned or controlled by the Government or by the coconut farmers under Sections 9 and 10, Article III hereof, the Authority shall have full power and authority to regulate the production, distribution and utilization of all subsidized coconut-based products, and to require the submission of such reports or documents as may be deemed necessary by the Authority to ascertain whether the levy payments and/or subsidy claims are due and correct and whether the subsidized products are distributed among, and utilized by, the consumers authorized by the Authority. The dissent seems to be saying that in the same way that restrictions on entry into the field were imposed in 1982 and then relaxed in 1987, they can be totally lifted now without prejudice to reimposing them in the future should it become necessary to do so. There is really no renunciation of the power to regulate, it is claimed. Trimming down of PCA's function to registration is not an abdication of the power to regulate but is regulation itself. But how can this be done when, under Resolution No. 018-93, the PCA no longer requires a license as condition for the establishment or operation of a plant? If a number of processing firms go to areas which are already congested, the PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back in their production. This is because the licensing system is the mechanism for regulation. Without it the PCA will not be able to regulate coconut plants or mills. In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy of free enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red tape" as justification for abolishing the licensing system. There can be no quarrel with the elimination of "unnecessary red tape." That is within the power of the PCA to do and indeed it should eliminate red tape. Its success in doing so will be applauded. But free enterprise does not call for removal of "protective regulations." Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic principle. 18 Although the present Constitution enshrines free enterprise as a policy, 19 it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. This is clear from the following provisions of Art. XII of the Constitution which, so far as pertinent, state: Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands . Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires . No combinations in restraint of trade or unfair competition shall be allowed. (Emphasis added). At all events, any change in policy must be made by the legislative department of the government. The regulatory system has been set up by law. It is beyond the power of an administrative agency to dismantle it. Indeed, petitioner charges the PCA of seeking to render moot a case filed by some of its members questioning the grant of licenses to certain parties by adopting the resolution in question. It is alleged that members of petitioner complained to the court that the PCA had authorized the establishment and operation of new plants in areas which were already crowded, in violation of its Administrative Order No. 002, series of 1991. In response, the Regional Trial Court issued a writ of preliminary injunction, enjoining the PCA from issuing licenses to the private respondent in that case. These allegations of petitioner have not been denied here. It would thus seem that instead of defending its decision to allow new entrants into the field against petitioner's claim that the PCA decision violated the guidelines in Administrative Order No. 002, series of 1991, the PCA adopted the resolution in question to render the case moot. In so doing, the PCA abdicated its function of regulation and left the field to untrammeled competition that is likely to resurrect the evils of cut-throat competition, underselling and overproduction which in 1982 required the temporary closing of the field to new players in order to save the industry.

The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the resolution in question. As already stated, what President Aquino approved in 1988 was the establishment and operation of new DCN plants subject to the guidelines to be drawn by the PCA . 20 In the first place, she could not have intended to amend the several laws already mentioned, which set up the regulatory system, by a mere memoranda to the PCA. In the second place, even if that had been her intention, her act would be without effect considering that, when she issued the memorandum in question on February 11, 1988, she was no longer vested with legislative authority. 21 WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration issued under it are hereby declared NULL and VOID for having been issued in excess of the power of the Philippine Coconut Authority to adopt or issue. SO ORDERED.

THIRD DIVISION G.R. No. L-47821 September 15, 1988 BENITO ROSALES, EMILIA R. ROSALES and ROMMEL ROSALES represented by Guardian-Ad-Litem, ROMMEL ROSALES, petitioners, vs.COURT OF APPEALS and DON BOSCO TECHNICAL INSTITUTE, FR. AGUSTIN LOPEZ; MRS. S.A. MENDOZA, assisted by her husband GODOFREDO MENDOZA and MISS FELICIDAD GORDON. respondents. Antonio R. Rabago for petitioners. Myrna Cruz-Feliciano for respondents.

On May 5, 1972, the Director of Private Schools rendered a decision holding that Rommel Rosales was the rightful valedictorian. On November 29, 1972, Rosales filed a complaint for damages itemized as follows: P25,000.00 for moral damages; P15,000.00 for correctional damages and P5,000.00 for attorney's fees, in view of the failure of the school to graduate Rommel Rosales as valedictorian of his class. In its answer, respondent school prayed that the complaint be dismissed on the ground that the Director of Private Schools acting on its motion dated May 11, 1972 reconsidered and set aside his decision of May 5, 1972 and instead "approved and/or confirmed the selection and award of honors to the students concerned for the school year 1971-1972 as effected by the school." (p. 14, Rollo [R.A., p. 31]) Petitioners, in their reply, averred that said motion for reconsideration was mysteriously filed, there being no original copies of the same in the Office of the Director of Private Schools which would show the date of filing thereof and their corresponding receipt of a copy thereof by the petitioners. Respondent school however, insisted that their motion for reconsideration was regularly filed and the assailed decision was in fact reconsidered as above stated on December 18,1972. The records show that petitioners filed a motion for reconsideration on January 11, 1973 of said decision of December 18, 1972 but was denied on January 19, 1973. Thus, on February 7, 1973, petitioners appealed both decisions of December 18, 1972 and January 19, 1973 to the Secretary of Education which appeal was still pending at the time of the filing of their complaint in court. At the pre-trial, plaintiffs (petitioners herein) confirmed their filing of said appeal with the Secretary of Education. For this reason, respondent school moved to dismiss the complaint for lack of cause of action on the ground of plaintiff's (petitioner's) failure to exhaust administrative remedies. On September 14, 1973, the trial court issued an order which reads: Acting on the motion to dismiss dated August 20, 1 973 and the opposition thereto filed by the plaintiffs and after hearing the oral argument of the plaintiffs during the hearing of the motion, the Court finds that plaintiffs have not exhausted all administrative remedies against the defendants and that it does not fall within any of the recognized exceptions to the requirement. Since the complaint does not allege exhaustion of said remedies principally on appeal to the Secretary of Education which was available to him, the Court finds that the complaint does not allege facts sufficient to constitute cause of action. WHEREFORE, the Motion to Dismiss is granted and the complaint is DISMISSED, without costs. (Rollo, pp. 23-24) On appeal, the Court of Appeals found that the court a quo incurred no error when it found that the decision of the Director of Private Schools dated May 5, 1972 was far from being final and that the administrative remedies availed of by plaintiffs had not yet been exhausted and affirmed the decision appealed from in toto. Hence, this petition. Petitioners raised the following assignment of errors: I THE LOWER COURT ERRED IN NOT FINDING THAT THE DECISION OF THE BUREAU OF PRIVATE SCHOOLS DATED MAY 5, 1972 HAS ALREADY BECOME FINAL AND CONCLUSIVE. II THE LOWER COURT ERRED IN NOT FINDING THAT THE EXHAUSTION OF ADMIMSTRATIVE REMEDIES IS NOT APPLICABLE IN THIS INSTANT CASE.

BIDIN, J.: This is a petition for review on certiorari seeking to annul and set aside the decision of the Court of Appeals * dated July 26, 1977 in CA-G.R. No. 54674-R entitled "BENITO ROSALES, et al, v. DON BOSCO TECHNICAL INSTITUTE" which affirmed the decision of the court a quo ** dated September 14, 1973, dismissing petitioners' complaint for damages. The decision of the Court of Appeals reads: ... (It) is clearly evident that plaintiffs were not candid when they maintained that they knew nothing about the school's petition for reconsideration, and that after all there was nothing 'mysterious' about the School's actuations. Further, it is likewise clear from the evidence that plaintiffs did seek the review by the Secretary of Education of the Director's ruling, and that at the time the School filed its motion to dismiss, the matter was still pending resolution with the Secretary of Education. Hence, the court a quo incurred in no error when it found that the decision of the Director of Private Schools dated May 5, 1972 was far from being final and that the administrative remedies availed of by plaintiffs had not yet been exhausted. As to the claim that plaintiffs have been denied due process, suffice it to say that the dismissal of the complaint was based on the ground that it was premature, administrative remedies not having been exhausted. PREMISES CONSIDERED, decision appealed from is hereby affirmed in toto. No costs. (pp. 26-27, Rollo) The facts of the case as found by the Court of Appeals, are as follows: On April 11, 1972, the Don Bosco Technical Institute (School, for short) posted the list of honor students for the graduation of its elementary department which was to take place on April 22,1972. Rommel Rosales a student of Grade VI, candidate for graduation and likewise candidate for Valedictorian, reported to his parents that he was not listed as Valedictorian of the class but that it was another boy by the name of Conrado Valerie. The parents of Rommel demanded for a re-computation of the grades of their son who, they averred, should be class valedictorian and filed a formal complaint with the Director of Bureau of Private Schools against the school claiming anomalous ranking of honor pupils for the grade school with a request for a review of the computations made by the school. On April 20, 1972, the Chief of the Legal Division of the Bureau of Private Schools sent a copy of the complaint by first indorsement to the Rector of herein respondent school. Said comment was made on April 21, 1972, stating, among others, that the complaint had lost its validity because the same was filed on the eve of the commencement exercises of the school, in violation of the provision of paragraph 176, Section XI of the Manual of Regulation for Private Schools requiring complaints of the kind to be filed not later than ten (10) days before commencement exercises. However, defendant Rector indicated that he would welcome an investigation in order to erase any doubt as to the selection of the honor students of the grade school concerned.

III THE LOWER COURT ERRED IN ACTING AND DISREGARDING THE APPLICATION OF DUE PROCESS OF LAW TO THE PLAINTIFFS-APPELLANTS. IV THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT OF THE PLAINTIFFS- APPELLANT. (pp. 10-11, Rollo).

which gives life to petitioners' cause of action has not yet been reached. This was still pending as evidenced in the certificate issued by the agency trying the same (Record on Appeal, pp. 53-54; Rollo, p. 14). The court a quo was thus correct in acting upon the motion to dismiss filed by the respondents on the ground that plaintiffs failed to exhaust administrative remedies. Under the doctrine of exhaustion of administrative remedies, recourse through court action, as a general rule, cannot prosper until all the remedies have been exhausted at the administrative level, (Pacana vs. Consunji, 108 SCRA 631[1981]; Pestaas et al. v. Dyogi, et al., 81 SCRA 574 [1978]; Antonio v. Tanco, 65 SCRA 448 [1975]). Thus, in Abe-Abe et al. v. Manta (90 SCRA 524, 531 [1979]) we emphatically declared:

The main issues in this case are: 1. Whether or not the decision of the Director of the Bureau of Private Schools dated May 5, 1972 has already become final and conclusive; and 2. Whether or not the principle of exhaustion of administrative remedies is applicable in this case. The first issue involves findings of fact of the Court of Appeals and of the trial court which as a general rule are final and may not be reviewed on appeal to this Court, subject to certain exceptions which have been recognized and accepted by this court at one time or another (Manlapaz v. Court of Appeals, 147 SCRA 238 [1987]). Petitioners' position is to the effect that there was no motion for reconsideration of the May 5, 1972 decision of the Director of Private Schools, so that the same has become final and executory. The Court of Appeals found that although the Record on Appeal does not contain a copy of the alleged motion for reconsideration of the subject decision of May 5, 1972, it was however, mentioned in the letter of the Director of Private Schools dated January 19, 1973 addressed to counsel of plaintiffs (petitioners herein) which reads: This has reference to your request in behalf of Mrs. Emilia R. Rosales, for reconsideration of the action taken by this Office as per letter dated December 18, 1972, reconsidering its original stand on the matter of the ranking of honor students at the Don Bosco Technical Institute, Mandaluyong, Rizal, for the school year 1971-72, as contained in a letter dated May 5, 1972. After a careful review of the records of the present case, in the light of existing rules and regulations on the matter, this Office finds no valid cause or reason to modify or disturb its action as embodied in a letter dated December 18, 1972. Accordingly, please be informed that your request for reconsideration, as per letter dated January 11, 1973, is denied. (p. 14, Rollo [R.A. pp. 28-29]. Thus, as correctly concluded by the Court of Appeals, the contents of aforesaid letter indubitably establish that there was in fact the questioned motion for reconsideration which was acted upon by the Director of Private Schools on December 18, 1972, reconsidering his stand on May 5,1972; that petitioners knew about this reconsidered stand otherwise they would not have written said request for reconsideration of the decision of said Director of December 18, 1972, and that the request for reconsideration written by Atty. Rabago in behalf of his clients, the herein petitioners was dated January 11, 1973 which was denied on January 19, 1973. Subject complaint, Civil Case No. 16998, was filed with the trial court on November 29,1972, showing beyond dispute that the request for reconsideration judicially admitted to have been filed by the petitioners on February 7, 1973 with the Secretary of Education and Culture had not yet been resolved at the time of the filing of Civil Case No. 16998. Hence, the said civil case which is an action for damages is premature. The finality of the administrative case When an adequate remedy may be had within the Executive Department of the government, but nevertheless, a litigant fails or refuses to avail himself of the same, the judiciary shall decline to interfere. This traditional attitude of the courts is based not only on convenience but likewise on respect; convenience of the party litigants and respect for a co-equal office in the government. If a remedy is available within the administrative machinery, this should be resorted to before resort can be made to (the) court. (citing Cruz vs. Del Rosario, 119 Phil. 63, 66). Petitioners however, claim that they were denied due process, obviously to show that their case falls within one of the exceptions to the doctrine of exhaustion of administrative remedies. Such contention is however untenable, because in the first place, they were made to avail in the same administrative agency, the opportunity or right to oppose, which in fact they did, when they filed a motion for reconsideration and later when the motion was denied, they appealed to the Secretary of Education and Culture. Precisely, a motion for reconsideration or appeal is curative in character on the issue of alleged denial of due process (Sampang vs. Inciong, 137 SCRA 56 [19851; REMERCO Garments v. MOLE, 135 SCRA 167 [1985]) WHEREFORE, the instant petition is Dismissed for lack of merit and the decision of the Court of Appeals is Affirmed. No costs. SO ORDERED.

THIRD DIVISION

LOURDES MEMPIN P 30.00/ " CHUA HUAT P 100.00/ "

G.R. No. L-53851 July 9, 1991 CHUA HUAT, ONG CHOAN, DOMINADOR FELINO, RUFINO CLEMENTE, TEODORA CLEMENTE, and LOURDES MEMPIN, petitioners, vs.THE HONORABLE COURT OF APPEALS, JUDGE ELVIRO PERALTA, SHERIFF OF MANILA, and THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, and MANUEL UY AND SONS, INC., respondents. G.R. No. L-63863 July 9, 1991 CHUA HUAT, LOURDES MEMPIN, RUFINO CLEMENTE, DOMINADOR FELINO, MARIA GAMBOA, and ONG CHOAN, petitioners, vs.HON. RAMON D. BAGATSING, City Mayor of Manila; ROMULO M. DEL ROSARIO, City Engineer and Building Official, City of Manila; and MANUEL UY AND SONS, INC., respondents. Fidel Manalo and Rizalino C. Vineza for petitioners. Sycip, Salazar, Hernandez & Gatmaitan and Oscar Z. Benares for respondents.

portion subleased by Gamboa P 38.00/ " portion subleased by Kho Chong P 110.00/ " portion subleased by Chua Chia P 55.00/ " ONG CHOAN P 100.00/ " FRANCISCO, RUFINO and TEODORA CLEMENTE P 25.00/ " b) Ordering said defendants, including Maximo Yambao or anyone claiming under him, to vacate the hands respectively occupied by them and to surrender the same to plaintiff UY; to remove their improvements thereon or to abandon them within sixty (60) days from receipt of this judgment. After the lapse of said sixty days, plaintiff can submit the corresponding motion under Section 14, Rule 39; c) On Ong Choan's Third-Party Complaint, sentencing third-party defendant SY PUT to reimburse the former for whatever amount he shall pay to UY pursuant to this judgment, with interest at the legal rate on the total amount from the date of payment until fully paid. SY PUT shall either remove all the improvements he has constructed on the land, or abandon them in favor of plaintiff within sixty (60) days from receipt of this judgment. Costs against defendants proportionately. SO ORDERED. Not satisfied with the said decision, herein petitioners, as defendants therein, appealed therefrom to the Court of Appeals which docketed it as C.A.-G.R. No. 51337-R. In its decision of 19 January 1977, the Court of Appeals affirmed in toto the aforesaid decision. 4 Petitioners, except Ong Choan, filed a Petition for Review on certiorari with this Court (G.R. No. L-47603) on 8 February 1978 to set aside the decision of the Court of Appeals. Petitioner Ong Choan separately filed a similar petition with this Court (G.R. No. L-48649), arguing that: "the case was actually an unlawful detainer case and therefore, the Court of First Instance had no jurisdiction over it, making the decision null and void." Both petitions for review on certiorari were denied by this Court.
5

DAVIDE, JR., J.:p In the resolution of 9 January 1984, this Court resolved to consolidate these cases as they are related. The first case, G.R. No. 53851, is a petition for review on certiorari of the decision of the Court of Appeals of 29 February 1980 in C.A.-G.R. No. 09251 SP 1 and its resolutions of 30 April 1980 and 8 July 1980 denying, respectively, petitioners' first and second motions for the reconsideration of said decision. The second case, G.R. No. 63863, 2 is a petition for prohibition, with prayer for preliminary injunction and/or restraining order, directed against the notices of condemnation and the demolition orders issued by the respondent City Engineer, upon authority of the respondent City Mayor, concerning the buildings occupied by petitioners at 1271 to 1277 Pedro Gil St. and 1553 to 1557 Paz St., Paco, Manila. For sheer lack of merit, these cases must be dismissed. The antecedent facts and proceedings are not disputed. On 31 May 1972, a decision was rendered in Civil Case No. 74634 3 by the Court of First Instance, Branch XVII, then presided by Honorable Judge now Associate Justice of this Court Ameurfina Melencio-Herrera, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered, a) sentencing defendant Dominador Felino, Lourdes Mempin, Chua Huat, Ong Choan, Francisco, Rufino and Teodora, all surnamed Clemente, to pay plaintiff UY the following monthly sums set out after their respective names beginning January 1, 1963, until the date they have vacated the property, with interest at 6% per annum from the date of this Decision as to the amounts due on May 31, 1972: DOMINADOR FELINO P 25.00/month

On 15 November 1978, after the decision in Civil Case No. 74634 became final and executory, the plaintiffs (private respondents herein) filed a motion to execute the same, which was granted by the trial court (Branch XXVII) on 20 November 1978. 6 Re: G.R. No. 53851 On 21 November 1978, petitioner Chua Huat filed with the Court of First Instance of Manila a complaint for the annulment of the judgment in Civil Case No. 74634. This complaint was docketed as Civil Case No. 119751 and was assigned to Branch XXII. Petitioner Ong Choan and others also filed a separate complaint for annulment of judgment which was docketed as Civil Case No. 119884. Both complaints were based on the ground that the Court of First Instance of Manila had no jurisdiction over Civil Case No. 74634 because the said action was one for

ejectment and not for recovery of possession ( accion publiciana) which was, therefore, cognizable by the City Court of Manila; hence, the decision in said Civil Case No. 74634 is null and void. On 23 February 1979, despite the filing of the above cases for annulment of judgment, the Court of First Instance of Manila ordered the execution of the judgment in Civil Case No. 74634. Petitioners field a motion for reconsideration of the said order and to suspend proceedings in Civil Case No. 74634 pending termination of the annulment case which was, however, denied by the trial court in its Order of 5 April 1979, which reads: All the points raised in defendants' motion for reconsideration and to suspend proceedings are already thoroughly covered in the order of February 23, 1979 which in effect holds that Branch XXII, a coordinate court, cannot interfere with this branch in its prerogative to carry out its decision, long final and affirmed by the higher courts, into effect, and said motion is hereby denied. It is only the superior court which can prohibit this branch from executing its decision. The Sheriff of Manila, unless restrained by either the Supreme Court or the Court of Appeals, shall immediately implement the writ of execution upon the expiration of thirty (30) days from receipt by the defendants of a copy of the order, if to give them time to bring the incident up on certiorari to said superior courts. 7 Petitioners then filed a Petition for Certiorari and Prohibition with the Court of Appeals, docketed as C.A.-G.R. No. 09251 SP, to set aside the order of execution of judgment, and to prohibit the respondents from executing the judgment until Civil Case No. 119751 pending in Branch XXII of the Court of First Instance of Manila is finally decided and terminated. In the Decision promulgated on 29 February 1980, the Court of Appeals denied the petition for lack of merit, stating inter alia: The instant petition must be denied for lack of merit. 1. The judgment in Civil Case No. 74634 is undisputedly final and executory. As such, the issuance of a writ of execution thereof becomes the ministerial duty of the respondent judge. . . . 2. Civil Case No. 119751 filed by petitioners herein to annul the judgment in Civil Case No. 74634 cannot stop the execution thereof because of finality of judgment or res judicata. A cursory reading of the questioned judgment, Civil Case No. 74634, discloses that the issue raised in the annulment of judgment case, C.C. No. 119751, has been decided in the prior case when the court then presided by now Supreme Court Justice Ameurfina MelencioHerrera who penned the said decision stated, as follows: A. This is an accion publiciana and not one for unlawful detainer, for which reason, it was rightfully brought before this Court. What is involved is not the recovery of physical possession only but the recovery of the right to possess. We find application in the following doctrines: A party may not, by changing the form of a lawsuit or adopting a different method of presenting the matter, escape the application of the principle that the same cause of action may not be litigated twice between the same parties. (Paz vs. Indanan, 76 Phil. 608; Pascual vs. Palermo, L-2185, April 29, 1950, 47 O.G. 6184; Francisco vs. Blas, L-5078, May 4, 1953; Barrera vs. Del Rosario, L-8928, April 28, 1956). Another aspect of the doctrine is that once an issue has been raised and finally decided by a court of competent jurisdiction, generally speaking it becomes res judicata or can be made the basis of a plea of estoppel by judgment as between the parties to that litigation, no matter in what manner it was raised and Official or not it was the principal issue or merely an incidental one. (Eugenio vs. Tiangco L-2804, Sept. 20, 1949; Robis vs. Caspe, L-6166, Sept. 28, 1964.).

WHEREFORE, there being no finding of a capricious and whimsical exercise of judgment by the respondent court equivalent to lack of jurisdiction which may be the subject of a writ of certiorari, the instant petition is hereby DENIED, with costs against petitioners. 8 The first and second motions for reconsideration filed by the petitioners were denied on 30 April 1980 and 8 July 1980, respectively, for the reason that the ground relied upon was already discussed, taken up and passed upon by the Court. 9 Hence, this petition which was filed on 7 August 1980. Petitioners claim that respondent Court of Appeals erred in holding that Civil Case No. 119751 cannot stop the execution of the judgment in Civil Case No. 74634 because of the finality of such judgment, or on the ground of res judicata, and it was the court's ministerial duty to execute it; and in not finding that the pendency of Civil Case No. 119751 to annul the judgment in Civil Case No. 74634 on the ground of lack of jurisdiction justifies the stay of execution of said judgment. In the resolution of 3 September 1980, We required respondents to comment on the petition which private respondents complied with on 14 October 1980. 10 To this comment, petitioners filed a reply on 29 October 1980.
11

On 19 November 1980, We gave due course to the petition and required the parties to submit simultaneously their memoranda which petitioners complied with on 12 January 1981 and the private respondents on 20 January 1981. It further appears that Civil Case No. 119751 aforestated was dismissed by the trial court in its Order of 24 September 1979. Herein petitioner Chua Huat appealed from said Order to the Intermediate Appellate Court which docketed the same as A.C.-GR CV No. 66303. 12 In its Decision of 12 March 1984, 13 the Intermediate Appellate Court affirmed in toto the questioned order holding: Plaintiff-appellant contends that the principle of res judicata does not apply in the case at bar because "although there may be identity of parties and of subject matter between Civil Case No. 74634" (which is for recovery of possession) "and Civil Case No. 119751" (which is for annulment of judgment) "there is no Identity of causes of action between these two cases." While there is, certainly on the face of the argument, merit in the contention that there is no identity of causes of action between Civil Case No. 74634 and this instant case, upon closer scrutiny, however, of the records of the said two cases, We find the same to be utterly devoid of merit. The records of the aforesaid two cases will bear it out that the issue of lack of jurisdiction (which is the cause of action in Civil Case No. 119751) has been squarely ruled upon, not only by the trial court in Civil Case No. 74634 but also by the Court of Appeals and by the Supreme Court. Plaintiff-appellant further contends that since the issue of jurisdiction in Civil Case No. 74634 was raised in their motion for reconsideration before the Court of Appeals in CA-G.R. No. 51337-R, the Appellate Court did not, in its resolution denying said motion, pass on the same and on appeal by petition for review to the Supreme Court in L-47603 and L-48649, where the same issue among others was raised, the High Court in its minutes' ( sic) did not rule squarely on said issue, "the court a quo should have proceeded with the hearing of this case on the judgments and thereafter decide (sic) the same based on the evidence adduced by the parties". We find the same likewise untenable. Issues raised by the parties in their brief and passed upon subsilencio by the appellate court in a decision which has become final and executory are considered closed and can no longer be revived by the parties in a subsequent litigation without doing violence to the principle of res judicata. (Corda vs. Maglinti, G.R. No. L17476, Nov. 30, 1961).

What more, neither the Supreme Court nor the Appellate Court is duty bound to discuss the pros and cons of appellant's argument. Lastly, in Kabigting vs. Acting Director of Prisons (116 Phil. 589; 1962) the Supreme Court pointed out: "It need not be stated that the Supreme Court, being the court of last resort, is the final arbiter of all legal questions properly brought before it and that its decision in any given case constitutes the law of that particular case. Once its judgment becomes final, it is binding on all inferior courts, and hence beyond their power and authority to alter or modify". The High Tribunal further pointed out that "Nor is it to be lost sight of that such principle does not apply only to the express terms of decision, but likewise to what is therein implicit, which must be implemented faithfully, no circumvention or evasion being allowed". (Sanchez vs. Court of Industrial Relations, L26932, 27 SCRA 490). Petitioners made no attempt to inform the Court of the dismissal of Civil Case No. 119751 and of the above action of the Intermediate Appellate Court. Re: G.R. No. 63863 On 14 September 1982, Manuel Uy and Sons, Inc., respondent in G.R. No. 53851, requested Romulo M. del Rosario the City Engineer and Building Officials, of Manila, to condemn the dilapidated structures located at 1271 to 1277 Pedro Gil St. and 1553 to 1557 Paz St., Paco, Manila, all occupied by petitioners. 14 On 17 November 1982, said official issued notices of condemnation addressed to petitioners Chua Huat, Maria Gamboa, Lourdes Mempin, Dominador Felino, Ong Choan, Rufino Clements, and several other persons. The condemnation orders stated that the subject buildings were found to be in dangerous condition and therefore condemned, subject to the confirmation of the Mayor as required by Section 276 of the Compilation of Ordinances of the City of Manila. It further stated that the notice is not an order to demolish as the findings of the City Engineer is (sic) still subject to the approval of the Mayor. 15 The orders were based on the inspection reports made by Architect Oscar D. Andres and the Memorandum-Reports made by the Evaluation Committee of the Office of the City Engineer, which all showed that the subject buildings suffer from structural deterioration by more than 50% and as much as 80%. 16 On 19 January 1983, Civil Engineer Romulo C. Molas, a private practitioner, inspected the abovementioned structures upon the request of petitioners herein. In his evaluation report dated 21 January 1983, he stated that although the buildings are old, they are still structurally sound and have a remaining economic life of at least eight years. 17 On 22 February 1983, or three months after the notices of condemnation were issued, petitioners formally protested against said notices of condemnation on the ground that the buildings are still in good physical condition and are structurally sound based on the abovementioned certification of Civil Engineer Romulo C. Molas dated 21 January 1983. 18 On 26 April 1983, Maria Gamboa, one of the petitioners herein, was informed of the issuance by the City Engineer of the demolition order with respect to the building located at 1565 Paz St., Paco, Manila, and was told to vacate the premises within 15 days from notice. 19 On 2 May 1983, petitioners filed the instant Petition for Prohibition, with Preliminary Injunction and/or Restraining Order, against City Mayor Ramon Bagatsing, City Engineer and Building Officer Romulo del Rosario and Manuel Uy and Sons, Inc., praying that a restraining order or preliminary injunction be issued enjoining respondents from proceeding with the announced demolition of the subject buildings, this petition be given due course, and after hearing, respondents be prohibited from demolishing said buildings. 20 They allege in their petition that: RESPONDENTS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN ISSUING THE CONDEMNATION ORDERS.

THERE IS NO APPEAL OR ANY OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY. On 9 May 1983, this Court directed respondents to comment on the petition and issued a Temporary Restraining Order against the respondents City Mayor and City Engineer restraining them from enforcing and/or carrying out the demolition order on the building occupied by Maria Gamboa at 1565 Paz Street. 21 On 6 July 1983, the respondent Mayor of Manila confirmed the rest of the condemnation orders issued by the respondent City Engineer. Pursuant thereto, the respondent City Engineer, on 12 September 1983, issued demolition orders addressed to Chua Huat, Ong Choan, Dominador Felino and Lourdes Mempin, whereby they were ordered to vacate and commence the demolition and/or removal of the buildings occupied by them after fifteen days from receipt of the order. 22 On 18 May 1983, respondents City Mayor and City Engineer filed their Comment 23 praying that the petition be dismissed on the following grounds: (a) that it involves questions of facts which should be ventilated before the Regional Trial Court of Manila; (b) the subject buildings were condemned and ordered removed after it was established that they had suffered from defects or deterioration thereby posing perils to the lives and limbs not only of petitioners but also to the public in general; (c) the power to condemn buildings and structures in the City of Manila falls within the exclusive domain of the City Engineer pursuant to Sections 275 and 276 of its Compilation of Ordinances (also Revised Ordinances 1600); (d) the power to condemn and remove buildings and structures is an exercise of the police power granted the City of Manila to promote public safety; and (e) administrative decisions falling within the executive jurisdiction cannot be set aside by courts of justice except on proof of grave abuse of discretion, fraud or error of law. On 20 May 1983, private respondent Manuel Uy and Sons, Inc. filed its Comment 24 wherein it contends that the petition is premature, unreasonable and deserves no consideration as petitioners have not exhausted readilyavailable administrative remedies and that the validity of the questioned condemnation and demolition orders entails questions of facts not entertainable in this petition. It alleges that the condemnation orders were not immediately executory, as the finding of the City Engineer/Building Officials, is still subject to the approval of the Mayor per Section 276 of the Compilation of Ordinances of the City of Manila. Moreover, under Section 5.3, Rule VII of the Implementing Rules and Regulations of P.D. No. 1096, the owner of a building may appeal to the Secretary of Public Works and Communications, whose decision is final, the finding or declaration of the Building Officials, and ask that a re-inspection or re-investigation of the building or structure be made; for not availing of this remedy, petitioners failed to exhaust administrative remedies. Petitioners filed a Reply on 3 October 1983,
25

to Which respondents filed a rejoinder on 14 November 1983.

26

On 4 January 1984, this case was consolidated with G.R. No. 53851. On 30 July 1986, We gave due course to this petition and required the parties to submit their respective memoranda. 27 Private respondent filed its Memorandum on 3 October 1986, while petitioners filed theirs on 3 November 1986. 28 On 18 January 1987, petitioners filed a rejoinder We now resolve these petitions. A. The first, G.R. No. 53851, is frivolous and is dismally bereft of merit. The antecedent facts stated above unmistakably disclose a clear pattern to make a mockery of the judicial process, or to abuse it. The decision of the trial court in Civil Case No. 74634 of 31 May 1972, which was affirmed, first, by the Court of Appeals in its decision of 19 January 1977 (C.A.-G.R. No. 51337-R) and second, by this Court (G.R. No. L-47603 and G.R. No. L48649), had long become firm and final. To maliciously stop its execution pursuant to the Order of 20 March 1978, petitioner Chua Huat filed with the trial court Civil Case No. 119751 to annul the decision, reviving therein issues which he had squarely raised in C.A.-G.R. No. 51337-R. Then, he filed a motion in Civil Case No. 74634 to set aside the order of execution and to suspend proceedings therein in view of the pendency of the annulment case.
29

to the Memorandum of private respondents.

Unfazed by his failure to hold the trial court hostage to his scheme, he went to the Court of Appeals (C.A.-G.R. No. 09251 SP) to question the denial by the trial court of his aforesaid motion, and when he failed again, he came to this Court via this petition with issues which, as his counsel fully knew, had long been laid to rest. At the same time, when Civil Case No. 119751 was dismissed on 24 September 1979, petitioner went to the Court of Appeals (A.C.-G.R. CV No. 66303), also raising the same issues. He, however, deliberately chose not to inform this Court of the unfavorable decision of the Intermediate Appellate Court of 12 March 1984. The reason of course is all too obvious, and in the light of his remarkable effort to frustrate or subvert the ends of justice, petitioner cannot be expected to do so. We find, therefore, the challenged decision of the respondent Court of Appeals to be in full accord with law and jurisprudence But this should not be the end of this case. We must state here for the petitioners and their counsel and on all others similarly inclined to resort to the same or related scheme or stratagem that this Court cannot condone or tolerate any abuse of the judicial process. We must, once again, remind counsel and litigants, as We did in Cantelang, et al. vs. Medina, et al., 30 that "this Court win ever be vigilant to nip in the bud any dilatory maneuver calculated to defeat or frustrate the ends of justice, fair play and the prompt implementation of final and executory judgments." And, more particularly for lawyers, in Banogon, et al. vs. Zerna, et al., 31 We said in no uncertain terms: As officers of the court, lawyers have a responsibility to assist in the proper administration of justice. They do not discharge this duty by filing pointless petitions that only add to the workload of the judiciary, especially this Court, which is burdened enough as it is. A judicious study of the facts and the law should advise them when a case, such as this, should not be permitted to be flied to merely clutter the already congested judicial dockets. They do not advance the cause of law or their clients by commencing litigations that for sheer lack of merit do not deserve the attention of the courts. In another portion of said decision, We said: This Court has repeatedly reminded litigants and lawyers alike: Litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that, once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against any scheme calculated to bring about that result. Constituted as they are to put an end to controversies, courts should frown upon any attempt to prolong them. 32 There should be a greater awareness on the part of litigants that the time of the judiciary, much more so of this Court, is too valuable to be wasted or frittered away by efforts, far from commendable, to evade the operation of a decision final and executory, especially so, where, as shown in this case, the clear and manifest absence of any right calling for vindication, is quite obvious and indisputable. 33 This appeal, moreover, should fail, predicated as it is on an insubstantial ( sic) objection bereft of any persuasive force. Defendants had to display ingenuity to conjure a technicality. From Alonso v. Villamor, a 1910 decision, we have left no doubt as to our disapproval of such a practice. The aim of a lawsuit is to render justice to the parties according to law. Procedural rules are precisely designed to accomplish such a worthy objective. Necessarily, therefore, any attempt to pervert the ends for which they are intended deserves condemnation. We have done so before. We do so again. 34 B. G.R. No. 63863 must equally fall. It is patently obvious that petitioners have no valid grievance for the remedy of certiorari under Rule 65 of the Rules of Court to be available to them. It is explicitly clear from Section 1 of Rule 65 of the Rules of Court that for certiorari to be available: (a) a tribunal, board or office exercising judicial function acted without or in excess of its or his jurisdiction, or with grave abuse of discretion, and (b) that there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. Petitioners failed to show the presence of both elements. The power to condemn buildings and structures in the City of Manila falls within the exclusive jurisdiction of the City Engineer, who is at the same time the Building Officials, (Sec. 206,

P.D. 1096). Sections 275 and 276 of the Compilation of Ordinances of the City of Manila (also Revised Ordinances 1600), provide: Sec. 275. Deterioration and Defects. All buildings or parts of buildings which show defects in any essential parts shall be repaired and put in safe condition at once, or if the deterioration be greater than fifty per centum of the value of the building, as estimated by the city engineer, they shall be removed . Sec. 276. Condemnation Proceeding. Whenever in the judgment of the City Engineer any building or portion of building has been damaged by any cause to such an extent as to be dangerous for use, he may condemn the same and shall immediately notify the owner and the Mayor of his action. If the owner or his agent be not willing to abide by this order of condemnation, he may make formal objection within the period of seven days following such notification. The Mayor shall hear the owner or his agent and his experts and also the city engineer, deciding the case on the evidence presented. If the Mayor confirms the action of the city engineer, the owner or his agent shall immediately proceed to remove the building within fifteen days from the date on which he was notified of such final action. Should the owner or his agent not comply with the decision of the Mayor the building shall be removed at his expense and the city will proceed to recover against him for the amount expended. Section 215 of P.D. 1096, otherwise known as the National Building Code, also states the authority of the Building Officials, with respect to dangerous buildings, to wit: When any building or structure is found or declared to be dangerous or ruinous, the Building Officials, shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or safety. This is without prejudice to further action that may be taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of the Philippines. From the abovementioned provisions, it is unquestionable that the Building Officials, has the authority to order the condemnation and demolition of buildings which are found to be in a dangerous or ruinous condition. It is also clear from the Compilation of Ordinances of the City of Manila that the Mayor has the power to confirm or deny the action taken by the Building Officials, with respect to the dangerous or ruinous buildings. Respondent City Engineer and Building Official, Romulo M. del Rosario, can, therefore, validly issue the questioned condemnation and demolition orders. This is also true with the respondent Mayor who can approve or deny the condemnation orders as provided in Section 276 of the Compilation of Ordinances of the City of Manila. The only issue then is Official or not said officials committed grave abuse of discretion in the exercise of their aforesaid powers. It is a settled doctrine that there is grave abuse of discretion amounting to lack of jurisdiction "when there is a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross so as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law." 35 We find no grave abuse of discretion on the part of the respondent City Engineer because the orders were made only after thorough ocular inspections were conducted by the City's Building Inspectors. The results of the inspections were set forth in a memorandum dated 16 November 1982 where it was shown that all the buildings had architectural, structural, sanitary, plumbing and electrical defects of up to 80%. 36 The respondent Mayor's act of approving the condemnation orders was likewise done in accordance with law. The protest made by petitioners was submitted only on 22 February 1983, or three months after the notices of condemnation were issued, and clearly beyond the seven days prescribed under Section 276 of the Compilation of Ordinances of the City of Manila.

Moreover, appeal was likewise available to petitioners. As correctly contended by private respondents, the Implementing Rules and Regulations promulgated by the then Ministry of Public Works to implement P.D. No. 1096, under the title Abatement/Demolition of Buildings, provide: 5. Procedure for Demolition of Buildings . The following steps shall be observed in the abatement/demolition of buildings under this Rule: 5.1. There must be a finding or declaration by the Building Officials, that the building or structure is a nuisance, ruinous or dangerous,. . . 5.3. Within the fifteen-day period the owner may if he so desires, appeal to the Secretary the finding or declaration of the Building Official and ask that a re-inspection or re-investigation of the building or structure be made. . . . 5.6. The decision of the Secretary on the appeal shall be final. (emphasis supplied). Certiorari will not he then because petitioners failed to exhaust all the administrative remedies. This Court has long upheld the doctrine of exhaustion of administrative remedies because it rests on the assumption that the administrative body, board or officer, if given the chance to correct its/his mistake or error, may amend its/his decision on a given matter. 37 Where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts, for reasons of law, comity and convenience, will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given opportunity to act and correct the errors committed in the administrative forum. 38 There are, of course, exceptions to this rule, 39 but none is available to petitioners. IN THE LIGHT OF ALL THE FOREGOING, judgment is hereby rendered DISMISSING these cases for lack of merit with treble costs against petitioners. SO ORDERED.

FIRST DIVISION

R-17584) was improperly laid. 2) The Court of Appeals committed gross error and grave abuse of discretion when it dismissed the petition despite petitioners' overwhelming evidence showing that the filing of Civil Case No. R-17584 is premature due to non-exhaustion of administrative remedies. It is the contention of petitioners that the proper venue of the action filed by Tan should be Bacolod City and not Cebu City. At the time of the filing of her action in court, Tan was actually residing and may be found in Bacolod City. In fact, in her "Statement of Assets and Liabilities," submitted by Tan to her employer, the Corazon Locsin Montelibano Memorial Hospital, she declared that she is a resident of FRAYU INTERIOR, 6th Street, Bacolod City. Section 2(b), Rule 4 of the Rules of Court provides:

G.R. No. L-53485 February 6, 1991 PATRIA ESUERTE and HERMINIA JAYME, petitioners, vs.HON. COURT OF APPEALS (Eleventh Division), HON. RAFAEL T. MENDOZA, Judge, Branch VI, Court of First Instance of Cebu and MA. BEVERLY TAN, respondents. Romeo B. Esuerte for petitioners. Eleno V. Andales & Sisinio M. Andales for private respondent.

Sec. 2. Venue in Courts of First Instance. xxx xxx xxx MEDIALDEA, J.:p This petition for certiorari with a prayer for preliminary injunction seeks to set aside the decision of the Court of Appeals in CA G.R. No. SP-08999-R, involving the same parties. An action for damages was filed by private respondent Beverly Tan against herein petitioners Patria Esuerte and Herminia Jayme with the Court of First Instance (now Regional Trial Court) of Cebu and docketed as Civil Case No. R-17584. The claim for damages arose from an incident involving the parties and summarized by the Court of Appeals, as follows: . . . that on September 22, 23 and 27, 1978, private respondent Ma. Beverly Tan, a Junior Resident Physician of Corazon Locsin-Montelibano Memorial Hospital, Bacolod City, without any justifiable reason shouted at, humiliated and insulted the petitioner, Patria Esuerte, Head Nurse, Medicare Department of the said hospital and as a result of the said incident, said petitioner complained to the Chief of the Hospital, Dr. Teodoro P. Motus, in writing. The other petitioner, Herminia Jayme, who was one of those who were present at the time of the incident also sent a letter to the Chief of the Hospital, Dr. Teodoro Motus, informing the latter of what she had witnessed. As a result thereof, private respondent was advised to explain in writing by the Chief of the Hospital, but private respondent instead of explaining only her side of the incident also complained against the petitioners. The Discipline and Grievance Committee, Corazon Locsin-Montelibano Memorial Hospital, conducted a fact-finding investigation and later, the Chief of the Hospital, Dr. Teodoro P. Motus, issued a resolution dated November 8, 1978, transmitting the records of the case to the Regional Health Office, No. 6, Jaro, Iloilo City for appropriate action; . . . . (pp. 91-92, Rollo) Esuerte and Jayme filed a motion to dismiss the complaint on the ground of improper venue and for being premature for failure of Tan to exhaust administrative remedies. On January 2, 1979, the trial court denied the motion to dismiss. The motion for reconsideration of the denial was likewise denied by the court on February 16, 1979. Esuerte and Jayme filed a petition for certiorari and prohibition with a prayer for preliminary injunction with the Court of Appeals. On September 18, 1979, the petition was dismissed without pronouncement as to costs. The motion for reconsideration of the decision was likewise denied for lack of merit on February 18, 1980. The following reasons were advanced by petitioners for the allowance of this petition: 1) The Court of Appeals committed gross error and grave abuse of discretion when it dismissed the petition despite petitioners' overwhelming evidence showing that the venue of private respondent's action (Civil Case No. (b) Personal Actions. All other actions may be commenced and tried where the defendants or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. The choice of venue for personal actions cognizable by the Regional Trial Court is given to the plaintiff but not to the plaintiff's caprice because the matter is regulated by the Rules of Court ( see Clavecilla Radio System v. Antillon, 19 SCRA 379). The rule on venue, like other procedural rules, are designed to insure a just and orderly administration of justice or the impartial and evenhanded determination of every action and proceeding (Sy v. Tyson Enterprises Inc., 19 SCRA 367). The option of the plaintiff in personal actions cognizable by the Regional Trial Court is either the place where the defendant resides or may be found or the place where the plaintiff resides. If plaintiff opts for the latter, he is limited to that place. "Resides" in the rules on venue on personal actions means the place of abode, whether permanent or temporary, of the plaintiff or defendants as distinguished from "domicile" which denotes a fixed permanent residence (Dangwa Transportation Co., Inc. v. Sarmiento, G.R. No. L-22795, January 31, 1977, 75 SCRA 124). And, in Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L-29791, January 10, 1978, 81 SCRA 75), venue of personal actions should be at the place of abode or place where plaintiffs actually reside, not in domicile or legal residence. In Koh v. CA, L-40428, December 17, 1975, 70 SCRA 298; 305, We ruled: Applying the foregoing observation to the present case, We are fully convinced that private respondent Coloma's protestations of domicile in San Nicolas, Ilocos Norte, based on his manifested intention to return there after the retirement of his wife from government service to justify his bringing of an action for damages against petitioner in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount importance is where he actually resided or where he may be found at the time he brought the action, to comply substantially with the requirements of Sec. 2(b) of Rule 4, Rules of Court, on venue of personal actions. . .. As perspicaciously observed by Justice Moreland, the purpose of procedure is not to restrict the court's jurisdiction over the subject matter but to give it effective facility "in righteous action," "to facilitate and promote the administration of justice" or to insure "just judgments" by means of a fair hearing. If the objective is not achieved, then "the administration of justice becomes incomplete and unsatisfactory and lays itself open to criticism." (Manila Railroad Co. v. Attorney General, 20 Phil. 523, 530). There is no question that private respondent as plaintiff in the Civil Case is a legal resident of Cebu City. Her parents live there. However, it cannot also be denied that at the time of her filing of the complaint against petitioners, she was a temporary resident of Bacolod City. She was then employed with the Corazon Locsin

Montelibano Memorial Hospital, Bacolod City, as resident physician. Moreover, the acts complained of were committed in Bacolod City. The private respondents were all residents of Bacolod City at the time of the bringing of the action. Though Tan's employment was only temporary there was no showing when this employment will end. Justice would be better served if the complaint were heard and tried in Bacolod City where all the parties resided. The second ground raised by petitioners is devoid of merit. The alleged need by private respondent Tan to exhaust administrative remedies before filing the complaint for damages does not apply to the instant case. Private respondent as plaintiff in the civil Case for damages has no administrative remedy available to her. It is true that the same incident complained of in the administrative case filed by petitioners against Tan is the subject of the action for damages filed by Tan against the petitioners in the trial court. However, the cause of action in the administrative case is different from that of the civil case for damages. While the complainant in the administrative case may be a private person, it is the government who is the aggrieved party and no award for damages may be granted in favor of private persons. In the civil action for damages, the trial court's concern is whether or not damages, personal to the plaintiff, were caused by the acts of the defendants. The civil action for damages can proceed notwithstanding the pendency of the administrative action. WHEREFORE, the position is GRANTED. The questioned decision of the Court of Appeals is SET ASIDE. Civil Case No. R-17584 is DISMISSED for improper venue. SO ORDERED.

SECOND DIVISION G.R. No. L-29062 March 9, 1987 PHILIPPINE REFINING COMPANY, plaintiff-appellee, vs.HON. ENRICO PALOMAR, in his capacity as Postmaster General, defendant-appellant. Parades, Poblador, Nazareno & Adaza Law Office for plaintiff-appellee. RESOLUTION

PARAS, J.: This is an appeal from the decision of the Court of First Instance of Manila in Civil Case No. 72498, 1 entitled "Philippine Refining Company v. Hon. Enrico Palomar," finding that plaintiff-appellee's promotion schemes ("Breeze Easy Money" and "CAMIA Lucky-Key Hunt") were not in the nature of a lottery and enjoining appellant from issuing a "fraud order" on the aforementioned schemes of appellee. It appears that the Philippine Refining Company, herein appellee, resorted to two schemes to promote the sale of its products: Breeze Easy Money and CAMIA Lucky-Key Hunt, both of which envisioned the giving away for free of certain prizes (without additional consideration) for the purchase of Breeze soap and CAMIA cooking oil. In other words, the participants would get the exact value of the price for the goods plus the chance of winning in the scheme. No one would be required to pay more than the usual price of the products. This Court has consistently ruled that a plan whereby prizes can be obtained without any additional consideration (when a product is purchased) is not a lottery (Uy v. Palomar L-23248, February 28, 1969; U.S. v. Baguio, 39 Phil. 862; Caltex (Phil.) Inc. v. Postmaster-General, 18 SCRA 247). It is thus clear that the schemes in the case at bar are not lotteries. The allegation that the prohibition by the Postmaster General should have first been appealed to the Department Secretary concerned in view of the doctrine denominated as "the exhaustion of administrative remedies" has no application here because one recognized exception to the doctrine is when the issue raised is purely a legal one. In view of the foregoing, the Court RESOLVED to DISMISS this appeal and to AFFIRM the assailed decision of the Court of First Instance.

EN BANC G.R. No. 78946 April 15, 1988 DR. NENITA PALMA-FERNANDEZ, petitioner, vs.DR. ADRIANO DE LA PAZ, DR. SOSEPATRO AGUILA, and THE SECRETARY OF HEALTH, respondents. Oscar C. Fernandez for petitioner. The Solicitor General for respondents.

of Health, furnishing copies to respondents De la Paz and Aguila, as well as to the Commissioner of Civil Service and the Chairman of the Government Reorganization Commission. Failing to secure any action on her protest within a month's time, petitioner filed on 8 July 1987 the instant Petition for Quo Warranto with Preliminary Injunction against respondents Dr. de la Paz, Dr. Aguila, and the Secretary of Health. On 14 July 1987, this Court issued a Temporary Restraining Order enjoining the implementation of Hospital Orders Nos. 21 and 22, series of 1987. After considering and deliberating on all Comments, the Reply, and the Rejoinder of the Solicitor General to said Reply, the Court, on 17 March 1988, Resolved to give due course to the Petition, and dispensing with memoranda, declared the case submitted for resolution. The Solicitor General has aptly framed the issues for resolution as follows: 1. Whether or not respondent De la Paz has the power or authority to issue the two Hospital Orders in question; 2. Whether or not petitioner has a valid cause of action; and 3. Whether or not the rule on exhaustion of administrative remedies precludes the filing of the instant Petition. The Solicitor General, on behalf of the Secretary of Health, makes common cause with petitioner and answers the first and third issues in the negative, and the second in the affirmative. For their part, Respondents De la Paz and Aguila uphold the opposite views. We rule for petitioner. 1. Since the East Avenue Medical Center is one of the National Health Facilities attached to the Department of Health, the power to appoint and remove subordinate officers and employees, like petitioner, is vested in the Secretary of Health, not the Medical Center Chief. The latter's function is confined to recommendation. Thus, Section 79 (D). of the Revised Administrative Code provides: Section 79 (D). Power to appoint and remove . The Department Head, upon the recommendation of the Chief of the bureau or office concerned, shall appoint all subordinate officers and employees whose appointment is not expressly vested by law in the President of the Philippines, and may remove or punish them, except as especially provided otherwise, in accordance with the Civil Service Law... The Department Head also may, from time to time, in the interest of the service, change the distribution among the several bureaus and offices of his Department of the employees or subordinates authorized by law. Executive Order No. 119, or the Reorganization Act of the Ministry of Health, likewise states: SEC. 26. New Structure and Pattern... The new position structure and staffing pattern of the Ministry shag be prescribed by the Minister within one hundred twenty (120) days from the approval of this executive order subject to approval by the Office of Compensation and Classification and the authorized positions created thereunder shall be filled thereafter with regular appointments by him or the President, as the case may be as herein provided... Respondent Medical Center Chiefs argument that petitioner was not appointed but was merely transferred in the interest of the public service to the Research Office pursuant to Section 24 (c) of Presidential Decree No. 807, or

MELENCIO-HERRERA, J.: This is a Petition for Quo Warranto filed by petitioner, Dr. Nenita Palma-Fernandez, claiming entitlement to the position of Assistant Director for Professional Services at the East Avenue Medical Center (formerly Hospital ng Bagong Lipunan) alleged to be unlawfully held by private respondent, Dr. Sosepatro Aguila. The background facts follow: On 1 May 1985, petitioner was extended a permanent appointment to the position of Chief of Clinics at the Hospital ng Bagong Lipunan (now East Avenue Medical Center) by then Minister of Health and Chairman of the Board of Governors of the Center, Jesus C. Azurin. Previous to this appointment, petitioner, a career physician, occupied the positions of Medical Specialist I in 1978, Medical Specialist II from October 1982 to April 1985, until her appointment as Chief of Clinics on 1 May 1985. Even during her incumbency as Medical Specialist II, petitioner was already designated as Acting Chief of Clinics since September 1983 up to her permanent appointment to said position. As Chief of Clinics, petitioner exercised direct control and supervision over all heads of departments in the Medical Center In 1986, the new organizational structure of the Center retitled the position of Chief of Clinics to Assistant Director for Professional Services. In partial implementation of this new set-up, respondent Dr. Adriano de la Paz, as Medical Center Chief, issued Hospital Order No. 30, Series of 1986, on 8 August 1986, designating petitioner as Assistant Director of Professional Services (Annex 3, Comment, p. 48, Rollo). As such, she continued to exercise direct control and supervision over all heads of departments in the Medical Center. On 30 January 1987, Executive Order No. 119 known as the "Reorganization Act of the Ministry of Health" was promulgated. On 29 May 1987, respondent De la Paz, as Medical Center Chief, designated respondent Dr. Aguila, who was then Medical Specialist I, as Assistant Director for Professional Services "vice Dr. Nenita Palma-Fernandez, who will be transferred to the Research Office." (Hospital Order No. 21, series of 1987, Annex B, Petition). Said order was purportedly issued "in the interest of the hospital service." On the same date, Hospital Order No. 22, series of 1987, (Annex C, Petition), was issued by respondent De la Paz, whereby petitioner was relieved "of her present duties and responsibilities as Chief of Clinic and hereby transferred to the Research Office. This order being issued in the interest of the hospital service. Upon receipt of Hospital Order No. 22, petitioner filed on 1 June 1987 a letter-protest with respondent Secretary

the Civil Service Decree of the Philippines 1 will not alter the situation. Even a transfer requires an appointment, which is beyond the authority of respondent Medical Center Chief to extend, supra. Besides, the transfer was without petitioner's consent, was tantamount to removal without valid cause, and as such is invalid and without any legal effect (Garcia, et al. vs. Lejano, et al., 109 Phil. 116). A removal without cause is violative of the Constitutional guarantee that "no officer or employee of the civil service shall be removed or suspended except for cause provided by law" (Article IX, B, Section 2(3),1987 Constitution). Petitioner's "designation" as Assistant Director for Professional Services on 8 August 1986 in accordance with the organizational structure of the Department of Health under Hospital Order No. 30, Series of 1986, issued by respondent Medical Center Chief did not make her occupancy of that position temporary in character. It bears stressing that the positions of Chief of Clinics and Assistant Director for Professional Services are basically one and the same except for the change in nomenclature. Petitioner's permanent appointment on 1 May 1985 to the position of Chief of Clinics, therefore, remained effective. Neither can respondent Medical Center Chief rely on Section 2, Article III of the Freedom Constitution and its Implementing Rules and Regulations embodied in Executive Order No. 17, Series of 1986. The relevant provision was effective only "within a period of one year from February 25, 1 986." 2 The Hospital Orders in question were issued only on 29 May, 1987. Executive Order No. 119, or the 'Reorganization Act of the Ministry of Health" promulgated on 30 January 1987, neither justifies petitioner's removal. The pertinent provision thereof reads: Sec. 26. New Structure and Pattern. Upon approval of this Executive Order, the officers and employees of the Ministry shall, in a holdover capacity, continue to perform their respective duties and responsibilities and receive the corresponding salaries and benefits unless in the meantime they are separated from government service pursuant to Executive Order No. 17 (1986) or Article III of the Freedom Constitution. The argument that, on the basis of this provision, petitioner's term of office ended on 30 January 1987 and that she continued in the performance of her duties merely in a hold over capacity and could be transferred to another position without violating any of her legal rights, is untenable. The occupancy of a position in a hold over capacity was conceived to facilitate reorganization and would have lapsed on 25 February 1987 (under the Provisional Constitution), but advanced to 2 February 1987 when the 1987 Constitution became effective (De Leon, et al. vs. Hon. Benjamin B. Esquerra, et al., G.R. No. 78059, 31 August 1987). After the said date the provisions of the latter on security of tenure govern. And while it may be that the designation of respondent Aguila as Assistant Director for Professional Services and the relief of petitioner from the said position were not disapproved by respondent Secretary of Health, it by no means implies that the questioned acts of respondent Medical Center Chief were approved by the former official. 2. It follows from the foregoing disquisition that petitioner has a valid cause of action. Where there is usurpation or intrusion into an office, quo warranto is the proper remedy. (Lota vs. Court of Appeals, No. L-14803, June 30, 1961, 2 SCRA 715). 3. The doctrine on exhaustion of administrative remedies does not preclude petitioner from seeking judicial relief This rule is not a hard and fast one but admits of exceptions among which are that (1) the question in dispute is "purely a legal one" and (2) the controverted act is 'patently illegal" (Carino vs. ACCFA, No. L-19808, September 29,1966,18 SCRA 183). The questions involved here are purely legal. The subject Hospital Orders violated petitioner's constitutional right to security of in tenure and were, therefore, "patently illegal." Judicial intervention was called for to enjoin the implementation of the controverted acts. There was substantial compliance by petitioner with the requirement of exhaustion of administrative remedies since she had filed a letter-protest With the respondent Secretary of Health, with copies furnished the Commissioner of Civil Service, and the Chairman of the Government Reorganization Commission, but the same remained unacted upon and proved an inadequate remedy. Besides, an action for quo warranto must be filed within one year after the cause of action accrues (Sec. 16, Rule 66, Rules of Court), and the pendency of

administrative remedies does not operate to suspend the running of the one-year period (Cornejo vs. Secretary of Justice L-32818, June 24, 1974, 57 SCRA 663). WHEREFORE, the Writ of Quo Warranto is granted and petitioner, Dr. Nenita Palma-Fernandez, is hereby held entitled to the position of Assistant Director of Professional Services of the East Avenue Medical Center up to the expiration of her term. The Temporary Restraining Order heretofore issued enjoining the implementation of Hospital Orders Nos. 21 and 22, both dated 29 May 1987, is hereby made permanent. SO ORDERED.

FIRST DIVISION

G.R. No. 92285 March 28, 1994 PROVIDENT TREE FARMS, INC., petitioner, vs.HON. DEMETRIO M. BATARIO, JR., Presiding Judge Branch 48, Regional Trial Court of Manila, COMMISSIONER OF CUSTOMS and A. J. INTERNATIONAL CORPORATION, respondents. Siguion Reyna, Montecillo & Ongsiako for petitioner. Sumulong, Sumulong, Paras & Abano Law Offices for private respondent.

In this present recourse, PTFI seeks to set aside the 8 February 1990 order of respondent court and prays for the continuation of the hearing in Civil Case No. 89-48836. PTFI claims that what was brought before the trial court was a civil case for injunction, i.e., "restraining the entry of safety matches into the country . . . for the purpose of securing compliance with Sec. 36 (l) of the Forestry Code" and for damages, "to seek redress of its right which has been clearly violated by the importation of safety matches . . . . (which) is a denial to the petitioner of the protection and incentive granted it by Section 36 (l) of the Forestry Code . . . ." 8 PTFI asserts the inapplicability of the procedures outlined in R.A. No. 1125 relative to incidents before the Court of Tax Appeals because the instant action is not a protest case where the aggrieved party is not an importer. It then argues that since it could not avail of the remedies afforded by the Tariff and Customs Code, resort to the courts is warranted, citing Commissioner of Customs v. Alikpala. 9 On the formal requirements, we hold that the claim of public respondent that the petition was filed late has no basis. The records revealed that PTFI received the assailed order of 8 February 1990 on 20 February 1990, 10 hence, it had until 7 March 1990 to file petition for review on certiorari. On that date, PTFI filed a motion for extension of fifteen (15) days within which to file the petition. 11 On 19 March 1990, this Court granted PTFI a thirty (30)-day non-extendible period to file its petition, 12 thus resetting the new deadline for the petition to 6 April 1990. On that date the petition was filed. Petitioner anchors his complaint on a statutory privilege or incentive granted under Sec. 36, par. (l), of the Revised Forestry Code. The only subject of this incentive is a ban against importation of wood, wood products or wood-derivated products which is to be enforced by the Bureau of Customs since it has, under the Tariff and Customs Code, the exclusive original jurisdiction over seizure and forfeiture cases 13 and, in fact, it is the duty of the Collector of Customs to exercise jurisdiction over prohibited importations. 14 The enforcement of the importation ban under Sec. 36, par. (l), of the Revised Forestry Code is within the exclusive realm of the Bureau of Customs, and direct recourse of petitioner to the Regional Trial Court to compel the Commissioner of Customs to enforce the ban is devoid of any legal basis. To allow the regular court to direct the Commissioner to impound the imported matches, as petitioner would, is clearly an interference with the exclusive jurisdiction of the Bureau of Customs over seizure and forfeiture cases. An order of a judge to impound, seize or forfeit must inevitably be based on his determination and declaration of the invalidity of the importation, hence, an usurpation of the prerogative and an encroachment on the jurisdiction of the Bureau of Customs. In other words, the reliefs directed against the Bureau of Customs 15 as well as the prayer for injunction against importation of matches by private respondent AJIC 16 may not be granted without the court arrogating upon itself the exclusive jurisdiction of the Bureau of Customs. The claim of petitioner that no procedure is outlined for the enforcement of the import ban under the Tariff and Customs Code, if true, does not at all diminish the jurisdiction of the Bureau of Customs over the subject matter. The enforcement of statutory rights is not foreclosed by the absence of a statutory procedure. The Commissioner of Customs has the power to "promulgate all rules and regulations necessary to enforce the provisions of this (Tariff and Customs) Code . . . subject to the approval of the Secretary of Finance." 17 Moreover, it has been held that ". . . . (w)here the statute does not require any particular method of procedure to be followed by an administrative agency, the agency may adopt any reasonable method to carry out its functions." 18 But over and above the foregoing, PTFI's correspondence with the Bureau of Customs 19 contesting the legality of match importations may already take the nature of an administrative proceeding the pendency of which would preclude the court from interfering with it under the doctrine of primary jurisdiction. In Presidential Commission on Good Government v. Pea, 20 we 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 a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered ( Pambujan Sur United Mine Workers v. Samar Mining Co., Inc., 94 Phil. 932, 941 [1954].) In this era of clogged court dockets, the need for specialized administrative boards or commissions with the

BELLOSILLO, J.: PETITIONER PROVIDENT TREE FARMS, INC. (PTFI), is a Philippine corporation engaged in industrial tree planting. It grows gubas trees in its plantations in Agusan and Mindoro which it supplies to a local match manufacturer solely for production of matches. In consonance with the state policy to encourage qualified persons to engage in industrial tree plantation, Sec. 36, par. (1), of the Revised Forestry Code 1 confers on entities like PTFI a set of incentives among which is a qualified ban against importation of wood and "wood-derivated" products. On 5 April 1989, private respondent A. J. International Corporation (AJIC) imported four (4) containers of matches from Indonesia, which the Bureau of Customs released on 12 April 1989, and two (2) more containers of matches from Singapore on 19 April 1989. The records do not disclose when the second shipment was released. On 25 April 1989, upon request of PTFI, Secretary Fulgencio S. Factoran, Jr., of the Department of Natural Resources and Environment issued a certification that "there are enough available softwood supply in the Philippines for the match industry at reasonable price." 2 On 5 May 1989, PTFI filed with the Regional Court of Manila a complaint for injunction and damages with prayer for a temporary restraining order against respondents Commissioner of Customs and AJIC to enjoin the latter from importing matches and "wood-derivated" products, and the Collector of Customs from allowing and releasing the importations. It was docketedas Civil Case No. 89-48836 and raffled to respondent Judge Demetrio M. Batario, Jr. PTFI prays for an order directing the Commissioner of Customs to impound the subject importations and the AJIC be directed to pay petitioner P250,000.00 in actual damages, P1,000,000.00 in exemplary damages, and P50,000.00 as attorney's fees. On 14 June 1989, AJIC moved to dismiss the complaint alleging that:(a) The Commissioner of Customs under Sec. 1207 of the Tariff and Customs Code and not the regular court, has "exclusive jurisdiction to determine the legality of an importation or ascertain whether the conditions prescribed by law for an importation have been complied with . . . . (and over cases of) seizure, detention or release of property affected . . . . ;" 3 (b) The release of subject importations had rendered injunction moot and academic; 4 (c) The prayer for damages has no basis as the questioned acts of the Commissioner are in accordance with law and no damages may be awarded based on future acts; 5 and, (d) The complaint for injunction cannot stand it being mainly a provisional relief and not a principal remedy. 6 PTFI opposed the motion to dismiss. On 28 July 1989, AJIC's motion to dismiss was denied. However, on 8 February 1990, on motion for reconsideration by AJIC and despite the opposition of PTFI, the Court reconsidered its 28 July 1989 order and dismissed the case on the ground that it had "no jurisdiction to determine what are legal or illegal importations." 7

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 . . . . Moreover, however cleverly the complaint may be worded, the ultimate relief sought by PTFI is to compel the Bureau of Customs to seize and forfeit the match importations of AJIC. Since the determination to seize or not to seize is discretionary upon the Bureau of Customs, the same cannot be subject of mandamus. But this does not preclude recourse to the courts by way of the extraordinary relief of certiorari under Rule 65 of the Rules of Court if the Bureau of Customs should gravely abuse the exercise of its jurisdiction. Otherwise stated, the court cannot compel an agency to do a particular act or to enjoin such act which is within its prerogative, except when in the exercise of its authority it gravely abuses or exceeds its jurisdiction. In the case at bench, we have no occasion to rule on the issue of grave abuse of discretion or excess of jurisdiction as it is not before us. The petitioner's claim for damages against AJIC being inextricably linked with the legality of the importations, must necessarily rise or fall with the main action to bar the question that "(e)very importation of matches by said defendant is a denial to plaintiff of the protection and incentives granted it by Sec. 36 (l) of the Forestry Code," 21 merely indicates its reliance on the illegality of the importations for its prayer for damages. In other words, if the importations were authorized, there would be no denial of the plaintiff's protection and incentives under the Forestry Code. Necessarily, the claim for damages must await the decision declaring the importations unlawful. In Rosales v. Court of Appeals, we categorized a similar case for damages as premature since "(t)he finality of the administrative case which gives life to petitioners' cause of action has not yet been reached." 22 The pendency of petitioner's request to the Bureau of Customs for the implementation of the ban against the importation of matches under the Forestry Code is impliedly admitted; in fact, it is apparent from the correspondence of counsel for petitioner that the Bureau is inclined to sustain the validity of the importations. 23 Hence, as in Rosales, the order of the trial court granting the dismissal of the civil case must be upheld. WHEREFORE, finding no reversible error in the appealed Order of the Regional Trial Court of Manila in Civil Case No. 89-48836 dated 8 February 1990, the same AFFIRMED and, consequently, the instant petition for review is DENIED.

EN BANC G.R. No. 98084 October 18, 1993 NEMESIO C. VIDAD, EXUPERIO BANTOTO, CRISTITO TEVES and LLOYD SIEGFRIED SIA, petitioners, vs. REGIONAL TRIAL COURT OF NEGROS ORIENTAL, BRANCH 42, SOLICITOR GENERAL'S OFFICE, MARCELO M. MONTES, GENEROSO CAPUYAN and TEOFILO GOMEZ, respondents. G.R. No. 98922 October 18, 1993 DR. TEOFILO E. GOMEZ, MARCELO BACALSO, NIEVA MONTES and GENEROSO CAPUYAN, petitioners, vs. HON. JESUS TABILON, Presiding Judge of Branch 42, RTC-Dumaguete; NEMESIO VIDAD, EXUPERIO BANTOTO, CRISTETA TEVES, and LLOYD SIEGFRIED SIA, respondents. G.R. Nos. 100300-03 October 18, 1993 DR. TEOFILO E. GOMEZ, MARCELO BACALSO, NIEVA MONTES and GENEROSO CAPUYAN, petitioners. vs. HON. JESUS TABILON, Presiding Judge of Branch 42, RTC - Dumaguete City, MARILYN S. NOBLE, ASTERIA R. ABLIR, ANITA R. EUMAGUE, LOVELLA E. UY, ELLUMINADA C. TAWING, REYNALDO CALLORA, JOSEFINA E. VILLAREAL, CECILIA P. ARBOLADO, ET AL., respondents. Francisco D. Yap for petitioners. VITUG, J.: A group of public school teachers in Negros Oriental held, starting 19 September 1990 and lasting until 21 September 1990, a must action, or a strike from their school classes, to demand the release of their salaries by the Department of Budget. The teachers also assailed alleged corruption in the Department of Education, Culture and Sports (DECS). 1 A return-to-work order was promptly issued by DECS Regional Director Teofilo Gomez with a warning that if the "striking" school teachers were not to resume their classes within twenty-four hours, administrative charges will be filed. 2 The order not having been heeded, administrative complaints against the teachers concerned were thereupon filed. The teachers were each given five days from receipt of said complaints within which to submit their respective answers and supporting documents. Constituted to look into the cases was an investigation panel composed of three DECS lawyers, namely, Marcelo Baclaso, Nieva Montes and Generoso Capuyan. 3 On 13 November 1990, a group of school teachers, who were administratively charged, filed with the Regional Trial Court of Dumaguete a complaint for injunction, prohibition and damages, with a prayer for preliminary injunction, against the aforenamed DECS officials. A temporary restraining order, prohibiting the defendants from continuing with the administrative investigation, was forthwith granted by the court. 4 The defendants filed their answer, later followed by a motion to dismiss. The school teachers, on their part, moved to strike out the appearance of the Office of the Solicitor General and to accordingly declare the defendants in default. Both motions of the plaintiffs and the defendants were denied by the court in its Order of 10 April 1991, viz: In the light of the foregoing, plaintiffs' motion to declare defendants in default, dated January 7, 1991 and defendants' motion to dismiss dated January 23, 1991, are all denied for lack of merit.

SO ORDERED. 5 From this denial, both parties filed with this Court their respective petitions for Certiorari, Prohibition and Mandamus under Rule 65 of the Rules of Court. The teachers' petition, that likewise impleaded as respondent, along with the DECS officials, the Office of the Solicitor General, was docketed as G.R. No. 98084 and that of the DECS officials as G.R. No. 98922. These cases were consolidated in this Court's resolution of 28 May 1991. 6 Four other cases, raising like issues, were later also filed with the court below by other public school teachers concerned. The DECS officials, again represented by the Solicitor General, filed motions to dismiss, which the court similarly denied. A joint petition for certiorari, prohibition and mandamus was thence filed with this Court, docketed as G.R. No. 100300-03. This Court later resolved the petition to be likewise consolidated with G.R. No. 98084 and G.R. No. 98922 in its Resolution of 04 July 1991. 7 The issues raised in these consolidated cases are (1) Whether or not the Office of the Solicitor General may properly represent the defendants in the Regional Trial Court cases; 8 nd (2) Whether or not the Regional Trial Court should have dismissed outright the said cases. 9 It should be conceded that the various complaints against the DECS officials have prescinded from the administrative actions taken, and contemplated to be yet taken, against public school teachers, the plaintiffs in the cases pending with the court a quo. The said complaints charge the defendants, all government officials, with having illegally withheld their salaries, having wrongfully filed administrative charges against the plaintiffs, having unjustifiably refused to inform the latter of the nature and accuse of accusation upon which the charges were initiated, having inexcusably violated elemental due process, and having erroneously applied the law. The school teachers pray for actual and moral damages, plus attorney's fees, as well as for an order restraining the defendants from further proceeding with the administrative investigations. The contention of the school teachers that the DECS officials are being sued solely in their private capacity certainly is not borne out by their above allegations and prayers. The root of the cases filed below deals, in fact, on the performance of official functions by the DECS officials. Whether the actions they have taken were proper or improper, or whether they have acted in good faith or bad faith, cannot, pending a full hearing that would aptly afford all parties an opportunity to ventilate their respective contentions, be yet determined. Until then, we must presume that official duties have been regularly performed. 10 Presidential Decree 478, in part, provides: 1) The Office of the Solicitor General shall represent the Government of the Philippines, its agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation or matter requiring the services of a lawyer. When authorized by the President of head of office concerned, it shall also represent government-owned or controlled corporations. The Office of the Solicitor General shall constitute the law office of the Government, and as such, shall discharge duties requiring the services of a lawyer. It shall have the following specific powers and functions: a) Represent the government in the Supreme Court and the Court of Appeals in all criminal proceedings represent the Government and its officers in the Supreme Court, the Court of Appeals, and all other courts or tribunals in all civil actions and special proceedings in which the Government or any officer thereof in his official capacity is a party (stress supplied). xxx xxx xxx The above provisions are basically reiterated in the Administrative Code of 1987.
11

We accordingly hold that the Solicitor General did not act improperly in deciding to represent the DECS officials in the above cases. The defendants' motion to dismiss the complaints have likewise been precipitately sought, and we see no reversible error in the denial thereof by the lower court. The various complaints filed by the public school teachers allege bad faith on the part of the DECS officials. It cannot be pretended this early that the same could be impossible of proof. On the assumption that the plaintiffs are able to establish their allegations of bad faith, a judgment for damages can be warranted. Public officials are certainly not immune from damages in their personal capacities arising from the acts done in bad faith; in these and similar cases, the public officials may not be said to have acted within the scope of their official authority, and no longer are they protected by the mantle of immunity for official actions. 12 It was, nonetheless, inopportune for the lower court to issue the restraining orders. The authority of the DECS Regional Director to issue the return to work memorandum, to initiate the administrative charges and to constitute the investigating panel can hardly be disputed. 13 We see the court cases and the administrative matters to be closely interrelated, if not, indeed, interlinked. While no prejudicial question strictly arises where one is a civil case and the other is an administrative proceeding, in the interest of good order, it behooves the court to suspend its action on the cases before it pending the final outcome of the administrative proceedings. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. We see, in these petitions before us, no cogent reason to deviate from the rule. WHEREFORE (1) The Petition in G.R. No. 98084 is DISMISSED; (2) In G.R. No. 98922 (a) the Order of 10 April 1991, appealed from is AFFIRMED; (b) the writ of preliminary injunction issued by the lower court is DISSOLVED; and (c) the lower court is DIRECTED to suspend further hearings in its Civil Case No. 9789, until after a final determination on the administrative proceedings would have been made; (3) In G.R. No. 100300 No. 100303, inclusive, (a) the Joint Order of 28 May 1991, denying the motions to dismiss Civil Case No. 9877, No. 9879, No. 9882 and No. 9883 is AFFIRMED; (b) the writ of preliminary injunction issued by the lower court in said civil cases is DISSOLVED; and (c) the lower court is DIRECTED to suspend further hearings in the above numbered civil cases, until after a final determination would have been made on the administrative proceedings. No costs.

THIRD DIVISION [G.R. No. 139583. May 31, 2000] CRUSADERS BROADCASTING SYSTEM, INC., petitioner, vs. NATIONAL TELECOMMUNICATIONS COMMISSION and COURT OF APPEALS, respondents. DECISION PURISIMA, J.: At bar is a petition for review under Rule 45 of the Rules of Court seeking to nullify the Decision[1] of the Court of Appeals which affirmed the decision of the National Telecommunications Commission (NTC, for brevity) denying petitioners request for renewal of its temporary permit to operate DWCD-FM, and recalling its assigned frequency. Undisputed are the pertinent facts, to wit: The petitioner, Crusaders Broadcasting System, Inc. (Crusaders, for short), was the grantee of Temporary Permit No. BSD-0459-92 to operate 10-KW DWCD-FM at a frequency of 97.9 Mhz. On July 12, 1994, Mr. Cesar A. Dumlao, Chairman of Crusaders, sent to the Commission a letter (Exh. "A") requesting permission to stop the broadcast of DWCD-FM for around a month starting July 12, 1994, so as to renovate its 20-year old Broadcast Booth and the entire facilities of the station. Subsequently, upon application of Crusaders, NTC renewed Temporary Permit No. BSD-0814-94, dated December 14, 1994, covering the period from January 1, 1995 to December 31, 1996. Again, on December 12, 1996, Crusaders applied for another renewal of its Temporary Permit. Acting on subject application, the NTC caused the inspection of the radio station of Crusaders and per report of NTC-National Capital Region, which conducted such ocular inspection on February 21, 1997, the station of Crusaders was inoperative. Acting upon such finding, the Broadcast Service Division of the NTC recommended the cancellation and revocation of the permit of Crusaders and the recall of its frequency 97.9 Mhz. Thus, on April 25, 1997 the Commission wrote Chairman Cesar A. Dumlao of Crusaders, informing the latter of the denial of his application for the renewal of Crusaders Temporary Permit. Crusaders presented a motion for reconsideration, thru its counsel, Atty. Felino Ganal, explaining that Crusaders was not able to resume its operations because of the institution of Civil Case No. 64739 before the Regional Trial Court of Pasig, Branch 163, by Conamor Broadcasting Corporation (Conamor, for brevity), against Crusaders Broadcasting System, Inc. and of the issuance of an order of injunction by the said Court enjoining Crusaders from operating its radio station. On July 14, 1997, the Commission issued a show-cause Order directing Crusaders to explain: (1) Why its application for renewal of Temporary Permit for station DWCD-FM should not be denied; (2) Why its station, DWCD-FM, should not be ordered closed; and (3) Why its station DWCD-FM assigned frequency should not be recalled. On August 5, 1997, Atty. Felino Ganal filed an "Urgent Motion For Extension" for the filing of Crusaders answer/explanation. Such motion was followed by a second "Urgent Motion For Extension", dated August 15,

1997, and a third motion for extension, dated August 22, 1997. On August 28, 1997, for failure of Crusaders to submit a responsive pleading, the Commission issued an order declaring Crusaders in default, and, thereafter, handed down its decision recalling the assigned frequency of Crusaders. The following day, or on February 29, 1997, to be precise, Atty. Ganal filed an Answer, averring that the showcause order was served upon him and not upon his client Crusaders and therefore, it was only upon the filing of its answer that Crusaders should be deemed to have voluntarily submitted itself to the jurisdiction of the Commission. It was further alleged that Crusaders is a grantee of a congressional franchise (RA No. 8091) but it could not yet resume its operation because its transmitter was taken by Conamor by virtue of an order of injunction issued by the Regional Trial Court of Pasig City in Civil Case No. 64739; that it has already applied with Commission for authority to acquire an additional transmitter; that the said injunction was already lifted and set aside by the same trial court, in an Order dated August 27, 1997; that it has mobilized its resources towards the operation of its radio station and that it has, in fact, made a test broadcast. On September 22, 1997, Crusaders filed an "urgent Motion for New Trial and/or Reconsideration" praying for the lifting of the order of default, setting aside of the decision, and for the reopening of the case. After hearing, the Commission granted the motion for new trial and/or reconsideration and declared the case reopened for reception of evidence by Crusaders in order to afford it ample opportunity to be heard and to substantiate its defense as regards the show-cause order issued by the Commission. The initial evidence presented in support of the motion for new trial and/or reconsideration was later adopted as Crusaders evidence in the main case. Then, the Commission came out with its assailed decision, disposing thus: "WHEREFORE, in light of all the foregoing, the Commission believes and so holds that respondents request for renewal of its temporary permit to operate DWCD-FM should be, as it is, hereby DENIED. Consequently, respondents assigned frequency, 97.9 Mhz, is hereby withdrawn and recalled, the same to be assigned without reasonable delay to the best qualified applicant. SO ORDERED."[2] Crusaders next step was to go to the Court of Appeals, which dismissed its petition for lack of merit. Undaunted, Crusaders found its way to this Court via the present petition for review. It is petitioners submission that the NTC committed a grave reversible error in considering as untenable the temporary stoppage of Crusaders broadcast. Petitioner insists that were it not for the order of injunction issued by the Regional Trial Court of Pasig City, which prohibited it from broadcasting, and caused the seizure of its transmitter, antenna, and other equipment, its station could have resumed operations. Petitioner contends further that had the NTC approved its application, dated December 12, 1995, for the acquisition of a new transmitter, it could have re-started to operate DWCD-FM despite the Courts injunction order. In short, petitioner maintains that its failure to operate is not unjustified because the stoppage of its broadcasting was not due to its own fault or negligence.

It is likewise petitioners stance that the Court of Appeals erred: 1......In upholding the finding of NTC that the "Programming and Marketing Agreement" with Conamor Broadcasting Corporation "to be one for a joint venture, which is a flagrant violation of Radio laws in that it would allow a non-franchise grantee to operate a public utility;" 2......In finding, in general terms, that "the findings of the respondent NTC are supported by substantial evidence and, therefore, should be "accorded respect and finality"; and 3......In upholding the NTC decision under the so-called "doctrine of primary jurisdiction." Crusaders likewise assigned some substantive and procedural errors on the part of the NTC but the same were affirmed by the Court of Appeals. Petitioner theorizes that the Court of Appeals gravely erred in affirming the decision of NTC, which denied the renewal of its temporary permit to operate DWCD-FM and caused the withdrawal of its assigned frequency. On the other hand, respondent NTC, through the Office of Solicitor General (OSG), countered that the NTC was justified in denying petitioners application for renewal of temporary permit and in recalling its assigned frequency. Anent the issue of the shifting of burden of proof, it alleges that the show-cause order dated July 14, 1997 was based on the inspection reports, dated February 21, 1997 and July 11, 1997, respectively, which indicated that petitioner failed to rehabilitate its broadcast booth and other facilities. Consequently, the burden of proof shifted to the petitioner. Respondent also contends that subject inspection reports need not be authenticated and identified by competent witnesses, the same being public documents; citing Section 23, Rule 132 of the Rules of Court, which provides that "Documents consisting of entries in public records made in the performance of a duty by a public officer are prima facie evidence of the facts therein stated." Indeed, it appears decisively clear that the assailed NTC decision is anchored on substantial evidence. The issue at bar may be encapsulated thus: Whether or not the NTC properly denied the application for renewal of Crusaders temporary permit to operate DWCD-FM, and validly ordered the withdrawal of the latters assigned frequency. Section 1 of Act No. 3846[3] reads: Section 1. No person, firm, company, association or corporation shall construct, install, establish, or operate a radio transmitting station, or a radio receiving station used for commercial purposes, or a radio broadcasting station, without having first obtained a franchise therefore from the Congress of the Philippines: xxx While Section 3 of the same Act provides: Section 3. The Secretary of Public Works and Communications is hereby empowered, to regulate the construction or manufacture, possession, control, sale and transfer of radio transmitters or transceivers (combination transmitter-receiver) and the establishment, use, the operation of all radio stations and of all form of radio

communications and transmissions within the Philippines. In addition to the above he shall have the following specific powers and duties: (1) He may approve or disapprove any application for renewal of station or operator license: Provided, however, That no application for renewal shall be disapproved without giving the licensee a hearing. xxx. It should be noted that by virtue of Executive Order (E.O) No. 546, creating the Ministry of Public Works and Ministry of Transportation and Communications, the regulation of radio communications is a function assigned to, and being performed by, the NTC. Petitioner does not deny and in fact, uses it as the reason for the stoppage of its broadcast that it was the filing of the aforementioned civil case against it (petitioner) which grounded DWCD-FMs broadcasting. It is not disputed, either, that what prompted Conamor to bring a complaint against petitioner was the latters rescission of a "Programming and Marketing Agreement", which gave Conamor the following rights and privileges akin to those of an owner, among others, to wit: (a).....The sole discretion to determine and implement whatever programs are deemed suitable to make the station competitive; (b).....The full discretion to change the station call letters, name, slogan or tagline and such other services that bear upon the stations identity to improve the stations market position; (c).....The acquisition, at its expense, of a new transmitter, studio, broadcast equipment recording booth, including cost of construction; and (d).....A share in the net profit at the rate of 65%, leaving only 35% to respondent, when the new facilities of Conamor became operational. (Exhibits "E-2" and "E-2-a") It is uncontested as well, that under the said Agreement, Conamor was free from any claim arising from employer-employee relationship. In order to settle the civil case, Crusaders and Conamor later entered into a "Compromise Agreement" which superseded the programming and marketing agreement. The Court approved compromise containing the following conditions: "1. Upon execution hereof, the parties hereby agree to jointly operate DWCD-FM at its original office and Broadcasting Station at No. 209 Dela Paz Street, Mandaluyong City, Metro Manila; 2......The parties shall equally share in the expenses as well as in the profits or losses, as the case may be, while they are jointly operating the radio station; 3......The plaintiff shall immediately return the radio stations official transmitter, antenna system and other available equipment of DWCD-FM from the Strata 200 Building, Emerald Avenue, Pasig City, Metro Manila to the above Mandaluyong City office of defendant;

4......The parties further agree that in the event the subject DWCD-FM would be sold or assigned to a third part, the written consent of the plaintiff shall be indispensably necessary to give effect and validity to any such sale, assignment or disposition of the said radio station; 5......In case of sale, assignment or any disposition of the subject radio station to any third party, 78.94% of the proceeds thereof shall go to the defendant (3.57% of which shall be paid to Atty. Felino Ganal a s (sic) his attorneys fees) while the remaining 21.06% shall belong to the plaintiff." (Exhibit "J") The said compromise agreement speaks for itself. Conamor has been given the right to operate and manage a radio station despite the clear mandate of the Radio Law that only holders of a legislative franchise can do so. Even on this ground alone, Crusaders can be prevented by the NTC from broadcasting. That the said ground was not reflected in the show-cause order does not mean that the same cannot be raised thereafter by the NTC, as it has done in the present case, when it gleaned a basis therefor during the administrative proceedings, from the evidence presented by the petitioner itself the substance of the agreement between petitioner and Conamor. The said findings were not rebutted by petitioner which kept on harping only on the alleged unfairness of NTC in the application of its procedures as well as on the existence of the said civil case against it and on the refusal of NTC to approve its application for the acquisition of a new transmitter. On the matter of factual findings by the NTC as to the inoperativeness of subject radio station, the Court agrees with the Court of Appeals that the said findings are supported by substantial evidence. Substantial evidence is such relevant evidence which a reasonable mind might accept as adequate to support a conclusion. As aptly stressed upon and ratiocinated by the Court of Appeals: "In the main, therefore, the findings of the respondent NTC are supported by substantial evidence. As to whether or not it should have adopted a policy of leniency is a matter that is addressed solely to its discretion. As in the case of other administrative agencies, the technical matters involved are entrusted to NTCs expertise. In the matter of issuance of licenses to operate radio stations, it is in a better position than the courts to determine to whom such privilege should be granted in order that public interest will be served. As long as its decisions are supported by substantial evidence, they are entitled to respect from the courts. The National Telecommunications Commission (NTC) numbers among those administrative agencies discharging specialized functions, in this case, the regulation of the nations airwaves. As in the case of other administrative tribunals, its findings of fact will be accorded respect, and on occasion, even finality, by reason of their acquired expertise on specific matters within their particular jurisdiction. ( Bataan Shipyard and Engineering Corporation v. National Labor Relations Commission , 269 SCRA 199 [1997]; Malonzo v. Commission on Elections, 269 SCRA 380 [1987] (sic); Naguiat v. National Labor Relations Commission, 269 SCRA 564 [1997]). The only requirement is that its decisions must be supported by substantial evidence, which need be neither overwhelming nor preponderant (Manila Central Line Corporation v. Manila Central Line Free Workers Union-National Federation of Labor, 290 SCRA 690 [1998])."[4] Neither can the Court find merit in the submission by petitioner that the stoppage of its broadcast would not have happened were it not for the case for injunction filed against it. In the first place, the said case could not have been instituted had petitioner not entered into a programming and marketing agreement with Conamor. What is more, it does not dispute the finding of NTC that it (petitioner) could have resumed broadcasting had it complied with the Order of RTC-Pasig to observe the formal requirements for a motion to lift the order of injunction on the basis of a counterbond. Such a simple step petitioner failed to take, and its failure to put up a counterbond engendered the stoppage of its operations for three years and rendered the stoppage of its

operation justified. The Court upholds the primary jurisdiction exercised by the NTC and quotes with approval the following opinion of the Court of Appeals, to wit: "Moreover, the doctrine of primary jurisdiction prevents this Court from "arrogating unto itself" the authority to resolve a controversy which falls under the jurisdiction of a tribunal possessed of a special competence. (Paat v. Court of Appeals, 266 SCRA 167 [1997]). As held in Villaflor v. Court of Appeals, 280 SCRA 297 [1997, which reiterates the rulings in Ismael, Jr. and Co. v. Deputy Executive Secretary, 90 SCRA 673 [1990] and Concerned Officials of MWSS v. Vasquez, 240 SCRA 502 [1995]: Courts cannot and will not resolve a controversy involving a question which is within the jurisdiction of an administrative tribunal, especially where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services to determine technical and intricate matters of fact."[5] WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED and the petition for review under consideration is DENIED for lack of merit. No pronouncement as to costs. SO ORDERED.

EN BANC G.R. No. 85439 January 13, 1992 KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM), TERESITA A. FAJARDO, NADYESDA B. PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S. FRANCISCO, AMADO V. MANUEL and ROLANDO G. GARCIA, incumbent members of the Board, AMADO G. PEREZ and MA. FE V. BOMBASE, incumbent General Manager and Secretary-Treasurer, respectively, petitioners, vs.HON. CARLOS G. DOMINGUEZ, Secretary of Agriculture, Regional Director of Region IV of the Department of Agriculture ROGELIO P. MADRIAGA, RECTO CORONADO and Municipal Mayor IGNACIO R. BUNYE, both in his capacity as Municipal Mayor of Muntinlupa, Metro Manila and as Presiding Officer of Sangguniang Bayan ng Muntinglupa, and JOHN DOES, respondents. G.R. No. 91927 January 13, 1992 IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E. AGUINALDO, ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO B. CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO, ROGER SMITH, RUFINO B. JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and NESTOR SANTOS, petitioners, vs.THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special Prosecutor III, respondents. DAVIDE, JR., J.: These cases have been consolidated because they are closely linked with each other as to factual antecedents and issues. The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case), questions the validity of the order of 28 October 1988 of then Secretary of Agriculture Hon. Carlos G. Dominguez which ordered: (1) the takeover by the Department of Agriculture of the management of the petitioner Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda ng Bagong Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory and supervisory powers under Section 8 of P.D. No. 175, as amended, and Section 4 of Executive Order No. 13, (2) the creation of a Management Committee which shall assume the management of KBMBPM upon receipt of the order, (3) the disbandment of the Board of Directors, and (4) the turn over of all assets, properties and records of the KBMBPM the Management Committee. The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks the nullification of the Resolution of 4 January 1990 of the Sandiganbayan admitting the Amended Information against petitioners in Criminal Case No. 13966 and denying their motion to order or direct preliminary investigation, and its Resolution of 1 February 1990 denying the motion to reconsider the former. The procedural and factual antecedents are not disputed. On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality), Metro Manila, thru its then Mayor Santiago Carlos, Jr., entered into a contract with the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM) represented by its General Manager, Amado Perez, for the latter's management and operation of the new Muntinlupa public market. The contract provides for a twenty-five (25) year term commencing on 2 September 1985, renewable for a like period, unless sooner terminated and/or rescinded by mutual agreement of the parties, at a monthly consideration of Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM within the first five (5) days of each month which shall, however, be increased by ten percent (10%) each year during the first five (5) years only. 1 The KBMBPM is a service cooperative organized by and composed of vendors occupying the New Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential Decree No. 175 and Letter of Implementation No. 23; its articles of incorporation and by-laws were registered with the then Office of the

Bureau of Cooperatives Development (thereafter the Bureau of Agricultural Cooperatives Development or BACOD and now the Cooperative Development Authority). 2 Following his assumption into office as the new mayor succeeding Santiago Carlos, Jr., petitioner Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-year term of the agreement, contrary to the provision of Section 143, paragraph 3 of Batas Pambansa Blg. 337," and the "patently inequitable rental," directed a review of the aforesaid contract. 3 He sought opinions from both the Commission on Audit and the Metro Manila Commission (MMC) on the validity of the instrument. In separate letters, these agencies urged that appropriate legal steps be taken towards its rescission. The letter of Hon. Elfren Cruz of the MMC even granted the Municipality authority "to take the necessary legal steps for the cancellation/recission of the above cited contract and make representations with KBMBPM for the immediate transfer/takeover of the possession, management and operation of the New Muntinlupa Market to the Municipal Government of Muntinlupa." 4 Consequently, upon representations made by Bunye with the Municipal Council, the latter approved on 1 August 1988 Resolution No. 45 abrogating the contract. To implement this resolution, Bunye, together with his copetitioners and elements of the Capital Command of the Philippine Constabulary, proceeded, on 19 August 1986, to the public market and announced to the general public and the stallholders thereat that the Municipality was taking over the management and operation of the facility, and that the stallholders should henceforth pay their market fees to the Municipality, thru the Market Commission, and no longer to the KBMBPM. 5 On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of Makati a complaint for breach of contract, specific performance and damages with prayer for a writ of preliminary injunction against the Municipality and its officers, which was docketed as Civil Case No. 88-1702. 6 The complaint was premised on the alleged illegal take-over of the public market effected "in excess of his (Bunye's) alleged authority" and thus "constitutes breach of contract and duty as a public official." The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts of Bunye and company to complete the take-over; they continued holding office in the KBS building, under their respective official capacities. The matter having been elevated to this Court by way of certiorari, 8 We remanded the same to the Court of Appeals which docketed it as C.A.-G.R. No. L-16930. 9 On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-complaint charging Bunye and his co-petitioners with oppression, harassment, abuse of authority and violation of the Anti-Graft and Corrupt Practices Act 10 for taking over the management and operation of the public market from KBMBPM. 11 In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of the Special Prosecutor directed Bunye and his co-petitioners to submit within ten (10) days from receipt thereof counter-affidavits, affidavits of their witnesses and other supporting documents. 12 The subpoena and letter-complaint were received on 12 October 1988. On 20 October 1988, two (2) days before the expiration of the period granted to file said documents, Bunye, et al. filed by mail an urgent motion for extension of "at least fifteen (15) days from October 22, 1988" within which to comply 13 with the subpoena. Thereafter, the following transpired which subsequently gave rise to these petitions: G.R. No. 85439 In the early morning of 29 October 1988, a Saturday, respondent Madriaga and Coronado, allegedly accompanied by Mayor Bunye and the latters' heavily armed men, both in uniform and in civilian clothes, together with other civilians, namely: Romulo Bunye II, Alfredo Bunye, Tomas Osias, Reynaldo Camilon, Benjamin Taguibao, Benjamin Bulos and other unidentified persons, allegedly through force, violence and intimidation, forcibly broke open the doors of the offices of petitioners located at the second floor of the KBS Building, new Muntinlupa Public Market, purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture dated 28 October 1988, and to implement the same, by taking over and assuming the management of KBMBPM, disbanding the then

incumbent Board of Directors for that purpose and excluding and prohibiting the General Manager and the other officers from exercising their lawful functions as such. 14 The Order of the Secretary reads as follows: 15 ORDER WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), Alabang, Muntinlupa, Metro Manila is a Cooperative registered under the provisions of Presidential Decree No. 175, as amended; WHEREAS, the Department of Agriculture is empowered to regulate and supervise cooperatives registered under the provisions of Presidential Decree No. 175, as amended; WHEREAS, the general membership of the KBMBPM has petitioned the Department of Agriculture for assistance in the removal of the members of the Board of Directors who were not elected by the general membership of said cooperative; WHEREAS, the on-going financial and management audit of the Department of Agriculture auditors show ( sic) that the management of the KBMBPM is not operating that cooperative in accordance with PD. 175, LOI No. 23, the Circulars issued by DA/BACOD and the provisions of the by-laws of KBMBPM; WHEREAS, the interest of the public so demanding it is evident and urgently necessary that the KBMBPM MUST BE PLACED UNDER MANAGEMENT TAKE-OVER of the Department of Agriculture in order to preserve the financial interest of the members of the cooperative and to enhance the cooperative development program of the government; WHEREAS, it is ordered that the Department of Agriculture in the exercise of its regulatory and supervisory powers under Section 8 of PD 175, as amended, and Section 4 of Executive Order No. 113, take over the management of KBMBPM under the following directives: 1. THAT a Management Committee is hereby created composed of the following: a) Reg. Dir. or OIC RD DA Region IV b) Atty. Rogelio P. Madriaga BACOD c) Mr. Recto Coronado KBMBPM d) Mrs. Nadjasda Ponsones KBMBPM e) One (1) from the Municipal Government of Muntinlupa to be designated by the Sangguniang Pambayan ng Muntinlupa; 2. THAT the Management Committee shall, upon receipt of this Order, assume the management of KBMBPM; 3. THAT the present Board of Directors is hereby disbanded and the officers and Manager of the KBMBPM are hereby directed to turnover all assets, properties and records of the KBMBPM to the Management Committee herein created; 4. THAT the Management Committee is hereby empowered to promulgate rules of procedure to govern its workings as a body;

5. THAT the Management Committee shall submit to the undersigned thru the Director of BACOD monthly reports on the operations of KBMBPM; 6. THAT the Management Committee shall call a General Assembly of all registered members of the KBMBPM within Ninety (90) days from date of this Order to decide such matters affecting the KBMBPM, including the election of a new set of Board of Director (sic). This Order takes effect immediately and shall continue to be in force until the members of the Board of Directors shall have been duly elected and qualified. Done this 28th day of October, 1988 at Quezon City. As claimed by petitioners, the Order served on them was not written on the stationary of the Department, does not bear its seal and is a mere xerox copy. The so-called petition upon which the Order is based appears to be an unverified petition dated 10 October 1988 signed, according to Mayor Bunye, 16 by 371 members of the KBMBPM. On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that: (a) Respondent Secretary acted without or in excess of jurisdiction in issuing the Order for he arrogated unto himself a judicial function by determining the alleged guilt of petitioners on the strength of a mere unverified petition; the disbandment of the Board of Directors was done without authority of law since under Letter of Implementation No. 23, removal of officers, directors or committee members could be done only by the majority of the members entitled to vote at an annual or special general assembly and only after an opportunity to be heard at said assembly. (b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic manner, so patent and gross that it amounted to a grave abuse of discretion. (c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise illegal and unlawful for it allows or tolerates the violation of the penal provisions under paragraph (c), Section 9 of P.D. No. 175. (d) The Order is a clear violation of the constitutional right of the individual petitioners to be heard.
17

They pray that upon the filing of the petition, respondents, their agents, representatives or persons acting on their behalf be ordered to refrain, cease and desist from enforcing and implementing the questioned Order or from excluding the individual petitioners from the exercise of their rights as such officers and, in the event that said acts sought to be restrained were already partially or wholly done, to immediately restore the management and operation of the public market to petitioners, order respondents to vacate the premises and, thereafter, preserve the status quo; and that, finally, the challenged Order be declared null and void. In the Resolution of 9 October 1988, 18 We required the respondents to Comment on the petition. Before any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion praying that respondent Atty. Rogelio Madriaga, who had assumed the position of Chairman of the Management Committee, be ordered to stop and/or cancel the scheduled elections of the officers of the KBMBPM on 6 January 1989 and, henceforth, desist from scheduling any election of officers or Members of the Board of Directors thereof until further orders on the Court. 19 The elections were, nevertheless, held and a new board of directors was elected. So, on 19 January 1989, petitioners filed a supplemental motion 20 praying that respondent Madriaga and the "newly elected Board of Directors be ordered to cease and desist from assuming, performing or exercising powers as such, and/or from removing or replacing the counsels of petitioners as counsels for KBMBPM and for Atty. Fernando Aquino, Jr., to cease and desist from unduly interfering with the affairs and business of the cooperative."

Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies the factual allegations in the petition and claims that petitioners failed to exhaust administrative remedies. A reply thereto was filed by petitioners on 7 February 1989. 22 Respondent Recto Coronado filed two (2) Comments. The first was filed on 6 February 1989 23 by his counsel, Atty. Fernando Aquino, Jr., and the second, which is for both him and Atty. Madriaga, was filed by the latter on 10 February 1989. 24 On 20 February 1989, petitioners filed a Reply to the first Comment of Coronado 25 and an Ex-Parte Motion for the immediate issuance of a cease and desist order 26 praying that the so-called new directors and officers of KBMBPM, namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino Moldez, Fortunato M. Medina, Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to immediately cease and desist from filing notices of withdrawals or motions to dismiss cases filed by the Cooperative now pending before the courts, administrative offices and the Ombudsman and Tanodbayan, and that if such motions or notices were already filed, to immediately withdraw and desist from further pursuing the same until further orders of this Court. The latter was precipitated by the Resolution No. 19 of the "new" board of directors withdrawing all cases filed by its predecessors against Bunye, et al., and more particularly the following cases: (a) G.R. No. 85439 (the instant petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110 before the Ombudsman, (d) IBP Case No. 88-0119 before the Tanodbayan, and Civil Case No. 88-118 for Mandamus. 27 On 1 March 1989, We required the Solicitor General to file his Comment to the petition and the urgent motion for the immediate issuance of a cease and desist order. 28 A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April 1989, We resolved to dismiss the case and consider it closed and terminated. 30 Thereupon, after some petitioners filed a motion for clarification and reconsideration, We set aside the dismissal order and required the new directors to comment on the Opposition to Motion to Dismiss filed by the former. 31 The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and Opposition dated 9 June 1989, earlier submitted it response to petitioners' motion for reconsideration of the order dismissing the instant petition, be treated as its Comment. 32 Both parties then continued their legal fencing, serving several pleadings on each other. In Our Resolution of 9 August 1989, respective Memoranda.
33

and Madriaga filed their separate Memoranda on 6 November 1989; its Memorandum on 11 December 1989. 39

38

while the new board of directors submitted

The new KBMBPM board submitted additional pleadings on 16 February 1990 which it deemed relevant to the issues involved herein. Reacting, petitioners filed a motion to strike out improper and inadmissible pleadings and annexes and sought to have the pleaders cited for contempt. Although We required respondents to comment, the latter did not comply. Nevertheless, a manifestation was filed by the same board on 25 February 1991 40 informing this Court of the holding, on 9 January 1991, of its annual general assembly and election of its board of directors for 1991. It then reiterates the prayer that the instant petition be considered withdrawn and dismissed. Petitioners filed a counter manifestation alleging that the instant petition was already given due course on 9 August 1989. 41 In its traverse to the counter manifestation, the new board insists that it "did not derive authority from the October 28, 1988 Order, the acts of the Management Committee, nor ( sic) from the elections held in (sic) January 6, 1989," but rather from the members of the cooperative who elected them into office during the elections. Petitioners filed a rejoinder asserting that the election of new directors is not a supervening event independent of the main issue in the present petition and that to subscribe to the argument that the issues in the instant petition became moot with their assumption into office is to reward a wrong done. G. R. NO. 91927 Petitioners claim that without ruling on their 20 October 1988 motion for an extension of at last 15 days from 22 October 1988 within which to file their counter-affidavits, which was received by the Office of the Special Prosecutor on 3 November 1988, Special Prosecutor Onos promulgated on 11 November 1988 a Resolution finding the evidence on hand sufficient to establish a prima facie case against respondents (herein petitioners) and recommending the filing of the corresponding information against them before the Sandiganbayan. 42 Petitioners also claim that they submitted their counter-affidavits on 9 November 1988. 43 In their motion dated 2 December 1988, petitioners move for a reconsideration of the above Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The information against the petitioners was attached to this order. Upon submission of the records for his approval, the Ombudsman issued a first indorsement on 4 April 1989 referring to "Judge Gualberto J. de la Llana, Acting Director , IEO/RSSO, this Office, the within records of OSP Case No. 88-02110 . . . for further preliminary investigation . . ." 46 Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la Llana requiring them to appear before the latter on 25 April 1989, 47 submit a report and file comment. After being granted an extension, Bunye and company submitted their comment on 18 May 1989. 48 On 22 August 1989, de la Llana recommended the filing of an information for violation of section 3 (e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred to special prosecuting officer Jose Parentela, Jr. who, in his Memorandum 50 to the Ombudsman through the Acting Special Prosecutor, likewise urged that an information be filed against herein petitioners. On 3 October 1989, the Ombudsman signed his conformity to the Memorandum and approved the 18 January information prepared by Onos, which was then filed with the Sandiganbayan. Consequently, Bunye, et al. were served arrest warrants issued by the Sandiganbayan. Detained at the NBI on 9 October 1989, they claim to have discovered only then the existence of documents recommending and approving the filing of the complaint and a memorandum by special prosecutor Bernardita G. Erum proposing the dismissal of the same. 51 Arraignment was set for 18 October 1989.
52

We gave the petition due course and required the parties to submit their

On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate issuance of a cease and desist order 34 in view of the new board's plan to enter into a new management contract; the motion was noted by this Court on 23 August 1989. A second ex-parte motion, noted on 18 October 1989, was filed on 19 September 1989 asking this court to consider the "Invitation to pre-qualify and bid" for a new contract published by respondent Bunye. 35 In a belated Comment 36 for the respondent Secretary of Agriculture filed on 22 September 1989, the Office of the Solicitor General asserts that individual petitioners, who were not allegedly elected by the members or duly designated by the BACOD Director, have no right or authority to file this case; the assailed Order of the Secretary was issued pursuant to P.D. No. 175, more particularly Section 8 thereof which authorizes him "(d) to suspend the operation or cancel the registration of any cooperative after hearing and when in its judgment and based on findings, such cooperative is operating in violation of this Decree, rules and regulations, existing laws as well as the by-laws of the cooperative itself;" the Order is reasonably necessary to correct serious flaws in the cooperative and provide interim measures until election of regular members to the board and officers thereof; the elections conducted on 6 January 1989 are valid; and that the motion to dismiss filed by the new board of directors binds the cooperative. It prays for the dismissal of the petition. Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the Comment submitted by the Office of the Solicitor General as his memorandum; 37 petitioners and respondents Coronado

However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus Motion to Remand to the Office of the Ombudsman; to Defer Arraignment and to Suspend Proceedings." 53 Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated Manifestation and Supplemental Motion 54 praying, inter alia, for the quashal of the information on the ground that they were deprived of their right to a preliminary investigation and that the information did not charge an offense. The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and directing the parties to submit their respective memoranda, 55 which petitioners complied with on 2 November 1989. 56 On 16 November 1989, special Prosecutor Berbano filed a motion to admit amendedinformation. 57 On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for lack of merit the Omnibus Motion to Remand the Case To The Office of the Ombudsman, to Defer Arraignment and to Suspend Proceedings. Petitioners then filed a motion to order a preliminary investigation 59 on the basis of the introduction by the amended information of new, material and substantive allegations, which the special prosecutor opposed, 60 thereby precipitating a rejoinder filed by petitioners. 61 On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the Amended Information and denying the motion to direct preliminary investigation. Their motion to reconsider this Resolution having been denied in the Resolution of 1 February 1990, 63 petitioners filed the instant petition on 12 February 1990. Petitioners claim that respondent Sandiganbayan acted without or in excess of jurisdiction or with manifest grave abuse of discretion amounting to lack of jurisdiction in denying petitioners their right to preliminary investigation and in admitting the Amended Information. They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the Sandiganbayan, admitting the amended information and denying the motion for reconsideration, respectively, be annulled; (b) a writ be issued enjoining the Sandiganbayan from proceeding further in Criminal Case No. 13966; and (c) respondents be enjoined from pursuing further actions in the graft case. We required the respondents to Comment on the petition. On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta and Rey E. Dulay as petitioners, 64 and in the Comment they filed on 30 March 1990, in compliance with Our Resolution of 1 March 1990, they state that they do not interpose any objection to the motion. On 20 March 1990, the Office of the Solicitor General moved that it be excused from filing comment for the respondents as it cannot subscribe to the position taken by the latter with respect to the questions of law involved. 65 We granted this motion in the resolution of 8 May 1990. Respondent Berbano filed his comment on 10 September 1991 and petitioners replied on 20 December 1990; Berbano subsequently filed a Rejoinder thereto on 11 January 1991. 66 The Sandiganbayan then filed a manifestation proposing that it be excused from filing comment as its position on the matters in issue is adequately stated in the resolutions sought to be annulled. 67 On 7 March 1991, We resolved to note the manifestation and order the instant petition consolidated with G.R. No. 85439. The present dispute revolves around the validity of the antecedent proceedings which led to the filing of the original information on 18 January 1989 and the amended information afterwards. THE ISSUES AND THEIR RESOLUTION 1. G. R. No. 85439.

As adverted to in the introductory portion of this Decision, the principal issue in G.R. No. 85439 is the validity of the 28 October 1988 Order of respondent Secretary of Agriculture. The exordium of said Order unerringly indicates that its basis is the alleged petition of the general membership of the KBMBPM requesting the Department for assistance "in the removal of the members of the Board of Directors who were not elected by the general membership" of the cooperative and that the "ongoing financial and management audit of the Department of Agriculture auditors show (sic) that the management of the KBMBPM is not operating that cooperative in accordance with P.D. 175, LOI 23, the Circulars issued by DA/BACOD and the provisions and bylaws of KBMBPM." It is also professed therein that the Order was issued by the Department "in the exercise of its regulatory and supervisory powers under Section 8 of P.D. 175, as amended, and Section 4 of Executive Order No. 113." Respondents challenge the personality of the petitioners to bring this action, set up the defense of nonexhaustion of administrative remedies, and assert that the Order was lawfully and validly issued under the above decree and Executive Order. We find merit in the petition and the defenses interposed do not persuade Us. Petitioners have the personality to file the instant petition and ask, in effect, for their reinstatement as Section 3, Rule 65 of the Rules of Court, defining an action for mandamus, permits a person who has been excluded from the use and enjoyment of a right or office to which he is entitled, to file suit. 68 Petitioners, as ousted directors of the KBMBPM, are questioning precisely the act of respondent Secretary in disbanding the board of directors; they then pray that this Court restore them to their prior stations. As to failure to exhaust administrative remedies, the rule is well-settled that this requirement does not apply where the respondent is a department secretary whose acts, as an alter ego of the President, bear the implied approval of the latter, unless actually disapproved by him. 69 This doctrine of qualified political agency ensures speedy access to the courts when most needed. There was no need then to appeal the decision to the office of the President; recourse to the courts could be had immediately. Moreover, the doctrine of exhaustion of administrative remedies also yields to other exceptions, such as when the question involved is purely legal, as in the instant case, 70 or where the questioned act is patently illegal, arbitrary or oppressive. 71 Such is the claim of petitioners which, as hereinafter shown, is correct. And now on the validity of the assailed Order. Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175) provides the procedure for the removal of directors or officers of cooperatives, thus: An elected officer, director or committee member may be removed by a vote of majority of the members entitled to vote at an annual or special general assembly. The person involved shall have an opportunity to be heard. A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-laws, reads: Sec. 17. Removal of Directors and Committee Members . Any elected director or committee member may be removed from office for cause by a majority vote of the members in good standing present at the annual or special general assembly called for the purpose after having been given the opportunity to be heard at the assembly. Under the same article are found the requirements for the holding of both the annual general assembly and a special general assembly. Indubitably then, there is an established procedure for the removal of directors and officers of cooperatives. It is likewise manifest that the right to due process is respected by the express provision on the opportunity to be heard. But even without said provision, petitioners cannot be deprived of that right.

The procedure was not followed in this case. Respondent Secretary of Agriculture arrogated unto himself the power of the members of the KBMBPM who are authorized to vote to remove the petitioning directors and officers. He cannot take refuge under Section 8 of P.D. No. 175 which grants him authority to supervise and regulate all cooperatives. This section does not give him that right. An administrative officer has only such powers as are expressly granted to him and those necessarily implied in the exercise thereof. 72 These powers should not be extended by implication beyond what may to necessary for their just and reasonable execution. 73 Supervision and control include only the authority to: (a) act directly whenever a specific function is entrusted by law or regulation to a subordinate; (b) direct the performance of duty; restrain the commission of acts; (c) review, approve, reverse or modify acts and decisions of subordinate officials or units; (d) determine priorities in the execution of plans and programs; and (e) prescribe standards, guidelines, plans and programs. Specifically, administrative supervision is limited to the authority of the department or its equivalent to: (1) generally oversee the operations of such agencies and insure that they are managed effectively, efficiently and economically but without interference with day-to-day activities; (2) require the submission of reports and cause the conduct of management audit, performance evaluation and inspection to determine compliance with policies, standards and guidelines of the department; (3) take such action as may be necessary for the proper performance of official functions, including rectification of violations, abuses and other forms of mal-administration; (4) review and pass upon budget proposals of such agencies but may not increase or add to them. 74 The power to summarily disband the board of directors may not be inferred from any of the foregoing as both P.D. No. 175 and the by-laws of the KBMBPM explicitly mandate the manner by which directors and officers are to be removed. The Secretary should have known better than to disregard these procedures and rely on a mere petition by the general membership of the KBMBPM and an on-going audit by Department of Agriculture auditors in exercising a power which he does not have, expressly or impliedly. We cannot concede to the proposition of the Office of the Solicitor General that the Secretary's power under paragraph (d), Section 8 of P.D. No. 175 above quoted to suspend the operation or cancel the registration of any cooperative includes the "milder authority of suspending officers and calling for the election of new officers." Firstly, neither suspension nor cancellation includes the take-over and ouster of incumbent directors and officers, otherwise the law itself would have expressly so stated. Secondly, even granting that the law intended such as postulated, there is the requirement of a hearing. None was conducted. Likewise, even if We grant, for the sake of argument, that said power includes the power to disband the board of directors and remove the officers of the KBMBPM, and that a hearing was not expressly required in the law, still the Order can be validly issued only after giving due process to the affected parties, herein petitioners. Due process is guaranteed by the Constitution 75 and extends to administrative proceedings. In the landmark case of Ang Tibay vs. Court of Industrial Relations , 76 this Court, through Justice Laurel, laid down the cardinal primary requirements of due process in administrative proceedings, foremost of which is the right to a hearing, which includes the right to present one's case and submit evidence in support thereof. The need for notice and the opportunity to be heard is the heart of procedural due process, be it in either judicial or administrative proceedings. 77 Nevertheless, a plea of a denial of procedural due process does not lie where a defect consisting in an absence of notice of hearing was thereafter cured by the aggrieved party himself as when he had the opportunity to be heard on a subsequent motion for reconsideration. This is consistent with the principle that what the law prohibits is not the absence of previous notice but the absolute absence thereof and lack of an opportunity to be heard. 78 In the instant case, there was no notice of a hearing on the alleged petition of the general membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order was based solely on an alleged petition by the general membership of the KBMBPM. There was then a clear denial of due process. It is most unfortunate that it was done after democracy was restored through the peaceful people revolt at EDSA and the overwhelming ratification of a new Constitution thereafter, which preserves for the generations to come the gains of that historic struggle which earned for this Republic universal admiration. If there were genuine grievances against petitioners, the affected members should have timely raise these issues

in the annual general assembly or in a special general assembly. Or, if such a remedy would be futile for some reason or another, judicial recourse was available. Be that as it may, petitioners cannot, however, be restored to their positions. Their terms expired in 1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to Section 13 of the by-laws, during the election at the first annual general assembly after registration, one-half plus one (4) of the directors obtaining the highest number of votes shall serve for two years, and the remaining directors (3) for one year; thereafter, all shall be elected for a term of two years. Hence, in 1988, when the board was disbanded, there was a number of directors whose terms would have expired the next year (1989) and a number whose terms would have expired two years after (1990). Reversion to the status quo preceding 29 October 1988 would not be feasible in view of this turn of events. Besides, elections were held in 1990 and 1991. 79 The affairs of the cooperative are presently being managed by a new board of directors duly elected in accordance with the cooperative's by-laws. 2. G. R. No. 91927. The right of an accused to a preliminary investigation is not among the rights guaranteed him in the Bill of Rights. As stated in Marcos, et al. vs. Cruz, 80 "the preliminary investigation in criminal cases is not a creation of the Constitution; its origin is statutory and it exists and the right thereto can be invoked when so established and granted by law. It is so specifically granted by procedural law. 81 If not waived, absence thereof may amount to a denial of due process. 82 However, lack of preliminary investigation is not a ground to quash or dismiss a complaint or information. Much less does it affect the court's jurisdiction. In People vs. Casiano, 83 this Court ruled: Independently of the foregoing, the absence of such investigation [preliminary] did not impair the validity of the information or otherwise render it defective. Much less did it affect the jurisdiction of the court of first instance over the present case. Hence, had the defendant-appellee been entitled to another preliminary investigation, and had his plea of not guilty upon arraignment not implied a waiver of said right, the court of first instance should have, either conducted such preliminary investigation, or ordered the Provincial Fiscal to make it, in pursuance of section 1687 of the Revised Administrative Code (as amended by Republic Act No. 732), or remanded the record for said investigation to the justice of the peace court, instead of dismissing the case as it did in the order appealed from. This doctrine was thereafter reiterated or affirmed in several case. 84 In the instant case, even if it is to be conceded for argument's sake that there was in fact no preliminary investigation, the Sandiganbayan, per Doromal vs. Sandiganbayan, 85 "should merely suspend or hold in abeyance proceedings upon the questioned Amended Information and remand the case to the Office of the Ombudsman for him to conduct a preliminary investigation." It is Our view, however, that petitioners were not denied the right to preliminary investigation. They, nevertheless, insist that the preliminary investigation conducted by the Office of the Special Prosecutor existed more in form than in substance. This is anchored on the failure by prosecutor Onos to consider the counteraffidavits filed by petitioners. The same sin of omission is ascribed to Acting Director de la Llana who purportedly failed to consider the comments submitted by the petitioners pursuant to a subpoena dated 13 April 1989. The failure of special prosecutor Berbano to conduct a preliminary investigation before amending the information is also challenged. It is finally urged that the Sandiganbayan completely disregarded the "glaring anomaly that on its face the Information filed by the Office of the Special Prosecutor" was prepared and subscribed on 18 January 1989, while the records indicate that the preliminary investigation was concluded on 3 October 1989. In his Comment, respondent Berbano dispassionately traces the genesis of the criminal information filed before the Sandiganbayan. His assessment that a preliminary investigation sufficient in substance and manner was conducted prior to the filing of the information reflects the view of the Sandiganbayan, maintained in both the

17 November 1989 and 4 January 1990 resolutions, that there was compliance with the requirements of due process. Petitioners were provided a reasonable period within which to submit their counter-affidavits; they did not avail of the original period; they moved for an extension of at least fifteen (15) days from 22 October 1988. Despite the urgency of its nature, the motion was sent by mail. The extension prayed for was good up to 6 November 1988. But, as admitted by them, they filed the Counter-Affidavits only on 9 November 1988. Yet, they blamed prosecutor Onos for promulgating the 11 November 1989 Resolution and for, allegedly, not acting on the motion. Petitioners then should not lay the blame on Onos; they should blame themselves for presuming that the motion would be granted. This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13 December 1988 requesting that the reviewing prosecutor consider the belatedly filed documents; 86 thus, there is the recommendation of prosecutor Bernardita Erum calling for the dismissal of the charges on 2 March 1989, which, however, was not sustained upon subsequent review. The Sandiganbayan, in its 17 November 1989 Resolution, succinctly summed up the matter when it asserted that "even granting, for the sake of argument, that prosecutor Onos . . . failed to consider accused-movants' counter-affidavits, such defect was cured when a "Motion for Reconsideration" was filed, and which . . . de la Llana took into account upon review." It may not then be successfully asserted that the counter-affidavits were not considered by the Ombudsman in approving the information. Perusal of the factual antecedents reveals that a second investigation was conducted upon the "1st Indorsement" of the Ombudsman of 4 April 1989. As a result, subpoenas were issued and comments were asked to be submitted, which petitioners did, but only after a further extension of fifteen (15) days from the expiration of the original deadline. From this submission the matter underwent further review. Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample discussion of the defenses raised by the petitioners in their counter-affidavits, thus negating the charge that the issues raised by them were not considered at all. 87 It is indisputable that the respondents were not remiss in their duty to afford the petitioners the opportunity to contest the charges thrown their way. Due process does not require that the accused actually file his counteraffidavits before the preliminary investigation is deemed completed. All that is required is that he be given the opportunity to submit such if he is so minded. 88 In any event, petitioners did in fact, although belatedly, submit their counter-affidavits and as a result thereof, the prosecutors concerned considered them in subsequent reviews of the information, particularly in the reinvestigation ordered by the Ombudsman. And now, as to the protestation of lack of preliminary investigation prior to the filing of the Amended Information. The prosecution may amend the information without leave of court before arraignment, 89 and such does not prejudice the accused. 90 Reliance on the pronouncements in Doromal vs. Sandiganbayan 91 is misplaced as what obtained therein was the preparation of an entirely new information as contrasted with mere amendments introduced in the amended information, which also charges petitioners with violating Section 3 (e) of the Anti-Graft Law. In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the Tanodbayan to conduct another preliminary investigation of a case under review by it. On the contrary, under P.D. No. 911, in relation to Rule 12, Administrative Order No. VII, the Tanodbayan may, upon review, reverse the findings of the investigator and thereafter "where he finds a prima facie case, to cause the filing of an information in court against the respondent, based on the same sworn statements or evidence submitted, without the necessity of conducting another preliminary investigation." Respondent Sandiganbayan did not then commit any grave abuse of discretion in respect to its Resolutions of 4 January 1990 and 1 February 1990.

The petition then must fail. CONCLUSION WHEREFORE, judgment is hereby rendered: 1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged Order of 28 October 1988 of the respondent Secretary of Agriculture; but denying, for having become moot and academic, the prayer of petitioners that they be restored to their positions in the KBMBPM. 2. DISMISSING, for lack of merit, the petition in G.R. No. 91927. No pronouncement as to costs. IT IS SO ORDERED.