[G.R. No. 84811. August 29, 1989.

]
SOLID HOMES, INC., petitioner, vs. TERESITA PAYAWAL
and COURT OF APPEALS, respondents.

subdivision lot. The position of the petitioner, the defendant in

that action, is that the decision of the trial court is null and void ab
initio because the case should have been heard and decided by
what is now called the Housing and Land Use Regulatory
Board. LibLex

SYLLABUS
1. ADMINISTRATIVE LAW; NATIONAL HOUSING
AUTHORITY; EXCLUSIVE JURISDICTION. The National
Housing Authority shall have exclusive jurisdiction to hear and
decide cases of the following nature: A. Unsound real estate
business practices; B. Claims involving refund and any other
claims filed by subdivision lot or condominium unit buyer against
the project owner, developer, dealer, broker or salesman; and C.
Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium
unit against the owner, developer, dealer, broker or salesman.
(P.D. 957 as amended by P.D. 1344)
2. STATUTORY CONSTRUCTION AND INTERPRETATION;
IN CASE OF CONFLICT BETWEEN A GENERAL AND A
SPECIFIC LAW, THE LATTER PREVAILS. In case of
conflict between a general law and a special law, the latter must
prevail regardless of the dates of their enactment. Thus, it has
been held that The fact that one law is special and the other
general creates a presumption that the special act is to be
considered as remaining an exception of the general act, one as a
general law of the land and the other as the law of the particular
case.
3. ID.; ID.; FACT OF EARLY ENACTMENT OF EITHER
LAW, IMMATERIAL. The circumstance that the special law
is passed before or after the general act does not change the
principle. Where the special law is later, it will be regarded as an
exception to, or a qualification of, the prior general act; and where
the general act is later, the special statute will be construed as
remaining an exception to its terms, unless repealed expressly or
by necessary implication.
4. ID.; STATUTES CONFERRING POWERS ON
ADMINISTRATIVE AGENCIES, LIBERALLY CONSTRUED.
Statutes conferring powers on their administrative agencies
must be liberally construed to enable them to discharge their
assigned duties in accordance with the legislative purpose.

The complaint was filed on August 31, 1982, by Teresita Payawal

against Solid Homes, Inc. before the Regional Trial Court of
Quezon City and docketed as Civil Case No. Q-36119. The
plaintiff alleged that the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the agreed price
of P28,080.00, and that by September 10, 1981, she had already
paid the defendant the total amount of P38,949.87 in monthly
installments and interests. Solid Homes subsequently executed a
deed of sale over the land but failed to deliver the corresponding
certificate of title despite her repeated demands because, as it
appeared later, the defendant had mortgaged the property in bad
faith to a financing company. The plaintiff asked for delivery of
the title to the lot or, alternatively, the return of all the amounts
paid by her plus interest. She also claimed moral and exemplary
damages, attorney's fees and the costs of the suit.
Solid Homes moved to dismiss the complaint on the ground that
the court had no jurisdiction, this being vested in the National
Housing Authority under PD No. 957. The motion was denied.
The defendant repleaded the objection in its answer, citing
Section 3 of the said decree providing that "the National Housing
Authority shall have exclusive jurisdiction to regulate the real
estate trade and business in accordance with the provisions of this
Decree." After trial, judgment was rendered in favor of the
plaintiff and the defendant was ordered to deliver to her the title
to the land or, failing this, to refund to her the sum of P38,949.87
plus interest from 1975 and until the full amount was paid. She
was also awarded P5,000.00 moral damages, P5,000.00
exemplary damages, P10,000.00 attorney's fees, and the costs of
the suit. 1
Solid Homes appealed but the decision was affirmed by the
respondent court, 2 which also berated the appellant for its
obvious efforts to evade a legitimate obligation, including its
dilatory tactics during the trial. The petitioner was also reproved
for its "gall" in collecting the further amount of P1,238.47 from
the plaintiff purportedly for realty taxes and registration expenses
despite its inability to deliver the title to the land.

5. REMEDIAL LAW; JURISDICTION; DECISION

RENDERED WITHOUT JURISDICTION, NULL AND VOID;
EXCEPTION; CASE AT BAR. Any decision rendered
without jurisdiction is a total nullity and may be struck down at
any time, even on appeal before this Court. The only exception is
where the party raising the issue is barred by estoppel, which does
not appear in the case before us. On the contrary, the issue was
raised as early as in the motion to dismiss filed in the trial court
by the petitioner, which continued to plead it in its answer and,
later, on appeal to the respondent court. We have no choice,
therefore, notwithstanding the delay this decision will entail, to
nullify the proceedings in the trial court for lack of jurisdiction.

In holding that the trial court had jurisdiction, the respondent

court referred to Section 41 of PD No. 957 itself providing that:

DECISION

While we are disturbed by the findings of fact of the trial court

and the respondent court on the dubious conduct of the petitioner,
we nevertheless must sustain it on the jurisdictional issue.

CRUZ, J p:
We are asked to reverse a decision of the Court of Appeals
sustaining the jurisdiction of the Regional Trial Court of Quezon
City over a complaint filed by a buyer, the herein private
respondent, against the petitioner, for delivery of title to a

SEC. 41. Other remedies. The rights and remedies provided in

this Decree shall be in addition to any and all other rights and
remedies that may be available under existing laws.
and declared that "its clear and unambiguous tenor undermine(d)
the (petitioner's) pretension that the court a quo was bereft of
jurisdiction." The decision also dismissed the contrary opinion of
the Secretary of Justice as impinging on the authority of the
courts of justice.

The applicable law is PD No. 957, as amended by PD No. 1344,

entitled "Empowering the National Housing Authority to Issue
Writs of Execution in the Enforcement of Its Decisions

Under Presidential Decree No. 967." Section 1 of the latter decree

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

The circumstance that the special law is passed before or after the
general act does not change the principle. Where the special law
is later, it will be regarded as an exception to, or a qualification
of, the prior general act; and where the general act is later, the
special statute will be construed as remaining an exception to its
terms, unless repealed expressly or by necessary implication. 5
It is obvious that the general law in this case is BP No. 129
and PD No. 1344 the special law.

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or
salesman. (Emphasis supplied.)
The language of this section, especially the italicized portions,
leaves no room for doubt that "exclusive jurisdiction" over the
case between the petitioner and the private respondent is vested
not in the Regional Trial Court but in the National Housing
Authority. 3
The private respondent contends that the applicable law BP No.
129, which confers on regional trial courts jurisdiction to hear and
decide cases mentioned in its Section 19, reading in part as
follows:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall
exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is
incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of,
real property, or any interest therein, except actions for forcible
entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts;
xxx xxx xxx
(8) In all other cases in which the demand, exclusive of interest
and cost or the value of the property in controversy, amounts to
more than twenty thousand pesos (P20,000.00).
It stresses, additionally, that BP No. 129 should control as the
later enactment, having been promulgated in 1981, after PD No.
957 was issued in 1975 and PD No. 1344 in 1978. llcd
This construction must yield to the familiar canon that in case of
conflict between a general law and a special law, the latter must
prevail regardless of the dates of their enactment. Thus, it has
been held that
The fact that one law is special and the other general creates a
presumption that the special act is to be considered as remaining
an exception of the general act, one as a general law of the land
and the other as the law of the particular case. 4
xxx xxx xxx

The argument that the trial court could also assume jurisdiction
because of Section 41 of PD No. 957, earlier quoted, is also
unacceptable. We do not read that provision as vesting concurrent
jurisdiction on the Regional Trial Court and the Board over the
complaint mentioned in PD No. 1344 if only because grants of
power are not to be lightly inferred or merely implied. The only
purpose of this section, as we see it, is to reserve to the aggrieved
party such other remedies as may be provided by existing law,
like a prosecution for the act complained of under the Revised
Penal Code. 6
On the competence of the Board to award damages, we find that
this is part of the exclusive power conferred upon it by PD No.
1344 to hear and decide "claims involving refund and any other
claims filed by subdivision lot or condominium unit buyers
against the project owner, developer, dealer, broker or salesman."
It was therefore erroneous for the respondent to brush aside the
well-taken opinion of the Secretary of Justice that
Such claim for damages which the subdivision condominium
buyer may have against the owner, developer, dealer or salesman,
being a necessary consequence of an adjudication of liability for
non-performance of contractual or statutory obligation, may be
deemed necessarily included in the phrase "claims involving
refund and any other claims" used in the aforequoted
subparagraph C of Section 1 of PD No. 1344. The phrase "any
other claims" is, we believe, sufficiently broad to include any and
all claims which are incidental to or a necessary consequence of
the claims/cases specifically included in the grant of jurisdiction
to the National Housing Authority under the subject provisions.
The same may be said with respect to claims for attorney's fees
which are recoverable either by agreement of the parties or
pursuant to Art. 2208 of the Civil Code (1) when exemplary
damages are awarded and (2) where the defendant acted in gross
and evident bad faith in refusing to satisfy the plaintiffs plainly
valid, just and demandable claim.LibLex
xxx xxx xxx
Besides, a strict construction of the subject provisions of PD No.
1344 which would deny the HSRC the authority to adjudicate
claims for damages and for damages and for attorney's fees would
result in multiplicity of suits in that the subdivision/condominium
buyer who wins a case in the HSRC and who is thereby deemed
entitled to claim damages and attorney's fees would be forced to
litigate in the regular courts for the purpose, a situation which is
obviously not in the contemplation of the law. (Emphasis
supplied.) 7
As a result of the growing complexity of the modern society, it
has become necessary to create more and more administrative
bodies to help in the regulation of its ramified activities.
Specialized in the particular fields 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. This

is the reason for the increasing vesture of quasi-legislative and

quasi-judicial powers in what is now not unreasonably called the
fourth department of the government.
Statutes conferring powers on their administrative agencies must
be liberally construed to enable them to discharge their assigned
duties in accordance with the legislative purpose. 8 Following this
policy in Antipolo Realty Corporation v. National Housing
Authority, 9 the Court sustained the competence of the
respondent administrative body, in the exercise of the exclusive
jurisdiction vested in it by PD No. 957 and PD No. 1344, to
determine the rights of the parties under a contract to sell a
subdivision lot.
It remains to state that, contrary to the contention of the
petitioner, the case of Tropical Homes v. National Housing
Authority 10 is not in point. We upheld in that case the
constitutionality of the procedure for appeal provided for in PD
No. 1344, but we did not rule there that the National Housing
Authority and not the Regional Trial Court had exclusive
jurisdiction over the cases enumerated in Section 1 of the said
decree. That is what we are doing now. LexLib
It is settled that any decision rendered without jurisdiction is a
total nullity and may be struck down at any time, even on appeal
before this Court. 11 The only exception is where the party
raising the issue is barred by estoppel, 12 which does not appear
in the case before us. On the contrary, the issue was raised as
early as in the motion to dismiss filed in the trial court by the
petitioner, which continued to plead it in its answer and, later, on
appeal to the respondent court. We have no choice, therefore,
notwithstanding the delay this decision will entail, to nullify the
proceedings in the trial court for lack of jurisdiction.
WHEREFORE, the challenged decision of the respondent court is
REVERSED and the decision of the Regional Trial Court of
Quezon City in Civil Case No. Q-36119 is SET ASIDE, without
prejudice to the filing of the appropriate complaint before the
Housing and Land Use Regulatory Board. No costs.
SO ORDERED.
||| (Solid Homes, Inc. v. Payawal, G.R. No. 84811, August 29,
1989)

[G.R. No. 164789. August 27, 2009.]

CHRISTIAN GENERAL ASSEMBLY, INC., petitioner, vs. SPS.
AVELINO C. IGNACIO and PRISCILLA T.
IGNACIO, respondents.

DECISION
BRION, J p:
We resolve in this Rule 45 petition the legal issue of whether an
action to rescind a contract to sell a subdivision lot that the buyer
found to be under litigation falls under the exclusive jurisdiction
of the Housing and Land Use Regulatory Board (HLURB).
In this petition, 1 Christian General Assembly, Inc. (CGA) prays
that we set aside the decision 2 issued by the Court of Appeals
(CA) in CA-G.R. SP No. 75717 that dismissed its complaint for
rescission filed with the Regional Trial Court (RTC) of Bulacan
for lack of jurisdiction, as well as the CA resolution 3 that denied
its motion for reconsideration.
FACTUAL ANTECEDENTS
The present controversy traces its roots to the case filed by CGA
against the Spouses Avelino and Priscilla Ignacio (respondents)
for rescission of their Contract to Sell before the RTC, Branch 14,
Malolos, Bulacan. The facts, drawn from the records and outlined
below, are not in dispute.
On April 30, 1998, CGA entered into a Contract to Sell a
subdivision lot 4 (subject property) with the respondents the
registered owners and developers of a housing subdivision known
as Villa Priscilla Subdivision located in Barangay Cutcut, Pulilan,
Bulacan. Under the Contract to Sell, CGA would pay
P2,373,000.00 for the subject property on installment basis; they
were to pay a down payment of P1,186,500, with the balance
payable within three years on equal monthly amortization
payments of P46,593.85, inclusive of interest at 24% per annum,
starting June 1998.
On August 5, 2000, the parties mutually agreed to amend the
Contract to Sell to extend the payment period from three to five
years, calculated from the date of purchase and based on the
increased total consideration of P2,706,600, with equal monthly
installments of P37,615.00, inclusive of interest at 24% per
annum, starting September 2000.
According to CGA, it religiously paid the monthly installments
until its administrative pastor discovered that the title covering the
subject property suffered from fatal flaws and defects. CGA
learned that the subject property was actually part of two
consolidated lots (Lots 2-F and 2-G Bsd-04-000829 [OLT]) that
the respondents had acquired from Nicanor
Adriano (Adriano) and Ceferino Sison (Sison), respectively.
Adriano and Sison were former tenant-beneficiaries of
Purificacion S. Imperial (Imperial) whose property in Cutcut,
Pulilan, Bulacan 5 had been placed under Presidential
Decree (PD) No. 27's Operation Land Transfer. 6 According to
CGA, Imperial applied for the retention of five hectares of her
land under Republic Act No. 6657, 7 which the Department of
Agrarian Reform (DAR) granted in its October 2, 1997
order (DAR Order). The DAR Order authorized Imperial to retain
the farm lots previously awarded to the tenant-beneficiaries,

including Lot 2-F previously awarded to Adriano, and Lot 2-G

Bsd-04-000829 awarded to Sison. On appeal, the Office of the
President 8 and the CA 9 upheld the DAR Order. Through the
Court's Resolution dated January 19, 2005 in G.R. No. 165650,
we affirmed the DAR Order by denying the petition for review of
the appellate decision.
Understandably aggrieved after discovering these circumstances,
CGA filed a complaint against the respondents before the RTC on
April 30, 2002. 10 CGA claimed that the respondents fraudulently
concealed the fact that the subject property was part of a property
under litigation; thus, the Contract to Sell was a rescissible
contract under Article 1381 of the Civil Code. CGA asked the
trial court to rescind the contract; order the respondents to return
the amounts already paid; and award actual, moral and exemplary
damages, attorney's fees and litigation expenses.
Instead of filing an answer, the respondents filed a motion to
dismiss asserting that the RTC had no jurisdiction over the
case. 11 Citing PD No. 957 12 and PD No. 1344, the respondents
claimed that the case falls within the exclusive jurisdiction of the
HLURB since it involved the sale of a subdivision lot. CGA
opposed the motion to dismiss, claiming that the action is for
rescission of contract, not specific performance, and is not among
the actions within the exclusive jurisdiction of the HLURB, as
specified by PD No. 957 and PD No. 1344. SHADcT
On October 15, 2002, the RTC issued an order denying the
respondents' motion to dismiss. The RTC held that the action for
rescission of contract and damages due to the respondents'
fraudulent misrepresentation that they are the rightful owners of
the subject property, free from all liens and encumbrances, is
outside the HLURB's jurisdiction.
The respondents countered by filing a petition for certiorari with
the CA. In its October 20, 2003 decision, the CA found merit in
the respondents' position and set the RTC order aside; the CA
ruled that the HLURB had exclusive jurisdiction over the subject
matter of the complaint since it involved a contract to sell a
subdivision lot based on the provisions of PD No. 957 and PD
No. 1344.
Contending that the CA committed reversible error, the CGA now
comes before the Court asking us to overturn the CA decision and
resolution.
THE PETITION
In its petition, CGA argues that the CA erred
(1) in applying Article 1191 of the Civil Code for breach of
reciprocal obligation, while the petitioner's action is for the
rescission of a rescissible contract under Article 1381 of the same
Code, which is cognizable by the regular court; and
(2) in holding that the HLURB has exclusive jurisdiction over the
petitioner's action by applying Antipolo Realty Corp. v. National
Housing Corporation 13 and other cited cases.
In essence, the main issue we are asked to resolve is which of the
two the regular court or the HLURB has exclusive
jurisdiction over CGA's action for rescission and damages.
According to CGA, the exclusive jurisdiction of the HLURB, as
set forth in PD No. 1344 and PD No. 957, is limited to cases

involving specific performance and does not cover actions for

rescission.
Taking the opposing view, respondents insist that since CGA's
case involves the sale of a subdivision lot, it falls under the
HLURB's exclusive jurisdiction.

THE COURT'S RULING

We find no merit in the petition and consequently affirm the CA
decision.
Development of the HLURB's jurisdiction

Executive Order No. 648 (EO 648), dated February 7, 1981,

transferred the regulatory and quasi-judicial functions of the NHA
to the Human Settlements Regulatory Commission (HSRC).
Section 8 of EO 648 provides:
SECTION 8. Transfer of Functions. The regulatory functions
of the National Housing Authority pursuant to Presidential
Decree Nos. 957, 1216, 1344 and other related laws are hereby
transferred to the Commission [Human Settlements Regulatory
Commission]. . . . . Among these regulatory functions are: 1)
Regulation of the real estate trade and business; . . . 11) Hear and
decide cases of unsound real estate business practices; claims
involving refund filed against project owners, developers, dealers,
brokers, or salesmen; and cases of specific performance.
Pursuant to Executive Order No. 90 dated December 17, 1986,
the HSRC was renamed as the HLURB. EaTCSA

The nature of an action and the jurisdiction of a tribunal are

determined by the material allegations of the complaint and the
law governing at the time the action was commenced. The
jurisdiction of the tribunal over the subject matter or nature of an
action is conferred only by law, not by the parties' consent or by
their waiver in favor of a court that would otherwise have no
jurisdiction over the subject matter or the nature of an
action. 14 Thus, the determination of whether the CGA's cause of
action falls under the jurisdiction of the HLURB necessitates a
closer examination of the laws defining the HLURB's jurisdiction
and authority. ITaESD
PD No. 957, enacted on July 12, 1976, was intended to closely
supervise and regulate the real estate subdivision and
condominium businesses in order to curb the growing number of
swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and operators.
As one of its "whereas clauses" states:
WHEREAS, reports of alarming magnitude also show cases of
swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and operators,
such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to different innocent
purchasers for value;
Section 3 of PD No. 957 granted the National Housing
Authority (NHA) the "exclusive jurisdiction to regulate the real
estate trade and business". Thereafter, PD No. 1344 was issued on
April 2, 1978 to expand the jurisdiction of the NHA to include the
following: CIDaTc
SECTION 1. In the exercise of its functions to regulate the real
estate trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing
Authority shall have exclusive jurisdiction to hear and decide
cases of the following nature:
A.Unsound real estate business practices;
B.Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C.Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or
salesman. HAaDTE

Rationale for HLURB's

extensive quasi-judicial powers
The surge in the real estate business in the country brought with it
an increasing number of cases between subdivision
owners/developers and lot buyers on the issue of the extent of the
HLURB's exclusive jurisdiction. In the cases that reached us, we
have consistently ruled that the HLURB has exclusive jurisdiction
over complaints arising from contracts between the subdivision
developer and the lot buyer or those aimed at compelling the
subdivision developer to comply with its contractual and statutory
obligations to make the subdivision a better place to live in. 15

We explained the HLURB's exclusive jurisdiction at length

in Sps. Osea v. Ambrosio, 16 where we said: aCITEH

Generally, the extent to which an administrative agency may

exercise its powers depends largely, if not wholly, on the
provisions of the statute creating or empowering such agency.
Presidential Decree (P.D.) No. 1344, "EMPOWERING THE
NATIONAL HOUSING AUTHORITY TO ISSUE WRIT OF
EXECUTION IN THE ENFORCEMENT OF ITS DECISION
UNDER Presidential Decree No. 957", clarifies and spells out the
quasi-judicial dimensions of the grant of jurisdiction to the
HLURB in the following specific terms:
SEC. 1.In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for
in Presidential Decree No. 957, the National Housing Authority
shall have exclusive jurisdiction to hear and decide cases of the
following nature:
A.Unsound real estate business practices;
B.Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C.Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, dealer, broker
or salesman. EDIaSH
The extent to which the HLURB has been vested with quasijudicial authority must also be determined by referring to the

terms of P.D. No. 957, "THE SUBDIVISION AND

CONDOMINIUM BUYERS' PROTECTIVE DECREE". Section
3 of this statute provides:
. . . National Housing Authority [now HLURB]. The National
Housing Authority shall have exclusive jurisdiction to regulate
the real estate trade and business in accordance with the
provisions of this Decree.
The need for the scope of the regulatory authority thus lodged in
the HLURB is indicated in the second, third and fourth
preambular paragraphs of PD 957 which provide:
WHEREAS, numerous reports reveal that many real estate
subdivision owners, developers, operators, and/or sellers have
reneged on their representations and obligations to provide and
maintain properly subdivision roads, drainage, sewerage, water
systems, lighting systems, and other similar basic requirements,
thus endangering the health and safety of home and lot buyers;

from the traditional allocation of governmental powers is justified

by expediency, or the need of the government to respond swiftly
and competently to the pressing problems of the modern world.
[Emphasis supplied.]
Another case Antipolo Realty Corporation v. NHA 17
explained the grant of the HLURB's expansive quasi-judicial
powers. We said:
In this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special
knowledge, experience and capability to hear and determine
promptly disputes on technical matters or essentially factual
matters, subject to judicial review in case of grave abuse of
discretion, has become well nigh indispensable. Thus, in 1984,
the Court noted that 'between the power lodged in an
administrative body and a court, the unmistakable trend has been
to refer it to the former'. ScaATD
xxx xxx xxx

WHEREAS, reports of alarming magnitude also show cases

of swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and operators,
such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to different innocent
purchasers for value;
xxx xxx xxx
WHEREAS, this state of affairs has rendered it imperative that
the real estate subdivision and condominium businesses be
closely supervised and regulated, and that penalties be imposed
on fraudulent practices and manipulations committed in
connection therewith.
The provisions of PD 957 were intended to encompass all
questions regarding subdivisions and condominiums. The
intention was aimed at providing for an appropriate government
agency, the HLURB, to which all parties aggrieved in the
implementation of provisions and the enforcement of contractual
rights with respect to said category of real estate may take
recourse. The business of developing subdivisions and
corporations being imbued with public interest and welfare, any
question arising from the exercise of that prerogative should be
brought to the HLURB which has the technical know-how on the
matter. In the exercise of its powers, the HLURB must commonly
interpret and apply contracts and determine the rights of private
parties under such contracts. This ancillary power is no longer a
uniquely judicial function, exercisable only by the regular courts.
As observed in C.T. Torres Enterprises, Inc. v. Hibionada:
The argument that only courts of justice can adjudicate claims
resoluble under the provisions of the Civil Code is out of step
with the fast-changing times. There are hundreds of
administrative bodies now performing this function by virtue of a
valid authorization from the legislature. This quasi-judicial
function, as it is called, is exercised by them as an incident of the
principal power entrusted to them of regulating certain activities
falling under their particular expertise. TEcAHI
In the Solid Homes case for example the Court affirmed the
competence of the Housing and Land Use Regulatory Board to
award damages although this is an essentially judicial power
exercisable ordinarily only by the courts of justice. This departure

In general, the quantum of judicial or quasi-judicial powers which

an administrative agency may exercise is defined in the enabling
act of such agency. In other words, the extent to which an
administrative entity may exercise such powers depends largely,
if not wholly on the provisions of the statute creating or
empowering such agency. In the exercise of such powers, the
agency concerned must commonly interpret and apply contracts
and determine the rights of private parties under such contracts,
One thrust of the multiplication of administrative agencies is
that the interpretation of contracts and the determination of
private rights thereunder is no longer a uniquely judicial function,
exercisable only by our regular courts. [Emphasis supplied.]
Subdivision cases under the
RTC's jurisdiction
The expansive grant of jurisdiction to the HLURB does not mean,
however, that all cases involving subdivision lots automatically
fall under its jurisdiction. As we said in Roxas v. Court of
Appeals: 18 aHTEIA
In our view, the mere relationship between the parties, i.e., that of
being subdivision owner/developer and subdivision lot buyer,
does not automatically vest jurisdiction in the HLURB. For an
action to fall within the exclusive jurisdiction of the HLURB, the
decisive element is the nature of the action as enumerated in
Section 1 of P.D. 1344. On this matter, we have consistently held
that the concerned administrative agency, the National Housing
Authority (NHA) before and now the HLURB, has jurisdiction
over complaints aimed at compelling the subdivision developer to
comply with its contractual and statutory obligations.
xxx xxx xxx
Note particularly pars. (b) and (c) as worded, where the HLURB's
jurisdiction concerns cases commenced by subdivision lot or
condominium unit buyers. As to par. (a), concerning "unsound
real estate practices", it would appear that the logical complainant
would be the buyers and customers against the sellers
(subdivision owners and developers or condominium builders and
realtors), and not vice versa. [Emphasis supplied.] ACcHIa
Pursuant to Roxas, we held in Pilar Development Corporation v.
Villar 19 and Suntay v. Gocolay 20 that the HLURB has no
jurisdiction over cases filed by subdivision or condominium

owners or developers against subdivision lot or condominium unit

buyers or owners. The rationale behind this can be found in the
wordings of Sec. 1, PD No. 1344, which expressly qualifies that
the cases cognizable by the HLURB are those instituted by
subdivision or condomium buyers or owners against the project
developer or owner. This is also in keeping with the policy of the
law, which is to curb unscrupulous practices in the real estate
trade and business. 21
Thus, in the cases of Fajardo Jr. v. Freedom to Build,
Inc., 22 and Cadimas v. Carrion, 23 we upheld the RTC's
jurisdiction even if the subject matter was a subdivision lot since
it was the subdivision developer who filed the action against the
buyer for violation of the contract to sell. HCaDIS
The only instance that HLURB may take cognizance of a case
filed by the developer is when said case is instituted as a
compulsory counterclaim to a pending case filed against it by the
buyer or owner of a subdivision lot or condominium unit. This
was what happened in Francel Realty Corporation v.
Sycip, 24 where the HLURB took cognizance of the developer's
claim against the buyer in order to forestall splitting of causes of
action.
Obviously, where it is not clear from the allegations in the
complaint that the property involved is a subdivision lot, as
in Javellana v. Hon. Presiding Judge, RTC, Branch 30,
Manila, 25 the case falls under the jurisdiction of the regular
courts and not the HLURB. Similarly, in Spouses Dela Cruz v.
Court of Appeals, 26 we held that the RTC had jurisdiction over a
case where the conflict involved a subdivision lot buyer and a
party who owned a number of subdivision lots but was not
himself the subdivision developer.HDTSCc
The Present Case
In the present case, CGA is unquestionably the buyer of a
subdivision lot from the respondents, who sold the property in
their capacities as owner and developer. As CGA stated in its
complaint:
2.01Defendants are the registered owners and developers of a
housing subdivision presently known as Villa Priscilla
Subdivision located at Brgy. Cutcut, Pulilan, Bulacan;

2.02On or about April 30, 1998, the plaintiff thru its

Administrative Pastor bought from defendants on installment
basis a parcel of land designated at Lot 1, Block 4 of the said
Villa Priscilla Subdivision . . .
xxx xxx xxx
2.04At the time of the execution of the second Contract to Sell
(Annex "B"), Lot 1, Block 4 of the Villa Priscilla Subdivision was
already covered by Transfer Certificate of Title No. T-127776 of
the Registry of Deeds of Quezon City in the name of Iluminada T.
Soneja, married to Asterio Soneja (defendant Priscilla T. Ignacio's
sister and brother-in-law) and the defendants as co-owners, but
the latter represented themselves to be the real and absolute
owners thereof, as in fact it was annotated in the title that they
were empowered to sell the same. Copy of TCT No. T-127776 is
hereto attached and made part hereof as Annex "C". AIHaCc

2.05Plaintiff has been religiously paying the agreed monthly

installments until its Administrative Pastor discovered recently
that while apparently clean on its face, the title covering the
subject lot actually suffers from fatal flaws and defects as it is
part of the property involved in litigation even before the original
Contract to Sell (Annex "A"), which defendants deliberately and
fraudulently concealed from the plaintiff;
2.06As shown in the technical description of TCT No. T-127776
(Annex "C"), it covers a portion of consolidated Lots 2-F and 2-G
Bsd-04-000829 (OLT), which were respectively acquired by
defendants from Nicanor Adriano and Ceferino Sison, former
tenants-beneficiaries of Purificacion S. Imperial, whose property
at Cutcut, Pulilan, Bulacan originally covered by TCT No.
240878 containing an area of 119,431 square meters was placed
under Operation Land Transfer under P.D. No. 27;
2.07Said Purificacion S. Imperial applied for retention of five (5)
hectares of her property at Cutcut, Pulilan, Bulacan under Rep.
Act No. 6657 and the same was granted by the Department of
Agrarian Reform (DAR) to cover in whole or in part farm lots
previously awarded to tenants-beneficiaries, including inter alia
Nicanor Adriano's Lot 2-F and Ceferino Sison's Lot 2-G Bsd-04000829 (OLT). EcTDCI
xxx xxx xxx
2.08Said order of October 2, 1997 was affirmed and declared
final and executory, and the case was considered closed, as in fact
there was already an Implementing Order dated November 10,
1997.
xxx xxx xxx
3.03As may thus be seen, the defendants deliberately and
fraudulently concealed from the plaintiff that fact that the parcel
of land sold to the latter under the Contract to Sell (Annexes "A"
and "B") is part of the property already under litigation and in fact
part of the five-hectare retention awarded to the original owner,
Purificacion S. Imperial.
xxx xxx xxx
3.05Plaintiff is by law entitled to the rescission of the Contracts to
Sell (Annexes "A" and "B") by restitution of what has already
been paid to date for the subject property in the total amount of
P2,515,899.20, thus formal demand therefor was made on the
defendants thru a letter dated April 5, 2002, which they received
but refused to acknowledge receipt. Copy of said letter is hereto
attached and made part hereof as Annex "J". 27 [Emphasis
supplied.] EITcaD
From these allegations, the main thrust of the CGA complaint is
clear to compel the respondents to refund the payments
already made for the subject property because the respondents
were selling a property that they apparently did not own. In other
words, CGA claims that since the respondents cannot comply
with their obligations under the contract, i.e., to deliver the
property free from all liens and encumbrances, CGA is entitled to
rescind the contract and get a refund of the payments already
made. This cause of action clearly falls under the actions
contemplated by Paragraph (b), Section 1 of PD No. 1344, which
reads:
SEC. 1.In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for

in Presidential Decree No. 957, the National Housing Authority

shall have exclusive jurisdiction to hear and decide cases of the
following nature:
xxx xxx xxx
B.Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
We view CGA's contention that the CA erred in applying
Article 1191 of the Civil Code as basis for the contract's
rescission to be a negligible point. Regardless of whether the
rescission of contract is based on Article 1191 or 1381 of the
Civil Code, the fact remains that what CGA principally wants is a
refund of all payments it already made to the respondents. This
intent, amply articulated in its complaint, places its action within
the ambit of the HLURB's exclusive jurisdiction and outside the
reach of the regular courts. Accordingly, CGA has to file its
complaint before the HLURB, the body with the proper
jurisdiction.
WHEREFORE, premises considered, we DENY the petition
and AFFIRM the October 20, 2003 Decision of the Court of
Appeals in CA G.R. SP No. 75717 dismissing for lack of
jurisdiction the CGA complaint filed with the RTC, Branch 14 of
Malolos, Bulacan. EDCcaS
SO ORDERED.
||| (Christian General Assembly, Inc. v. Spouses Ignacio, G.R. No.
164789, August 27, 2009)

[G.R. No. 106498. June 28, 1993.]

CRUZ, J p:

LOLITA DADUBO, petitioner, vs. CIVIL SERVICE

COMMISSION and the DEVELOPMENT BANK OF THE
PHILIPPINES, respondents.

Petitioner Lolita A. Dadubo, Senior Accounts Analyst and

Rosario B. Cidro, Cash Supervisor, of the Development Bank of
the Philippines, Borongan Branch were administratively charged
with conduct prejudicial to the best interest of the service. 1 The
charges were based on reports on the unposted withdrawal of
P60,000.00 from Savings Account No. 87-692 in the name of Eric
Tiu, Edgar Tiu, and/or Pilar Tiu. LLjur

Francisco P. Duran for petitioner.

SYLLABUS
1. CONSTITUTIONAL LAW; CIVIL SERVICE
COMMISSION; FINDINGS OF FACTS OF
ADMINISTRATIVE BODIES; CONTROLLING ON THE
REVIEWING AUTHORITY IF BASED ON SUBSTANTIAL
EVIDENCE. The rule is that the findings of fact of
administrative bodies, if based on substantial evidence, are
controlling on the reviewing authority. It is settled that it is not for
the appellate court to substitute it own judgment for that of the
administrative agency on the sufficiency of the evidence and the
credibility of the witnesses. Administrative decisions on matters
within their jurisdiction are entitled to respect and can only be set
aside on proof of grave abuse of discretion, fraud or error of law.
2. PETITIONER'S INVOCATION OF DUE PROCESS IS
WITHOUT MERIT; REASON. The petitioner's invocation of
due process is without merit. Her complaint that she was not
sufficiently informed of the charges against her has no basis.
While the rules governing judicial trials should be observed as
much as possible, their strict observance is not indispensable in
administrative cases. As this Court has held, "the standard of due
process that must be met in administrative tribunals allows a
certain latitude as long as the element of fairness is not ignored."
3. THE CHARGE IN AN ADMINISTRATIVE CASE; THE
ALLEGATION OF THE ACTS COMPLAINED OF IS
CONTROLLING, NOT THE DESIGNATION OF THE
OFFENSE. It is true that the petitioner was formally charged
with conduct prejudicial to the best interest of the bank and not
specifically with embezzlement. Nevertheless, the allegations and
the evidence presented sufficiently proved her guilt of
embezzlement of bank funds, which is unquestionably prejudicial
to the best interest of the bank. The charge against the respondent
in an administrative case need not de 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, not the
designation of the offense.
4. THE CONSTITUTIONAL REQUIREMENT TO STATE
CLEARLY AND DISTINCTLY THE FACTS AND THE LAW
ON WHICH A DECISION IS BASED; APPLIES ONLY TO
COURTS OF JUSTICE AND NOT TO ADMINISTRATIVE
BODIES LIKE THE CIVIL SERVICE COMMISSION. We
must also dismiss the petitioner's complaint that CSC Resolution
No. 92-878 failed to comply with the constitutional requirement
to state clearly and distinctly the facts and the law on which a
decision is based. We have held that this provision applies only to
courts of justice and not to administrative bodies like the Civil
Service Commission. In any event, there was an earlier statement
of the facts and the law involved in the decision rendered by the
MSPB dated February 28, 1990, which affirmed DBP's decision
to dismiss the petitioner. In both decisions, the facts and the law
on which they were based were clearly and distinctly stated.
DECISION

The formal investigations revealed that in the morning of August

13, 1987, Erlinda Veloso, authorized representative of the Tius,
presented an undated withdrawal slip for P60,000.00. 2 Dadubo,
as acting teller, prepared the corresponding ticket and voucher in
the name of the cash supervisor, Rosario Cidro. Dadubo initialed
the withdrawal slip, ticket and voucher, all dated August 13,
1987, and passed on to Cidro all the documents on the said
transaction. These were then forwarded to the accountant,
Reynaldo Dorado, who signed the voucher ledger card and
passbook, Babaylon initialed the withdrawal slip and returned the
documents to Dorado, who approved the withdrawal and
thereafter disbursed the P60,000.00 to Veloso. The Received
payment portion of the withdrawal slip was signed by Veloso but
Cidro, who disbursed the amount, failed to initial the passbook.
After banking hours, another withdrawal slip was presented by
Feliciano Bugtas, Jr., also an employee of the Tius. 3 This was
the second P60,000.00 withdrawal. Veloso did not know about it.
The withdrawal slip was processed and approved on the same
day, August 13, 1987. The space Posted by was initialed by
Babaylon but no posting was actually made because the passbook
was not presented. While the withdrawal slip was dated August
13, 1987, all other supporting documents were dated August 14,
1987, this being a withdrawal after banking hours (ABH).
The following day, August 14, 1987, prior to the payment of the
ABH withdrawal, Veloso presented another undated withdrawal
slip for P60,000.00. 4 This was the third P60,000.00 withdrawal.
The withdrawal slip was received by Dorado, who handed it to
Dadubo. At that time, Cidro was encashing the check at PNB to
satisfy the ABH withdrawal. When she returned from the bank,
she paid this withdrawal to Veloso, who thought that what she
was collecting was the P60,000.00 corresponding to the
withdrawal slip she presented that morning.
When Dadubo informed Cidro about the third withdrawal, till
money of P100,000.00 was made to service it. Prior to the
payment of the third P60,000.00 withdrawal, Veloso came back
and presented another withdrawal slip for P40,000.00. 5 The
petitioner claimed she disbursed P100,000.00 to Veloso, covering
the third P60,000.00 and the P40,000.00 withdrawals. On the
other hand, Veloso testified that she received only P40,000.00
from the petitioner. She acknowledged receipt of the amount by
signing the withdrawal slip and indicating opposite her signature
the amount of P40,000.00.
That left the balance of P60,000.00 unaccounted for and directly
imputable to Dadubo.
On the basis of these findings, DBP found Dadubo guilty of
dishonesty for embezzlement of bank funds. She was penalized
with dismissal from the service. 6 Cidro was adjudged guilty of
gross neglect of duty and fined in an amount equivalent to one
month basic salary, payable through salary deductions in not
more than 12 installments.

Dadubo appealed to the Merit Systems Protection Board

(MSPB), 7 which affirmed the decision of the DBP, declaring as
follows:
There is nothing in the records to show that the Senior Manager,
Personnel Services and Vice-Chairman, both of the DBP, abused
their discretion in deciding the case against the appellant or that
their decision was made and attended with arbitrariness or
unfairness. To all intents and purposes, the ensuing decision was
a necessary consequence of the evidence.
However, DBP was reversed by the Civil Service Commission in
its Resolution No. 91-642, dated May 21, 1991, 8 which reduced
Dadubo's penalty to suspension for six months on the ground that:
Although Dadubo made alterations on the dates in the Ledger
Card from August 13 to August 14, the fact remains that the bank
was defrauded on account of said ABH withdrawal (for) which
Cidro is held responsible and accordingly found guilty of Gross
Neglect of Duty and Inefficiency and Incompetence in the
Performance of Official Duty. It was also Dadubo who reported
on the irreconcilable P60,000.00. The most that Dadubo could be
charged with is willful violation of office regulation when she
undertook reconciliation for under the Bank Manual the tellers are
not allowed access to the savings account ledger cards.
Respondent DBP moved for reconsideration. On July 16, 1992,
the Commission acting favorably on the motion, promulgated
Resolution No. 92-878 9 affirming the earlier findings of the DBP
as to Dadubo's guilt, thus.
The records reveal that Dadubo admitted in her Answer that she
changed entry of the date August 13 to 14 in the ledger in the
course of her reconciliation which she was advised not to do.
xxx xxx xxx
This act of admission needs no further elaboration to prove that
Dadubo is guilty of the charge. such admission is however treated
as a mitigating circumstance which is offset by the aggravating
circumstance of taking advantage of her official position. There is
no reason for her to change or alter entries in the ledger unless she
intends to benefit therefrom or to conceal some facts.
Further, it should be noted that the report was made only on
September 28, 1987 (the date the report on reconciliation was
submitted to the Regional Office). It should be emphasized as
earlier stated that Dadubo was not authorized to reconcile the
subsidiary ledger cards for the period ending August 20, 1987.
Hence, as emphatically stated in the MSPB decision, ". . .
respondent Dadubo manipulated the bank records to conceal the
offense which constituted the act of dishonesty."
The opinion of an acting Internal Audit Office, whose report was
among the preliminary findings considered in the investigation of
the case, is not conclusive as there are other available and
convincing evidence to prove the guilt of Dadubo.
Dadubo has brought her case to this Court in this petitioner
for certiorari. She claims that CSC Resolution No. 92-878 failed
to comply with the constitutional requirement to state clearly and
distinctly the facts and the law on which the decision is based;
CSC Resolution No. 92-878 conflicts with the findings of fact in
CSC Resolution No. 91-642; the Commission manifestly
overlooked or disregarded certain relevant facts not disputed by

the parties; and it based its conclusions entirely on speculations,

surmises or conjectures.
Required to comment, the Solicitor General argued that CSC
Resolution No. 92-878 did not need to restate the legal and
factual bases of the original decision in CSC-MSPB No. 497
which already explained the relevant facts and the applicable law.
The petitioner had admitted that she changed the entry of the
dates in the subsidiary ledger card from August 13 to 14 in the
course of her reconciliation work although she was not authorized
to do this. This admission, along with the other evidence
presented during the investigation in the bank, proved Dadubo's
guilt. Moreover, the affidavit of Albert C. Ballicud was
inadmissible in evidence because he was never subjected to crossexamination.

The petitioner's challenges are mainly factual. The rule is that the
findings of fact of administrative bodies, if based on substantial
evidence, are controlling on the reviewing authority. 10 It is
settled that it is not for the appellate court to substitute it own
judgment for that of the administrative agency on the sufficiency
of the evidence and the credibility of the
witnesses. 11 Administrative decisions on matters within their
jurisdiction are entitled to respect and can only be set aside on
proof of grave abuse of discretion, fraud or error of law. 12 None
of these vices has been shown in this case.
The petitioner's invocation of due process is without merit. Her
complaint that she was not sufficiently informed of the charges
against her has no basis. While the rules governing judicial trials
should be observed as much as possible, their strict observance is
not indispensable in administrative cases. 13 As this Court has
held, "the standard of due process that must be met in
administrative tribunals allows a certain latitude as long as the
element of fairness is not ignored." 14
The essence of due process is distilled in the immortal cry of
Themistocles to Eurybiades: "Strike, but hear me first!" Less
dramatically, it simply connotes an opportunity to be heard. The
petitioner had several opportunities to be heard and to present
evidence that she was not guilty of embezzlement but only of
failure to comply with the tellering procedure. Not only did she
testify at her formal investigation but she also filed a motion for
reconsideration with the DBP, then appealed to the Merit System
Protection Board (MSPB), and later elevated the case to the Civil
Service Commission. Having been given all these opportunities to
be heard, which she fully availed of, she cannot now complain
that she was denied due process.
Appreciation of the evidence submitted by the parties was, to
repeat, the prerogative of the administrative body, subject to
reversal only upon a clear showing of arbitrariness. The rejection
of the affidavit of Ballicud, for example, was not improper
because there was nothing in that document showing that the
petitioner did not embezzle the P60,000.00.
It is true that the petitioner was formally charged with conduct
prejudicial to the best interest of the bank and not specifically
with embezzlement. Nevertheless, the allegations and the
evidence presented sufficiently proved her guilt of embezzlement
of bank funds, which is unquestionably prejudicial to the best
interest of the bank.

The charge against the respondent in an administrative case need

not de 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, not the designation of the offense. 15
We must also dismiss the petitioner's complaint that CSC
Resolution No. 92-878 failed to comply with the constitutional
requirement to state clearly and distinctly the facts and the law on
which a decision is based. We have held that this provision
applies only to courts of justice and not to administrative bodies
like the Civil Service Commission. 16 In any event, there was an
earlier statement of the facts and the law involved in the decision
rendered by the MSPB dated February 28, 1990, which affirmed
DBP's decision to dismiss the petitioner. In both decisions, the
facts and the law on which they were based were clearly and
distinctly stated.
It is worth adding that inasmuch as Civil Service Resolution No.
92-878 was rendered only to resolve DBP's motion for
reconsideration, it was not really necessary to restate the factual
and legal bases for the said decisions. Even resolutions issued by
this Court do not need to conform to the first paragraph of Article
VIII, Section 14, of the Constitution, for reasons extensively
discussed in Borromeo v. Court of Appeals 17 and other
subsequent cases. 18
We find no justification to nullify or modify the questioned
resolution. It would perhaps have been more thorough if certain
other officers of the bank had been also investigated for their part
in the anomalous transaction. But that matter is not before this
Court and cannot be resolved by us at this time.
WHEREFORE, the petitioner is DISMISSED for lack of a clear
showing of grave abuse of discretion on the part of the Civil
Service Commission in issuing the questioned resolutions. Costs
against the petitioner.
SO ORDERED.
||| (Dadubo v. CSC, G.R. No. 106498, June 28, 1993)

[G.R. No. L-30637. July 16, 1987.]

LIANGA BAY LOGGING, CO., INC., petitioner, vs. HON.
MANUEL LOPEZ ENAGE, in his capacity as Presiding Judge of
Branch II of the Court of First Instance of Agusan and AGO
TIMBER CORPORATION, respondents.
SYLLABUS
1. ADMINISTRATIVE LAW; REVISED ADMINISTRATIVE
CODE; BUREAU OF FORESTRY; VESTED WITH THE
JURISDICTION AND AUTHORITY OVER DEMARCATION
OF ALL PUBLIC FOREST AND FOREST RESERVES.
Respondent Judge erred in taking cognizance of the complaint
filed by respondent Ago, asking for the determination anew of the
correct boundary line of its licensed timber area, for the same
issue had already been determined by the Director of Forestry, the
Secretary of Agriculture and Natural Resources and the Office of
the President, administrative officials under whose jurisdictions
the matter properly belongs. Section 1816 of the Revised
Administrative Code vests in the Bureau of Forestry, the
jurisdiction and authority over the demarcation, protection,
management, reproduction, reforestation, occupancy, and use of
all public forests and forest reserves and over the granting of
licenses for game and fish, and for the taking of forest products,
including stone and earth therefrom. The Secretary of Agriculture
and Natural Resources, as department head, may repeal or modify
the decision of the Director of Forestry when advisable in the
public interests, whose decision is in turn appealable to the Office
of the President.
2. ID.; ID.; ID.; ID.; COURTS OF JUSTICE DEVOID OF
JURISDICTION TO TAKE COGNIZANCE PURELY
ADMINISTRATIVE MATTERS. In giving due course to the
complaint below, the respondent court would necessarily have to
assess and evaluate anew all the evidence presented in the
administrative proceedings, which is beyond its competence and
jurisdiction. For the respondent court to consider and weigh again
the evidence already presented and passed upon by said officials
would be to allow it to substitute its judgment for that of said
officials who are in a better position to consider and weigh the
same in the light of the authority specifically vested in them by
law. Such a posture cannot be entertained, for it is a well-settled
doctrine that the courts of justice will generally not interfere with
purely administrative matters which are addressed to the sound
discretion of government agencies and their expertise unless there
is a clear showing that the latter acted arbitrarily or with grave
abuse of discretion or when they have acted in a capricious and
whimsical manner such that their action may amount to an excess
or lack of jurisdiction.
3. REMEDIAL LAW; EVIDENCE; FINDINGS OF
ADMINISTRATIVE BODIES SHALL NOT BE DISTURBED
ON APPEAL. A doctrine long recognized is that where the
law confines in an administrative office the power to determine
particular questions or matters, upon the facts to be presented, the
jurisdiction of such office shall prevail over the courts. 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 of such findings are supported by substantial
evidence. As recently stressed by the Court, "in this era of

clogged court dockets, the need for specialized administrative

boards or commissions with the special knowledge, experience
and capability to hear and determine promptly disputes on
technical matters or essentially factual matters, subject to judicial
review in case of grave abuse of discretion, has become well nigh
indispensable."
4. ID.; CIVIL PROCEDURE; DRAFT OF DECISION DOES
NOT OPERATE AS A JUDGMENT ON A CASE UNTIL THE
SAME IS DULY SIGNED AND DELIVERED TO THE CLERK
FOR FILING AND PROMULGATION. It is elementary that
a draft of a decision does not operate as judgment on a case until
the same is duly signed and delivered to the clerk for filing and
promulgation. A decision cannot be considered as binding on the
parties until its promulgation. Respondent should be aware of this
rule. In still another case of Ago v. Court of Appeals, (where
herein respondent Ago was the petitioner) the Court held that,
"While it is to be presumed that the judgment that was dictated in
open court will be the judgment of the court, the court may still
modify said order as the same is being put into writing. And even
if the order or judgment has already been put into writing and
signed, while it has not yet been delivered to the clerk for filing, it
is still subject to amendment or change by the judge. It is only
when the judgment signed by the judge is actually filed with the
clerk of court that it becomes a valid and binding judgment. Prior
thereto, it could still be subject to amendment and change and
may not, therefore, constitute the real judgment of the court."
5. ID.; EVIDENCE; BURDEN OF PROOF AND
PRESUMPTION; SUSPICION AND CONJECTURES CAN
NOT OVERCOME THE PRESUMPTION OF REGULARITY
AND LEGALITY OF OFFICIAL ACTIONS. The mere
suspicion of respondent that there were anomalies in the nonrelease of the Leido "decision" allegedly denying petitioner's
motion for reconsideration and the substitution thereof by the
Duavit decision granting reconsideration does not justify judicial
review. Beliefs, suspicions and conjectures cannot overcome the
presumption of regularity and legality of official actions. It is
presumed that an official of a department performs his official
duties regularly. It should be noted, furthermore, that as
hereinabove stated with regard to the case history in the Office of
the President, Ago's motion for reconsideration of the Duavit
decision dated August 9, 1968 was denied in the Order dated
October 2, 1968 and signed by Assistant Executive Secretary
Leido himself (who thereby joined in the reversal of his own first
decision dated June 16, 1966 and signed by himself).
6. ADMINISTRATIVE LAW; ORDINARY TIMBER
LICENSE; OPERATES AS A CONTRACT BETWEEN THE
GOVERNMENT AND THE GRANTEE; TERMS AND
STIPULATIONS THEREOF, NOT SUBJECT TO
QUESTIONING BY GRANTEE. The Ordinary Timber
License No. 1323-'60 [New] which approved the transfer to
respondent Ago of the 4,000 hectares from the forest area
originally licensed to Narciso Lansang, stipulates certain
conditions, terms and limitations, among which were: that the
decision of the Director of Forestry as to the exact location of its
licensed areas is final; that the license is subject to whatever
decision that may be rendered on the boundary conflict between
the Lianga Bay Logging Co. and the Ago Timber Corporation;
that the terms and conditions of the license are subject to change
at the discretion of the Director of Forestry and the license may
be made to expire at an earlier date. Under Section 1834 of the
Revised Administrative Code, the Director of Forestry, upon
granting any license, may prescribe and insert therein such terms,
conditions, and limitations, not inconsistent with law, as may be

deemed by him to be in the public interest. The license operates

as a contract between the government and respondent.
Respondent, therefore, is estopped from questioning the terms
and stipulation thereof.
7. ID.; PROVISIONAL REMEDIES; INJUNCTION;
ISSUANCE THEREOF BY COURT OF FIRST INSTANCE
LIMITED TO ACTS COMMITTED WITHIN ITS
TERRITORIAL BOUNDARIES. Clearly, the injunctive writ
should not have been issued. The provisions of law explicitly
provide that Courts of First Instance shall have the power to issue
writ of injunction, mandamus, certiorari, prohibition, quo
warranto and habeas corpus in their respective places, if the
petition filed relates to the acts or omissions of an inferior court,
or of a corporation, board, officer or person, within their
jurisdiction. The jurisdiction or authority of the Court of First
Instance to control or restrain acts by means of the writ of
injunction is limited only to acts which are being committed
within the territorial boundaries of their respective provinces or
districts except where the sole issue is the legality of the decision
of the administrative officials.
8. ID.; ID.; ID.; ID.; EXCEPTION. A different rule applies
only when the point in controversy relates solely to a
determination of a question of law whether the decision of the
respondent administrative officials was legally correct or not. We
thus declared in Director of Forestry v. Ruiz: "In Palanan Lumber
& Plywood Co., Inc., supra, we reaffirmed the rule of nonjurisdiction of courts of first instance to issue injunctive writs in
order to control acts outside of their premises or districts. We
went further and said that when the petition filed with the courts
of first instance not only questions the legal correctness of the
decision of administrative officials but also seeks to enjoin the
enforcement of the said decision, the court could not validly issue
the writ of injunction when the officials sought to be restrained
from enforcing the decision are not stationed within its territory.
9. ID.; ID.; ID.; WRIT IN EXCESS OF JURISDICTION, VOID.
The writ of preliminary injunction issued by respondent court
is furthermore void, since it appears that the forest area described
in the injunctive writ includes areas not licensed to respondent
Ago. The forest area referred to and described therein comprises
the whole area originally licensed to Narciso Lansang under the
earlier Ordinary Timber License No. 584-52. Only a portion of
this area was in fact transferred to respondent Ago as described in
its Ordinary Timber License No. 1323-'60(New).
10. ID.; SPECIAL CIVIL ACTION; CERTIORARI; GRAVE
ABUSE OF DISCRETION; REFUSAL TO DISMISS A CASE
ON APPARENT LACK OF JURISDICTION AND ISSUING
WRIT OF INJUNCTION. It is abundantly clear that
respondent court has no jurisdiction over the subject matter of
Civil Case No. 1253 of the Court of First Instance of Agusan nor
has it jurisdiction to decide on the common boundary of the
licensed areas of petitioner Lianga and respondent Ago, as
determined by respondents public officials against whom no case
of grave abuse of discretion has been made. Absent a cause of
action and jurisdiction, respondent Judge acted with grave abuse
of discretion and excess, if not lack, of jurisdiction in refusing to
dismiss the case under review and in issuing the writ of
preliminary injunction enjoining the enforcement of the final
decision dated August 9, 1968 and the order affirming the same
dated October 2, 1968 of the Office of the President.

DECISION
TEEHANKEE, C.J p:
The Court grants the petition for certiorari and prohibition and
holds that respondent judge, absent any showing of grave abuse
of discretion, has no competence nor authority to review anew the
decision in administrative proceedings of respondents public
officials (director of forestry, secretary of agriculture and natural
resources and assistant executive secretaries of the Office of the
President) in determining the correct boundary line of the licensed
timber areas of the contending parties. The Court reaffirms the
established principle that findings of fact by an administrative
board or agency or official, following a hearing, are binding upon
the courts and will not be disturbed except where the board,
agency and/or official(s) have gone beyond their statutory
authority, exercised unconstitutional powers or clearly acted
arbitrarily and without regard to their duty or with grave abuse of
discretion.
The parties herein are both forest concessionaries whose licensed
areas are adjacent to each other. The concession of petitioner
Lianga Bay Logging Corporation Co., Inc. (hereinafter referred to
as petitioner Lianga) as described in its Timber License
Agreement No. 49, is located in the municipalities of Tago,
Cagwait, Marihatag and Lianga, all in the Province of Surigao,
consisting of 110,406 hectares, more or less, while that of
respondent Ago Timber Corporation (hereinafter referred to as
respondent Ago) granted under Ordinary Timber License No.
1323-60 [New] is located at Los Arcos and San Salvador,
Province of Agusan, with an approximate area of 4,000 hectares.
It was a part of a forest area of 9,000 hectares originally licensed
to one Narciso Lansang under Ordinary Timber License No. 584'52.
Since the concessions of petitioner and respondent are adjacent to
each other, they have a common boundary the Agusan-Surigao
Provincial boundary whereby the eastern boundary of
respondent Ago's concession is petitioner Lianga's western
boundary. The western boundary of petitioner Lianga is described
as ". . . Corner 5, a point in the intersection of the Agusan-Surigao
Provincial boundary and Los Arcos-Lianga Road; thence
following Agusan-Surigao Provincial boundary in a general
northerly and northwesterly and northerly directions about 39,500
meters to Corner 6, a point at the intersection of the AgusanSurigao Provincial boundary and Nalagdao Creek . . ." The
eastern boundary of respondent Ago's concession is described as
". . . point 4, along the Agusan-Surigao boundary; thence
following Agusan-Surigao boundary in a general southeasterly
and southerly directions about 12,000 meters to point 5, a point
along Los Arcos-Lianga Road; . . ." 1
Because of reports of encroachment by both parties on each
other's concession areas, the Director of Forestry ordered a survey
to establish on the ground the common boundary of their
respective concession areas. Forester Cipriano Melchor undertook
the survey and fixed the common boundary as "Corner 5 of
Lianga Bay Logging Company at Km. 10.2 instead of Km. 9.7 on
the Lianga-Arcos Road and lines N90E, 21,000 meters; N12W,
21,150 meters; N40W, 3,000 meters; N31W, 2,800 meters;
N50W, 1,700 meters" which respondent Ago protested claiming
that "its eastern boundary should be the provincial boundary line
of Agusan-Surigao as described in Section 1 of Art. 1693 of the
Philippine Commission as indicated in the green pencil in the
attached sketch" of the areas as prepared by the Bureau of

Forestry. 2 The Director of Forestry, after considering the

evidence, found: LibLex

reinstating the decision, dated March 20, 1961, of the Director of

Forestry. 6

"That the claim of the Ago Timber Corporation portrays a line

(green line) far different in alignment with the line (red) as
indicated in the original License Control Map of this Office;

Respondent Ago filed a motion for reconsideration of the decision

dated August 9, 1968 of the Office of the President but after
written opposition of petitioner Lianga, the same was denied in an
order dated October 2, 1968, signed by then Assistant Executive
Secretary Jose J. Leido, Jr. 7

"That the claim of the Ago Timber Corporation (green line) does
not conform to the distance of 6,800 meters from point 3 to point
4 of the original description of the area of Narciso Lansang but
would project said line to a distance of approximately 13,800
meters;
"That to follow the claim of the Ago Timber Corporation would
increase the area of Narciso Lansang from 9,000 to 12,360
hectares;
"That to follow the claim of the Ago Timber Corporation would
reduce the area of the Lianga Bay Logging, Co., Inc. to 107,046
hectares instead of the area granted which is 110,406 hectares."
and ruled that "the claim of the Ago Timber Corporation runs
counter to the intentions of this Office is granting the license of
Mr. Narciso Lansang; and further, that it also runs counter to the
intentions of this Office in granting the Timber License
Agreement to the Lianga Bay Logging Co., Inc. The intentions of
this Office in granting the two licenses (Lansang and Lianga Bay
Logging Co., Inc.) are patently manifest in that distances and
bearings are the controlling factors. If mention was ever made of
the Agusan-Surigao boundary, as the common boundary line of
both licenses, this Office could not have meant the AgusanSurigao boundary as described under Section 1 of Act 1693 of the
Philippine Commission for were it so it could have been so easy
for this Office to mention the distance from point 3 to point 4 of
Narciso Lansang as approximately 13,800 meters. This cannot be
considered a mistake considering that the percentage of error
which is more or less 103% is too high an error to be committed
by an Office manned by competent technical men. The AgusanSurigao boundary as mentioned in the technical descriptions of
both licensees. is, therefore, patently an imaginary line based on
B.F. License Control Map. Such being the case, it is reiterated
that distance and bearings control the description where an
imaginary line exists. 3 The decision fixed the common boundary
of the licensed areas of the Ago Timber Corporation and Lianga
Bay Logging Co., Inc. as that indicated in red pencil of the sketch
attached to the decision.
In an appeal interposed by respondent Ago, docketed in the
Department of Agriculture and Natural Resources as DANR Case
No. 2268, the then Acting Secretary of Agriculture and Natural
Resources Jose Y. Feliciano, in a decision dated August 9, 1965
set aside the appealed decision of the Director of Forestry and
ruled that "(T)he common boundary line of the licensed areas of
the Ago Timber Corporation and the Lianga Bay Logging Co.,
Inc., should be that indicated by the green line on the same sketch
which had been made an integral part of the appealed decision." 4
Petitioner elevated the case to the Office of the President, where
in a decision dated June 16, 1966, signed by then Assistant
Executive Secretary Jose J. Leido, Jr., the ruling of the then
Secretary of Agriculture and Natural Resources was
affirmed. 5 On motion for reconsideration, the Office of the
President issued another decision dated August 9, 1968 signed by
then Assistant Executive Secretary Gilberto Duavit reversing and
overturning the decision of the then Acting Secretary of
Agriculture and Natural Resources and affirming in toto and

On October 21, 1968, a new action was commenced by Ago

Timber Corporation, as plaintiff, in the Court of First Instance of
Agusan, Branch II, docketed thereat as Civil Case No. 1253,
against Lianga Bay Logging Co., Inc., Assistant Executive
Secretaries Jose J. Leido, Jr. and Gilberto M. Duavit and Director
of Forestry, as defendants, for "Determination of Correct
Boundary Line of License Timber Areas and Damages with
Preliminary Injunction" reiterating once more the same question
raised and passed upon in DANR Case No. 2268 and insisting
that "a judicial review of such divergent administrative decisions
is necessary in order to determine the correct boundary line of the
licensed areas in question." 8
As prayed for, respondent judge issued a temporary restraining
order on October 28, 1968, on a bond of P20,000, enjoining the
defendants from carrying out the decision of the Office of the
President. The corresponding writ was issued the next day, or on
October 29, 1968. 9
On November 10, 1968, defendant Lianga (herein petitioner)
moved for dismissal of the complaint and for dissolution of the
temporary restraining order on grounds that the complaint states
no cause of action and that the court has no jurisdiction over the
person of respondent public officials and respondent corporation.
It also submitted its opposition to plaintiff's (herein respondent
prayer for the issuance of a writ of preliminary injunction. 10 A
supplemental motion was filed on December 6, 1968. 11
On December 19, 1968, the lower court issued an order denying
petitioner Lianga's motion to dismiss and granting the writ of
preliminary injunction prayed for by respondent Ago. 12 Lianga's
Motion for Reconsideration of the Order was denied on May 9,
1969. 13 Hence, this petition praying of the Court (a) to declare
that the Director of Forestry has the exclusive jurisdiction to
determine the common boundary of the licensed areas of
petitioners and respondents and that the decision of the Office of
the President dated August 9, 1968 is final and executory; (b) to
order the dismissal of Civil Case No. 1253 in the Court of First
Instance of Agusan; (c) to declare that respondent Judge acted
without jurisdiction or in excess of jurisdiction and with grave
abuse of discretion, amounting to lack of jurisdiction, in issuing
the temporary restraining order dated October 28, 1968 and
granting the preliminary injunction per its Order dated December
19, 1968; and (d) to annul the aforementioned orders.

After respondent's comments on the petition and petitioner's reply

thereto, this Court on June 30, 1969 issued a restraining order
enjoining in turn the enforcement of the preliminary injunction
and related orders issued by the respondent court in Civil Case
No. 1253. 14
The Court finds merit in the petition. prcd
Respondent Judge erred in taking cognizance of the complaint
filed by respondent Ago, asking for the determination anew of the

correct boundary line of its licensed timber area, for the same
issue had already been determined by the Director of Forestry, the
Secretary of Agriculture and Natural Resources and the Office of
the President, administrative officials under whose jurisdictions
the matter properly belongs. Section 1816 of the Revised
Administrative Code vests in the Bureau of Forestry, the
jurisdiction and authority over the demarcation, protection,
management, reproduction, reforestation, occupancy, and use of
all public forests and forest reserves and over the granting of
licenses for game and fish, and for the taking of forest products,
including stone and earth therefrom. The Secretary of Agriculture
and Natural Resources, as department head, may repeal or modify
the decision of the Director of Forestry when advisable in the
public interests, 15 whose decision is in turn appealable to the
Office of the President. 16
In giving due course to the complaint below, the respondent court
would necessarily have to assess and evaluate anew all the
evidence presented in the administrative proceedings, 17 which is
beyond its competence and jurisdiction. For the respondent court
to consider and weigh again the evidence already presented and
passed upon by said officials would be to allow it to substitute its
judgment for that of said officials who are in a better position to
consider and weigh the same in the light of the authority
specifically vested in them by law. Such a posture cannot be
entertained, for it is a well-settled doctrine that the courts of
justice will generally not interfere with purely administrative
matters which are addressed to the sound discretion of
government agencies and their expertise unless there is a clear
showing that the latter acted arbitrarily or with grave abuse of
discretion or when they have acted in a capricious and whimsical
manner such that their action may amount to an excess or lack of
jurisdiction. 18
A doctrine long recognized is that where the law confines in an
administrative office the power to determine particular questions
or matters, upon the facts to be presented, the jurisdiction of such
office shall prevail over the courts. 19
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 of such findings are
supported by substantial evidence. 20 As recently stressed by the
Court, "in this era of clogged court dockets, the need for
specialized administrative boards or commissions with the special
knowledge, experience and capability to hear and determine
promptly disputes on technical matters or essentially factual
matters, subject to judicial review in case of grave abuse of
discretion, has become well nigh indispensable." 21
The facts and circumstances in the instant case are similar to the
earlier case of Pajo, et al. v. Ago, et al. 22 (where therein
respondent Pastor Ago is the president of herein respondent Ago
Timber Corporation). In the said case, therein respondent Pastor
Ago, after an adverse decision of the Director of Forestry,
Secretary of Agriculture and Natural Resources and Executive
Secretary in connection with his application for renewal of his
expired timber licenses, filed with the Court of First instance of
Agusan a petition for certiorari, prohibition and damages with
preliminary injunction alleging that the rejection of his
application for renewal by the Director of Forestry and Secretary

of Agriculture and Natural Resources and its affirmance by the

Executive Secretary constituted an abuse of discretion and was
therefore illegal. The Court held that "there can be no question
that petitioner Director of Forestry has jurisdiction over the grant
or renewal of respondent Ago's timber license (Sec. 1816, Rev.
Adm. Code); that petitioner Secretary of Agriculture and Natural
Resources as department head, is empowered by law to affirm,
modify or reject said grant or renewal of respondent Ago's timber
license by petitioner Director of Forestry (Sec. 79[c], Rev. Adm.
Code); and that petitioner Executive Secretary, acting for and in
behalf and by authority of the President has, likewise, jurisdiction
to affirm, modify or reverse the orders regarding the grant or
renewal of said timber license by the two aforementioned
officials." The Court went on to say that, "(I)n the case of
Espinosa, et al. v. Makalintal, et al. (79 Phil. 134; 45 Off. Gaz.
712), we held that the powers granted to the Secretary of
Agriculture and Commerce (Natural Resources) by law regarding
the disposition of public lands such as granting of licenses,
permits, leases, and contracts or approving, rejecting, reinstating,
or cancelling applications or deciding conflicting applications, are
all executive and administrative in nature. It is a well-recognized
principle that purely administrative and discretionary functions
may not be interfered with by the courts. In general, courts have
no supervising power over the proceedings and actions of the
administrative departments of the government. This is generally
true with respect to acts involving the exercise of judgment or
discretion, and findings of act. Findings of fact by an
administrative board, agency or official, following a hearing, are
binding upon the courts and will not be disturbed except where
the board, agency or official has gone beyond his statutory
authority, exercised unconstitutional powers or clearly acted
arbitrarily and without regard to his duty or with grave abuse of
discretion. And we have repeatedly held that there is grave abuse
of discretion justifying the issuance of the writ of certiorari only
when there is capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. (Abad Santos v. Province of
Tarlac, 67 Phil. 480; Tan vs. People, 88 Phil. 609)"
Respondent Ago contends that the motion filed by petitioner
Lianga for reconsideration of the decision of the Office of the
President was denied in an alleged "decision" dated August 15,
1966, allegedly signed by then Assistant Executive Secretary Jose
J. Leido, Jr. that, "however, for some mysterious, unknown if not
anomalous reasons and/or illegal considerations, the `decision'
allegedly dated August 15, 1966 (Annex "D") was never
released" and instead a decision was released on August 9, 1968,
signed by then Assistant Executive Secretary Gilberto M. Duavit,
which reversed the findings and conclusions of the Office of the
President in its first decision dated June 16, 1966 and signed by
then Assistant Executive Secretary Leido. llcd
It is elementary that a draft of a decision does not operate as
judgment on a case until the same is duly signed and delivered to
the clerk for filing and promulgation. A decision cannot be
considered as binding on the parties until its
promulgation. 23 Respondent should be aware of this rule. In still
another case of Ago v. Court of Appeals, 24 (where herein
respondent Ago was the petitioner) the Court held that, "While it
is to be presumed that the judgment that was dictated in open
court will be the judgment of the court, the court may still modify
said order as the same is being put into writing. And even if the
order or judgment has already been put into writing and signed,
while it has not yet been delivered to the clerk for filing, it is still
subject to amendment or change by the judge. It is only when the
judgment signed by the judge is actually filed with the clerk of
court that it becomes a valid and binding judgment. Prior thereto,

it could still be subject to amendment and change and may not,

therefore, constitute the real judgment of the court."

districts 29 except where the sole issue is the legality of the

decision of the administrative officials. 30

Respondent alleges "that in view of the hopelessly conflicting

decisions of the administrative bodies and/or offices of the
Philippine government, and the important questions of law and
fact involved therein, as well as the well-grounded fear and
suspicion that some anomalous, illicit and unlawful
considerations had intervened in the concealment of the decision
of August 15, 1966 (Annex "D") of Assistant Executive Secretary
Gilberto M. Duavit, a judicial review of such divergent
administrative decisions is necessary in order to determine the
correct boundary line of the licensed areas in question and restore
the faith and confidence of the people in the actuations of our
public officials and in our system of administration of justice."

In the leading case of Palanan Lumber Plywood Co., Inc. v.

Arranz, 31 which involved a petition for certiorari and prohibition
filed in the Court of First Instance of Isabela against the same
respondent public officials as here and where the administrative
proceedings taken were similar to the case at bar, the Court laid
down the rule that: "We agree with the petitioner that the
respondent Court acted without jurisdiction in issuing a
preliminary injunction against the petitioners Executive Secretary,
Secretary of Agriculture and Natural Resources and the Director
of Forestry, who have their official residences in Manila and
Quezon City, outside of the territorial jurisdiction of the
respondent Court of First Instance of Isabela. Both the statutory
provisions and the settled jurisdiction of this Court unanimously
affirm that the extraordinary writs issued by the Court of First
Instance are limited to and operative only within their respective
provinces and districts."

The mere suspicion of respondent that there were anomalies in

the non-release of the Leido "decision" allegedly denying
petitioner's motion for reconsideration and the substitution thereof
by the Duavit decision granting reconsideration does not justify
judicial review. Beliefs, suspicions and conjectures cannot
overcome the presumption of regularity and legality of official
actions. 25 It is presumed that an official of a department
performs his official duties regularly. 26 It should be noted,
furthermore, that as hereinabove stated with regard to the case
history in the Office of the President, Ago's motion for
reconsideration of the Duavit decision dated August 9, 1968 was
denied in the Order dated October 2, 1968 and signed by
Assistant Executive Secretary Leido himself (who thereby joined
in the reversal of his own first decision dated June 16, 1966 and
signed by himself).

The Ordinary Timber License No. 1323-'60 [New] which

approved the transfer to respondent Ago of the 4,000 hectares
from the forest area originally licensed to Narciso Lansang,
stipulates certain conditions, terms and limitations, among which
were: that the decision of the Director of Forestry as to the exact
location of its licensed areas is final; that the license is subject to
whatever decision that may be rendered on the boundary conflict
between the Lianga Bay Logging Co. and the Ago Timber
Corporation; that the terms and conditions of the license are
subject to change at the discretion of the Director of Forestry and
the license may be made to expire at an earlier date. Under
Section 1834 of the Revised Administrative Code, the Director of
Forestry, upon granting any license, may prescribe and insert
therein such terms, conditions, and limitations, not inconsistent
with law, as may be deemed by him to be in the public interest.
The license operates as a contract between the government and
respondent. Respondent, therefore, is estopped from questioning
the terms and stipulation thereof.
Clearly, the injunctive writ should not have been issued. The
provisions of law explicitly provide that Courts of First Instance
shall have the power to issue writ of injunction, mandamus,
certiorari, prohibition, quo warranto and habeas corpus in their
respective places, 27 if the petition filed relates to the acts or
omissions of an inferior court, or of a corporation, board, officer
or person, within their jurisdiction. 28
The jurisdiction or authority of the Court of First Instance to
control or restrain acts by means of the writ of injunction is
limited only to acts which are being committed within the
territorial boundaries of their respective provinces or

A different rule applies only when the point in controversy relates

solely to a determination of a question of law whether the
decision of the respondent administrative officials was legally
correct or not. 32 We thus declared in Director of Forestry v.
Ruiz: 33 "In Palanan Lumber & Plywood Co., Inc., supra, we
reaffirmed the rule of non-jurisdiction of courts of first instance to
issue injunctive writs in order to control acts outside of their
premises or districts. We went further and said that when the
petition filed with the courts of first instance not only questions
the legal correctness of the decision of administrative officials but
also seeks to enjoin the enforcement of the said decision, the
court could not validly issue the writ of injunction when the
officials sought to be restrained from enforcing the decision are
not stationed within its territory. LLphil
"To recapitulate, insofar as injunctive or prohibitory writs are
concerned, the rule still stands that courts of first instance have
the power to issue writs limited to and operative only within their
respective provinces or districts."
The writ of preliminary injunction issued by respondent court is
furthermore void, since it appears that the forest area described in
the injunctive writ includes areas not licensed to respondent Ago.
The forest area referred to and described therein comprises the
whole area originally licensed to Narciso Lansang under the
earlier Ordinary Timber License No. 584-52. Only a portion of
this area was in fact transferred to respondent Ago as described in
its Ordinary Timber License No. 1323-'60[New].
It is abundantly clear that respondent court has no jurisdiction
over the subject matter of Civil Case No. 1253 of the Court of
First Instance of Agusan nor has it jurisdiction to decide on the
common boundary of the licensed areas of petitioner Lianga and
respondent Ago, as determined by respondents public officials
against whom no case of grave abuse of discretion has been
made. Absent a cause of action and jurisdiction, respondent Judge
acted with grave abuse of discretion and excess, if not lack, of
jurisdiction in refusing to dismiss the case under review and in
issuing the writ of preliminary injunction enjoining the
enforcement of the final decision dated August 9, 1968 and the
order affirming the same dated October 2, 1968 of the Office of
the President.
ACCORDINGLY, the petition for certiorari and prohibition is
granted. The restraining order heretofore issued by the Court
against enforcement of the preliminary injunction and related

orders issued by respondent judge is the case below is made

permanent and the respondent judge or whoever has taken his
place is hereby ordered to dismiss Civil Case No. 1253.
SO ORDERED.
||| (Lianga Bay Logging, Co., Inc. v. Enage, G.R. No. L-30637,
July 16, 1987)

THIRD DIVISION
[G.R. No. 102976. October 25, 1995.]
IRON AND STEEL AUTHORITY, petitioner, vs. THE COURT
OF APPEALS and MARIA CRISTINA FERTILIZER
CORPORATION, respondents.
The Solicitor General for petitioner. cdlex
Angara, Abello, Concepcion, Regala & Cruz for private
respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; WHO MAY BE
PARTIES TO A CIVIL ACTION. Rule 3, Section 1 of the
Rules of Court specifies who may be parties to a civil action.
Under this provision, it will be seen that those who can be parties
to a civil action may be broadly categorized into two (2) groups:
(a) those who are recognized as personsunder the law whether
natural, i.e., biological persons, on the one hand, or juridical
persons such as corporations, on the other hand; and (b) entities
authorized by law to institute actions.
2. ID.; ID.; ID.; THE REPUBLIC AS A CORPORATE BODY IS
VESTED WITH "LEGAL PERSONALITY." The Republic
itself is a body corporate and juridical person vested with the full
panoply of powers and attributes which are compendiously
described as "legal personality."
3. ID.; ID.; ID.; AN INCORPORATED AGENCY OR
INSTRUMENTALITY OF THE GOVERNMENT IS VESTED
WITH A DISTINCT JURIDICAL PERSONALITY. It is
common knowledge that other agencies or instrumentalities of the
Government of the Republic are cast in corporate form, that is to
say, are incorporated agencies or instrumentalities, sometimes
with and at other times without capital stock, and accordingly
vested with a juridical personality distinct from the personality of
the Republic.
4. POLITICAL LAW; GOVERNMENT AGENCIES OR
INSTRUMENTALITIES; INCORPORATED OR NONINCORPORATED; CONSEQUENCES OF THE EXPIRATION
OF STATUTORY TERM. It is worth noting that the term
"Authority" has been used to designate both incorporated and
non-incorporated agencies or instrumentalities of the
Government. When the statutory term of a nonincorporated agency expires, the powers, duties and functions as
well as the assets and liabilities of that agency revert back to, and
are re-assumed by, the Republic of the Philippines, in the absence
of special provisions of law specifying some other disposition
thereof such as, e.g., devolution or transmission of such powers,
duties, functions, etc. to some other identified successor agency
or instrumentality of the Republic of the Philippines. When the
expiring agency is anincorporated one, the consequences of such
expiry must be looked for, in the first instance, in the charter of
that agency and, by way of supplementation, in the provisions of
the Corporation Code. The procedural implications of the
relationship between an agent or delegate of the Republic of the
Philippines and the Republic itself are, at least in part, spelled out
in the Rules of Court. The general rule is, of course, that an action
must be prosecuted and defended in the name of the real party-ininterest. (Rule 3, Section 2) The Rules of Court at the same time
expressly recognize the role of representative parties.

5. CONSTITUTIONAL LAW; POWER OF EMINENT

DOMAIN; VALID DELEGATION TO THE PRESIDENT IN
THE CASE AT BAR. While the power of eminent domain is,
in principle, vested primarily in the legislative department of the
government, this Court believes and so holds that no new
legislative act is necessary should the Republic decide, upon
being substituted for ISA, in fact to continue to prosecute the
expropriation proceedings. For the legislative authority, a long
time ago, enacted a continuing or standing delegation of authority
to the President of the Philippines to exercise, or cause the
exercise of, the power of eminent domain on behalf of the
Government of the Republic of the Philippines. In the present
case, the President, exercising the power duly delegated under
both the 1917 and 1987 Revised Administrative Codes in effect
made a determination that it was necessary and advantageous to
exercise the power of eminent domain in behalf of the
Government of the Republic and accordingly directed the
Solicitor General to proceed with the suit.
DECISION
FELICIANO, J p:
Petitioner Iron and Steel Authority ("ISA") was created by
Presidential Decree (P.D.) No. 272 dated 9 August 1973 in order,
generally, to develop and promote the iron and steel industry in
the Philippines. The objectives of the ISA are spelled out in the
following terms: cdasia
"SECTION 2. Objectives. The Authority shall have the
following objectives:
(a) to strengthen the iron and steel industry of the Philippines and
to expand the domestic and export markets for the products of the
industry;
(b) to promote the consolidation, integration and rationalization of
the industry in order to increase industry capability and viability
to service the domestic market and to compete in international
markets; cdtai
(c) to rationalize the marketing and distribution of steel products
in order to achieve a balance between demand and supply of iron
and steel products for the country and to ensure that industry
prices and profits are at levels that provide a fair balance between
the interests of investors, consumers, suppliers, and the public at
large;
(d) to promote full utilization of the existing capacity of the
industry, to discourage investment in excess capacity, and in
coordination with appropriate government agencies to encourage
capital investment in priority areas of the industry;
(e) to assist the industry in securing adequate and low-cost
supplies of raw materials and to reduce the excessive dependence
of the country on imports of iron and steel." cdt
The list of powers and functions of the ISA included the
following:
"SECTION 4. Powers and Functions. The authority shall have
the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and
steel facilities for subsequent resale and/or lease to the companies

involved if it is shown that such use of the State's power is

necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the
Authority; cdasia
xxx xxx xxx

In an Order dated 9 November 1988, the trial court granted

MCFC's motion to dismiss and did dismiss the case. The
dismissal was anchored on the provision of the Rules of Court
stating that "only natural or juridical persons or entities
authorized by law may be parties in a civil case." 3 The trial court
also referred to non-compliance by petitioner ISA with the
requirements of Section 16, Rule 3 of the Rules of Court. 4

(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5)
years counting from 9 August 1973. 1 When ISA's original term
expired on 10 October 1978, its term was extended for another
ten (10) years by Executive Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned
subsidiary of the National Development Corporation which is
itself an entity wholly owned by the National Government,
embarked on an expansion program embracing, among other
things the construction of an integrated steel mill in Iligan City.
The construction of such a steel mill was considered a priority
and major industrial project of the Government. Pursuant to the
expansion program of the NSC, Proclamation No. 2239 was
issued by the President of the Philippines on 16 November 1982
withdrawing from sale or settlement a large tract of public land
(totalling about 30.25 hectares in area) located in Iligan City, and
reserving that land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter
of Proclamation No. 2239 were occupied by a non-operational
chemical fertilizer plant and related facilities owned by private
respondent Maria Cristina Fertilizer Corporation ("MCFC"),
Letter of Instruction (LOI) No. 1277, also dated 16 November
1982, was issued directing the NSC to "negotiate with the owners
of MCFC, for and on behalf of the Government, for the
compensation of MCFC's present occupancy rights on the subject
land." LOI No. 1277 also directed that should NSC and private
respondent MCFC fail to reach an agreement within a period of
sixty (60) days from the date of LOI No. 1277, petitioner ISA was
to exercise its power of eminent domain under P.D. No. 272 and
to initiate expropriation proceedings in respect of occupancy
rights of private respondent MCFC relating to the subject public
land as well as the plant itself and related facilities and to code the
same to the NSC. 2 aisadc
Negotiations between NSC and private respondent MCFC did
fail. Accordingly, on 18 August 1983, petitioner ISA commenced
eminent domain proceedings against private respondent MCFC in
the Regional Trial Court, Branch 1, of Iligan City, praying that it
(ISA) be placed in possession of the property involved upon
depositing in court the amount of P1,760,789.69 representing ten
percent (10%) of the declared market values of that property. The
Philippine National Bank, as mortgagee of the plant facilities and
improvements involved in the expropriation proceedings, was
also impleaded as party-defendant.
On 17 September 1983 a writ of possession was issued by the
trial court in favor of ISA. ISA in turn placed NSC in possession
and control of the land occupied by MCFC's fertilizer plant
installation.
The case proceeded to trial. While the trial was on-going,
however, the statutory existence of petitioner ISA expired on 11
August 1988. MCFC then filed a motion to dismiss, contending
that no valid judgment could be rendered against ISA which had
ceased to be a juridical person. Petitioner ISA filed its opposition
to this motion. cdta

Petitioner ISA moved for reconsideration of the trial court's

Order, contending that despite the expiration of its term, its
juridical existence continued until the winding up of its affairs
could be completed. In the alternative, petitioner ISA urged that
the Republic of the Philippines, being the real party-in-interest,
should be allowed to be substituted for petitioner ISA. In this
connection, ISA referred to a letter from the Office of the
President dated 28 September 1988 which especially directed the
Solicitor General to continue the expropriation case.

The trial court denied the motion for reconsideration, stating,

among other things that: cdasia
"The property to be expropriated is not for public use or benefit
[_] but for the use and benefit [_] of NSC, a government
controlled private corporation engaged in private business and for
profit, specially now that the government, according to newspaper
reports, is offering for sale to the public its [shares of stock] in the
National Steel Corporation in line with the pronounced policy of
the present administration to disengage the government from its
private business ventures." 5 (Brackets supplied.)
Petitioner went on appeal to the Court of Appeals. In a Decision
dated 8 October 1991, the Court of Appeals affirmed the order of
dismissal of the trial court. The Court of Appeals held that
petitioner ISA, "a government regulatory agency exercising
sovereign functions," did not have the same rights as an ordinary
corporation and that the ISA, unlike corporations organized under
the Corporation Code, was not entitled to a period for winding up
its affairs after expiration of its legally mandated term, with the
result that upon expiration of its term on 11 August 1987, ISA
was "abolished and [had] no more legal authority to perform
governmental functions." The Court of Appeals went on to say
that the action for expropriation could not prosper because the
basis for the proceedings, the ISA's exercise of its delegated
authority to expropriate, had become ineffective as a result of the
delegate's dissolution, and could not be continued in the name of
Republic of the Philippines, represented by the Solicitor General:
"It is our considered opinion that under the law, the complaint
cannot prosper, and therefore, has to be dismissed without
prejudice to the refiling of a new complaint for expropriation if
the Congress sees it fit." (Emphasis supplied.) cdtai
At the same time, however, the Court of Appeals held that it was
premature for the trial court to have ruled that the expropriation
suit was not for a public purpose, considering that the parties had
not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since
ISA initiated and prosecuted the action for expropriation in its
capacity as agent of the Republic of the Philippines, the Republic,
as principal of ISA, is entitled to be substituted and to be made a
party-plaintiff after the agent ISA's term had expired.

Private respondent MCFC, upon the other hand, argues that the
failure of Congress to enact a law further extending the term of
ISA after 11 August 1988 evinced a "clear legislative intent to
terminate the juridical existence of ISA," and that the
authorization issued by the Office of the President to the Solicitor
General for continued prosecution of the expropriation suit could
not prevail over such negative intent. It is also contended that the
exercise of the eminent domain by ISA or the Republic is
improper, since that power would be exercised "not on behalf of
the National Government but for the benefit of NSC."
The principal issue which we must address in this case is whether
or not the Republic of the Philippines is entitled to be substituted
for ISA in view of the expiration of ISA's term. As will be made
clear below, this is really the only issue which we must resolve at
this time.
Rule 3, Section 1 of the Rules of Court, specifies who may be
parties to a civil action:
"SECTION 1. Who May Be Parties. Only natural or juridical
persons or entities authorized by law may be parties in a civil
action." cdasia
Under the above quoted provision, it will be seen that those who
can be parties to a civil action may be broadly categorized into
two (2) groups:
(a) those who are recognized as persons under the law whether
natural, i.e., biological persons, on the one hand, or juridical
persons such as corporations, on the other hand; and
(b) entities authorized by law to institute actions. aisadc
Examination of the statute which created petitioner ISA shows
that ISA falls under category (b) above. P.D. No. 272, as already
noted, contains express authorization to ISA to commence
expropriation proceedings like those here involved:
"SECTION 4. Powers and Functions. The Authority shall have
the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and
steel facilities for subsequent resale and/or lease to the companies
involved if it is shown that such use of the State's power is
necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the
Authority; cdasia
xxx xxx xxx"
(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly
authorized it to enter into certain kinds of contracts "for and in
behalf of the Government" in the following terms:
"xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts for
and in behalf of the government, for the bulk purchase of
materials, supplies or services for any sectors in the industry, and
to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce
operating costs of such sector; cdtai

xxx xxx xxx"

(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes
normally associated with juridical personality. There is, however,
no provision in P.D. No. 272 recognizing ISA as possessing
general or comprehensive juridical personality separate and
distinct from that of the Government. The ISA in fact appears to
the Court to be a non-incorporated agency or instrumentality of
the Republic of the Philippines, or more precisely of the
Government of the Republic of the Philippines. It is common
knowledge that other agencies or instrumentalities of the
Government of the Republic are cast in corporate form, that is to
say, are incorporated agencies or instrumentalities, sometimes
with and at other times without capital stock, and accordingly
vested with a juridical personality distinct from the personality of
the Republic. Among such incorporated agencies or
instrumentalities are: National Power Corporation; 6 Philippine
Ports Authority; 7 National Housing Authority; 8 Philippine
National Oil Company; 9 Philippine National Railways; 10 Public
Estates Authority; 11 Philippine Virginia Tobacco
Administration; 12 and so forth. It is worth noting that the term
"Authority" has been used to designate both incorporated and
non-incorporated agencies or instrumentalities of the
Government.
We consider that the ISA is properly regarded as an agent or
delegate of the Republic of the Philippines. The Republic itself is
a body corporate and juridical person vested with the full panoply
of powers and attributes which are compendiously described as
"legal personality." The relevant definitions are found in
the Administrative Code of 1987:
"SECTION 2. General Terms Defined. Unless the specific
words of the text, or the context as a whole, or a particular statute,
require a different meaning: cdt
(1) Government of the Republic of the Philippines refers to
the corporate governmental entity through which the functions of
government are exercised throughout the Philippines, including,
save as the contrary appears from the context, the various arms
through which political authority is made effective in the
Philippines, whether pertaining to the autonomous regions, the
provincial, city, municipal or barangay subdivisions or other
forms of local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units
of the Government, including a department,
bureau, office instrumentality, or government-owned or
controlled corporation, or a local government or a distinct unit
therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed
with some if not all corporate powers, administering special
funds, and enjoying operational autonomy, usually through a
charter. This term includes regulatory agencies, chartered
institutions and government-owned and controlled
corporations. cdasia

xxx xxx xxx"

(Emphasis supplied)
When the statutory term of a non-incorporated agency expires,
the powers, duties and functions as well as the assets and
liabilities of that agency revert back to, and are re-assumed by,
the Republic of the Philippines, in the absence of special
provisions of law specifying some other disposition thereof such
as, e.g., devolution or transmission of such powers, duties,
functions, etc. to some other identified successor agency or
instrumentality of the Republic of the Philippines. When the
expiring agency is anincorporated one, the consequences of such
expiry must be looked for, in the first instance, in the charter of
that agency and, by way of supplementation, in the provisions of
the Corporation Code. Since, in the instant case, ISA is a nonincorporated agency or instrumentality of the Republic, its
powers, duties, functions, assets and liabilities are properly
regarded as folded back into the Government of the Republic of
the Philippines and hence assumed once again by the Republic,
no special statutory provision having been shown to have
mandated succession thereto by some other entity or agency of
the Republic.
The procedural implications of the relationship between an agent
or delegate of the Republic of the Philippines and the Republic
itself are, at least in part, spelled out in the Rules of Court. The
general rule is, of course, that an action must be prosecuted and
defended in the name of the real party in interest. (Rule 3, Section
2) Petitioner ISA was, at the commencement of the expropriation
proceedings, a real party in interest, having been explicitly
authorized by its enabling statute to institute expropriation
proceedings.The Rules of Court at the same time expressly
recognize the role of representative parties: aisadc

"SECTION 3. Representative Parties. A trustee of an

expressed trust, a guardian, an executor or administrator, or a
party authorized by statute may sue or be sued without joining the
party for whose benefit the action is presented or defended; but
the court may, at any stage of the proceedings, order such
beneficiary to be made a party. . . ." (Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in
its capacity as an agent or delegate or representative of the
Republic of the Philippines pursuant to its authority under P.D.
No. 272. The present expropriation suit was brought on behalf of
and for the benefit of the Republic as the principal of ISA.
Paragraph 7 of the complaint stated:
"7. The Government, thru the plaintiff ISA, urgently needs the
subject parcels of land for the construction and installation of iron
and steel manufacturing facilities that are indispensable to the
integration of the iron and steel making industry which is vital to
the promotion of public interest and welfare." (Emphasis
supplied) cdta
The principal or the real party in interest is thus the Republic of
the Philippines and not the National Steel Corporation, even
though the latter may be an ultimate user of the properties
involved should the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the
Philippines is entitled to be substituted in the expropriation
proceedings as party-plaintiff in lieu of ISA, the statutory term of

ISA having expired. Put a little differently, the expiration of ISA's

statutory term did not by itself require or justify the dismissal of
the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic
which occurred upon the expiration of ISA's statutory term, was
not a ground for dismissal of such proceedings since a party may
be dropped or added by order of the court, on motion of any
party or on the court's own initiative at any stage of the action and
on such terms as are just. 13 In the instant case, the Republic has
precisely moved to take over the proceedings as partyplaintiff. cdasia
In E.B. Marcha Transport Company, Inc. v. Intermediate
Appellate Court, 14 the Court recognized that the Republic may
initiate or participate in actions involving its agents. There the
Republic of the Philippines was held to be a proper party to sue
for recovery of possession of property although the "real" or
registered owner of the property was the Philippine Ports
Authority, a government agency vested with a separate juridical
personality. The Court said:
"It can be said that in suing for the recovery of the rentals, the
Republic of the Philippines acted as principal of the Philippine
Ports Authority, directly exercising the commission it had earlier
conferred on latter as its agent. . . ." 15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the
Republic to commence all over again another proceeding, as the
trial court and Court of Appeals had required, was to generate
unwarranted delay and create needless repetition of
proceedings: cdtai
"More importantly, as we see it, dismissing the complaint on the
ground that the Republic of the Philippines is not the proper party
would result in needless delay in the settlement of this matter and
also in derogation of the policy against multiplicity of suits. Such
a decision would require the Philippine Ports Authority to refile
the very same complaint already proved by the Republic of the
Philippines and bring back as it were to square one." 16
(Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the
substitution of the Republic of the Philippines for the ISA upon
the ground that the action for expropriation could not prosper
because the basis for the proceedings, the ISA's exercise of its
delegated authority to expropriate, had become legally ineffective
by reason of the expiration of the statutory term of the agent or
delegate, i.e., ISA. Since, as we have held above, the powers and
functions of ISA have reverted to the Republic of the Philippines
upon the termination of the statutory term of ISA, the question
should be addressed whether fresh legislative authority is
necessary before the Republic of the Philippines may continue the
expropriation proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested
primarily in the legislative department of the government, we
believe and so hold that no new legislative act is necessary should
the Republic decide, upon being substituted for ISA, in fact to
continue to prosecute the expropriation proceedings. For the
legislative authority, a long time ago, enacted a continuing or
standing delegation of authority to the President of the Philippines
to exercise, or cause the exercise of, the power of eminent domain
on behalf of the Government of the Republic of the
Philippines. The 1917 Revised Administrative Code, which was
in effect at the time of the commencement of the present

expropriation proceedings before the Iligan Regional Trial Court,

provided that: cdt
"SECTION 64. Particular powers and duties of the President of
the Philippines. In addition to his general supervisory
authority, the President of the Philippines shall have such other
specific powers and duties as are expressly conferred or imposed
on him by law, and also, in particular, the powers and duties set
forth in this Chapter.

WHEREFORE, for all the foregoing, the Decision of the Court of

Appeals dated 8 October 1991 to the extent that it affirmed the
trial court's order dismissing the expropriation proceedings, is
hereby REVERSED and SET ASIDE and the case is
REMANDED to the court a quo which shall allow the
substitution of the Republic of the Philippines for petitioner Iron
and Steel Authority and for further proceedings consistent with
this Decision. No pronouncement as to costs. cdta
SO ORDERED.

Among such special powers and duties shall be:

Romero, Melo, Vitug and Panganiban, JJ., concur.
xxx xxx xxx
(h) To determine when it is necessary or advantageous to exercise
the right of eminent domain in behalf of the Government of the
Philippines; and to direct the Secretary of Justice, where such act
is deemed advisable, to cause the condemnation proceedings to be
begun in the court having proper jurisdiction." (Emphasis
supplied) cdasia
The Revised Administrative Code of 1987 currently in force has
substantially reproduced the foregoing provision in the following
terms:
"SECTION 12. Power of eminent domain. The President
shall determine when it is necessary or advantageous to exercise
the power of eminent domain in behalf of the National
Government, and direct the Solicitor General, whenever he deems
the action advisable, to institute expropriation proceedings in the
proper court." (Emphasis supplied)
In the present case, the President, exercising the power duly
delegated under both the 1917 and 1987 Revised Administrative
Codes in effect made a determination that it was necessary and
advantageous to exercise the power of eminent domain in behalf
of the Government of the Republic and accordingly directed the
Solicitor General to proceed with the suit. 17 aisadc
It is argued by private respondent MCFC that, because Congress
after becoming once more the depository of primary legislative
power, had not enacted a statute extending the term of ISA, such
non-enactment must be deemed a manifestation of a legislative
design to discontinue or abort the present expropriation suit. We
find this argument much too speculative; it rests too much upon
simple silence on the part of Congress and casually disregards the
existence of Section 12 of the 1987 Administrative Code already
quoted above.
Other contentions are made by private respondent MCFC, such
as, that the constitutional requirement of "public use" or "public
purpose" is not present in the instant case, and that the
indispensable element of just compensation is also absent. We
agree with the Court of Appeals in this connection that these
contentions, which were adopted and set out by the Regional Trial
Court in its order of dismissal, are premature and are
appropriately addressed in the proceedings before the trial court.
Those proceedings have yet to produce a decision on the merits,
since trial was still on going at the time the Regional Trial Court
precipitously dismissed the expropriation proceedings. Moreover,
as a pragmatic matter, the Republic is, by such substitution as
party-plaintiff, accorded an opportunity to determine whether or
not, or to what extent, the proceedings should be continued in
view of all the subsequent developments in the iron and steel
sector of the country including, though not limited to, the partial
privatization of the NSC.

||| (Iron and Steel Authority v. Court of Appeals, G.R. No.

102976, October 25, 1995)

[G.R. No. 120319. October 6, 1995.]

LUZON DEVELOPMENT
BANK, petitioner, vs. ASSOCIATION OF LUZON
DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S.
GARCIA in her capacity as VOLUNTARY
ARBITRATOR, respondents. cdasia
Eusebio P. Navarro, Jr. and Adolfo R. Fandialan for petitioner.
Ester S. Garcia for respondent Voluntary Arbitrator.
Napoleon Banzuela, Jr. for private respondent.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE;
ARBITRATION; DEFINED. Arbitration is the reference of a
labor dispute to an impartial third person for determination on the
basis of evidence and arguments presented by such parties who
have bound themselves to accept the decision of the arbitrator as
final and binding.
2. ID.; ID.; ID.; CLASSIFICATION; COMPULSORY
ARBITRATION AND VOLUNTARY ARBITRATION.
Arbitration may be classified as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a
dispute are compelled by the government to forego their right to
strike and are compelled to accept the resolution of their dispute
through arbitration by a disinterested third party normally
appointed by the government, and whose decision is final and
binding on the parties. Under voluntary arbitration, on the other
hand, referral of a dispute by the parties is made, pursuant to a
voluntary arbitration clause in their collective agreement, to an
impartial third person who is mutually acceptable, for a final and
binding resolution.
3. ID.; ID.; ARBITRATORS AND LABOR ARBITERS;
JURISDICTION AND APPEALS, COMPARED AND
DISCUSSED. Article 261 of the Labor Code provides for
exclusive original jurisdiction of voluntary arbitrator or panel of
arbitrators. Article 262 authorizes them, but only upon agreement
of the parties, to exercise jurisdiction over other labor disputes.
On the other hand, a labor arbiter has jurisdiction on cases
enumerated under Article 217 of the Labor Code. The jurisdiction
conferred by law on a voluntary arbitrator or a panel of such
arbitrators is quite limited compared to the original jurisdiction of
the labor arbiter and the appellate jurisdiction of the National
Labor Relations Commission (NLRC) for that matter. The state of
our present law relating to voluntary arbitration provides that
"(t)he award or decision of the Voluntary Arbitrator . . . shall be
final and executory after ten (10) calendar days from receipt of
the copy of the award or decision by the parties," while the
"(d)ecision, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such
decisions, awards, or orders." Hence, while there is an express
mode of appeal from the decision of a labor arbiter, Republic Act
No. 6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator. Yet, past practice shows that a decision or
award of a voluntary arbitrator is, more often than not, elevated to
the Supreme Court itself on a petition for certiorari, in effect
equating the voluntary arbitrator with the NLRC or the Court of
Appeals. In the view of the Court, this is illogical and imposes an
unnecessary burden upon it.

4. ID.; ID.; VOLUNTARY ARBITRATORS; STATUS IS THAT

OF A QUASI-JUDICIAL INSTRUMENTALITY; DECISIONS
APPEALABLE TO THE COURT OF APPEALS.
In Volkschel Labor Union, et al., v. NLRC, et al., this Court ruled
that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et
al. v. Romero, et al., this Court ruled that "a voluntary arbitrator
by the nature of her functions acts in a quasi-judicial capacity."
Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a
quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter. Section
9 of B.P. Blg. 129, as amended by Republic Act No. 7902,
provides that the Court of Appeals shall exercise exclusive
appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of quasi-judicial agencies and
instrumentalities. Governmental "agency" or "instrumentality" are
synonymous. Either of them is a means by which a government
acts, or by which a certain government act or function is
performed. The voluntary arbitrator performs a state function
pursuant to a governmental power delegated to him under the
provisions in the Labor Code and he falls, therefore, within the
contemplation of the term "instrumentality" in Sec. 9 of B.P. 129.
The award or decision of the voluntary arbitrator is equated with
that of the regional trial court. Consequently, in a petition
for certiorari from that award or decision, the Court of Appeals
must be deemed to have concurrent jurisdiction with the Supreme
Court. As a matter of policy, this Court shall henceforth remand
to the Court of Appeals petitions of this nature for proper
disposition. cdtai
DECISION
ROMERO, J p:
From a submission agreement of the Luzon Development Bank
(LDB) and the Association of Luzon Development Bank
Employees (ALDBE) arose an arbitration case to resolve the
following issue: cdasia
"Whether or not the company has violated the Collective
Bargaining Agreement provision and the Memorandum of
Agreement dated April 1994, on promotion."
At a conference, the parties agreed on the submission of their
respective Position Papers on December 1-15, 1994. Atty. Ester
S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other
hand, failed to submit its Position Paper despite a letter from the
Voluntary Arbitrator reminding them to do so. As of May 23,
1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary
Arbitrator rendered a decision disposing as follows:
"WHEREFORE, finding is hereby made that the Bank has not
adhered to the Collective Bargaining Agreement provision nor the
Memorandum of Agreement on promotion." cdtai
Hence, this petition for certiorari and prohibition seeking to set
aside the decision of the Voluntary Arbitrator and to prohibit her
from enforcing the same.
In labor law context, arbitration is the reference of a labor dispute
to an impartial third person for determination on the basis of

evidence and arguments presented by such parties who have

bound themselves to accept the decision of the arbitrator as final
and binding.
Arbitration may be classified, on the basis of the obligation on
which it is based, as either compulsory or voluntary. cdt
Compulsory arbitration is a system whereby the parties to a
dispute are compelled by the government to forego their right to
strike and are compelled to accept the resolution of their dispute
through arbitration by a third party. 1 The essence of arbitration
remains since a resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and binding on
the parties, but in compulsory arbitration, such a third party is
normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a
dispute by the parties is made, pursuant to a voluntary arbitration
clause in their collective agreement, to an impartial third person
for a final and binding resolution. 2 Ideally, arbitration awards are
supposed to be complied with by both parties without delay, such
that once an award has been rendered by an arbitrator, nothing is
left to be done by both parties but to comply with the same. After
all, they are presumed to have freely chosen arbitration as the
mode of settlement for that particular dispute. Pursuant thereto,
they have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to be
bound by said arbitrator's decision.
In the Philippine context, the parties Collective Bargaining
Agreement (CBA) are required to include therein provisions for a
machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company
personnel policies. 3 For this purpose, parties to a CBA shall
name and designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection, preferably
from those accredited by the National Conciliation and Mediation
Board (NCMB). Article 261 of the Labor Code accordingly
provides for exclusive original jurisdiction of such voluntary
arbitrator or panel of arbitrators over (1) the interpretation or
implementation of the CBA and (2) the interpretation or
enforcement of company personnel policies. Article 262
authorizes them, but only upon agreement of the parties, to
exercise jurisdiction over other labor disputes. aisadc
On the other hand, a labor arbiter under Article 217 of the Labor
Code has jurisdiction over the following enumerated cases:
". . . . (a) Except as otherwise provided under this Code the Labor
Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:

5. Cases arising from any violation of Article 264 of this Code,

including questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.

xxx xxx xxx"

It will thus be noted that the jurisdiction conferred by law on a
voluntary arbitrator or a panel of such arbitrators is quite limited
compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations
Commission (NLRC) for that matter. 4 The state of our present
law relating to voluntary arbitration provides that "(t)he award or
decision of the Voluntary Arbitrator . . . shall be final and
executory after ten (10) calendar days from receipt of the copy of
the award or decision by the parties," 5 while the "(d)ecision,
awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or
orders." 6 Hence, while there is an express mode of appeal from
the decision of a labor arbiter, Republic Act No. 6715is silent
with respect to an appeal from the decision of a voluntary
arbitrator. cdta
Yet, past practice shows that a decision or award of a voluntary
arbitrator is, more often than not, elevated to the Supreme Court
itself on a petition for certiorari, 7 in effect equating the voluntary
arbitrator with the NLRC or the Court of Appeals. In the view of
the Court, this is illogical and imposes an unnecessary burden
upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled
premise that the judgments of courts and awards of quasi-judicial
agencies must become final at some definite time, this Court ruled
that the awards of voluntary arbitrators determine the rights of
parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et
al. v. Romero, et al., 9 this Court ruled that "a voluntary arbitrator
by the nature of her functions acts in a quasi-judicial capacity."
Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a
quasi-judicial agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No.
7902, provides that the Court of Appeals shall exercise:
"xxx xxx xxx

1. Unfair labor practice cases;

2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work
and other terms and conditions of employment; cdt
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;

(B) Exclusive appellate jurisdiction over all final judgments,

decisions, resolutions, orders or awards of Regional Trial Courts
and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange
Commission, the Employees Compensation Commission and the
Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines
underPresidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and

subparagraph (4) of the fourth paragraph of Section 17 of the

Judiciary Act of 1948. cdasia
xxx xxx xxx"
Assuming arguendo that the voluntary arbitrator or the panel of
voluntary arbitrators may not strictly be considered as a quasijudicial agency, board or commission, still both he and the panel
are comprehended within the concept of a "quasi-judicial
instrumentality." It may even be stated that it was to meet the
very situation presented by the quasi-judicial functions of the
voluntary arbitrators here, as well as the subsequent
arbitrator/arbitral tribunal operating under the Construction
Industry Arbitration Commission, 11 that the broader term
"instrumentalities" was purposely included in the above-quoted
provision.
An "instrumentality" is anything used as a means or agency. 12
Thus, the terms governmental "agency" or "instrumentality" are
synonymous in the sense that either of them is a means by which
a government acts, or by which a certain government act or
function is performed. 13 The word "instrumentality," with
respect to a state, contemplates an authority to which the state
delegates governmental power for the performance of a state
function. 14 An individual person, like an administrator or
executor, is a judicial instrumentality in the settling of an estate,
15 in the same manner that a sub-agent appointed by a bankruptcy
court is an instrumentality of the court, 16 and a trustee in
bankruptcy of a defunct corporation is an instrumentality of the
state. 17
The voluntary arbitrator no less performs a state function pursuant
to a governmental power delegated to him under the provisions
therefor in the Labor Code and he falls, therefore, within the
contemplation of the term "instrumentality" in the aforequoted
Sec. 9 of B.P. 129. The fact that his functions and powers are
provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that,
although the Employees Compensation Commission is also
provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 195, laid down the procedure for the appealability of its decisions
to the Court of Appeals under the foregoing rationalization, and
this was later adopted by Republic Act No. 7902 in amending
Sec. 9 of B.P. 129. cdtai
A fortiori, the decision or award of the voluntary arbitrator or
panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasijudicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original
purpose of Circular No. 1-91 to provide a uniform procedure for
the appellate review of adjudications of all quasi-judicial entities
18 not expressly excepted from the coverage of Sec. 9 of B.P.
129 by either the Constitution or another statute. Nor will it run
counter to the legislative intendment that decisions of the NLRC
be reviewable directly by the Supreme Court since, precisely, the
cases within the adjudicative competence of the voluntary
arbitrator are excluded from the jurisdiction of the NLRC or the
labor arbiter.
In the same vein, it is worth mentioning that under Section 22
of Republic Act No. 876, also known as the Arbitration Law,

arbitration is deemed a special proceeding of which the court

specified in the contract or submission, or if none be specified,
the Regional Trial Court for the province or city in which one of
the parties resides or is doing business, or in which the arbitration
is held, shall have jurisdiction. A party to the controversy may, at
any time within one (1) month after an award is made, apply to
the court having jurisdiction for an order confirming the award
and the court must grant such order unless the award is vacated,
modified or corrected. 19 cdt
In effect, this equates the award or decision of the voluntary
arbitrator with that of the regional trial court. Consequently, in a
petition for certiorari from that award or decision, the Court of
Appeals must be deemed to have concurrent jurisdiction with the
Supreme Court. As a matter of policy, this Court shall henceforth
remand to the Court of Appeals petitions of this nature for proper
disposition.
ACCORDINGLY, the Court resolved to REFER this case to the
Court of Appeals.
SO ORDERED
||| (Luzon Development Bank v. Association of Luzon
Development Bank Employees, G.R. No. 120319, October 06,
1995)