Republic of the Philippines

SUPREME COURT
Manila
EN BANC

Treasurer Fidel Jacob

Auditor Leo Sales 1
On June 19, 1989, respondent Leandro I. Verceles, Governor of Catanduanes, sent a letter to
respondent Luis T. Santos, the Secretary of Local Government,* protesting the election of the
officers of the FABC and seeking its nullification in view of several flagrant irregularities in the
manner it was conducted. 2

G.R. No. 90336 August 12, 1991

RUPERTO TAULE, petitioner,
vs.
SECRETARY LUIS T. SANTOS and GOVERNOR LEANDRO VERCELES, respondents.

In compliance with the order of respondent Secretary, petitioner Ruperto Taule as President of
the FABC, filed his comment on the letter-protest of respondent Governor denying the alleged
irregularities and denouncing said respondent Governor for meddling or intervening in the
election of FABC officers which is a purely non-partisan affair and at the same time requesting
for his appointment as a member of the Sangguniang Panlalawigan of the province being the
duly elected President of the FABC in Catanduanes. 3

Balgos & Perez and Bugaring, Tugonon & Associates Law Offices for petitioner.
Juan G. Atencia for private respondent.

On August 4, 1989, respondent Secretary issued a resolution nullifying the election of the
officers of the FABC in Catanduanes held on June 18, 1989 and ordering a new one to be
conducted as early as possible to be presided by the Regional Director of Region V of the
Department of Local Government. 4

GANCAYCO, J.:p

Petitioner filed a motion for reconsideration of the resolution of August 4, 1989 but it was denied
by respondent Secretary in his resolution of September 5, 1989. 5

The extent of authority of the Secretary of Local Government over the katipunan ng mga
barangay or the barangay councils is brought to the fore in this case.

In the petition for certiorari before Us, petitioner seeks the reversal of the resolutions of
respondent Secretary dated August 4, 1989 and September 5, 1989 for being null and void.

On June 18,1989, the Federation of Associations of Barangay Councils (FABC) of Catanduanes,

composed of eleven (11) members, in their capacities as Presidents of the Association of
Barangay Councils in their respective municipalities, convened in Virac, Catanduanes with six
members in attendance for the purpose of holding the election of its officers.
Present were petitioner Ruperto Taule of San Miguel, Allan Aquino of Viga, Vicente Avila of
Virac, Fidel Jacob of Panganiban, Leo Sales of Caramoran and Manuel Torres of Baras. The
Board of Election Supervisors/Consultants was composed of Provincial Government Operation
Officer (PGOO) Alberto P. Molina, Jr. as Chairman with Provincial Treasurer Luis A. Manlapaz,
Jr. and Provincial Election Supervisor Arnold Soquerata as members.
When the group decided to hold the election despite the absence of five (5) of its members, the
Provincial Treasurer and the Provincial Election Supervisor walked out.
The election nevertheless proceeded with PGOO Alberto P. Molina, Jr. as presiding officer.
Chosen as members of the Board of Directors were Taule, Aquino, Avila, Jacob and Sales.
Thereafter, the following were elected officers of the FABC:
President Ruperto Taule
Vice-President Allan Aquino
Secretary Vicente Avila

Petitioner raises the following issues:

1) Whether or not the respondent Secretary has jurisdiction to entertain an
election protest involving the election of the officers of the Federation of
Association of Barangay Councils;
2) Whether or not the respondent Governor has the legal personality to file
an election protest;
3) Assuming that the respondent Secretary has jurisdiction over the election
protest, whether or not he committed grave abuse of discretion amounting
to lack of jurisdiction in nullifying the election;
The Katipunan ng mga Barangay is the organization of all sangguniang barangays in the
following levels: in municipalities to be known as katipunang bayan; in cities, katipunang
panlungsod; in provinces, katipunang panlalawigan; in regions, katipunang pampook; and on the
national level, katipunan ng mga barangay. 6
The Local Government Code provides for the manner in which the katipunan ng mga
barangay at all levels shall be organized:
Sec. 110. Organization. (1) The katipunan at all levels shall be organized
in the following manner:

(a) The katipunan in each level shall elect a board of directors and a set of
officers. The president of each level shall represent the katipunan
concerned in the next higher level of organization.
(b) The katipunan ng mga barangay shall be composed of the katipunang
pampook, which shall in turn be composed of the presidents of the
katipunang panlalawigan and the katipunang panlungsod. The presidents of
the katipunang bayan in each province shall constitute the katipunang
panlalawigan. The katipunang panlungsod and the katipunang bayan shall
be composed of the punong barangays of cities and municipalities,
respectively.
xxx xxx xxx
The respondent Secretary, acting in accordance with the provision of the Local Government
Code empowering him to "promulgate in detail the implementing circulars and the rules and
regulations to carry out the various administrative actions required for the initial implementation
of this Code in such a manner as will ensure the least disruption of on-going programs and
projects 7 issued Department of Local Government Circular No. 89-09 on April 7, 1989, 8 to
provide the guidelines for the conduct of the elections of officers of the Katipunan ng mga
Barangay at the municipal, city, provincial, regional and national levels.
It is now the contention of petitioner that neither the constitution nor the law grants jurisdiction
upon the respondent Secretary over election contests involving the election of officers of the
FABC, the katipunan ng mga barangay at the provincial level. It is petitioner's theory that under
Article IX, C, Section 2 of the 1987 Constitution, it is the Commission on Elections which has
jurisdiction over all contests involving elective barangay officials.
On the other hand, it is the opinion of the respondent Secretary that any violation of the
guidelines as set forth in said circular would be a ground for filing a protest and would vest upon
the Department jurisdiction to resolve any protest that may be filed in relation thereto.
Under Article IX, C, Section 2(2) of the 1987 Constitution, the Commission on Elections shall
exercise "exclusive original jurisdiction over all contests relating to the elections, returns, and
qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction over
all contests involving elective municipal officials decided by trial courts of general jurisdiction, or
involving elective barangay officials decided by trial courts of limited jurisdiction." The 1987
Constitution expanded the jurisdiction of the COMELEC by granting it appellate jurisdiction over
all contests involving elective municipal officials decided by trial courts of general jurisdiction or
elective barangay officials decided by trial courts of limited jurisdiction. 9
The jurisdiction of the COMELEC over contests involving elective barangay officials is limited to
appellate jurisdiction from decisions of the trial courts. Under the law, 10 the sworn petition
contesting the election of a barangay officer shall be filed with the proper Municipal or
Metropolitan Trial Court by any candidate who has duly filed a certificate of candidacy and has
been voted for the same office within 10 days after the proclamation of the results. A voter may
also contest the election of any barangay officer on the ground of ineligibility or of disloyalty to
the Republic of the Philippines by filing a sworn petition for quo warranto with the Metropolitan or
Municipal Trial Court within 10 days after the proclamation of the results of the election. 11 Only
appeals from decisions of inferior courts on election matters as aforestated may be decided by
the COMELEC.
The Court agrees with the Solicitor General that the jurisdiction of the COMELEC is over popular
elections, the elected officials of which are determined through the will of the electorate. An

election is the embodiment of the popular will, the expression of the sovereign power of the
people. 12 It involves the choice or selection of candidates to public office by popular
vote. 13 Specifically, the term "election," in the context of the Constitution, may refer to the
conduct of the polls, including the listing of voters, the holding of the electoral campaign, and the
casting and counting of the votes 14 which do not characterize the election of officers in
the Katipunan ng mga barangay. "Election contests" would refer to adversary proceedings by
which matters involving the title or claim of title to an elective office, made before or after
proclamation of the winner, is settled whether or not the contestant is claiming the office in
dispute 15 and in the case of elections of barangay officials, it is restricted to proceedings after
the proclamation of the winners as no pre-proclamation controversies are allowed. 16
The jurisdiction of the COMELEC does not cover protests over the organizational set-up of the
katipunan ng mga barangay composed of popularly elected punong barangays as prescribed by
law whose officers are voted upon by their respective members. The COMELEC exercises only
appellate jurisdiction over election contests involving elective barangay officials decided by the
Metropolitan or Municipal Trial Courts which likewise have limited jurisdiction. The authority of
the COMELEC over the katipunan ng mga barangay is limited by law to supervision of the
election of the representative of the katipunan concerned to the sanggunian in a particular level
conducted by their own respective organization. 17
However, the Secretary of Local Government is not vested with jurisdiction to entertain any
protest involving the election of officers of the FABC.
There is no question that he is vested with the power to promulgate rules and regulations as set
forth in Section 222 of the Local Government Code.
Likewise, under Book IV, Title XII, Chapter 1, See. 3(2) of the Administrative Code of
1987, ** the respondent Secretary has the power to "establish and prescribe rules, regulations
and other issuances and implementing laws on the general supervision of local government
units and on the promotion of local autonomy and monitor compliance thereof by said units."
Also, the respondent Secretary's rule making power is provided in See. 7, Chapter II, Book IV of
the Administrative Code, to wit:
(3) Promulgate rules and regulations necessary to carry out department
objectives, policies, functions, plans, programs and projects;
Thus, DLG Circular No. 89-09 was issued by respondent Secretary in pursuance of his rulemaking power conferred by law and which now has the force and effect of law. 18
Now the question that arises is whether or not a violation of said circular vests jurisdiction upon
the respondent Secretary, as claimed by him, to hear a protest filed in relation thereto and
consequently declare an election null and void.
It is a well-settled principle of administrative law that unless expressly empowered,
administrative agencies are bereft of quasi- judicial powers. 19 The jurisdiction of administrative
authorities is dependent entirely upon the provisions of the statutes reposing power in them; they
cannot confer it upon themselves. 20 Such jurisdiction is essential to give validity to their
determinations. 21
There is neither a statutory nor constitutional provision expressly or even by necessary
implication conferring upon the Secretary of Local Government the power to assume jurisdiction
over an election protect involving officers of the katipunan ng mga barangay. An understanding

of the extent of authority of the Secretary over local governments is therefore necessary if We
are to resolve the issue at hand.

the parties is to the ordinary courts. The Regional Trial Courts have the exclusive original
jurisdiction to hear the protest. 33

Presidential power over local governments is limited by the Constitution to the exercise of
general supervision 22"to ensure that local affairs are administered according to law." 23 The
general supervision is exercised by the President through the Secretary of Local Government.

The provision in DLG Circular No. 89-15 amending DLG Circular No. 89-09 which states that
"whenever the guidelines are not substantially complied with, the election shall be declared null
and void by the Department of Local Government and an election shall conduct and being
invoked by the Solicitor General cannot be applied. DLG Circular No. 89-15 was issued on July
3, 1989 after the June 18, 1989 elections of the FABC officers and it is the rule in statutory
construction that laws, including circulars and regulations 34 cannot be applied
retrospectively.35 Moreover, such provision is null and void for having been issued in excess of
the respondent Secretary's jurisdiction, inasmuch as an administrative authority cannot confer
jurisdiction upon itself.

24

In administrative law, supervision means overseeing or the power or authority of an officer to see
that the subordinate officers perform their duties. If the latter fails or neglects to fulfill them the
former may take such action or step as prescribed by law to make them perform their duties.
Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside
what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former for that of the latter. The fundamental law permits the Chief Executive to
wield no more authority than that of checking whether said local government or the officers
thereof perform their duties as provided by statutory enactments. Hence, the President cannot
interfere with local governments so long as the same or its officers act within the scope of their
authority. 25 Supervisory power, when contrasted with control, is the power of mere oversight
over an inferior body; it does not include any restraining authority over such body. 26
Construing the constitutional limitation on the power of general supervision of the President over
local governments, We hold that respondent Secretary has no authority to pass upon the validity
or regularity of the election of the officers of the katipunan. To allow respondent Secretary to do
so will give him more power than the law or the Constitution grants. It will in effect give him
control over local government officials for it will permit him to interfere in a purely democratic and
non-partisan activity aimed at strengthening the barangay as the basic component of local
governments so that the ultimate goal of fullest autonomy may be achieved. In fact, his order
that the new elections to be conducted be presided by the Regional Director is a clear and direct
interference by the Department with the political affairs of the barangays which is not permitted
by the limitation of presidential power to general supervision over local governments. 27
Indeed, it is the policy of the state to ensure the autonomy of local governments. 28 This state
policy is echoed in the Local Government Code wherein it is declared that "the State shall
guarantee and promote the autonomy of local government units to ensure their fullest
development as self-reliant communities and make them more effective partners in the pursuit of
national development and social progress." 29 To deny the Secretary of Local Government the
power to review the regularity of the elections of officers of the katipunan would be to enhance
the avowed state policy of promoting the autonomy of local governments.
Moreover, although the Department is given the power to prescribe rules, regulations and other
issuances, the Administrative Code limits its authority to merely "monitoring compliance" by local
government units of such issuances. 30 To monitor means "to watch, observe or check. 31 This is
compatible with the power of supervision of the Secretary over local governments which as
earlier discussed is limited to checking whether the local government unit concerned or the
officers thereof perform their duties as provided by statutory enactments. Even the Local
Government Code which grants the Secretary power to issue implementing circulars, rules and
regulations is silent as to how these issuances should be enforced. Since the respondent
Secretary exercises only supervision and not control over local governments, it is truly doubtful if
he could enforce compliance with the DLG Circular. 32 Any doubt therefore as to the power of the
Secretary to interfere with local affairs should be resolved in favor of the greater autonomy of the
local government.
Thus, the Court holds that in assuming jurisdiction over the election protest filed by respondent
Governor and declaring the election of the officers of the FABC on June 18, 1989 as null and
void, the respondent Secretary acted in excess of his jurisdiction. The respondent Secretary not
having the jurisdiction to hear an election protest involving officers of the FABC, the recourse of

As regards the second issue raised by petitioner, the Court finds that respondent Governor has
the personality to file the protest. Under Section 205 of the Local Government Code, the
membership of the sangguniang panlalawigan consists of the governor, the vice-governor,
elective members of the said sanggunian and the presidents of the katipunang panlalawigan and
the kabataang barangay provincial federation. The governor acts as the presiding officer of
the sangguniang panlalawigan. 36
As presiding officer of the sagguniang panlalawigan, the respondent governor has an interest in
the election of the officers of the FABC since its elected president becomes a member of the
assembly. If the president of the FABC assumes his presidency under questionable
circumstances and is allowed to sit in the sangguniang panlalawigan the official actions of the
sanggunian may be vulnerable to attacks as to their validity or legality. Hence, respondent
governor is a proper party to question the regularity of the elections of the officers of the FABC.
As to the third issue raised by petitioner, the Court has already ruled that the respondent
Secretary has no jurisdiction to hear the protest and nullify the elections.
Nevertheless, the Court holds that the issue of the validity of the elections should now be
resolved in order to prevent any unnecessary delay that may result from the commencement of
an appropriate action by the parties.
The elections were declared null and void primarily for failure to comply with Section 2.4 of DLG
Circular No. 89-09 which provides that "the incumbent FABC President or the VicePresident shall preside over the reorganizational meeting, there being a quorum." The rule
specifically provides that it is the incumbent FABC President or Vice-President who shall preside
over the meeting. The word "shall" should be taken in its ordinary signification, i.e., it must be
imperative or mandatory and not merely
permissive, 37 as the rule is explicit and requires no other interpretation. If it had been intended
that any other official should preside, the rules would have provided so, as it did in the elections
at the town and city levels 38 as well as the regional level.. 39
It is admitted that neither the incumbent FABC President nor the Vice-President presided over
the meeting and elections but Alberto P. Molina, Jr., the Chairman of the Board of Election
Supervisors/Consultants. Thus, there was a clear violation of the aforesaid mandatory provision.
On this ground, the elections should be nullified.
Under Sec. 2.3.2.7 of the same circular it is provided that a Board of Election
Supervisors/Consultants shall be constituted to oversee and/or witness the canvassing of votes
and proclamation of winners. The rules confine the role of the Board of Election
Supervisors/Consultants to merely overseeing and witnessing the conduct of elections. This is

consistent with the provision in the Local Government Code limiting the authority of the
COMELEC to the supervision of the election. 40
In case at bar, PGOO Molina, the Chairman of the Board, presided over the elections. There
was direct participation by the Chairman of the Board in the elections contrary to what is dictated
by the rules. Worse, there was no Board of Election Supervisors to oversee the elections in view
of the walk out staged by its two other members, the Provincial COMELEC Supervisor and the
Provincial Treasurer. The objective of keeping the election free and honest was therefore
compromised.
The Court therefore finds that the election of officers of the FABC held on June 18, 1989 is null
and void for failure to comply with the provisions of DLG Circular No. 89-09.
Meanwhile, pending resolution of this petition, petitioner filed a supplemental petition alleging
that public respondent Local Government Secretary, in his memorandum dated June 7, 1990,
designated Augusto Antonio as temporary representative of the Federation to the sangguniang
panlalawigan of Catanduanes. 41 By virtue of this memorandum, respondent governor swore into
said office Augusto Antonio on June 14, 1990. 42
The Solicitor General filed his comment on the supplemental petition 43 as required by the
resolution of the Court dated September 13,1990.
In his comment, the Solicitor General dismissed the supervening event alleged by petitioner as
something immaterial to the petition. He argues that Antonio's appointment was merely
temporary "until such time that the provincial FABC president in that province has been elected,
appointed and qualified." 44 He stresses that Antonio's appointment was only a remedial
measure designed to cope with the problems brought about by the absence of a representative
of the FABC to the "sanggunian ang panlalawigan."
Sec. 205 (2) of the Local Government Code (B.P. Blg. 337) provides(2) The sangguniang panlalawigan shall be composed of the governor, the
vice-governor, elective members of the said sanggunian and the presidents
of the katipunang panlalawigan and the kabataang barangay provincial
federation who shall be appointed by the President of the Philippines.
(Emphasis supplied.)

panlungsod ng mga barangay for he lacked the elegibility and qualification required by law, not
being a barangay captain and for not having been elected president of the association of
barangay councils. The Court held that an unqualified person cannot be appointed a member of
the sanggunian, even in an acting capacity. In Reyes vs. Ferrer, 47 the appointment of Nemesio
L. Rasgo Jr. as representative of the youth sector to the sangguniang panlungsod of Davao City
was declared invalid since he was never the president of the kabataang barangay city federation
as required by Sec. 173, Batas Pambansa Blg. 337.
In the present controversy involving the sangguniang panlalawigan, the law is likewise explicit.
To be appointed by the President of the Philippines to sit in the sangguniang panlalawigan is the
president of the katipunang panlalawigan. The appointee must meet the qualifications set by
law. 48 The appointing power is bound by law to comply with the requirements as to the basic
qualifications of the appointee to the sangguniang panlalawigan. The President of the
Philippines or his alter ego, the Secretary of Local Government, has no authority to appoint
anyone who does not meet the minimum qualification to be the president of the federation of
barangay councils.
Augusto Antonio is not the president of the federation. He is a member of the federation but he
was not even present during the elections despite notice. The argument that Antonio was
appointed as a remedial measure in the exigency of the service cannot be sustained. Since
Antonio does not meet the basic qualification of being president of the federation, his
appointment to the sangguniang panlalawigan is not justified notwithstanding that such
appointment is merely in a temporary capacity. If the intention of the respondent Secretary was
to protect the interest of the federation in the sanggunian, he should have appointed the
incumbent FABC President in a hold-over capacity. For even under the guidelines, the term of
office of officers of the katipunan at all levels shall be from the date of their election until their
successors shall have been duly elected and qualified, without prejudice to the terms of their
appointments as members of the sanggunian to which they may be correspondingly
appointed. 49 Since the election is still under protest such that no successor of the incumbent
has as yet qualified, the respondent Secretary has no choice but to have the incumbent FABC
President sit as member of the sanggunian. He could even have appointed petitioner since he
was elected the president of the federation but not Antonio. The appointment of Antonio,
allegedly the protege of respondent Governor, gives credence to petitioner's charge of political
interference by respondent Governor in the organization. This should not be allowed. The
barangays should be insulated from any partisan activity or political intervention if only to give
true meaning to local autonomy.
WHEREFORE, the petition is GRANTED in that the resolution of respondent Secretary dated
August 4, 1989 is hereby SET ASIDE for having been issued in excess of jurisdiction.

Batas Pambansa Blg. 51, under Sec. 2 likewise states:

xxx xxx xxx
The sangguniang panlalawigan of each province shall be composed of the
governor as chairman and presiding officer, the vice-governor as presiding
officer pro tempore, the elective sangguniang panlalawigan members, and
the appointive members consisting of the president of the provincial
association of barangay councils, and the president of the provincial
federation of the kabataang barangay. (Emphasis supplied.)
In Ignacio vs. Banate Jr. 45 the Court, interpreting similarly worded provisions of Batas
Pambansa Blg. 337 and Batas Pambansa Blg. 51 on the composition of the sangguniang
panlungsod, 46 declared as null and void the appointment of private respondent Leoncio Banate
Jr. as member of the Sangguniang Panlungsod of the City of Roxas representing thekatipunang

The election of the officials of the ABC Federation held on June 18, 1989 is hereby annulled. A
new election of officers of the federation is hereby ordered to be conducted immediately in
accordance with the governing rules and regulations.
The Supplemental petition is hereby GRANTED. The appointment of Augusto Antonio as
representative to theSangguniang Panlalawigan in a temporary capacity is declared null and
void.
No costs.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin,
Sarmiento, Grio-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH
70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and
CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH
163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE BUSINESS
RESOURCES, INC. represented by, MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY
OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE,
BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES
INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT
CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE,
BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING &
TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and
TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH
78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and
ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR
WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH
78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC.,
represented by its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or
MAYOR WALFREDO M. DE LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE,
BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING
CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR FISHING CORP.;
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS,respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate
consumption and extravagance of the rich or fishing in the murky waters of the Pasig River and
the Laguna Lake or making a clearing in the forest so that he can produce food for his family, to
understand why protecting birds, fish, and trees is more important than protecting him and
keeping his family alive.
How do we strike a balance between environmental protection, on the one hand, and the
individual personal interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and sustainable
development, Republic Act No. 4850 created the "Laguna Lake Development Authority." This
Government Agency is supposed to carry out and effectuate the aforesaid declared policy, so as
to accelerate the development and balanced growth of the Laguna Lake area and the
surrounding provinces, cities and towns, in the act clearly named, within the context of the
national and regional plans and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections
of Republic Act No. 4850 because of the concern for the rapid expansion of Metropolitan Manila,
the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective
uses of the lake for municipal-industrial water supply, irrigation, fisheries, and the like. Concern
on the part of the Government and the general public over: the environment impact of
development on the water quality and ecology of the lake and its related river systems; the inflow
of polluted water from the Pasig River, industrial, domestic and agricultural wastes from
developed areas around the lake; the increasing urbanization which induced the deterioration of
the lake, since water quality studies have shown that the lake will deteriorate further if steps are
not taken to check the same; and the floods in Metropolitan Manila area and the lakeshore
towns which will influence the hydraulic system of Laguna de Bay, since any scheme of
controlling the floods will necessarily involve the lake and its river systems, likewise gave
impetus to the creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the national policy
to promote, and accelerate the development and balanced growth of the
Laguna Lake area and the surrounding provinces, cities and towns
hereinafter referred to as the region, within the context of the national and
regional plans and policies for social and economic development and to
carry out the development of the Laguna Lake region with due regard and
adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. 1
Special powers of the Authority, pertinent to the issues in this case, include:

Sec. 3. Section 4 of the same Act is hereby further amended by adding

thereto seven new paragraphs to be known as paragraphs (j), (k), (l), (m),
(n), (o), and (p) which shall read as follows:
xxx xxx xxx
(j) The provisions of existing laws to the contrary
notwithstanding, to engage in fish production and other
aqua-culture projects in Laguna de Bay and other
bodies of water within its jurisdiction and in pursuance
thereof to conduct studies and make experiments,
whenever necessary, with the collaboration and
assistance of the Bureau of Fisheries and Aquatic
Resources, with the end in view of improving present
techniques and practices. Provided, that until modified,
altered or amended by the procedure provided in the
following sub-paragraph, the present laws, rules and
permits or authorizations remain in force;
(k) For the purpose of effectively regulating and
monitoring activities in Laguna de Bay,the Authority
shall have exclusive jurisdiction to issue new permit for
the use of the lake waters for any projects or activities
in or affecting the said lake including navigation,
construction, and operation of fishpens, fish enclosures,
fish corrals and the like, and to impose necessary
safeguards for lake quality control and management
and to collect necessary fees for said activities and
projects: Provided, That the fees collected for fisheries
may be shared between the Authority and other
government agencies and political sub-divisions in such
proportion as may be determined by the President of
the Philippines upon recommendation of the Authority's
Board: Provided, further, That the Authority's Board
may determine new areas of fishery development or
activities which it may place under the supervision of
the Bureau of Fisheries and Aquatic Resources taking
into account the overall development plans and
programs for Laguna de Bay and related bodies of
water: Provided, finally, That the Authority shall subject
to the approval of the President of the Philippines
promulgate such rules and regulations which shall
govern fisheries development activities in Laguna de
Bay which shall take into consideration among others
the following: socio-economic amelioration of bonafide
resident fishermen whether individually or collectively in
the form of cooperatives, lakeshore town development,
a master plan for fishpen construction and operation,
communal fishing ground for lake shore town residents,
and preference to lake shore town residents in hiring
laborer for fishery projects;
(l) To require the cities and municipalities embraced
within the region to pass appropriate zoning ordinances
and other regulatory measures necessary to carry out

the objectives of the Authority and enforce the same

with the assistance of the Authority;
(m) The provisions of existing laws to the contrary
notwithstanding, to exercise water rights over public
waters within the Laguna de Bay region whenever
necessary to carry out the Authority's projects;
(n) To act in coordination with existing governmental
agencies in establishing water quality standards for
industrial, agricultural and municipal waste discharges
into the lake and to cooperate with said existing
agencies of the government of the Philippines in
enforcing such standards, or to separately pursue
enforcement and penalty actions as provided for in
Section 4 (d) and Section 39-A of this Act: Provided,
That in case of conflict on the appropriate water quality
standard to be enforced such conflict shall be resolved
thru the NEDA Board. 2
To more effectively perform the role of the Authority under Republic Act No. 4850, as though
Presidential Decree No. 813 were not thought to be completely effective, the Chief Executive,
feeling that the land and waters of the Laguna Lake Region are limited natural resources
requiring judicious management to their optimal utilization to insure renewability and to preserve
the ecological balance, the competing options for the use of such resources and conflicting
jurisdictions over such uses having created undue constraints on the institutional capabilities of
the Authority in the light of the limited powers vested in it by its charter, Executive Order No. 927
further defined and enlarged the functions and powers of the Authority and named and
enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region".
Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927
which include in particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within
the Lake Region: To effectively regulate and monitor activities in the Laguna
de Bay region, the Authority shall have exclusive jurisdiction to issue permit
for the use of all surface water for any projects or activities in or affecting the
said region including navigation, construction, and operation of fishpens,
fish enclosures, fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay Region"
shall refer to the Provinces of Rizal and Laguna; the Cities of San Pablo,
Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan,
Sto. Tomas and Malvar in Batangas Province; the towns of Silang and
Carmona in Cavite Province; the town of Lucban in Quezon Province; and
the towns of Marikina, Pasig, Taguig, Muntinlupa, and Pateros in Metro
Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to collect
fees for the use of the lake water and its tributaries for all beneficial
purposes including but not limited to fisheries, recreation, municipal,
industrial, agricultural, navigation, irrigation, and waste disposal
purpose; Provided, that the rates of the fees to be collected, and the sharing
with other government agencies and political subdivisions, if necessary,
shall be subject to the approval of the President of the Philippines upon

recommendation of the Authority's Board, except fishpen fee, which will be

shared in the following manner; 20 percent of the fee shall go to the
lakeshore local governments, 5 percent shall go to the Project Development
Fund which shall be administered by a Council and the remaining 75
percent shall constitute the share of LLDA. However, after the
implementation within the three-year period of the Laguna Lake Fishery
Zoning and Management Plan, the sharing will be modified as follows: 35
percent of the fishpen fee goes to the lakeshore local governments, 5
percent goes to the Project Development Fund and the remaining 60
percent shall be retained by LLDA; Provided, however, that the share of
LLDA shall form part of its corporate funds and shall not be remitted to the
National Treasury as an exception to the provisions of Presidential Decree
No. 1234. (Emphasis supplied)
It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna
Lake" in this manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this
Act, the same shall refer to Laguna de Bay which is that area covered by
the lake water when it is at the average annual maximum lake level of
elevation 12.50 meters, as referred to a datum 10.00 meters below mean
lower low water (M.L.L.W). Lands located at and below such elevation are
public lands which form part of the bed of said lake.
Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in
the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law
gave municipal governments the exclusive jurisdiction to issue fishing privileges within their
municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to grant fishery
privileges in the municipal waters and impose rental fees or charges
therefor in accordance with the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals, oyster,
mussel or other aquatic beds or bangus fry areas,
within a definite zone of the municipal waters, as
determined by it; . . . .
(2) Grant privilege to gather, take or catch bangus fry,
prawn fry or kawag-kawag or fry of other species and
fish from the municipal waters by nets, traps or other
fishing gears to marginal fishermen free from any rental
fee, charges or any other imposition whatsoever.
xxx xxx xxx

Sec. 447. Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code,
grant exclusive privileges of constructing fish corrals or
fishpens, or the taking or catching of bangus fry, prawn
fry orkawag-kawag or fry of any species or fish within
the municipal waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen
permits. Big fishpen operators took advantage of the occasion to establish fishpens and
fishcages to the consternation of the Authority. Unregulated fishpens and fishcages, as of July,
1995, occupied almost one-third of the entire lake water surface area, increasing the occupation
drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit to
construct fishpens and fishcages were all undertaken in violation of the policies adopted by the
Authority on fishpen zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities of separate independent policies
in the operation of fishpens and fishcages within their claimed territorial municipal waters in the
lake and their indiscriminate grant of fishpen permits have already saturated the lake area with
fishpens, thereby aggravating the current environmental problems and ecological stress of
Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general public that:
In compliance with the instructions of His Excellency PRESIDENT FIDEL V.
RAMOS given on June 23, 1993 at Pila, Laguna pursuant to Republic Act
4850 as amended by Presidential Decree 813 and Executive Order 927
series of 1983 and in line with the policies and programs of the Presidential
Task Force on Illegal Fishpens and Illegal Fishing, the general public is
hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the Laguna de
Bay Region, which were not registered or to which no application for
registration and/or permit has been filed with Laguna Lake Development
Authority as of March 31, 1993 are hereby declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so declared as
illegal shall be subject to demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures declared
as illegal shall, without prejudice to demolition of their structures be
criminally charged in accordance with Section 39-A of Republic Act 4850 as
amended by P.D. 813 for violation of the same laws. Violations of these
laws carries a penalty of imprisonment of not exceeding 3 years or a fine not
exceeding Five Thousand Pesos or both at the discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures

declared as illegal in accordance with the foregoing Notice shall have one
(1) month on or before 27 October 1993 to show cause before the LLDA
why their said fishpens, fishcages and other aqua-culture structures should
not be demolished/dismantled.
One month, thereafter, the Authority sent notices to the concerned owners of the illegally
constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle
their respective structures within 10 days from receipt thereof, otherwise, demolition shall be
effected.
Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before
various regional trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and
Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc.
and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional Trial Court, Branch 162,
Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp.
and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial
Court, Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias
Reynaldo M. Tianco; (d) Civil Case No. 556-M, for Prohibition, Injunction and Damages,
Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil
Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78,
Morong, Rizal, filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-,
for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by
Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No.
64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR Trading Co.,
Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions
to dismiss were invariably denied. Meanwhile, temporary restraining order/writs of preliminary
mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining the
Authority from demolishing the fishpens and similar structures in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were
filed by the Authority with this court. Impleaded as parties-respondents are concerned regional
trial courts and respective private parties, and the municipalities and/or respective Mayors of
Binangonan, Taguig and Jala-jala, who issued permits for the construction and operation of
fishpens in Laguna de Bay. The Authority sought the following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of preliminary
injunction issued in Civil Cases Nos. 64125, 759 and 566;
(B) Permanent prohibition against the regional trial courts from exercising
jurisdiction over cases involving the Authority which is a co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government Code of
1991) did not repeal, alter or modify the provisions of R.A. 4850, as
amended, empowering the Authority to issue permits for fishpens, fishcages
and other aqua-culture structures in Laguna de Bay and that, the Authority
the government agency vested with exclusive authority to issue said
permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to
the Court of Appeals.

In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated
petitions, the Court of Appeals holding that: (A) LLDA is not among those quasi-judicial agencies
of government whose decision or order are appealable only to the Court of Appeals; (B) the
LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned;
(C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are
concerned had been repealed by the Local Government Code of 1991; (D) in view of the
aforesaid repeal, the power to grant permits devolved to and is now vested with their respective
local government units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging
the following errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN
ERROR WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT
AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.
2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813
AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC
ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED
PRINCIPLES AND JURISPRUDENCE OF STATUTORY CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN
PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO CONCERNED
(LAKESHORE) LOCAL GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which
agency of the Government the Laguna Lake Development Authority or the towns and
municipalities comprising the region should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850,
the provisions of Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited
above, specifically provide that the Laguna Lake Development Authority shall have exclusive
jurisdiction to issue permits for the use of all surface water for any projects or activities in or
affecting the said region, including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local
Government Code of 1991, has granted to the municipalities the exclusive authority to grant
fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to
erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone
of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the
aforementioned laws creating the Laguna Lake Development Authority and granting the latter
water rights authority over Laguna de Bay and the lake region.
The Local Government Code of 1991 does not contain any express provision which categorically
expressly repeal the charter of the Authority. It has to be conceded that there was no intent on
the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of
laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a
special law. Republic Act No. 7160, the Local Government Code of 1991, is a general law. It is

basic in statutory construction that the enactment of a later legislation which is a general law
cannot be construed to have repealed a special law. It is a well-settled rule in this jurisdiction
that "a special statute, provided for a particular case or class of cases, is not repealed by a
subsequent statute, general in its terms, provisions and application, unless the intent to repeal or
alter is manifest, although the terms of the general law are broad enough to include the cases
embraced in the special law." 3
Where there is a conflict between a general law and a special statute, the special statute should
prevail since it evinces the legislative intent more clearly than the general statute. The special
law is to be taken as an exception to the general law in the absence of special circumstances
forcing a contrary conclusion. This is because implied repeals are not favored and as much as
possible, effect must be given to all enactments of the legislature. A special law cannot be
repealed, amended or altered by a subsequent general law by mere implication. 4
Thus, it has to be concluded that the charter of the Authority should prevail over the Local
Government Code of 1991.
Considering the reasons behind the establishment of the Authority, which are environmental
protection, navigational safety, and sustainable development, there is every indication that the
legislative intent is for the Authority to proceed with its mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that
"Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The
900 km lake surface water, the eight (8) major river tributaries and several other smaller rivers
that drain into the lake, the 2,920 km basin or watershed transcending the boundaries of
Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite, Batangas, and
Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be
protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable
development. This is an exhaustible natural resource a very limited one which requires
judicious management and optimal utilization to ensure renewability and preserve its ecological
integrity and balance."
"Managing the lake resources would mean the implementation of a national policy geared
towards the protection, conservation, balanced growth and sustainable development of the
region with due regard to the inter-generational use of its resources by the inhabitants in this part
of the earth. The authors of Republic Act 4850 have foreseen this need when they passed this
LLDA law the special law designed to govern the management of our Laguna de Bay lake
resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies
where lakeshore local government units exercise exclusive dominion over specific portions of
the lake water. The garbage thrown or sewage discharged into the lake, abstraction of water
therefrom or construction of fishpens by enclosing its certain area, affect not only that specific
portion but the entire 900 km of lake water. The implementation of a cohesive and integrated
lake water resource management policy, therefore, is necessary to conserve, protect and
sustainably develop Laguna de Bay." 5
The power of the local government units to issue fishing privileges was clearly granted for
revenue purposes. This is evident from the fact that Section 149 of the New Local Government
Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II,
of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other
Revenue Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other
aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the
Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and
management. 6 It does partake of the nature of police power which is the most pervasive, the
least limitable and the most demanding of all State powers including the power of taxation.
Accordingly, the charter of the Authority which embodies a valid exercise of police power should
prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture
structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the
proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our
holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of
Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake
Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:
xxx xxx xxx
As a general rule, the adjudication of pollution cases generally pertains to
the Pollution Adjudication Board (PAB), except in cases where the special
law provides for another forum. It must be recognized in this regard that the
LLDA, as a specialized administrative agency, is specifically mandated
under Republic Act No. 4850 and its amendatory laws to carry out and
make effective the declared national policy of promoting and accelerating
the development and balanced growth of the Laguna Lake area and the
surrounding provinces of Rizal and Laguna and the cities of San Pablo,
Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the
quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution. Under such a broad
grant of power and authority, the LLDA, by virtue of its special charter,
obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to
pass upon and approve or disapprove all plans, programs, and projects
proposed by local government offices/agencies within the region, public
corporations, and private persons or enterprises where such plans,
programs and/or projects are related to those of the LLDA for the
development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency has only
such powers as are expressly granted to it by law, it is likewise a settled rule
that an administrative agency has also such powers as are necessarily
implied in the exercise of its express powers. In the exercise, therefore, of
its express powers under its charter, as a regulatory and quasi-judicial body
with respect to pollution cases in the Laguna Lake region, the authority of
the LLDA to issue a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless" paper agency.
there is no question that the Authority has express powers as a regulatory and quasijudicial body in respect to pollution cases with authority to issue a "cease and desist

order" and on matters affecting the construction of illegal fishpens, fishcages and
other aqua-culture structures in Laguna de Bay. The Authority's pretense, however,
that it is co-equal to the Regional Trial Courts such that all actions against it may only
be instituted before the Court of Appeals cannot be sustained. On actions
necessitating the resolution of legal questions affecting the powers of the Authority as
provided for in its charter, the Regional Trial Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, has not repealed the provisions of the charter of
the Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the
Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in
Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise
such powers as are by its charter vested on it.
Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed
purpose of protecting and developing the Laguna Lake Region. Otherwise stated, the abrogation
of this power would render useless its reason for being and will in effect denigrate, if not abolish,
the Laguna Lake Development Authority. This, the Local Government Code of 1991 had never
intended to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar
as they relate to the authority of the Laguna Lake Development Authority to grant fishing
privileges within the Laguna Lake Region.

Separate Opinions

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to
stress what the decision already states, i.e., that the local government units in the Laguna Lake
area are not precluded from imposing permits on fishery operations for revenue raising purposes
of such local government units. In other words, while the exclusive jurisdiction to determine
whether or not projects or activities in the lake area should be allowed, as well as their
regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit,
the permittee may still be subjected to an additional local permit or license for revenue purposes
of the local government units concerned. This approach would clearly harmonize the special law,
Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will
also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level
of economic viability.
Separate Opinions

The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch
78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge
Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void and
ordered set aside for having been issued with grave abuse of discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to
construct and operate fishpens, fishcages and other aqua-culture structures within the Laguna
Lake Region, their previous issuances being declared null and void. Thus, the fishing permits
issued by Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of
Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise declared
null and void and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of
permits issued by Municipal Mayors within the Laguna Lake Region, specifically, permits issued
to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc.,
represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial Development
Corporation and R.J. Orion Development Corporation; IRMA Fishing And Trading Corporation,
ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue
Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc.,
represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing
Corporation, and MINAMAR Fishing Corporation, are hereby declared illegal structures subject
to demolition by the Laguna Lake Development Authority.

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to
stress what the decision already states, i.e., that the local government units in the Laguna Lake
area are not precluded from imposing permits on fishery operations for revenue raising purposes
of such local government units. In other words, while the exclusive jurisdiction to determine
whether or not projects or activities in the lake area should be allowed, as well as their
regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit,
the permittee may still be subjected to an additional local permit or license for revenue purposes
of the local government units concerned. This approach would clearly harmonize the special law,
Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will
also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level
of economic viability.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-50444 August 31, 1987

SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.

ANTIPOLO REALTY CORPORATION, petitioner,

vs.
THE NATIONAL HOUSING AUTHORITY, HON. G.V. TOBIAS, in his capacity as General
Manager of the National Housing Authority, THE HON. JACOBO C. CLAVE, in his capacity
as Presidential Executive Assistant and VIRGILIO A. YUSON, respondents.

FELICIANO, J.:
By virtue of a Contract to Sell dated 18 August 1970, Jose Hernando acquired prospective and
beneficial ownership over Lot. No. 15, Block IV of the Ponderosa Heights Subdivision in
Antipolo, Rizal, from the petitioner Antipolo Realty Corporation.
On 28 August 1974, Mr. Hernando transferred his rights over Lot No. 15 to private respondent
Virgilio Yuson. The transfer was embodied in a Deed of Assignment and Substitution of Obligor
(Delegacion), executed with the consent of Antipolo Realty, in which Mr. Yuson assumed the
performance of the vendee's obligations under the original contract, including payment of his
predecessor's installments in arrears. However, for failure of Antipolo Realty to develop the
subdivision project in accordance with its undertaking under Clause 17 of the Contract to Sell,
Mr. Yuson paid only the arrearages pertaining to the period up to, and including, the month of
August 1972 and stopped all monthly installment payments falling due thereafter Clause 17
reads:
Clause 17. SUBDIVISION BEAUTIFICATION. To insure the beauty of
the subdivision in line with the modern trend of urban development, the
SELLER hereby obligates itself to provide the subdivision with:

In a second letter dated 27 November 1976, Antipolo Realty reiterated its request that Mr. Yuson
resume payment of his monthly installments, citing the decision rendered by the National
Housing Authority (NHA) on 25 October 1976 in Case No. 252 (entitled "Jose B. Viado Jr.,
complainant vs. Conrado S. Reyes, respondent") declaring Antipolo Realty to have "substantially
complied with its commitment to the lot buyers pursuant to the Contract to Sell executed by and
between the lot buyers and the respondent." In addition, a formal demand was made for full and
immediate payment of the amount of P16,994.73, representing installments which, Antipolo
Realty alleged, had accrued during the period while the improvements were being completed
i.e., between September 1972 and October 1976.
Mr. Yuson refused to pay the September 1972-October 1976 monthly installments but agreed to
pay the post October 1976 installments. Antipolo Realty responded by rescinding the Contract to
Sell, and claiming the forfeiture of all installment payments previously made by Mr. Yuson.
Aggrieved by the rescission of the Contract to Sell, Mr. Yuson brought his dispute with Antipolo
Realty before public respondent NHA through a letter-complaint dated 10 May 1977 which
complaint was docketed in NHA as Case No. 2123.
Antipolo Realty filed a Motion to Dismiss which was heard on 2 September 1977. Antipolo
Realty, without presenting any evidence, moved for the consolidation of Case No. 2123 with
several other cases filed against it by other subdivision lot buyers, then pending before the NHA.
In an Order issued on 7 February 1978, the NHA denied the motion to dismiss and scheduled
Case No. 2123 for hearing.

a) Concrete curbs and gutters

b) Underground drainage system
c) Asphalt paved roads

After hearing, the NHA rendered a decision on 9 March 1978 ordering the reinstatement of the
Contract to Sell under the following conditions:
l) Antipolo Realty Corporation shall sent [sic] to Virgilio Yuzon a statement of
account for the monthly amortizations from November 1976 to the present;

d) Independent water system

e) Electrical installation with concrete posts.
f) Landscaping and concrete sidewall
g) Developed park or amphi-theatre
h) 24-hour security guard service.
These improvements shall be complete within a period of two (2) years from
date of this contract.Failure by the SELLER shall permit the BUYER to
suspend his monthly installments without any penalties or interest charges
until such time that such improvements shall have been completed. 1
On 14 October 1976, the president of Antipolo Realty sent a notice to private respondent Yuson
advising that the required improvements in the subdivision had already been completed, and
requesting resumption of payment of the monthly installments on Lot No. 15. For his part, Mr.
Yuson replied that he would conform with the request as soon as he was able to verify the truth
of the representation in the notice.

m) No penalty interest shall be charged for the period from November 1976
to the date of the statement of account; and
n) Virgilio Yuzon shall be given sixty (60) days to pay the arrears shown in
the statement of account.2
Antipolo Realty filed a Motion for Reconsideration asserting: (a) that it had been denied due
process of law since it had not been served with notice of the scheduled hearing; and (b) that the
jurisdiction to hear and decide Mr. Yuson's complaint was lodged in the regular courts, not in the
NHA, since that complaint involved the interpretation and application of the Contract to Sell.
The motion for reconsideration was denied on 28 June 1978 by respondent NHA General
Manager G.V. Tobias, who sustained the jurisdiction of the NHA to hear and decide the Yuson
complaint. He also found that Antipolo Realty had in fact been served with notice of the date of
the hearing, but that its counsel had failed to attend the hearing. 3 The case was submitted for
decision, and eventually decided, solely on the evidence presented by the complainant.
On 2 October 1978, Antipolo Realty came to this Court with a Petition for certiorari and
Prohibition with Writ of Preliminary Injunction, which was docketed as G.R. No. L-49051. Once
more, the jurisdiction of the NHA was assailed. Petitioner further asserted that, under Clause 7
of the Contract to Sell, it could validly terminate its agreement with Mr. Yuson and, as a
consequence thereof, retain all the prior installment payments made by the latter. 4

This Court denied certiorari in a minute resolution issued on 11 December 1978, "without
prejudice to petitioner's pursuing the administrative remedy." 5 A motion for reconsideration was
denied on 29 January 1979.
Thereafter, petitioner interposed an appeal from the NHA decision with the Office of the
President which, on 9 March 1979, dismissed the same through public respondent Presidential
Executive Assistant Jacobo C. Clave. 6
In the present petition, Antipolo Realty again asserts that, in hearing the complaint of private
respondent Yuson and in ordering the reinstatement of the Contract to Sell between the parties,
the NHA had not only acted on a matter beyond its competence, but had also, in effect,
assumed the performance of judicial or quasi-judicial functions which the NHA was not
authorized to perform.
We find the petitioner's arguments lacking in merit.
It is by now commonplace learning that many administrative agencies exercise and perform
adjudicatory powers and functions, though to a limited extent only. Limited delegation of judicial
or quasi-judicial authority to administrative agencies (e.g., the Securities and Exchange
Commission and the National Labor Relations Commission) is well recognized in our
jurisdiction, 7 basically because the need for special competence and experience has been
recognized as essential in the resolution of questions of complex or specialized character and
because of a companion recognition that the dockets of our regular courts have remained
crowded and clogged. In Spouses Jose Abejo and Aurora Abejo, et al. vs. Hon. Rafael dela
Cruz, etc., et al., 8 the Court, through Mr. Chief Justice Teehankee, said:
In the fifties, the Court taking cognizance of the move to vest jurisdiction in
administrative commissions and boards the power to resolve specialized
disputes in the field of labor (as in corporations, public transportation and
public utilities) ruled that Congress in requiring the Industrial Court's
intervention in the resolution of labor management controversies likely to
cause strikes or lockouts meant such jurisdiction to be exclusive, although it
did not so expressly state in the law. The Court held that under the "sensemaking and expeditious doctrine of primary jurisdiction . . . the courts cannot
or will not determine a controversy involving a question which is within the
jurisdiction of an administrative tribunal where the question demands the
exercise of sound administrative discretion requiring the special knowledge,
experience, and services of the administrative tribunal to determine
technical and intricate matters of fact, and a uniformity of ruling is essential
to comply with the purposes of the regulatory statute
administered" (Pambujan Sur United Mine Workers v. Samar Mining Co.,
Inc., 94 Phil, 932, 941 [1954]).
In this era of clogged court dockets, the need for specialized administrative
boards or commissions with the 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 unmistakeable trend has been to refer it to the former, "Increasingly, this
Court has been committed to the view that unless the law speaks clearly
and unequivocably, the choice should fall on fan administrative agency]" '
(NFL v. Eisma, 127 SCRA 419, 428, citing precedents). The Court in the
earlier case of Ebon vs. De Guzman (113 SCRA 52, 56 [1982]), noted that
the lawmaking authority, in restoring to the labor arbiters and the NLRC their

jurisdiction to award all kinds of damages in labor cases, as against the

previous P.D. amendment splitting their jurisdiction with the regular courts,
"evidently, . . . had second thoughts about depriving the Labor Arbiters and
the NLRC of the jurisdiction to award damages in labor cases because that
setup would mean duplicity of suits, splitting the cause of action and
possible conflicting findings and conclusions by two tribunals on one and the
same claim."
In an even more recent case, Tropical Homes, Inc. vs. National Housing Authority, et al., 9 Mr.
Justice Gutierrez, speaking for the Court, observed that:
There is no question that a statute may vest exclusive original jurisdiction in
an administrative agency over certain disputes and controversies falling
within the agency's special expertise. The very definition of an
administrative agency includes its being vested with quasi-judicial
powers. The ever increasing variety of powers and functions given to
administrative agencies recognizes the need for the active intervention of
administrative agencies in matters calling for technical knowledge and
speed in countless controversies which cannot possibly be handled by
regular courts.
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. 10 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.
Thus, the extent to which the NHA has been vested with quasi-judicial authority must be
determined by referring to the terms of Presidential Decree No. 957, known as "The Subdivision
and Condominium Buyers' Decree." 11Section 3 of this statute provides as follows:
National Housing Authority. The National Housing Authority shall have
exclusive jurisdiction to regulate the real estate trade and business in
accordance with the provisions of this decree (emphasis supplied)
The need for and therefore the scope of the regulatory authority thus lodged in the NHA are
indicated in the second and third preambular paragraphs of the statute which provide:
WHEREAS, numerous reports reveal that many real estate subdivision
owners, developers, operators, and/or sellers have reneged on their
representations 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;
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 . (emphasis supplied)

Presidential Decree No. 1344 12 clarified and spelled out the quasi-judicial dimensions of the
grant of regulatory authority to the NHA in the following quite specific terms:
SECTION 1. In the exercise of its functions to regulate the real estate trade
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 sub- division 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.(emphasis supplied.)
The substantive provisions being applied and enforced by the NHA in the instant case are found
in Section 23 of Presidential Decree No. 957 which reads:
Sec. 23. Non-Forfeiture of Payments. No installment payment made by a
buyer in a subdivision or condominium project for the lot or unit he
contracted to buy shall be forfeited in favor of the owner or developer when
the buyer, after due notice to the owner or developer, desists from further
payment due to the failure of the owner or developer to develop the
subdivision or condominium project according to the approved plans and
within the time limit for complying with the same. Such buyer may, at his
option, be reimbursed the total amount paid including amortization and
interests but excluding delinquency interests, with interest thereon at the
legal rate. (emphasis supplied.)
Having failed to comply with its contractual obligation to complete certain specified
improvements in the subdivision within the specified period of two years from the date of the
execution of the Contract to Sell, petitioner was not entitled to exercise its options under Clause
7 of the Contract. Hence, petitioner could neither rescind the Contract to Sell nor treat the
installment payments made by the private respondent as forfeited in its favor. Indeed, under the
general Civil Law, 13 in view of petitioner's breach of its contract with private respondent, it is the
latter who is vested with the option either to rescind the contract and receive reimbursement of
an installment payments (with legal interest) made for the purchase of the subdivision lot in
question, or to suspend payment of further purchase installments until such time as the
petitioner had fulfilled its obligations to the buyer. The NHA was therefore correct in holding that
private respondent's prior installment payments could not be forfeited in favor of petitioner.
Neither did the NHA commit any abuse, let alone a grave abuse of discretion or act in excess of
its jurisdiction when it ordered the reinstatement of the Contract to Sell between the parties.
Such reinstatement is no more than a logical consequence of the NHA's correct ruling, just
noted, that the petitioner was not entitled to rescind the Contract to Sell. There is, in any case,
no question that under Presidential Decree No. 957, the NHA was legally empowered to
determine and protect the rights of contracting parties under the law administered by it and
under the respective agreements, as well as to ensure that their obligations thereunder are
faithfully performed.

We turn to petitioner's assertion that it had been denied the right to due process. This assertion
lacks substance. The record shows that a copy of the order denying the Motion to Dismiss and
scheduling the hearing of the complaint for the morning of 6 March 1978, was duly served on
counsel for petitioner, as evidenced by the annotation appearing at the bottom of said copy
indicating that such service had been effected. 14 But even if it be assumed, arguendo, that
such notice had not been served on the petitioner, nevertheless the latter was not deprived of
due process, for what the fundamental law abhors is not the absence of previous notice but
rather the absolute lack of opportunity to be heard. 15 In the instant case, petitioner was given
ample opportunity to present its side and to be heard on a motion for reconsideration as well,
and not just on a motion to dismiss; the claim of denial of due process must hence sound even
more hollow. 16
We turn finally to the question of the amount of P16,994.73 which petitioner insists had accrued
during the period from September 1972 to October 1976, when private respondent had
suspended payment of his monthly installments on his chosen subdivision lot. The NHA in its 9
March 1978 resolution ruled that the regular monthly installments under the Contract to Sell did
not accrue during the September 1972 October 1976 period:
[R]espondent allowed the complainant to suspend payment of his monthly
installments until the improvements in the subdivision shall have been
completed. Respondent informed complainant on November 1976 that the
improvements have been completed. Monthly installments during the period
of suspension of payment did not become due and demandable Neither did
they accrue Such must be the case, otherwise, there is no sense in
suspending payments. If the suspension is lifted the debtor shall resume
payments but never did he incur any arrears.
Such being the case, the demand of respondent for complainant to pay the
arrears due during the period of suspension of payment is null and
void. Consequently, the notice of cancellation based on the refusal to pay
the s that were not due and demandable is also null and void. 17
The NHA resolution is probably too terse and in need of certification and amplification. The NHA
correctly held that no installment payments should be considered as having accrued during the
period of suspension of payments. Clearly, the critical issue is what happens to the installment
payments which would have accrued and fallen due during the period of suspension had no
default on the part of the petitioner intervened. To our mind, the NHA resolution is most
appropriately read as directing that the original period of payment in the Contract to Sell must be
deemed extended by a period of time equal to the period of suspension (i.e., by four (4) years
and two (2) months) during which extended time (tacked on to the original contract period)
private respondent buyer must continue to pay the monthly installment payments until the entire
original contract price shall have been paid. We think that such is the intent of the NHA
resolution which directed that "[i]f the suspension is lifted, the debtor shall resume payments"
and that such is the most equitable and just reading that may be given to the NHA resolution. To
permit Antipolo Realty to collect the disputed amount in a lump sum after it had defaulted on its
obligations to its lot buyers, would tend to defeat the purpose of the authorization (under Sec. 23
of Presidential Decree No. 957, supra) to lot buyers to suspend installment payments. As the
NHA resolution pointed out, [s]uch must be the case, otherwise, there is no sense in suspending
payments." Upon the other hand, to condone the entire amount that would have become due
would be an expressively harsh penalty upon the petitioner and would result in the unjust
enrichment of the private respondent at the expense of the petitioner. It should be recalled that
the latter had already fulfilled, albeit tardily, its obligations to its lot buyers under their Contracts
to Sell. At the same time, the lot buyer should not be regarded as delinquent and as such
charged penalty interest. The suspension of installment payments was attributable to the
petitioner, not the private respondent. The tacking on of the period of suspension to the end of

the original period precisely prevents default on the part of the lot buyer. In the words of the NHA
resolution, "never would [the buyer] incur any arrears."
WHEREFORE, the Petition for certiorari is DISMISSED. The NHA decision appealed from is
hereby AFFIRMED and clarified as providing for the lengthening of the original contract period
for payment of installments under the Contract to Sell by four (4) years and two (2) months,
during which extended time private respondent shall continue to pay the regular monthly
installment payments until the entire original contract price shall have been paid. No
pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-45839 June 1, 1988
RUFINO MATIENZO, GODOFREDO ESPIRITU, DIOSCORRO FRANCO, AND LA SUERTE
TRANSPORTATION CORPORATION, petitioners,
vs.
HON. LEOPOLDO M. ABELLERA, ACTING CHAIRMAN OF THE BOARD OF
TRANSPORTATION, HON. GODOFREDO Q. ASUNCION, MEMBER OF THE BOARD OF
TRANSPORTATION, ARTURO DELA CRUZ, MS TRANSPORTATION CO., INC., NEW
FAMILIA TRANSPORTATION CO., ROBERTO MOJARES, ET AL.,respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari and prohibition, with application for preliminary injunction, seeking
the annulment and inhibition of the grant or award of provisional permits or special authority by
the respondent Board of Transportation (BOT) to respondent taxicab operators, for the operation
and legalization of "excess taxicab units" under certain provisions of Presidential Decree No.
101 "despite the lapse of the power to do so thereunder," and "in violation of other provisions of
the Decree, Letter of Instructions No. 379 and other relevant rules of the BOT."
The petitioners and private respondents are all authorized taxicab operators in Metro Manila.
The respondents, however, admittedly operate "colorum" or "kabit" taxicab units. On or about
the second week of February, 1977, private respondents filed their petitions with the respondent
Board for the legalization of their unauthorized "excess" taxicab units citing Presidential Decree
No. 101, promulgated on January 17, 1973, "to eradicate the harmful and unlawful trade of
clandestine operators, by replacing or allowing them to become legitimate and responsible
operators." Within a matter of days, the respondent Board promulgated its orders setting the
applications for hearing and granting applicants provisional authority to operate their "excess
taxicab units" for which legalization was sought. Thus, the present petition.
Opposing the applications and seeking to restrain the grant of provisional permits or authority, as
well as the annulment of permits already granted under PD 101, the petitioners allege that the
BOT acted without jurisdiction in taking cognizance of the petitions for legalization and awarding
special permits to the private respondents.

Presidential Decree No. 101 vested in the Board of Transportation the power, among others "To
grant special permits of limited term for the operation of public utility motor vehicles as may, in
the judgment of the Board, be necessary to replace or convert clandestine operators into
legitimate and responsible operators." (Section 1, PD 101)
Citing, however, Section 4 of the Decree which provides:
SEC. 4. Transitory Provision. Six months after the promulgation of this
Decree, the Board of Transportation, the Bureau of Transportation, The
Philippine Constabulary, the city and municipal forces, and the provincial
and city fiscals shall wage a concerted and relentless drive towards the total
elimination and punishment of all clandestine and unlawful operators of
public utility motor vehicles."
the petitioners argue that neither the Board of Transportation chairman nor any member thereof
had the power, at the time the petitions were filed (i.e. in 1977), to legitimize clandestine
operations under PD 101 as such power had been limited to a period of six (6) months from and
after the promulgation of the Decree on January 17, 1973. They state that, thereafter, the power
lapses and becomes functus officio.
To reinforce their stand, the petitioners refer to certain provisions of the Rules and Regulations
implementing PD 101 issued by respondent Board, Letter of Instructions No. 379, and BOT
Memorandum Circular No. 76-25 (a). In summary, these rules provide inter alia that (1) only
applications for special permits for "colorum" or "kabit" operators filed before July 17, 1973 shall
be accepted and processed (Secs. 3 and 16 (c), BOT-LTC-HPG Joint Regulations Implementing
PD 101, pp. 33 and 47, Rollo); (2) Every provisional authority given to any taxi operator shall be
cancelled immediately and no provisional authority shall thereafter be issued (par. 6, Letter of
Instructions No. 379, issued March 10, 1976, p. 58, Rollo); (3) Effective immediately, no
provisional authorities on applications for certificates of public convenience shall be granted or
existing provisional authorities on new applications extended to, among others, taxi
denominations in Metro Manila (BOT Memorandum Circular No. 75-25 (a), August 30, 1976, p.
64, Rollo); (4) All taxis authorized to operate within Metro Manila shall obtain new special
permits from the BOT, which permits shall be the only ones recognized within the area (par. 8,
LOI No. 379, supra); and (5) No bonafide applicant may apply for special permit to operate,
among others, new taxicab services, and, no application for such new service shall be accepted
for filing or processed by any LTC agency or granted under these regulations by any LTC
Regional Office until after it shall have announced its program of development for these types of
public motor vehicles (Sec. 16d, BOT-LTC-HPG Joint Regulations, p. 47, Rollo).
The petitioners raise the following issues:
I. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE
POWER TO GRANT PROVISIONAL PERMITS TO OPERATE DESPITE
THE BAN THEREON UNDER LETTER OF INSTRUCTIONS NO. 379;
II. WHETHER OR NOT THE BOARD OF TRANSPORTATION HAS THE
POWER TO LEGALIZE, AT THIS TIME, CLANDESTINE AND UNLAWFUL
TAXICAB OPERATIONS UNDER SECTION 1, P.D. 101; AND
III. WHETHER OR NOT THE PROCEDURE BEING FOLLOWED BY THE
BOARD IN THE CASES IN QUESTION SATISFIES THE PROCEDURAL
DUE PROCESS REQUIREMENTS. (p. 119, Rollo)

We need not pass upon the first issue raised anent the grant of provisional authority to
respondents. Considering that the effectivity of the provisional permits issued to the respondents
was expressly limited to June 30, 1977, as evidenced by the BOT orders granting the same
(Annexes G, H, I and J among others) and Memorandum Circular No. 77-4 dated January 20,
1977 (p. 151, Rollo), implementing paragraph 6 of LOI 379 (ordering immediate cancellation of
all provisional authorities issued to taxicab operators, supra), which provides:
5. After June 30, 1977, all provisional authorities are deemed cancelled,
even if hearings on the main application have not been terminated.
the issue is MOOT and ACADEMIC. Only the issue on legalization remains under consideration.
Justifying its action on private respondent's applications, the respondent Board emphasizes
public need as the overriding concern. It is argued that under PD 101, it is the fixed policy of the
State "to eradicate the harmful and unlawful trade of clandestine operators by replacing or
allowing them to become legitimate and responsible ones" (Whereas clause, PD 101). In view
thereof, it is maintained that respondent Board may continue to grant to "colorum" operators the
benefits of legalization under PD 101, despite the lapse of its power, after six (6) months, to do
so, without taking punitive measures against the said operators.
Indeed, a reading of Section 1, PD 101, shows a grant of powers to the respondent Board to
issue provisional permits as a step towards the legalization of colorum taxicab operations
without the alleged time limitation. There is nothing in Section 4, cited by the petitioners, to
suggest the expiration of such powers six (6) months after promulgation of the Decree. Rather, it
merely provides for the withdrawal of the State's waiver of its right to punish said colorum
operators for their illegal acts. In other words, the cited section declares when the period of
moratorium suspending the relentless drive to eliminate illegal operators shall end. Clearly, there
is no impediment to the Board's exercise of jurisdiction under its broad powers under the Public
Service Act to issue certificates of public convenience to achieve the avowed purpose of PD 101
(Sec. 16a, Public Service Act, Nov. 7, 1936).
It is a settled principle of law that in determining whether a board or commission has a certain
power, the authority given should be liberally construed in the light of the purposes for which it
was created, and that which is incidentally necessary to a full implementation of the legislative
intent should be upheld as being germane to the law. Necessarily, too, where the end is
required, the appropriate means are deemed given (Martin, Administrative Law, 1979, p. 46).
Thus, as averred by the respondents:

In line with its duty to rationalize the transport industry, the Board shall. from
time to time, re- study the public need for public utilities in any area in the
Philippines for the purpose of re- evaluating the policies. (p. 64, Rollo)
Thus, the respondents correctly argue that "as the need of the public changes and oscillates
with the trends of modern life, so must the Memo Orders issued by respondent jibe with the
dynamic and flexible standards of public needs. ... Respondent Board is not supposed to 'tie its
hands' on its issued Memo Orders should public interest demand otherwise" (Answer of private
respondents, p. 121, Rollo).
The fate of the private respondent's petitions is initially for the Board to determine. From the
records of the case, acceptance of the respondent's applications appears to be a question
correctly within the discretion of the respondent Board to decide. As a rule, where the jurisdiction
of the BOT to take cognizance of an application for legalization is settled, the Court enjoins the
exercise thereof only when there is fraud, abuse of discretion or error of law. Furthermore, the
court does not interfere, as a rule, with administrative action prior to its completion or finality . It
is only after judicial review is no longer premature that we ascertain in proper cases whether the
administrative findings are not in violation of law, whether they are free from fraud or imposition
and whether they find substantial support from the evidence.
Finally, with respect to the last issue raised by the petitioners alleging the denial of due process
by respondent Board in granting the provisional permits to the private respondents and in taking
cognizance of their applications for legalization without notice and hearing, suffice it to say that
PD 101 does not require such notice or hearing for the grant of temporary authority . The
provisional nature of the authority and the fact that the primary application shall be given a full
hearing are the safeguards against its abuse. As to the applications for legalization themselves,
the Public Service Act does enjoin the Board to give notice and hearing before exercising any of
its powers under Sec. 16 thereof. However, the allegations that due process has been denied
are negated by the hearings set by the Board on the applications as expressed in its orders
resolving the petitions for special permits (Annexes G, H, I, pp. 80-102, Rollo).
The Board stated:
The grounds involved in the petition are of first impression. It cannot resolve
the issue ex-parte. It needs to hear the views of other parties who may have
an interest, or whose interest may be affected by any decision that this
Board may take.

... [A]ll things considered, the question is what is the best for the interest of
the public. Whether PD 101 has lost its effectiveness or not, will in no way
prevent this Board from resolving the question in the same candor and
spirit that P.D. 101 and LOI 379 were issued to cope with the multifarious ills
that plague our transport system. ... (Emphasis supplied) (pp. 91-92, Rollo)
This, the private respondents appreciate, as they make reference to PD 101, merely to cite the
compassion with which colorum operators were dealt with under the law. They state that it is "in
the same vein and spirit that this Honorable Board has extended the Decree of legalization to
the operatives of the various PUJ and PUB services along legislative methods," that
respondents pray for authorization of their colorum units in actual operation in Metro Manila
(Petitions for Legalization, Annexes E & F, par. 7, pp. 65-79, Rollo).
Anent the petitioners' reliance on the BOT Rules and Regulations Implementing PD 101 as well
as its Memorandum Circular No. 76-25(a), the BOT itself has declared:

The Board therefore, decides to set the petition for hearing.

xxx xxx xxx
As to the required notice, it is impossible for the respondent Board to give personal notice to all
parties who may be interested in the matter, which parties are unknown to it. Its aforementioned
order substantially complies with the requirement. The petitioners having been able to timely
oppose the petitions in question, any lack of notice is deemed cured.
WHEREFORE. the petition is hereby DISMISSED for lack of merit. The questioned orders of the
then Board of Transportation are AFFIRMED.
SO ORDERED.