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Administrative Law

Case Notes/Digest
Luzon Development Bank v. Assoc of LDB
Issue
Whether or not the company has violated the
Collective Bargaining Agreement provision and the
Memorandum of Agreement dated April 1994, on
promotion.
At a conference, the parties agreed on the submission
of their respective Position Papers on December 115, 1994. Atty. Ester S. Garcia, in her capacity as
Voluntary Arbitrator, received ALDBE's Position
Paper on January 18, 1995. LDB, on the other hand,
failed to submit its Position Paper despite a letter
from the Voluntary Arbitrator reminding them to do
so. As of May 23, 1995 no Position Paper had been
filed by LDB. (The Arbitrator proceeded to rule on
the matter notwithstanding the absence of the
position paper of the petitioner.)
In labor law context, arbitration is the reference of a
labor dispute to an impartial third person for
determination on the basis of evidence and arguments
presented by such parties who have bound
themselves to accept the decision of the arbitrator as
final and binding. Compulsory arbitration is a system
whereby the parties to a dispute are compelled by
the government to forego their right to strike and are
compelled to accept the resolution of their dispute
through arbitration by a third party. Under voluntary
arbitration, on the other hand, referral of a dispute by
the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to
an impartial third person for a final and binding
resolution.
Ideally, arbitration awards are supposed to be
complied with by both parties without delay, such
that once an award has been rendered by an
arbitrator, nothing is left to be done by both parties
but to comply with the same. After all, they are
presumed to have freely chosen arbitration as the
mode of settlement for that particular dispute.
Pursuant thereto, they have chosen a mutually
acceptable arbitrator who shall hear and decide their
case.
In the Philippine context, the parties to a Collective
Bargaining Agreement (CBA) are required to
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include therein provisions for a MACHINERY


FOR THE RESOLUTION OF GRIEVANCES
arising from the interpretation or implementation
of the CBA or company personnel policies. 3 For
this purpose, parties to a CBA shall name and
designate therein a voluntary arbitrator or a panel of
arbitrators, or include a procedure for their selection,
preferably from those accredited by the National
Conciliation and Mediation Board (NCMB).
It will thus be noted that the jurisdiction conferred by
law on a voluntary arbitrator or a panel of such
arbitrators is quite limited compared to the original
jurisdiction of the labor arbiter and the appellate
jurisdiction of the National Labor Relations
Commission (NLRC) for that matter. 4 The state of
our present law relating to voluntary arbitration
provides that "(t)he award or decision of the
Voluntary Arbitrator . . . shall be final and executory
after ten (10) calendar days from receipt of the copy
of the award or decision by the parties," 5 while the
"(d)ecision, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the
Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards,
or orders." 6 Hence, while there is an express mode
of appeal from the decision of a labor arbiter,
Republic Act No. 6715 is silent with respect to an
appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a
voluntary arbitrator is, more often than not, elevated
to the Supreme Court itself on a petition for
certiorari, 7 IN EFFECT EQUATING THE
VOLUNTARY ARBITRATOR WITH THE NLRC
or the Court of Appeals. In the view of the Court,
this is illogical and imposes an unnecessary burden
upon it.
***In Volkschel Labor Union, et al. v. NLRC, et al.,
8 on the settled premise that the judgments of courts
and awards of quasi-judicial agencies must become
final at some definite time, this Court ruled that the
awards of voluntary arbitrators determine the rights
of parties; hence, their decisions HAVE THE
SAME LEGAL EFFECT as judgments of a court.
In Oceanic Bic Division (FFW), et al. v. Romero, et
al., 9 this Court ruled that "a VOLUNTARY
ARBITRATOR BY THE NATURE OF HER

Administrative Law
Case Notes/Digest
FUNCTIONS ACTS IN A QUASI-JUDICIAL
CAPACITY." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a
panel, enjoys in law the status of a quasi-judicial
agency but independent of, and apart from, the
NLRC since his decisions are not appealable to the
latter.
An "instrumentality" is anything used as a means
or agency. 12 Thus, the terms governmental
"agency" or "instrumentality" are synonymous in the
sense that either of them is a means by which a
government acts, or by which a certain government
act or function is performed. 13 The word
"instrumentality," with respect to a state,
contemplates an authority to which the state
delegates
governmental
power
for
the
PERFORMANCE OF A STATE FUNCTION. 14
An individual person, like an administrator or
executor, is a judicial instrumentality in the settling of
an estate, 15 in the same manner that a sub-agent
appointed by a bankruptcy court is an instrumentality
of the court, 16 and a trustee in bankruptcy of a
defunct corporation is an instrumentality of the state.
The voluntary arbitrator no less performs a state
function pursuant to a governmental power
delegated to him under the provisions therefor in
the Labor Code and he falls, therefore, within the
contemplation of the term "instrumentality" in the
aforequoted Sec. 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor
Code does not place him within the exceptions to said
Sec. 9 since he is a quasi-judicial instrumentality as
contemplated therein.
A fortiori, the decision or award of the voluntary
arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the
procedure outlined in Revised Administrative
Circular No. 1-95, just like those of the quasi-judicial
agencies, boards and commissions enumerated
therein.
Iron & Steel Authority v. CA
Petitioner Iron and Steel Authority ("ISA") was
created by Presidential Decree (P.D.) No. 272 dated 9
August 1973 in order, generally, to develop and
promote the iron and steel industry in the Philippines.
P.D. No. 272 initially created petitioner ISA for a
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term of five (5) years counting from 9 August 1973. 1


When ISA's original term expired on 10 October
1978, its term was extended for another ten (10)
years by Executive Order No. 555 dated 31 August
1979.
Since certain portions of the public land (The land
referred to here will be used by the National Steel
Authority for the construction of a steel mill in Iligan
City) subject matter Proclamation No. 2239 were
occupied by a non-operational chemical fertilizer
plant and related facilities owned by private
respondent Maria Cristina Fertilizer Corporation
("MCFC"), Letter of Instruction (LOI), No. 1277,
also dated 16 November 1982, was issued directing
the NSC to "negotiate with the owners of MCFC, for
and on behalf of the Government, for the
compensation of MCFC's present occupancy rights
on the subject land." LOI No. 1277 also directed that
should NSC and private respondent MCFC fail to
reach an agreement within a period of sixty (60)
days from the date of LOI No. 1277, petitioner
ISA was to exercise its power of eminent domain
under P.D. No. 272 and to initiate expropriation
proceedings in respect of occupancy rights of private
respondent MCFC relating to the subject public land
as well as the plant itself and related facilities and to
cede the same to the NSC. Negotiations between
NSC and private respondent MCFC did fail.
Accordingly, on 18 August 1983, petitioner ISA
commenced eminent domain proceedings against
private respondent MCFC. On 17 September 1983, a
writ of possession was issued by the trial court in
favor of ISA. ISA in turn placed NSC in possession
and control of the land occupied by MCFC's fertilizer
plant installation.
The case proceeded to trial. While the trial was
ongoing, however, the statutory existence of
petitioner ISA expired on 11 August 1988. MCFC
then filed a motion to dismiss, contending that no
valid judgment could be rendered against ISA which
had ceased to be a juridical person. Petitioner ISA
filed its opposition to this motion. In an Order dated 9
November 1988, the trial court granted MCFC's
motion to dismiss and did dismiss the case. The
dismissal was anchored on the provision of the Rules
of Court stating that "only natural or juridical persons
or entities authorized by law may be parties in a civil

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Case Notes/Digest
case." 3 The trial court also referred to noncompliance by petitioner ISA with the requirements
of Section 16, Rule 3 of the Rules of Court.
Petitioner contended that despite the expiration of
its term, its juridical existence continued until the
winding up of its affairs could be completed. In the
alternative, petitioner ISA urged that the Republic of
the Philippines, being the real party-in-interest,
should be allowed to be substituted for petitioner
ISA. In this connection, ISA referred to a letter from
the Office of the President dated 28 September 1988
which especially directed the Solicitor General to
continue the expropriation case. (Which was denied
on the ground that the property to be expropriated is
not for public use of benefit but for the use and
benefit of NSC, which will engage in private business
and profit.)
Court of Appeals affirmed the order of dismissal of
the trial court. The Court of Appeals held that
petitioner ISA, "a government regulatory agency
exercising sovereign functions," did not have the
same rights as an ordinary corporation and that the
ISA, unlike corporations organized under the
Corporation Code, was not entitled to a period for
winding up its affairs after expiration of its legally
mandated term, with the result that upon expiration
of its term on 11 August 1987, ISA was "abolished
and [had] no more legal authority to perform
governmental functions." The Court of Appeals went
on to say that the action for expropriation could not
prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to
expropriate, had become ineffective as a result of
the delegate's dissolution, and could not be
continued in the name of Republic of the Philippines,
represented by the Solicitor General.
Issue
The principal issue which we must address in this
case is whether or not the Republic of the Philippines
is entitled to be substituted for ISA in view of the
expiration of ISA's term.
Ruling
Clearly, ISA was vested with some of the powers or
attributes normally associated with juridical
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personality. There is, however, no provision in P.D.


No. 272 recognizing ISA as possessing general or
comprehensive juridical personality separate and
distinct from that of the Government. The ISA in
fact appears to the Court to be a non-incorporated
agency or instrumentality of the Republic of the
Philippines, or more precisely of the Government of
the Republic of the Philippines. It is common
knowledge that other agencies or instrumentalities of
the Government of the Republic are cast in corporate
form, that is to say, are incorporated agencies or
instrumentalities, sometimes with and at other times
without capital stock, and accordingly vested with a
juridical personality distinct from the personality of
the Republic. We consider that the ISA is properly
regarded as an agent or delegate of the Republic
of the Philippines. The Republic itself is a body
corporate and juridical person vested with the full
panoply of powers and attributes which are
compendiously described as "legal personality.
When the statutory term of a non-incorporated
agency expires, the powers, duties and functions as
well as the assets and liabilities of that agency
revert back to, and are re-assumed by, the
Republic of the Philippines, in the absence of
special provisions of law specifying some other
disposition thereof such as, e.g., devolution or
transmission of such powers, duties, functions, etc. to
some other identified successor agency or
instrumentality of the Republic of the Philippines.
When the expiring agency is an incorporated one,
the consequences of such expiry must be looked
for, in the first instance, in the charter of that
agency and, by way of supplementation, in the
provisions of the Corporation Code. Since, in the
instant case, ISA is a non-incorporated agency or
instrumentality of the Republic, its powers, duties,
functions, assets and liabilities are properly regarded
as folded back into the Government of the Republic
of the Philippines and hence assumed once again by
the Republic, no special statutory provision having
been shown to have mandated succession thereto by
some other entity or agency of the Republic.
The procedural implications of the relationship
between an agent or delegate of the Republic of the
Philippines and the Republic itself are, at least in
part, spelled out in the Rules of Court. The general

Administrative Law
Case Notes/Digest
rule is, of course, that an action must be prosecuted
and defended in the name of the real party in interest.
(Rule 3, Section 2) Petitioner ISA was, at the
commencement of the expropriation proceedings, a
real party in interest, having been explicitly
authorized by its enabling statute to institute
expropriation proceedings. In the instant case, ISA
instituted the expropriation proceedings in its
capacity as an agent or delegate or representative of
the Republic of the Philippines pursuant to its
authority under P.D. No. 272. The present
expropriation suit was brought on behalf of and for
the benefit of the Republic as the principal of ISA.
From the foregoing premises, it follows that the
Republic of the Philippines is entitled to be
substituted in the expropriation proceedings as partyplaintiff in lieu of ISA, the statutory term of ISA
having expired. Put a little differently, the expiration
of ISA's statutory term did not by itself require or
justify the dismissal of the eminent domain
proceedings.
While the power of eminent domain is, in principle,
vested primarily in the legislative department of the
government, we believe and so hold that no new
legislative act is necessary should the Republic
decide, upon being substituted for ISA, in fact to
continue to prosecute the expropriation proceedings.
For the legislative authority, a long time ago, enacted
a continuing or standing delegation of authority to
the President of the Philippines to exercise, or
cause the exercise of, the power of eminent domain
on behalf of the Government of the Republic of the
Philippines. The 1917 Revised Administrative Code,
which was in effect at the time of the commencement
of the present expropriation proceedings before the
Iligan Regional Trial Court, provided that: In addition
to his general supervisory authority, the President of
the Philippines shall have such other specific
powers and duties as are expressly conferred or
imposed on him by law, and also, in particular, the
powers and duties set forth in this Chapter. To
determine when it is necessary or advantageous to
exercise the right of eminent domain in behalf of the
Government of the Philippines; and to direct the
Secretary of Justice, where such act is deemed
advisable, to cause the condemnation proceedings to
be begun in the court having proper jurisdiction.

Christian Arbiol
San Beda College Alabang School of Law

Solid Homes v. Payawal


The complaint was filed on August 31, 1982, by
Teresita Payawal against Solid Homes, Inc. before
the Regional Trial Court of Quezon City and
docketed as Civil Case No. Q-36119. The plaintiff
alleged that the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the
agreed price of P 28,080.00, and that by September
10, 1981, she had already paid the defendant the
total amount of P 38,949.87 in monthly
installments
and
interests.
Solid
Homes
subsequently executed a deed of sale over the land
but failed to deliver the corresponding certificate
of title despite her repeated demands because, as it
appeared later, the defendant had mortgaged the
property in bad faith to a financing company. The
plaintiff asked for delivery of the title to the lot or,
alternatively, the return of all the amounts paid by her
plus interest. She also claimed moral and exemplary
damages, attorney's fees and the costs of the suit.
Solid Homes moved to dismiss the complaint on the
ground that the court had no jurisdiction, this being
vested in the National Housing Authority under PD
No. 957. The motion was denied. The defendant
repleaded the objection in its answer, citing Section 3
of the said decree providing that "the National
Housing Authority
shall
have
exclusive
jurisdiction to regulate the real estate trade and
business in accordance with the provisions of this
Decree." After trial, judgment was rendered in favor
of the plaintiff.
The private respondent contends that the applicable
law is BP No. 129, which confers on regional trial
courts jurisdiction to hear and decide cases
mentioned therein (such as in this case.) It stresses,
additionally, that BP No. 129 should control as the
later enactment, having been promulgated in
1981, after PD No. 957 was issued in 1975 and PD
No. 1344 in 1978.
Ruling
This construction must yield to the familiar canon
that in case of conflict between a general law and a
special law, the latter must prevail regardless of the
dates of their enactment. The circumstance that the
special law is passed before or after the general act

Administrative Law
Case Notes/Digest
does not change the principle. Where the special law
is later, it will be regarded as an exception to, or a
qualification of, the prior general act; and where the
general act is later, the special statute will be
construed as remaining an exception to its terms,
unless repealed expressly or by necessary
implication. It is obvious that the general law in this
case is BP No. 129 and PD No. 1344 the special law.
We do not read that provision as vesting concurrent
jurisdiction on the Regional Trial Court and the
Board over the complaint mentioned in PD No. 1344
if only because grants of power are not to be lightly
inferred or merely implied. The only purpose of this
section, as we see it, is to reserve. to the aggrieved
party such other remedies as may be provided by
existing law, like a prosecution for the act
complained of under the Revised Penal Code.
As a result of the growing complexity of the modern
society, it has become necessary to create more and
more administrative bodies to help in the regulation
of its ramified activities. Specialized in the particular
fields assigned to them, they can deal with the
problems thereof with more expertise and dispatch
than can be expected from the legislature or the
courts of justice. This is the reason for the increasing
vesture of quasi-legislative and quasi-judicial powers
in what is now not unreasonably called the fourth
department of the government. Statutes conferring
powers on their administrative agencies must be
liberally construed to enable them to discharge
their assigned duties in accordance with the
legislative purpose.
Dadubo v. Civil Service Commission
Petitioner Lolita A. Dadubo, Senior Accounts Analyst
and Rosario B. Cidro, Cash Supervisor, of the
Development Bank of the Philippines, Borongan
Branch were administratively charged with
conduct prejudicial to the best interest of the
service. 1 The charges were based on reports on the
unposted withdrawal of P60,000.00 (The withdrawal
occurred for at least 3 times.) from Savings Account
No. 87-692 in the name of Eric Tiu, Edgar Tiu, and/or
Pilar Tiu.
On the basis of these findings, DBP found Dadubo
guilty of dishonesty for embezzlement of bank
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funds. She was penalized with dismissal from the


service. 6 Cidro was adjudged guilty of gross neglect
of duty and fined in an amount equivalent to one
month basic salary, payable through salary
deductions in not more than 12 installments. Dadubo
appealed to the Merit Systems Protection Board
(MSPB), 7 which affirmed the decision of the DBP
where it ruled that: There is nothing in the records
to show that the Senior Manager, Personnel Services
and Vice-Chairman, both of the DBP, abused their
discretion in deciding the case against the appellant
or that their decision was made and attended with
arbitrariness or unfairness. To all intents and
purposes, the ensuing decision was a necessary
consequence of the evidence.
However, DBP was reversed by the Civil Service
Commission in its Resolution No. 91-642, dated May
21, 1991, 8 which reduced Dadubo's penalty to
suspension for six months: Although Dadubo made
alterations on the dates in the Ledger Card from
August 13 to August 14, the fact remains that the
bank was defrauded on account of said ABH
withdrawal (for) which Cidro is held responsible and
accordingly found guilty of Gross Neglect of Duty
and Inefficiency and Incompetence in the
Performance of Official Duty. It was also Dadubo
who reported on the irreconcilable P60,000.00. The
most that Dadubo could be charged with is willful
violation of office regulation when she undertook
reconciliation for under the Bank Manual the tellers
are not allowed access to the savings account ledger
cards. Although subsequently, it was reversed upon
the timely filing of a MR by the DBP and thus this
petition.
Dadubo has brought her case to this Court in this
petition for certiorari. She claims that CSC
Resolution No. 92-878 failed to comply with the
constitutional requirement to state clearly and
distinctly the facts and the law on which the
decision is based; CSC Resolution No. 92-878
conflicts with the findings of fact in CSC Resolution
No. 91-642; the Commission manifestly overlooked
or disregarded certain relevant facts not disputed by
the parties; and it based its conclusions entirely on
speculations, surmises or conjectures.

Administrative Law
Case Notes/Digest
Required to comment, the Solicitor General argued
that CSC Resolution No. 92-878 did not need to
restate the legal and factual bases of the original
decision in CSC-MSPB No. 497 which already
explained the relevant facts and the applicable law.
The petitioner had admitted that she changed the
entry of the dates in the subsidiary ledger card from
August 13 to 14 in the course of her reconciliation
work although she was not authorized to do this. This
admission, along with the other evidence Presented
during the investigation in the bank, proved Dadubo's
guilt. Moreover, the affidavit of Albert C. Ballicud
was inadmissible in evidence because he was never
subjected to cross-examination.
Ruling
The petitioner's challenges are mainly factual. The
rule is that the findings of fact of administrative
bodies, if based on substantial evidence, are
controlling on the reviewing authority. 10 is settled
that it is not for the appellate court to substitute its
own judgment for that of the administrative agency
on the sufficiency of the evidence and the credibility
of the witnesses. 11 Administrative decisions on
matters within their jurisdiction are entitled to respect
and can only be set aside on proof of grave abuse of
discretion, fraud or error of law. 12 None of these
vices has been shown in this case.
The petitioner's invocation of due process is without
merit. Her complaint that she was not sufficiently
informed of the charges against her has no basis.
While the rules governing Judicial trials should be
observed as much as possible, their strict
observance is not indispensable in administrative
cases. 13 As this Court has held, "the standard of due
process that must be met in administrative tribunals
allows a certain latitude as long as the element of
fairness is not ignored."
The essence of due process is distilled in the
immortal cry of Themistocles to Eurybiades: "Strike,
but hear me first!" Less dramatically, it simply
connotes an opportunity to be heard. The petitioner
had several opportunities to be heard and to present
evidence that she was not guilty of embezzlement but
only of failure to comply with the tellering procedure.
Not only did she testify at her formal investigation
but she also filed a motion for reconsideration with
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the DBP, then appealed to the Merit Systems


Protection Board (MSPB), and later elevated the case
to the Civil Service Commission. Having been given
all these opportunities to be heard, which she fully
availed of, she cannot now complain that she was
denied due process.
The charge against the respondent in an
administrative case need not be drafted with the
precision of an information in a criminal
prosecution. It is sufficient that he is apprised of the
substance of the charge against him; what is
controlling is the allegation of the acts complained of,
not the designation of the offense. We must also
dismiss the petitioner's complaint that CSC
Resolution No. 92-878 failed to comply with the
constitutional requirement to state clearly and
distinctly the facts and the law on which a decision is
based. We have held that this provision applies only
to courts of justice and not to administrative bodies
like the Civil Service Commission. 16 In any event,
there was an earlier statement of the facts and the
law involved in the decision rendered by the MSPB
dated February 28, 1990, which affirmed DBP's
decision to dismiss the petitioner. In both decisions,
the facts and the law on which they were based were
clearly and distinctly stated. It is worth adding that
inasmuch as Civil Service Resolution No. 92-878
was rendered only to resolve DBP's motion for
reconsideration, it was not really necessary to re-state
the factual and legal bases for the said decisions.
Lianga Bay Logging v. Enage
The parties herein are both forest concessionaries
whose licensed areas are adjacent to each other. Since
the concessions of petitioner and respondent are
adjacent to each other, they have a common
boundary-the Agusan-Surigao Provincial boundarywhereby the eastern boundary of respondent Ago's
concession is petitioner Lianga's western boundary.
Because of reports of encroachment by both parties
on each other's concession areas, the Director of
Forestry ordered a survey to establish on the ground
the common boundary of their respective concession
areas. Forester Cipriano Melchor undertook the
survey and fixed the common boundary, which
respondent Ago protested claiming that "its eastern
boundary should be the provincial boundary line of

Administrative Law
Case Notes/Digest
Agusan-Surigao as described in Section 1 of Art.
1693 of the Philippine Commission as indicated in
the green pencil in the attached sketch" of the areas
as prepared by the Bureau of Forestry.
The Director of Forestry ruled on the matter, by
holding that he claim of the Ago Timber Corporation
runs counter to the intentions of this Office is
granting the license of Mr. Narciso Lansang; and
further, that it also runs counter to the intentions of
this Office in granting the Timber License Agreement
to the Lianga Bay Logging Co., Inc. The intentions of
this Office in granting the two licenses (Lansang and
Lianga Bay Logging Co., Inc.) are patently manifest
in that distances and bearings are the controlling
factors. If mention was ever made of the AgusanSurigao boundary, as the common boundary line of
both licensees, this Office could not have meant the
Agusan-Surigao boundary as described under Section
1 of Act 1693 of the Philippine Commission for were
it so it could have been so easy for this Office to
mention the distance from point 3 to point 4 of
Narciso Lansang as approximately 13,800 meters.
This cannot be considered a mistake considering that
the percentage of error which is more or less 103%
is too high an error to be committed by an Office
manned by competent technical men. The AgusanSurigao boundary as mentioned in the technical
descriptions of both licensees, is, therefore, patently
an imaginary line based on B.F. License Control
Map. Such being the case, it is reiterated that distance
and bearings control the description where an
imaginary line exists. 3 The decision fixed the
common boundary of the licensed areas of the Ago
Timber Corporation and Lianga Bay Logging Co.,
Inc. as that indicated in red pencil of the sketch
attached to the decision.
In an appeal interposed by respondent Ago, docketed
in the Department of Agriculture and Natural
Resources as DANR Case No. 2268, the then Acting
Secretary of Agriculture and Natural Resources Jose
Y. Feliciano, in a decision dated August 9, 1965 set
aside the appealed decision of the Director of
Forestry and ruled that "(T)he common boundary line
of the licensed areas of the Ago Timber Corporation
and the Lianga Bay Logging Co., Inc., should be that
indicated by the green line on the same sketch which
had been made an integral part of the appealed
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decision." And it was reversed by the Office of the


President.
On October 21, 1968, a new action was commenced
by Ago Timber Corporation, as plaintiff, in the Court
of First Instance of Agusan, Branch II, docketed
thereat as Civil Case No. 1253, against Lianga Bay
Logging Co., Inc., Assistant Executive Secretaries
Jose J. Leido, Jr. and Gilberto M. Duavit and Director
of Forestry, as defendants, for "Determination of
Correct Boundary Line of License Timber Areas and
Damages with Preliminary Injunction" reiterating
once more the same question raised and passed upon
in DANR Case No. 2268 and insisting that "a judicial
review of such divergent administrative decisions is
necessary in order to determine the correct boundary
fine of the licensed areas in question."
Respondent Judge erred in taking cognizance of the
complaint filed by respondent Ago, asking for the
determination anew of the correct boundary fine of
its licensed timber area, for the same issue had
already been determined by the Director of
Forestry, the Secretary of Agriculture and Natural
Resources and the Office of the President,
administrative officials under whose jurisdictions
the matter properly belongs. Section 1816 of the
Revised Administrative Code vests in the Bureau of
Forestry, the jurisdiction and authority over the
demarcation, protection, management, reproduction,
reforestation, occupancy, and use of all public forests
and forest reserves and over the granting of licenses
for game and fish, and for the taking of forest
products, including stone and earth therefrom. The
Secretary of Agriculture and Natural Resources, as
department head, may repeal or in the decision of the
Director of Forestry when advisable in the public
interests, 15 whose decision is in turn appealable to
the Office of the President.
In giving due course to the complaint below, the
respondent court would necessarily have to assess
and evaluate anew all the evidence presented in the
administrative proceedings, 17 which is beyond its
competence and jurisdiction. For the respondent court
to consider and weigh again the evidence already
presented and passed upon by said officials would be
to allow it to substitute its judgment for that of said
officials who are in a better position to consider and

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Case Notes/Digest
weigh the same in the light of the AUTHORITY
SPECIFICALLY VESTED in them by law. Such a
posture cannot be entertained, for it is a well-settled
doctrine that the courts of justice will generally not
interfere with purely administrative matters which
are addressed to the sound discretion of government
agencies and their expertise unless there is a clear
showing that the latter acted arbitrarily or with
grave abuse of discretion or when they have acted
in a capricious and whimsical manner such that their
action may amount to an excess or lack of
jurisdiction. A doctrine long recognized is that where
the law confines in an administrative office the power
to determine particular questions or matters, upon the
facts to be presented, the jurisdiction of such office
shall prevail over the courts.
The general rule, under the principles of
administrative law in force in this jurisdiction, is that
decisions of administrative officers shall not be
disturbed by the courts, except when the former
have acted without or in excess of their jurisdiction,
or with grave abuse of discretion. Findings of
administrative officials and agencies who have
acquired expertise because their jurisdiction is
confined to specific matters are generally accorded
not only respect but at times even finality of such
findings are supported by substantial evidence. 20
As recently stressed by the Court, "in this era of
clogged court dockets, the need for specialized
administrative boards or commissions with the
special knowledge, experience and capability to hear
and determine promptly disputes on technical matters
or essentially factual matters, subject to judicial
review in case of grave abuse of discretion, has
become well nigh indispensable."
It is elementary that a draft of a decision does not
operate as judgment on a case until the same is duly
signed and delivered to the clerk for filing and
promulgation. A decision cannot be considered as
binding on the parties until its promulgation. 23
Respondent should be aware of this rule. In still
another case of Ago v. Court of Appeals, 24 (where
herein respondent Ago was the petitioner) the Court
held that, "While it is to be presumed that the
judgment that was dictated in open court will be the
judgment of the court, the court may still modify said
order as the same is being put into writing. And even
Christian Arbiol
San Beda College Alabang School of Law

if the order or judgment has already been put into


writing and signed, while it has not yet been
delivered to the clerk for filing, it is stin subject to
amendment or change by the judge. It is only when
the judgment signed by the judge is actually filed
with the clerk of court that it becomes a valid and
binding judgment. Prior thereto, it could still be
subject to amendment and change and may not,
therefore, constitute the real judgment of the court."
The mere suspicion of respondent (The 2 decisions
by the OP were signed by 2 different Exec.
Secretaries.) that there were anomalies in the nonrelease of the Leido "decision" allegedly denying
petitioner's motion for reconsideration and the
substitution thereof by the Duavit decision granting
reconsideration does not justify judicial review.
Beliefs, suspicions and conjectures cannot
overcome the presumption of regularity and legality
of official actions. 25 It is presumed that an official
of a department performs his official duties
regularly. 26 It should be noted, furthermore, that as
hereinabove stated with regard to the case history in
the Office of the President, Ago's motion for
reconsideration of the Duavit decision dated August
9, 1968 was denied in the Order dated October 2,
1968 and signed by Assistant Executive Secretary
Leido himself (who thereby joined in the reversal of
his own first decision dated June 16, 1966 and signed
by himself)
It is abundantly clear that respondent court has no
jurisdiction over the subject matter of Civil Case No.
1253 of the Court of First Instance of Agusan nor has
it jurisdiction to decide on the common boundary of
the licensed areas of petitioner Lianga and respondent
Ago, as determined by respondents public officials
against whom no case of grave abuse of discretion
has been made. Absent a cause of action and
jurisdiction, respondent Judge acted with grave abuse
of discretion and excess, if not lack, of jurisdiction in
refusing to dismiss the case under review and in
issuing the writ of preliminary injunction enjoining
the enforcement of the final decision dated August 9,
1968 and the order affirming the same dated October
2, 1968 of the Office of the President.

Administrative Law
Case Notes/Digest
Christian General Assembly v. Sps. Ignacio
Issue
We resolve in this Rule 45 petition the legal issue of
whether an action to rescind a contract to sell a
subdivision lot that the buyer found to be under
litigation falls under the exclusive jurisdiction of the
Housing and Land Use Regulatory Board (HLURB).
Facts
On April 30, 1998, CGA entered into a Contract to
Sell a subdivision lot 4 (subject property) with the
respondents the registered owners and developers
of a housing subdivision known as Villa Priscilla
Subdivision located in Barangay Cutcut, Pulilan,
Bulacan. Under the Contract to Sell, CGA would pay
P2,373,000.00 for the subject property on installment
basis; they were to pay a down payment of
P1,186,500, with the balance payable within three
years on equal monthly amortization payments of
P46,593.85, inclusive of interest at 24% per annum,
starting June 1998. On August 5, 2000, the parties
mutually agreed to amend the Contract to Sell to
extend the payment period from three to five years,
calculated from the date of purchase and based on the
increased total consideration of P2,706,600, with
equal monthly installments of P37,615.00, inclusive
of interest at 24% per annum, starting September
2000.
According to CGA, it religiously paid the monthly
installments until its administrative pastor
discovered that the title covering the subject
property suffered from fatal flaws and defects. CGA
learned that the subject property was actually part of
two consolidated lots (Lots 2-F and 2-G Bsd-04000829 [OLT]) that the respondents had acquired
from Nicanor Adriano (Adriano) and Ceferino
Sison (Sison), respectively. Adriano and Sison were
former tenant-beneficiaries of Purificacion S.
Imperial (Imperial) whose property in Cutcut,
Pulilan, Bulacan 5 had been placed under Presidential
Decree (PD)No.
27's
Operation
Land
Transfer. 6 According to CGA, Imperial applied for
the retention of five hectares of her land
under Republic Act No. 6657, 7 which the
Department of Agrarian Reform (DAR) granted in its
October 2, 1997 order (DAR Order). The DAR
Christian Arbiol
San Beda College Alabang School of Law

Order authorized Imperial to retain the farm lots


previously awarded to the tenant-beneficiaries,
including Lot 2-F previously awarded to Adriano,
and Lot 2-G Bsd-04-000829 awarded to Sison. On
appeal, the Office of the President 8 and the
CA 9 upheld the DAR Order. Through the Court's
Resolution dated January 19, 2005 in G.R. No.
165650, we affirmed the DAR Order by denying the
petition for review of the appellate decision.
Understandably aggrieved after discovering these
circumstances, CGA filed a complaint against the
respondents before the RTC on April 30,
2002. 10 CGA claimed that the respondents
FRAUDULENTLY CONCEALED the fact that the
subject property was part of a property under
litigation; thus, the Contract to Sell was a rescissible
contract under Article 1381 of the Civil Code. CGA
asked the trial court to rescind the contract; order the
respondents to return the amounts already paid; and
award actual, moral and exemplary damages,
attorney's fees and litigation expenses. Instead of
filing an answer, the respondents filed a motion to
dismiss asserting that the RTC had no jurisdiction
over the case. 11 Citing PD No. 957 12 and PD No.
1344, the respondents claimed that the case falls
within the exclusive jurisdiction of the HLURB since
it involved the sale of a subdivision lot. CGA
opposed the motion to dismiss, claiming that the
action is for rescission of contract, not specific
performance, and is not among the actions within the
exclusive jurisdiction of the HLURB, as specified
by PD No. 957 and PD No. 1344.
Lower Court Rulings
The respondents countered by filing a petition
for certiorari with the CA. In its October 20, 2003
decision, the CA found merit in the respondents'
position and set the RTC order aside; the CA ruled
that the HLURB had exclusive jurisdiction over the
subject matter of the complaint since it involved a
contract to sell a subdivision lot based on the
provisions of PD No. 957 and PD No. 1344.
Ruling of the Court
The nature of an action and the jurisdiction of a
tribunal are determined by the material allegations of
the complaint and the law governing at the time the

Administrative Law
Case Notes/Digest
action was commenced. The jurisdiction of the
tribunal over the subject matter or nature of an action
is conferred only by law, not by the parties' consent
or by their waiver in favor of a court that would
otherwise have no jurisdiction over the subject matter
or the nature of an action. PD No. 957, enacted on
July 12, 1976, was intended to closely supervise and
regulate the real estate subdivision and condominium
businesses in order to curb the growing number of
swindling and fraudulent manipulations perpetrated
by unscrupulous subdivision and condominium
sellers and operators.
Section 3 of PD No. 957 granted the National
Housing Authority (NHA) the "exclusive jurisdiction
to regulate the real estate trade and business".
Thereafter, PD No. 1344 was issued on April 2,
1978 to expand the jurisdiction of the NHA.
Executive Order No. 648 (EO 648), dated February 7,
1981, transferred the regulatory and quasi-judicial
functions of the NHA to the Human Settlements
Regulatory
Commission (HSRC).
Pursuant
to Executive Order No. 90 dated December 17, 1986,
the HSRC was renamed as the HLURB.
The surge in the real estate business in the country
brought with it an increasing number of cases
between subdivision owners/developers and lot
buyers on the issue of the extent of the HLURB's
exclusive jurisdiction. In the cases that reached us,
we have consistently ruled that the HLURB has
exclusive jurisdiction over complaints arising from
contracts between the subdivision developer and the
lot buyer or those aimed at compelling the
subdivision developer to comply with its contractual
and statutory obligations to make the subdivision a
better place to live in.
The provisions of PD 957 were intended to
encompass all questions regarding subdivisions
and condominiums. The intention was aimed at
providing for an appropriate government agency,
the HLURB, to which all parties aggrieved in the
implementation of provisions and the enforcement
of contractual rights with respect to said category of
real estate may take recourse. The business of
developing subdivisions and corporations being
imbued with public interest and welfare, any question
arising from the exercise of that prerogative should
Christian Arbiol
San Beda College Alabang School of Law

be brought to the HLURB which has the technical


know-how on the matter. In the exercise of its
powers, the HLURB must commonly interpret and
apply contracts and determine the rights of private
parties under such contracts. This ancillary power is
no longer a uniquely judicial function, exercisable
only by the regular courts.
The argument that only courts of justice can
adjudicate claims resoluble under the provisions of
the Civil Code is out of step with the fast-changing
times. There are hundreds of administrative bodies
now performing this function by virtue of a valid
authorization from the legislature. This quasijudicial function, as it is called, is exercised by them
as an incident of the principal power entrusted to
them of regulating certain activities falling under
their particular expertise. In the Solid Homes case
for example the Court affirmed the competence of the
Housing and Land Use Regulatory Board to award
damages although this is an essentially judicial power
exercisable ordinarily only by the courts of justice.
This departure from the traditional allocation of
governmental powers is justified by expediency, or
the need of the government to respond swiftly and
competently to the pressing problems of the modern
world.
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. In
general, the quantum of judicial or quasi-judicial
powers which an administrative agency may exercise
is defined in the enabling act of such agency. In other
words, the extent to which an administrative entity
may exercise such powers depends largely, if not
wholly on the provisions of the statute creating or
empowering such agency. In the exercise of such
powers, the agency concerned must commonly
interpret and apply contracts and determine the rights
of private parties under such contracts, One thrust of
the multiplication of administrative agencies is
that the interpretation of contracts and the
determination of private rights thereunder is no

10

Administrative Law
Case Notes/Digest
longer a uniquely judicial function, exercisable
only by our regular courts.
The expansive grant of jurisdiction to the HLURB
does not mean, however, that all cases involving
subdivision lots automatically fall under its
jurisdiction. Note particularly pars. (b) and (c) as
worded, where the HLURB's jurisdiction concerns
cases commenced by subdivision lot or condominium
unit buyers. As to par. (a), concerning "unsound real
estate practices", it would appear that the logical
complainant WOULD BE THE BUYERS AND
CUSTOMERS
AGAINST
THE
SELLERS
(subdivision
owners
and
developers
or
condominium builders and realtors), and not vice
versa.
Pursuant to Roxas, we held in Pilar Development
Corporation
v.
Villar 19 and Suntay
v.
Gocolay 20 that the HLURB has no jurisdiction over
cases filed bysubdivision or condominium owners or
developers against subdivision lot or condominium
unit buyers or owners. The rationale behind this can
be found in the wordings of Sec. 1, PD No. 1344,
which expressly qualifies that the cases cognizable by
the HLURB are those instituted by subdivision or
condomium buyers or owners against the project
developer or owner. This is also in keeping with the
policy of the law, which is to curb unscrupulous
practices in the real estate trade and business. The
only instance that HLURB may take cognizance of a
case filed by the developer is when said case is
instituted as a compulsory counterclaim to a pending
case filed against it by the buyer or owner of a
subdivision lot or condominium unit.
From these allegations, the main thrust of the CGA
complaint is clear to compel the respondents to
refund the payments already made for the subject
property because the respondents were selling a
property that they apparently did not own. In other
words, CGA claims that since the respondents
cannot comply with their obligations under the
contract, i.e., to deliver the property free from all

Christian Arbiol
San Beda College Alabang School of Law

liens and encumbrances, CGA is entitled to


rescind the contract and get a refund of the
payments already made. This cause of action
clearly falls under the actions contemplated by
Paragraph (b), Section 1 of PD No. 1344, which
reads: 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: Claims involving
refund and any other claims filed by subdivision
lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman.
Regardless of whether the rescission of contract is
based on Article 1191 or 1381 of the Civil Code, the
fact remains that what CGA principally wants is a
refund of all payments it already made to the
respondents.

11

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