UNION BANK VS.

CA
FACTS:
It has been about a year since the Thai baht plummeted to a record low and sparked the downspin of
most of Asias other currencies including our very own peso. The Philippines has not suffered as much from
the full impact of the regions worst financial turmoil when most neighboring economies are still sluggishly
inching their way towards recovery. Tested economic initiatives often hailed for helping save the country
from losing its hard-earned gains cannot hide the fact that some businesses are still going downhill in light
of serious liquidity problems resulting from said crisis. Private respondents present predicament is one such
example and from which they now intend to free themselves.
The road to recovery seems elusive though. Private respondents bid to salvage their collapsing
business by seeking suspension of payments a statutory device allowing distressed debtors to defer
payment of their debts now faces a major hindrance as petitioner challenges their recourse to said remedy.
The records disclose the following antecedent facts:

On September 16, 1997, private respondents EYCO Group of Companies (EYCO),[1] Eulogio O.
Yutingco, Caroline Yutingco-Yao, and Theresa T. Lao (the Yutingcos), all of whom are controlling
stockholders of the aforementioned corporations, jointly filed with the SEC a Petition for the Declaration
of Suspension of Payment[s], Formation and Appointment of Rehabilitation Receiver/Committee,
Approval of Rehabilitation Plan with Alternative Prayer for Liquidation and Dissolution of
Corporations[2] alleging, among other things, that, the present combined financial condition of the
petitioners clearly indicates that their assets are more than enough to pay off the creditsbut that due to
factors beyond control and anticipation of the management xxx the inability of the EYCO Group of
Companies to meet the obligations as they fall due on the schedule agreed with the [creditors] has now
become a stark reality.[3] In a footnote to said petition[4] the Yutingcos justified their inclusion as co-
petitioners before the SEC on the ground that they had personally bound themselves to EYCOs creditor
under a J.S.S. Clause (Joint Several Solidary Guaranty).

Upon finding the above petition to be sufficient in form and substance, the SEC Hearing Panel then
composed of Manolito S. Soller, George P. Palmares and Rommel G. Olivia issued an order[5] dated
September 19, 1997 setting its hearing on October 22, 1997. At the same time, said panel also directed the
suspension of all actions, claims and proceedings against private respondents pending before any court,
tribunal, office, board and/or commission.
Meanwhile, some of private respondents creditor, composed mainly of twenty-two (22) domestic banks
(the consortium)[6] including herein petitioner Union Bank of the Philippines,[7] also convened on September
19, 1997 for the purpose of deciding their options in the event that private respondents invoke the provisions
of Presidential Decree No. 902-A, as amended. The minutes[8] embodying the terms agreed upon by the
consortium in said meeting provided, inter alia, for the following:

. . . In response to this, the following were actions agreed upon by all the creditor banks present:

Hire a lawyer to advise the banks on the legal matters of suspension of payments. Atty. Balgos was
engaged to be the legal counsel.

Form a management committee to represent all the creditor banks. This will be composed of the first
seven banks with the highest exposures, namely:

Philippine National Bank

Far East Bank and Trust Co.

 Traders Royal Bank

Allied Banking Corporation

Philippine Commercial and International Bank

Bank of Commerce

Westmont Bank

The other creditor Banks will be informed as often as needed.

Without notifying the members of the consortium, petitioner, however, decided to break away from the
group by suing private respondents in the regular courts. These cases are:

Civil Case No. 97-2184 (Union Bank of the Philippines v. Nikon Industrial Corporation, et al.) for Sum of
Money with Application for Preliminary Attachment filed before the Regional Trial Court of Makati,
Branch 148, on September 23, 1997;[9]

Civil Case No. 5360-V-97 (Union Bank of the Philippines v. Eulogio and Bee Kuan Yutingco, et
al.,) for Annulment, Rescission of Titles/Injunction with prayer for Issuance of Preliminary
Mandatory Injunction filed before the Regional Trial Court of Valenzuela, Branch 172, on September 24,
1997;[10]

Civil Case No. 66477 (Union Bank of the Philippines v. Eulogion and Bee Kuan Yutingco, et
al.) for Annulment, Rescission of Titles/Injunction with prayer for Issuance of Preliminary
Mandatory Injunction filed before the Regional Trial Court of Pasig City, Branch 157, on September 26,
1997;

Civil Case No. 66479 (Union Bank of the Philippines v. Eulogio and Bee Kuan Yutingco, et
al.) for Annulment, Rescission of Titles/Injunction with Prayer for Issuance of Preliminary
Mandatory Injunction filed before the Regional Trial Court of Pasig City, Branch 159, on September 24,
1997; and

Civil Case No. 66478 (Union Bank of the Philippines v. Eulogion and Bee Kuan Yutingco, and Enrique
Yao) for Annulment, Rescission of Titles/Injunction with prayer for Issuance of Preliminary
Mandatory Injunction filed before the Regional Trial Court of Pasig City, Branch 158, on September 25,
1997.

In the meantime, the SEC issued an order[11] on October 3, 1997, appointing (a) Amelia B. Cabal of
SGV & Co., as common representative; (b) Inoncencio Deza, Jr., of the Philippine National Bank as
representative of the creditor-banks; and (c) Atty. Florencio B. Orendain as representative of the EYCO
Group and the Yutingcos, to act collectively as interim receivers of the distressed corporations.
Aside from commencing suits in the regular courts, petitioner also vehemently opposed private
respondents petition for suspension of payments in the SEC by filing a Motion to Dismiss on October 22,
1997.[12] It contended that the SEC was bereft of jurisdiction over such petition on the ground that the
inclusion of the Yutingcos in the petition cannot be allowed since the authority and power of the Commission
under the (sic) virtue of [the] law applies only to corporations, partnership[s] and other forms of
associations, and not to individual petitioners who are not clearly covered by P.D. 902-A as
amended. According to petitioner, what should have been applied instead was the provision on suspension
of payments under Act No. 1956, otherwise known as the Insolvency Law, which mandated the filing of the
petition in the Regional Trial Court and not in the SEC. Finally, petitioner disputed private respondents
recourse to suspension of payments alleging that the latter prejudiced their creditors by fraudulently
disposing of corporate properties within the 30-day period prior to the filing of such petition.
Subsequently, a creditors meeting was again convened pursuant to SECs earlier order dated
September 19, 1997, wherein the matter of creating a management committee (the Mancom) was
submitted for resolution. Apparently, only petitioner opposed the creation of said Mancom as it filed earlier
with the SEC its Motion to Dismiss.
The SEC Hearing Panel composed of Hon. Fe Eloisa C. Gloria and Manolito S. Soller subsequently
issued an Omnibus Order[13] on October 27, 1997, directing this time the creation of the Mancom
consisting of seven (7) members; four (4) of whom shall come from the creditor banks, one (1) from the
non-bank creditors, one (1) from the petitioners and one (1) to be appointed by the SEC. Moreover, the
panel likewise granted an earlier Urgent Motion for Reconsideration filed by creditor banks which sought
to annotate the September 19, 1997 suspension order on the titles of the properties of the private
respondent corporations. In issuing said order, the panel resolved that the interest of private respondents
and their creditors could be best served if such Mancom is created. It is noteworthy, however, that this
directive expressly stated that the same was without prejudice to the resolution of petitioners Motion to
Dismiss whose scheduled hearing was set by petitioner itself on October 29, 1997.
Aggrieved, petitioner immediately took recourse to the Court of Appeals on October 29, 1997 by filing
therewith a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order
and/or Writ of Preliminary Injunction[14] under Rule 65 of the 1997 Rules of Civil Procedure. It imputed
grave abuse of discretion on the part of the SEC Hearing Panel in precipitately issuing the suspension order
dated September 19, 1997 and in prematurely directing the creation of the Mancom prior to the scheduled
hearing of its Motion to Dismiss on October 29, 1997. Petitioner lamented that these actions of the panel
deprived it of due process by effectively rendering moot and academic its Motion to Dismiss which allegedly
presented a prejudicial question to the propriety of creating a Mancom. Furthermore, it insisted that
jurisdiction over private respondents petition properly pertained to the Regional Trial Courts under Act No.
1956 and that, in any event, private respondents were not entitled to suspension of payments since they
had already committed fraudulent dispositions of their properties.
Without giving due course to Union Banks petition, the appellate court issued a resolution[15] on
October 31, 1997 directing private respondents to submit their comment on the petition while temporarily
restraining the SEC from appointing the members of Mancom, annotating the suspension orders on the
titles of the properties of private respondents, and taking further proceedings with regard to the suspension
of payments and/or rehabilitation.
Meanwhile, members of so-called steering committee of the consortium composed of the Philippine
National Bank, Far East Bank and Trust Company, Allied Bank, Traders Royal Bank, Philippine Commercial
International Bank, Bank of Commerce, and Westmont Bank (the Intervenors) filed with the appellate court
an Urgent Motion for Intervention[16] and a Consolidated Intervention and Counter-Motion for
Contempt and for the Imposition of Disciplinary Measures Against Petitioners Counsel [17] both dated
November 3, 1997 claiming that they were not impleaded at all by petitioner in its petition before the
appellate court when in fact they had actual, material, direct and legal interest in the outcome of said case
as owners of at least eighty-five percent (85%) of private respondents obligations. Moreover, they opposed
said petition because of petitioners ostensible failure to exhaust administrative remedies in the consortium
and in the SEC and for being guilty of forum-shopping in the appellate court as its Motion to Dismiss in the
SEC was yet to be resolved at the time.
Petitioner, however, countered intervenors motion in its Opposition to Urgent Motion for
Intervention and Reply to the Comment-in-Intervention,[18] vehemently challenging the existence of a
consortium, its membership therein, the intervenors ownership of at least eighty-five percent (85%) of
private respondents obligations and their due representation of the twenty-two (22) creditor banks, the
existence of an agreement drawn up during the September 19, 1997 meeting regarding the satisfaction of
the individual exposures of the creditor banks, and its consent to the creation of the Mancom. It also denied
intervenors accusation of forum-shopping and non-exhaustion of administrative remedies on the ground
that it was acting with a sense of urgency, the Hearing Panel having already created the Mancom and was
about to appoint the members thereof at the same time.
 After several exchanges of pleadings between the parties, the Court of Appeals First Division finally
rendered its assailed decision[19] on December 22, 1997, granting intervention of the seven (7) creditor
banks named above while dismissing the petition for failure to exhaust administrative remedies and forum-
shopping. Nothing in the said decision, however, indicates that the appellate court squarely confronted the
issue of jurisdiction raised earlier by petitioner.
Without moving for reconsideration of the appellate courts decision, petitioner elevated the said matter
to this Court through a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction[20] filed on December 29 1997. Petitioner, however,
seasonably amended[21] the same on January 5, 1998.
Upon being notified by petitioner that the SEC Hearing Panel had already appointed members of the
proposed Mancom on January 5, 1998,[22] this Court issued a resolution[23] on January 6, 1998, granting
the temporary restraining order (TRO) prayed for in the petition and requiring all the respondents to
comment thereon.
Both EYCO and the Yutingcos duly filed their Comment[24] on January 14, 1998 asking the Court to
cite petitioner and its counsel for contempt because of deliberate forum shopping, assailing the propriety of
the temporary restraining order which we issued, and arguing that Union Banks petition should be
dismissed outright for (1) categorizing it as having been filed both under Rule 45 and Rule 65 of the 1997
Rules of Civil Procedure; (2) failing to move for reconsideration before the Court of Appeals; (3) failing to
implead indispensable parties; (4) raising factual allegations of fraud; (5) forum shopping; and (6) failing to
exhaust administrative remedies.
On January 27, 1998, the intervenors before the appellate court also came to as through an Urgent
Manifestation,[25] seeking the outright dismissal of the petition on grounds of forum-shopping and failure to
implead them as indispensable parties which allegedly violated Section 4, Rule 45 of the 1997 Rules of
Civil Procedure requiring that the petition should state the name of the appealing party as the petitioner and
the adverse party as respondent.
For their part, the interim receivers who are also impleaded as private respondents in the instant
petition, filed their own Comment[26] on January 30, 1998, likewise contending that petitioner failed to
exhaust administrative remedies when it leap-frogged to the Court of Appeals and that, in any case, the
SEC had jurisdiction to entertain private respondents petition for suspension of payments.
In response to the respective comments of private respondents and interim receivers, petitioner filed
its Consolidated Reply and Opposition[27] on February 5, 1998, reiterating its earlier position that (1) the
SEC had no jurisdiction to entertain private respondents petition for suspension of payments; (2) private
respondents are already bankrupt because of the alleged fraudulent disposition they have made and hence,
are no longer entitled to the remedy of suspension of payments; (3) prior motion for reconsideration is not
indispensable when, as in this case, there is an actual threat that the Mancom members would soon be
appointed; (4) intervenors are not indispensable parties; and (5) there is no forum-shopping.
Complaining that daily interests on its outstanding debts continue mounting by the millions and that
the work of SEC-appointed interim receivers has been paralyzed for quite some time, private respondents
filed an Urgent Motion[28] on February 12, 1998 praying that the temporary restraining order be lifted for
the preservation of their assets and to pave the way for rehabilitation. They likewise asked, among other
things, that their motion to cite petitioner and its counsel for contempt be immediately resolved.
Petitioner, in turn, filed a Motion to Cite Yutingcos and Their Counsel in Contempt [29] for allegedly
misleading this Court in stating that Union Bank failed to pay the required deposit for costs, that they were
not served a copy of the Amended Petition, and that they never nominated Sycip, Gorres, Velayo & Co.
(the SGV) is rehabilitation receiver.
As may be gleaned from the above factual account, there are only two basic and outstanding issues
in the instant case which require our resolution, namely:
(1) Whether the SEC can validly acquire jurisdiction over a petition for suspension of payments filed
pursuant to Section 5(d) of P.D. No. 902 A, as amended, when such petition joins as co-petitioners
the petitioning corporate entities AND individual stockholders thereof; and

(1) Whether petitioner engaged in forum-shopping and failed to exhaust administrative remedies in taking
direct recourse to the Court of Appeals to challenge the assumption of jurisdiction by the SEC
Hearing panel over private respondents petition for suspension of payments.

We shall discuss this issues seriatim.

ISSUE:

Non-Exhaustion of Administrative Remedies and Forum-Shopping

Equally weak is petitioners challenge on the Court of Appeals decision dismissing its petition
for certiorari for failure to exhaust administrative remedies. Its complaint that the SEC Hearing Panel was
acting without jurisdiction in conducting proceedings relative to private respondents petition and for
rendering moot and academic its Motion to Dismiss does not justify the procedural short-cut it took to the
appellate court. Basic is the rule which has been consistently held by this Court in a long line of cases that
before a party is allowed to seek the intervention of the court, it is a pre-condition that should have availed
of all the means of administrative processes afforded by him. Hence, if a remedy within the administrative
machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide
on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the courts
judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of
action.[39] That this is the prevailing rule is aptly explained thus:

The underlying principle of the rule of exhaustion of administrative remedies rests on the presumption that
the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same
correctly. There are both legal and practical reasons for the principle. The administrative process is
intended to provide less expensive and more speedy solutions to disputes. Where the enabling statute
indicates a procedure for administrative review and provides a system of administrative appeal or
reconsideration, the courts --- for reason of law, comity, and convenience --- will not entertain a case
unless the available administrative remedies have been resorted to and the appropriate authorities have
been given an opportunity to act and correct the errors committed in the administrative forum. [40]

In this case, petitioner was actually not without remedy to correct what it perceived and supposed was
an erroneous assumption of jurisdiction by the SEC without having recourse immediately to the Court of
Appeals. Under Section 6 (m) of P.D. No. 902-A, it has been expressly provided that "the decision, ruling
or order of any such Commissioner, bodies, boards, committees and/or officer may be appealed to the
Commission sitting en banc within thirty days after receipt by the appellant of notice of such decision, ruling
or order." Such procedure being available, could have been resorted to by petitioner which, however, it
chose to forego. Furthermore, by taking up the matter with the SEC, it could still have obtained an injunction
which it similarly sought from the appellate court via its petition for certiorari because the said body has
been empowered by Section 6 (a) of P.D. No. 902-A "to issue preliminary or permanent injunctions whether
prohibitory or mandatory, in all cases in which it has jurisdiction...." Finally, petitioner itself hardly concealed
the fact that it distrusted altogether the whole mechanism of appeal to the SEC en banc, which is why it did
not find resort thereto imperative. Thus, it explicitly stated that "it is a given that SEC will not reverse itself,
therefore, any reconsideration or appeal en banc would be a mere exercise of futility, [particularly] when
public respondent Associate Commissioner Fe Gloria is the acting Chairperson of SEC."[41]What basis does
petitioner have in casting doubt on the integrity and competence of the SEC en banc? This baseless, even
reckless, reasoning hardly deserves an iota of attention. It cannot justify a procedural short-cut quite
contrary to law. If this were so, then the SEC en banc would not have been empowered at all by the statute
to take cognizance of appeals from its subordinate units. But the lawmakers, having faith in a collegial body
such as the SEC en banc, precisely empowered it to act as such appellate body. Whatever opinion
petitioner entertains with respect to the SEC's competence cannot override the fact that the law mandates
recourse thereto.
As to the issue of forum-shopping, we fully subscribe to the Court of Appeals in ruling that such
violation existed when it declared:

"Finally, the charge that petitioner is guilty of forum shopping --- which is the institution of two or more
actions or proceedings grounded on the same cause --- cannot unceremoniously be glossed over. It is
patent that the instant petition and the pending motion to dismiss before the SEC raise identical issues,
namely, lack of jurisdiction and the propriety of the suspension of payments."[42] [Underscoring supplied]

Actually, even a simple perusal of the pleadings filed by petitioner before this Court reveals that it has
been continuously reiterating the same arguments that it had earlier raised in its Motion to Dismiss and its
Petition for Certiorari before the appellate court. Hence, we do not see why the appellate court's decision
on this aspect should not be sustained.
WHEREFORE, the instant petition is hereby DENIED for lack of merit. Finding neither reversible error
nor grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Court of Appeals,
its decision dated December 22, 1997 is AFFIRMED. Furthermore, the Temporary Restraining Order (TRO)
issued by this Court in its resolution order of January 6, 1988, is hereby LIFTED and/or
DISSOLVED. However, the Securities and Exchange Commission is directed to drop from the petition for
suspension of payments filed before it the names of Eulogio O. Yutingco, Caroline Yutingco-Yao, and
Theresa T. Lao without prejudice to their filing a separate petition in the Regional Trial Courts.

CABALLES VS. SISON

This is a petition for certiorari under Rule 65 of the Rules of Court with application for preliminary
injunction and/or temporary restraining order. The petitioners assail the dismissal of their petition in the
Court of Appeals docketed as CA-G.R. SP No. 39494[1] as well as the appellate courts Resolution which
dismissed their motion for reconsideration.
The facts as culled from the records are as follows:
On December 1, 1994, the Samahan ng Mga Optometrist sa Pilipinas (SOP), through its President,
Charlie L. Ho, filed a Letter-Affidavit[2] with the Board of Optometry of the Professional Regulations
Commission (PRC), charging Emma Emperado-Dreyfus, Ma. Teresita C. Caballes, Filemon P. Esquivel,
Jr. and Vladimir L. Ruidera, all employees of Vision Express Philippines, Inc. (VEPI), with unethical and/or
unprofessional conduct. Thus:

The undersigned, as President of the Samahan ng mga Optometrist sa Pilipinas (SOP), is writing in
behalf of the association to bring to your attention and proper action possible violations of certain
provisions of the Code of Ethics for Optometrists.

Under Section 3 (e), article III of the Code of Ethics for Optometrists, it is considered unethical and
unprofessional conduct to xxx (hold) oneself to the public as an optometrist under the name of any
corporation, company, institution, clinic, association, parlor, or any other name than the name of the
optometrist.

Applying said provision to the subject of this letter, please be informed that the following duly licensed
optometrists

1. Emma Emperado-Dreyfus PRC Lic. No. 4433

 2. Ma. Teresita C. Caballes PRC Lic. No. 4189
3. Filemon P. Esquivel, Jr. PRC Lic. No. 5629
4. Vladimir L. Ruidera 1994 Board passer

may have possibly committed an infraction considering the following circumstances:

1. They have been employed by a corporation named Vision Express Phils., Inc. since September 1994
up to the present;

2. Vision Express Phils., Inc. is a corporation that has been charged with illegally engaging in the practice
of optometry before the Securities and Exchange Commission under SEC PED Case No. 94-1732;

3. Since they have been employed by the corporation, it is inevitable that they associate themselves with
and represent themselves to the public as part of the corporation, thus, adopting the name of the
corporation instead of their own in practicing their profession;

4. By consenting to the present arrangement, and knowing that the corporation is engaging in activities
solely reserved for optometrists, they have allowed themselves to be part of the corporations illegal
practice of optometry.[3]

The complaint was supported by affidavits executed by Charlie Ho, [4] Emelito Tecson,[5] and Digna
Marcelo.[6] In his affidavit, Ho averred as follows:

2. Sometime in September 1994, an establishment under the name of Vision Express (VEPI henceforth)
opened at the 4th level-Annex-B Building of the SM Megamall in Mandaluyong.

3. On or about October 1994, I personally visited the said establishment and was able to talk to Dr. Emma
Emperado-Dreyfus, store manager, in connection with the optometrists employed by the corporation who
render optometric services to the public, to wit:

a. Emma Emperado-Dreyfus PRC Lic. No. 4433

b. Ma. Teresita C. Caballes PRC Lic. No. 4189
c. Filemon P. Esquivel, Jr. PRC Lic. No. 5629
d. Vladimir L. Ruidera 1994 Board passer

4. On said occasion, it was admitted to me by said Dr. Dreyfus, but without disclosing their identities, that
there are several optometrists employed by the corporation.

5. As optometrists employed by the corporation, I saw Dr. Dreyfus and Dr. Esquivel in the establishment
rendering services for the corporation in furtherance of the practice of optometry.

6. There were also other individuals in the establishment performing eye examinations on patients with
the use of an auto-refractor, whose identities are established by the affidavits of Emelito Tecson and
Digna Marcelo, hereto attached as Annexes A and B, respectively.[7]

The complaint was docketed as Adm. Case No. 157. The respondents therein submitted a Joint
Counter-Affidavit[8] where they admitted being employees of VEPI, but denied that they were engaged in
the practice of optometry. They alleged that Ho was guilty of unprofessional and unethical conduct, and
prayed that he be stripped of his professional license as optometrist. They averred that the complaint was
malicious and unfounded, and that Ho was moved by malice and bad faith in bringing forth the
complaint. They likewise accused Ho of trying to perpetuate a monopoly of the optical shop business.
 Ho submitted his Reply-Affidavit,[9] while the respondents therein submitted their Rejoinder-
Affidavit.[10] Pre-trial then ensued. Thereafter, on August 14, 1995, Teresita Caballes and Valdimir Ruidera
filed a Motion to Dismiss[11] the complaint for its failure to state a cause of action. The petitioners made the
following averments:
1. During the last hearing of the instant case on July 20, 1995, plaintiff admitted before this
Honorable Commission that he did not see respondents Teresita Caballes and Vladimir
Ruidera rendering services for the corporation in furtherance of the practice of optometry;
2. The affidavits of plaintiffs witnesses Emil (sic) Tecson and Digna Marcelo do not indicate any
participation of the respondents to the incidents set forth by the said witnesses; neither are
the respondents identified in the said affidavits.
3. Since plaintiffs complaint failed to set forth distinctly, clearly and concisely the charge or
charges or the offense or offenses complained of against respondents Teresita Caballes and
Vladimir Ruidera, they should be discharged as respondents and the cases against them be
dismissed for failure to state a cause of action.[12]
The complainant Charlie Ho filed his opposition thereto.[13]
On September 26, 1995, the Board of Optometry issued an Order denying the motion to dismiss, thus:

Again, the Board of Optometry finds the motion to be without basis. The complainant has properly
identified the respondents as employees in the Vision Corporation, a fact which they themselves admitted
in their counter-affidavits. The only question now which is to be proven is, can they be held guilty for
unethical and/or unprofessional conduct by the nature of their employment in said optical clinic?

IN VIEW OF THE FOREGOING, the Board of Optometry resolve[s] as it hereby resolves to:

a) Order the respondents to answer the request for admission made by the complainant dated July 31,
1995.

b) Deny the Motion To Dismiss filed by the respondents for lack of merit. [14]

The petitioners filed a motion for reconsideration[15] of the said order which was, however, also denied
by the Board.[16] It ruled that a reading of the complaint-affidavit reveals that there was, indeed, a cause of
action, as the petitioners were charged with alleged violation of Section 6(e) and (j) of Article III of the Code
of Ethics of Optometrists. According to the Board, that the complaint-affidavit made no mention of the details
as to how the unprofessional or undesirable conduct was committed would not justify the dismissal of the
complaint. The Board stated that rules of procedure are not to be applied in a very rigid or technical
sense.[17]
The petitioners, thereafter, filed a petition for certiorari with application for preliminary injunction and
temporary restraining order with the Court of Appeals, urging the reversal of the questioned orders on the
following grounds:
A. RESPONDENT BOARD ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DENIED PETITIONERS MOTION TO DISMISS
DESPITE THE FACT THAT THE COMPLAINT FILED AGAINST THEM PATENTLY FAILED
TO STATE A CAUSE OF ACTION.
B. RESPONDENT BOARD ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DENIED PETITIONERS MOTION FOR
RECONSIDERATION FROM ITS SEPTEMBER 26, 1995 ORDER, CITING AS BASIS FOR
ITS DENIAL THE INJURY TO THE COMPLAINANT WHEN THE LATTER DID NOT EVEN
ALLEGE ANY INJURY SUFFERED BY IT ATTRIBUTABLE TO ANY ACT OF ANY OF THE
PETITIONERS.
 C. RESPONDENT BOARD ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN FROM ITS ORDERS DATED SEPTEMBER 26 AND
DECEMBER 8, IT UNREASONABLY IMPLIED THAT PETITIONERS SHOULD BE
BROUGHT TO TRIAL FOR SIMPLY BEING EMPLOYEES OF VEPI.
D. THERE IS NO APPEAL, NOR ANY PLAIN SPEEDY REMEDY IN THE ORDINARY COURSE
OF LAW FROM THE AFOREMENTIONED ORDERS OF THE RESPONDENT BOARD
EXCEPT THIS PETITION FOR CERTIORARI.[18]
The petition was dismissed for lack of merit. The Court of Appeals held that a defendant who moves
to dismiss a complaint on the ground of failure to state a cause of action is deemed to have hypothetically
admitted the allegations therein. Invoking the test of sufficiency, the CA held that the sole element furnishing
the said test is usually the complaint itself, and no other. The absence of proof to substantiate an allegation
in the complaint does not mean that the complaint is insufficient, only that it is unsupported by
evidence. According to the CA, this could be the judgment of the Board in its decision after trial. At this
stage, the Board could not be said to have acted with grave abuse of discretion in denying the petitioners
motion to dismiss.
The appellate court also ruled that an order denying a motion to dismiss, being interlocutory in nature,
cannot be the subject of a petition for certiorari under Rule 65. The remedy of the losing party in such case
is to proceed to trial, and, in case an adverse decision is rendered, to appeal in due time, assigning the
denial of the motion to dismiss as an error. The appellate court added that it would not preempt the Board
of Optometry from deciding on the case.
Thus, the petitioners filed the instant petition for certiorari under Rule 65 of the Rules of Court with
prayer for the issuance of a preliminary injunction and/or restraining order to enjoin the Board from further
proceeding with the case.
The petitioners allege that the Court of Appeals erred as follows:
1. THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION WHEN IT DISMISSED THE PETITION FOR
CERTIORARI WHEN IT IS VERY CLEAR FROM THE QUESTIONED COMPLAINT THAT IT
FAILED TO STATE A CAUSE OF ACTION.
2. THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED PETITIONERS MOTION
FOR RECONSIDERATION FROM ITS 09 JUNE 1997 DECISION IN A MINUTE
RESOLUTION.
3. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN
FINDING THAT AN ORDER DENYING A MOTION TO DISMISS CANNOT BE THE
SUBJECT OF A PETITION FOR CERTIORARI UNDER RULE 65 CITING THE CASE OF
ATIENZA VS. COURT OF APPEALS, G.R. No. 85455, 232 SCRA 737 (1994). [19]
According to the petitioners, in dismissing their petition for certiorari, the CA relied on the fact that they
are employees of VEPI, on the presumption that it was engaged in the illegal practice of optometry. The
petitioners note that the SEC upheld the legality of VEPIs right to engage in its business, and further upheld
its right to engage the services of optometrists. The petitioners assert that a closer look at the
complaint/affidavit would show that it failed to state a cause of action. Nothing in the said affidavit mentioned
that the petitioners committed any act which would constitute unethical or professional conduct, and all that
was mentioned was that they were employees of VEPI.
The petitioners contend that the averment of the law they allegedly violated, Sections 6(e) and (j) of
Article III of the Code of Ethics for Optometrists, only appeared in a subsequent pleading. The
complaint/affidavit did not mention that the petitioners held themselves out to the public as optometrists
under the name of a corporation nor advertised and practiced under names other than their own. According
to the petitioners, the failure to state the above facts in the complaint/affidavit itself is fatal, and such defect
cannot be cured by alleging those facts in subsequent pleadings. The act or omission allegedly committed
by the petitioners, the very heart of the complaint, was missing.
 The petitioners maintain that there is no law which provides that mere employment in a corporation by
an optometrist is prima facie evidence of illegal practice of optometry. The pronouncement made by the CA
that it is up to the Board to decide whether to punish an optometrist by mere employment in a corporation
would set a bad precedent, as it would imply that the Board has the authority to punish optometrists by the
fact of mere employment in a corporation. Furthermore, the petitioners assert that the ruling of the CA is a
bad precedent and is violative of the due process clause under Section 1, Article III of the 1987
Constitution. They likewise claim that they are entitled to the equal protection of laws, as there are a number
of professionals who are also employees of other corporations, but who have not been charged with
unethical or unprofessional conduct for simply being employees.
The petitioners contend that after the Board denied their motion for reconsideration, the plain,
adequate and speedy remedy available to them was a petition for certiorari, and that in the interest of
substantial justice, an order denying a motion to dismiss can be the subject of a petition for certiorari.
In their Comment, the private respondents aver that the petitioners should have availed themselves of
the remedy of a petition for review under Rule 45 of the Rules of Civil Procedure. They likewise insist that
a perusal of the complaint/affidavit of respondent Ho will reveal that the essential requisites of a cause of
action are present. The objection raised in the motion to dismiss is premature, because the parties were
only at the pre-trial stage. Moreover, according to the private respondents, the petitioners contradicted
themselves when they averred that the complaint/affidavit had no cause of action, but, instead of
immediately filing a motion to dismiss, they filed a joint counter-affidavit, which was actually an answer.
The petition is bereft of merit.
Rep. Act No. 8050[20] specifically vests in the Board of Optometry the power to conduct hearings and
investigations to resolve complaints against practitioners of optometry for malpractice, unethical and
unprofessional conduct, or violation of any of the provisions of the Act or any of its regulations [21] and
authorizes the said Board to render a decision thereon as long as the vote of three (3) members is
obtained.[22] Thus, the Board may, after giving proper notice and hearing to the party concerned, revoke an
optometrists certificate of registration or suspend his license to practice on the foregoing grounds, or upon
the conviction of the optometrist of a crime involving moral turpitude.[23] The revocation of a certificate or
suspension of a professional license by the Board shall become final, unless appealed to the PRC within
fifteen (15) days from receipt of the decision.[24]
The petitioners premature resort to the courts necessarily becomes fatal to their cause of action. It is
presumed that an administrative agency, in this case, the Board of Optometry, if afforded an opportunity to
pass upon a matter, would decide the same correctly, or correct any previous error committed in its forum.
The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the
administrative agencies to carry out their functions and discharge their responsibilities within the specialized
areas of their respective competence. Furthermore, reasons of law, comity and convenience prevent the
courts from entertaining cases proper for determination by administrative agencies. [25]
We note that the petition stems from an order denying the petitioners motion to dismiss. It must be
stressed that such order is merely an interlocutory one and therefore not appealable. Neither can it be the
subject of a petition for certiorari. Such order may only be reviewed in the ordinary course of law by an
appeal from the judgment after trial. Although the special civil action for certiorari may be availed of in case
there is grave abuse of discretion or lack of jurisdiction on the part of the lower court, or body, [26] it would
be a breach of orderly procedure to allow a party to come before the appellate court every time an order is
issued with which a party does not agree.[27] Hence, as a general rule, there must first be a judgment on
the merits of the case before it may be questioned via a special civil action for certiorari. Thus:

The remedy of the aggrieved party is to file an answer to the complaint and to interpose as defenses the
objections raised in his motion to dismiss, proceed to trial, and in case of an adverse decision, to elevate
the entire case by appeal in due course. However, the rule is not ironclad. Under certain situations,
recourse to certiorari or mandamus is considered appropriate, that is, (a) when the trial court issued the
order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial
court; or, (c) appeal would not prove to be a speedy and adequate remedy as when an appeal would not
promptly relieve a defendant from the injurious effects of the patently mistaken order maintaining the
plaintiffs baseless action and compelling the defendant needlessly to go through protracted trial and
clogging the court dockets by another futile case.[28]

The petitioners failed to show that the instant case falls under any of the recognized exceptions to the
rule. Furthermore, they failed to show that the respondent Board committed a grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the assailed orders.
IN VIEW WHEREOF, the petition is DISMISSED for lack of merit. The Decision of the Court of Appeals
in CA-G.R. SP No. 39494 and its Resolution dated October 22, 1997 are AFFIRMED in toto.
SO ORDERED.

LLDA VS. CA

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 or kawag-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 km² lake
surface water, the eight (8) major river tributaries and several other smaller rivers that drain into the lake,
the 2,920 km² 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 km² 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 quasi-judicial 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.

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.

SO ORDERED.