Professional Documents
Culture Documents
De Borja, Medialdea, Ata, Bello, Guevarra & Serapio for private respondent.
NOCON, J.:
Brought to fore in this petition for certiorari and prohibition with application for preliminary injunction
is the novel question of where and in what manner appeals from decisions of the Board of
Investments (BOI) should be filed. A thorough scrutiny of the conflicting provisions of Batas
Pambansa Bilang 129, otherwise known as the "Judiciary Reorganization Act of 1980," Executive
Order No. 226, also known as the Omnibus Investments Code of 1987 and Supreme Court Circular
No. 1-91 is, thus, called for.
Briefly, this question of law arose when BOI, in its decision dated December 10, 1992 in BOI Case
No. 92-005 granted petitioner First Lepanto Ceramics, Inc.'s application to amend its BOI certificate
of registration by changing the scope of its registered product from "glazed floor tiles" to "ceramic
tiles." Eventually, oppositor Mariwasa filed a motion for reconsideration of the said BOI decision
while oppositor Fil-Hispano Ceramics, Inc. did not move to reconsider the same nor appeal
therefrom. Soon rebuffed in its bid for reconsideration, Mariwasa filed a petition for review with
respondent Court of Appeals pursuant to Circular 1-91.
Acting on the petition, respondent court required the BOI and petitioner to comment on Mariwasa's
petition and to show cause why no injunction should issue. On February 17, 1993, respondent court
temporarily restrained the BOI from implementing its decision. This temporary restraining order
lapsed by its own terms on March 9, 1993, twenty (20) days after its issuance, without respondent
court issuing any preliminary injunction.
On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift Restraining Order" on
the ground that respondent court has no appellate jurisdiction over BOI Case No. 92-005, the same
being exclusively vested with the Supreme Court pursuant to Article 82 of the Omnibus Investments
Code of 1987.
On May 25, 1993, respondent court denied petitioner's motion to dismiss, the dispositive portion of
which reads as follows:
Private respondent is hereby given an inextendible period of ten (10) days from
receipt hereof within which to file its comment to the petition.1
Upon receipt of a copy of the above resolution on June 4, 1993, petitioner decided not to file any
motion for reconsideration as the question involved is essentially legal in nature and immediately
filed a petition for certiorariand prohibition before this Court.
Petitioner posits the view that respondent court acted without or in excess of its jurisdiction in issuing
the questioned resolution of May 25, 1993, for the following reasons:
I. Respondent court has no jurisdiction to entertain Mariwasa's appeal from the BOI's
decision in BOI Case No. 92-005, which has become final.
II. The appellate jurisdiction conferred by statute upon this Honorable Court cannot
be amended or superseded by Circular No. 1-91.2
Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa Bilang 129 and
Circular 1-91, "Prescribing the Rules Governing Appeals to the Court of Appeals from a Final Order
or Decision of the Court of Tax Appeals and Quasi-Judicial Agencies" cannot be the basis of
Mariwasa's appeal to respondent court because the procedure for appeal laid down therein runs
contrary to Article 82 of E.O. 226, which provides that appeals from decisions or orders of the BOI
shall be filed directly with this Court, to wit:
On the other hand, Mariwasa maintains that whatever "obvious inconsistency" or "irreconcilable
repugnancy" there may have been between B.P. 129 and Article 82 of E.O. 226 on the question of
venue for appeal has already been resolved by Circular 1-91 of the Supreme Court, which was
promulgated on February 27, 1991 or four (4) years after E.O. 226 was enacted.
1. Scope. — These rules shall apply to appeals from final orders or decisions of the
Court of Tax Appeals. They shall also apply to appeals from final orders or decisions
of any quasi-judicial agency from which an appeal is now allowed by statute to the
Court of Appeals or the Supreme Court. Among these agencies are the Securities
and Exchange Commission, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and
Technology Transfer, National Electrification Administration, Energy Regulatory
Board, National Telecommunications Commission, Secretary of Agrarian Reform and
Special Agrarian Courts under RA 6657, Government Service Insurance System,
Employees Compensation Commission, Agricultural Inventions Board, Insurance
Commission and Philippine Atomic Energy Commission.
2. Cases not covered. — These rules shall not apply to decisions and interlocutory
orders of the National Labor Relations Commission or the Secretary of Labor and
Employment under the Labor Code of the Philippines, the Central Board of
Assessment Appeals, and other quasi-judicial agencies from which no appeal to the
courts is prescribed or allowed by statute.
3. Who may appeal and where to appeal. — The appeal of a party affected by a final
order, decision, or judgment of the Court of Tax Appeals or of a quasi-judicial agency
shall be taken to the Court of Appeals within the period and in the manner herein
provided, whether the appeal involves questions of fact or of law or mixed questions
of fact and law. From final judgments or decisions of the Court of Appeals, the
aggrieved party may appeal by certiorari to the Supreme Court as provided in Rule
45 of the Rules of Court.
It may be called that Section 9(3) of B.P. 129 vests appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of quasi-judicial agencies on the Court of Appeals, to wit:
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders, awards of Regional Trial Courts and
quasi-judicial agencies, instrumentalities, boards or commissions, except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction, including
the power to grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued under
the Labor Code of the Philippines and by the Central Board of Assessment Appeals.
Clearly evident in the aforequoted provision of B.P. 129 is the laudable objective of providing a
uniform procedure of appeal from decisions of all quasi-judicial agencies for the benefit of the bench
and the bar. Equally laudable is the twin objective of B.P. 129 of unclogging the docket of this Court
to enable it to attend to more important tasks, which in the words of Dean Vicente G. Sinco, as
quoted in our decision in Conde v. Intermediate Appellate Court4 is "less concerned with the
decisions of cases that begin and end with the transient rights and obligations of particular
individuals but is more intertwined with the direction of national policies, momentous economic and
social problems, the delimitation of governmental authority and its impact upon fundamental rights.
In Development Bank of the Philippines vs. Court of Appeals,5 this Court noted that B.P. 129 did not
deal only with "changes in the rules on procedures" and that not only was the Court of Appeals
reorganized, but its jurisdiction and powers were also broadened by Section 9 thereof. Explaining
the changes, this Court said:
However, it cannot be denied that the lawmaking system of the country is far from perfect. During
the transitional period after the country emerged from the Marcos regime, the lawmaking power was
lodged on the Executive Department. The obvious lack of deliberation in the drafting of our laws
could perhaps explain the deviation of some of our laws from the goal of uniform procedure which
B.P. 129 sought to promote.
In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of 1987 provides that
all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the
order or decision.
Noteworthy is the fact that presently, the Supreme Court entertains ordinary appeals only from
decisions of the Regional Trial Courts in criminal cases where the penalty imposed is reclusion
perpetua or higher. Judgments of regional trial courts may be appealed to the Supreme Court only
by petition for review on certiorari within fifteen (15) days from notice of judgment in accordance with
Rule 45 of the Rules of Court in relation to Section 17 of the Judiciary Act of 1948, as amended, this
being the clear intendment of the provision of the Interim Rules that "(a)ppeals to the Supreme Court
shall be taken by petition for certiorari which shall be governed by Rule 45 of the Rules of Court."
Thus, the right of appeal provided in E.O. 226 within thirty (30) days from receipt of the order or
decision is clearly not in consonance with the present procedure before this Court. Only decisions,
orders or rulings of a Constitutional Commission (Civil Service Commission, Commission on
Elections or Commission on Audit), may be brought to the Supreme Court on original petitions
for certiorari under Rule 65 by the aggrieved party within thirty (30) days form receipt of a copy
thereof.7
Under this contextual backdrop, this Court, pursuant to its Constitutional power under Section 5(5),
Article VIII of the 1987 Constitution to promulgate rules concerning pleading, practice and procedure
in all courts, and by way of implementation of B.P. 129, issued Circular 1-91 prescribing the rules
governing appeals to the Court of Appeals from final orders or decisions of the Court of Tax Appeals
and quasi-judicial agencies to eliminate unnecessary contradictions and confusing rules of
procedure.
Contrary to petitioner's contention, although a circular is not strictly a statute or law, it has, however,
the force and effect of law according to settled jurisprudence.8 In Inciong v. de Guia,9 a circular of this
Court was treated as law. In adopting the recommendation of the Investigating Judge to impose a
sanction on a judge who violated Circular No. 7 of this Court dated
September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and Circular No. 20 dated
October 4, 1979, requiring raffling of cases, this Court quoted the ratiocination of the Investigating
Judge, brushing aside the contention of respondent judge that assigning cases instead of raffling is a
common practice and holding that respondent could not go against the circular of this Court until it is
repealed or otherwise modified, as "(L)aws are repealed only by subsequent ones, and their violation
or non-observance shall not be excused by disuse, or customs or practice to the contrary."10
The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91 because the
former grants a substantive right which, under the Constitution cannot be modified, diminished or
increased by this Court in the exercise of its rule-making powers is not entirely defensible as it
seems. Respondent correctly argued that Article 82 of E.O. 226 grants the right of appeal from
decisions or final orders of the BOI and in granting such right, it also provided where and in what
manner such appeal can be brought. These latter portions simply deal with procedural aspects
which this Court has the power to regulate by virtue of its constitutional rule-making powers.
The case of Bustos v. Lucero11 distinguished between rights created by a substantive law and those
arising from procedural law:
Indeed, the question of where and in what manner appeals from decisions of the BOI should be
brought pertains only to procedure or the method of enforcing the substantive right to appeal granted
by E.O. 226. In other words, the right to appeal from decisions or final orders of the BOI under E.O.
226 remains and continues to be respected. Circular 1-91 simply transferred the venue of appeals
from decisions of this agency to respondent Court of Appeals and provided a different period of
appeal, i.e., fifteen (15) days from notice. It did not make an incursion into the substantive right to
appeal.
The fact that BOI is not expressly included in the list of quasi-judicial agencies found in the third
sentence of Section 1 of Circular 1-91 does not mean that said circular does not apply to appeals
from final orders or decision of the BOI. The second sentence of Section 1 thereof expressly states
that "(T)hey shall also apply to appeals from final orders or decisions of any quasi-judicial agency
from which an appeal is now allowed by statute to the Court of Appeals or the Supreme Court." E.O.
266 is one such statute. Besides, the enumeration is preceded by the words "(A)mong these
agencies are . . . ," strongly implying that there are other quasi-judicial agencies which are covered
by the Circular but which have not been expressly listed therein. More importantly, BOI does not fall
within the purview of the exclusions listed in Section 2 of the circular. Only the following final
decisions and interlocutory orders are expressly excluded from the circular, namely, those of: (1) the
National Labor Relations Commission; (2) the Secretary of Labor and Employment; (3) the Central
Board of Assessment Appeals and (4) other quasi-judicial agencies from which no appeal to the
courts is prescribed or allowed by statute. Since in DBP v. CA13 we upheld the appellate jurisdiction
of the Court of Appeals over the Court of Tax Appeals despite the fact that the same is not among
the agencies reorganized by B.P. 129, on the ground that B.P. 129 is broad and comprehensive,
there is no reason why BOI should be excluded from
Circular 1-91, which is but implementary of said law.
Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the
manner and method of enforcing the right to appeal from decisions of the BOI are concerned.
Appeals from decisions of the BOI, which by statute was previously allowed to be filed directly with
the Supreme Court, should now be brought to the Court of Appeals.
WHEREFORE, in view of the foregoing reasons, the instant petition for certiorari and prohibition with
application for temporary restraining order and preliminary injunction is hereby DISMISSED for lack
of merit. The Temporary Restraining Order issued on July 19, 1993 is hereby LIFTED.
SO ORDERED.
RESOLUTION
GARCIA, J.:
ORDER
1. Judgment of the court a quo dated January 15, 1999 (mailed to counsels
only on March 2, 1999) was received by defendants-appellants thru
counsel on March 12, 1999 (p. 369, rec.);
3. Order of the court a quo dated May 7, 1999 denying the motion for
reconsideration (p. 381, rec.);
4. Motion for execution of judgment dated September 9, 1999 filed with the
court a quo on September 14, 1999 (rec.);
5. Order dated February 14, 2000 of the court a quo denying motion for
execution of judgment and granting defendants fifteen (15) days to
appeal (p. 400, rec.);
6. Notice of appeal filed with the court a quo on November 3, 1999 (p. 412,
rec.);
7. Appeal fee paid after four (4) months on March 14, 2000 (p. 427, rec.); and
8. Order of the court a quo dated March 14, 2000 approving the appeal. (p.
429, rec.)
the court hereby resolved to dismiss the appeal for being filed out of time and
frivolous.
2. Judge Amado L. Becamon extended the period of appeal fixed by the Rules
(p. 400, rec.);
3. The court still received the appeal fee on March 14, 2000 despite the lapse
of the period of appeal (p. 427, rec.); and
4. Judge Amado L. Becamon still approved the appeal despite the lapse of the
period of appeal (p. 429, rec.).
And, considering the gross irregularity in the record, Judge Amado L. Becamon, Mrs.
Lolita delos Reyes, Clerk of Court II, and Eddie delos Reyes, Process Server, of the
4th MCTC of Placer-Cawayan-Esperanza, Masbate are hereby ordered to explain in
writing within ten (10) days from notice why they should not be dealt with
administratively for grave misconduct, ignorance of law and dishonesty.
Furnish a copy of this order to Honorable Court Administrator for his information.
So ordered.
On the other hand, the present case - A.M. No. MTJ-02-1404 - stemmed from a
sworn letter-complaint of the same complainant against the very same respondents
addressed to then Court Administrator Alfredo L. Benipayo. In said sworn letter-
complaint, Judge Henry B. Basilla averred:
In compliance with your letter dated October 25, 2000, I, in my capacity as Executive
Judge, after a careful study of the record in Civil Case No. 288 (MCTC Case No. 263-
C) entitled Visitacion Mahusay vda. de Du, Plaintiff vs. Benjamin Du, et
al., Defendants for Recovery of Possession and Ownership of Land, hereby formally
charge administratively Judge Amado L. Becamon, Mrs. Lolita delos Reyes, Clerk of
Court II and Mr. Eddie delos Reyes, Junior Process Server, of MCTC of Placer-
Cawayan-Esperanza, Masbate, for Gross Neglect of Duty and/or Grave Misconduct,
for Ignorance of Law and for violation of Canon 3 of the Code of Judicial Conduct of
1989 (specially for Judge Amado L. Becamon) --- committed by freezing and
delaying the release of the decision and the order denying to reconsider it, for one and
a half months and five months, respectively, and extending the period of appeal fixed
by the rules, and for receiving the appeal fee and after which approving the appeal
despite the time to do so had long elapsed.
2.) Annex B Judgment of the court a quo dated January 15, 1999 (mailed to
counsel only on March 2, 1999, p. 365, registry receipt, rec.) was
received by defendants-appellants thru counsel on March 12, 1999 (p.
369, rec.);
4.) Annex D Order of the court a quo dated May 7, 1999 denying the motion
for reconsideration (p. 381, registry receipt, rec.);
5.) Annex E Motion for execution of judgment dated September 9, 1999 filed
with the court a quo on September 14, 1999 (rec.);
6.) Annex F Order dated February 14, 2000 of the court a quo denying motion
for execution of judgment and granting defendants fifteen (15) days to
appeal (p. 400, rec.);
6.) Annex G Notice of appeal filed with the court a quo on November 3,
1999 (p. 412, rec.);
8.) Annex H Appeal fee paid after four (4) months on March 14, 2000 (p. 427,
rec.);
9.) Annex I Order of the court a quo dated March 14, 2000 approving the
appeal (p. 429, rec.).
Clear it is from the above that both A.M. No. MTJ-02-1438 and the instant
administrative case - A.M. No. MTJ-02-1404 - refer to the same subject matter, raise the
same issues and involve the same parties.
Applying the principle of res judicata or bar by prior judgment, the present
administrative case becomes dismissible. Section 47, Rule 39 of the Rules of Court
enunciates the rule of res judicata or bar by prior judgment, thus:
SEC. 47. Effect of judgments or final orders. - The effect of a judgment or
final order rendered by a court of the Philippines, having jurisdiction to pronounce the
judgment or final order, may be as follows:
(b) In other cases, the judgment or final order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors-in-interest by title subsequent to
the commencement of the action or special proceeding, litigating for the same thing
and under the same title and in the same capacity;
Under the said doctrine, a matter that has been adjudicated by a court of competent
jurisdiction must be deemed to have been finally and conclusively settled if it arises in any
subsequent litigation between the same parties and for the same cause. [3] It provides that
[a] final judgment on the merits rendered by a court of competent jurisdiction is conclusive
as to the rights of the parties and their privies; and constitutes an absolute bar to
subsequent actions involving the same claim, demand, or cause of action. [4] Res
judicata is based on the ground that the party to be affected, or some other with whom he
is in privity, has litigated the same matter in the former action in a court of competent
jurisdiction, and should not be permitted to litigate it again.[5]
This principle frees the parties from undergoing all over again the rigors of
unnecessary suits and repetitious trials. At the same time, it prevents the clogging of court
dockets. Equally important, res judicata stabilizes rights and promotes the rule of law.[6]
The records reveal that the two (2) administrative cases stemmed from the same
factual circumstances between the same parties. The earlier administrative case (A.M.
No. MTJ-02-1438) which was already terminated in our en banc Resolution of January
22, 2004, arose when the OCA was furnished with a copy of the order dated April 5,
2000issued by complainant Judge Henry B. Basilla. Complete record of MCTC Case No.
263-C was also transmitted to the said office, and, after evaluating the matter, Deputy
Court Administrator Jose P. Perez, in his Report dated April 19, 2002, recommended that
the same be re-docketed as a regular administrative matter, which recommendation was
adopted by this Court in its Resolution of July 10, 2002, and accordingly had the matter
docketed as A.M. No. MTJ-02-1438.
Meanwhile, on December 6, 2000, Executive Judge Henry B. Basilla, in compliance
with then Court Administrator Alfredo L. Benipayos letter dated October 25, 2000, filed
his sworn letter-complaint formally charging herein respondents for the same irregularities
committed by them relative to the same MCTC Case No. 263-C. Later, in his January 16,
2002 Report, the incumbent Court Administrator, Presbitero J. Velasco, Jr.,
recommended the re-docketing of the present complaint as a regular administrative
matter. And, in our Resolution dated February 27, 2002, we adopted said
recommendation and thus docketed that very same letter-complaint as A.M. No. MTJ-
02-1404. This explain why two (2) administrative cases, having identical subject matter,
cause of action and involving the same parties existed.
WHEREFORE, the instant administrative complaint is DISMISSED for being a mere
duplication of the complaint in A.M. No. MTJ-02-1438 which, to stress, was already
resolved by this Court in its en banc Resolution promulgated on January 22, 2004 (420
SCRA 608).
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.
Corona, J., on leave.
DECISION
PUNO, C.J.:
This is a Petition for Review on Certiorari under Rule 45 filed by the National Housing Authority
(NHA) against the Court of Appeals, the Regional Trial Court of San Pedro Laguna, Branch 31, and
private respondent Segunda Almeida.
On June 28, 1959, the Land Tenure Administration (LTA) awarded to Margarita Herrera several
portions of land which are part of the Tunasan Estate in San Pedro, Laguna. The award is evidenced
by an Agreement to Sell No. 3787.1 By virtue of Republic Act No. 3488, the LTA was succeeded by
the Department of Agrarian Reform (DAR). On July 31, 1975, the DAR was succeeded by the NHA
by virtue of Presidential Decree No. 757.2 NHA as the successor agency of LTA is the petitioner in
this case.
The records show that Margarita Herrera had two children: Beatriz Herrera-Mercado (the mother of
private respondent) and Francisca Herrera. Beatriz Herrera-Mercado predeceased her mother and
left heirs.
On August 22, 1974, Francisca Herrera, the remaining child of the late Margarita Herrera executed a
Deed of Self-Adjudication claiming that she is the only remaining relative, being the sole surviving
daughter of the deceased. She also claimed to be the exclusive legal heir of the late Margarita
Herrera.
The Deed of Self-Adjudication was based on a Sinumpaang Salaysay dated October 7, 1960,
allegedly executed by Margarita Herrera. The pertinent portions of which are as follows:
SINUMPAANG SALAYSAY
SA SINO MAN KINAUUKULAN;
1. Na ako ay may tinatangkilik na isang lagay na lupang tirikan (SOLAR), tumatayo sa Nayon
ng San Vicente, San Pedro, Laguna, mayroong PITONG DAAN AT PITUMPU'T ISANG
(771) METRONG PARISUKAT ang laki, humigit kumulang, at makikilala sa tawag na Lote
17, Bloke 55, at pag-aari ng Land Tenure Administration;
3. Na dahilan sa ako'y matanda na at walang ano mang hanap buhay, ako ay nakatira at
pinagsisilbihan nang aking anak na si Francisca Herrera, at ang tinitirikan o solar na
nasasabi sa unahan ay binabayaran ng kaniyang sariling cuarta sa Land Tenure
Administration;
The said document was signed by two witnesses and notarized. The witnesses signed at the left-
hand side of both pages of the document with the said document having 2 pages in total. Margarita
Herrera placed her thumbmark5above her name in the second page and at the left-hand margin of
the first page of the document.
The surviving heirs of Beatriz Herrera-Mercado filed a case for annulment of the Deed of Self-
Adjudication before the then Court of First Instance of Laguna, Branch 1 in Binan, Laguna (now,
Regional Trial Court Branch 25). The case for annulment was docketed as Civil Case No. B-1263.6
On December 29, 1980, a Decision in Civil Case No. B-1263 (questioning the Deed of Self-
Adjudication) was rendered and the deed was declared null and void.7
During trial on the merits of the case assailing the Deed of Self-Adjudication, Francisca Herrera filed
an application with the NHA to purchase the same lots submitting therewith a copy of the
"Sinumpaang Salaysay" executed by her mother. Private respondent Almeida, as heir of Beatriz
Herrera-Mercado, protested the application.
In a Resolution8 dated February 5, 1986, the NHA granted the application made by Francisca
Herrera, holding that:
From the evidence of the parties and the records of the lots in question, we gathered the
following facts: the lots in question are portions of the lot awarded and sold to the late
Margarita Herrera on July 28, 1959 by the defunct Land Tenure Administration; protestant is
the daughter of the late Beatriz Herrera Mercado who was the sister of the protestee;
protestee and Beatriz are children of the late Margarita Herrera; Beatriz was the transferee
from Margarita of Lot Nos. 45, 46, 47, 48 and 49, Block 50; one of the lots transferred to
Beatriz, e.g. Lot 47, with an area of 148 square meters is in the name of the protestant;
protestant occupied the lots in question with the permission of the protestee; protestee is a
resident of the Tunasan Homesite since birth; protestee was born on the lots in question;
protestee left the place only after marriage but resided in a lot situated in the same Tunasan
Homesite; her (protestee) son Roberto Herrera has been occupying the lots in question; he
has been there even before the death of the late Margarita Herrera; on October 7, 1960,
Margarita Herrera executed a "Sinumpaang Salaysay" whereby she waived or
transferred all her rights and interest over the lots in question in favor of the
protestee; and protestee had paid the lots in question in full on March 8, 1966 with the
defunct Land Tenure Administration.
This Office finds that protestee has a better preferential right to purchase the lots in question.9
Private respondent Almeida appealed to the Office of the President.10 The NHA Resolution was
affirmed by the Office of the President in a Decision dated January 23, 1987.11
On February 1, 1987, Francisca Herrera died. Her heirs executed an extrajudicial settlement of her
estate which they submitted to the NHA. Said transfer of rights was approved by the NHA.12 The
NHA executed several deeds of sale in favor of the heirs of Francisca Herrera and titles were issued
in their favor.13 Thereafter, the heirs of Francisca Herrera directed Segunda Mercado-Almeida to
leave the premises that she was occupying.
Feeling aggrieved by the decision of the Office of the President and the resolution of the NHA,
private respondent Segunda Mercado-Almeida sought the cancellation of the titles issued in favor of
the heirs of Francisca. She filed a Complaint on February 8, 1988, for "Nullification of Government
Lot's Award," with the Regional Trial Court of San Pedro, Laguna, Branch 31.
In her complaint, private respondent Almeida invoked her forty-year occupation of the disputed
properties, and re-raised the fact that Francisca Herrera's declaration of self-adjudication has been
adjudged as a nullity because the other heirs were disregarded. The defendant heirs of Francisca
Herrera alleged that the complaint was barred by laches and that the decision of the Office of the
President was already final and executory.14 They also contended that the transfer of purchase of the
subject lots is perfectly valid as the same was supported by a consideration and that Francisca
Herrera paid for the property with the use of her own money.15 Further, they argued that plaintiff's
occupation of the property was by mere tolerance and that they had been paying taxes thereon.16
The Regional Trial Court issued an Order dated June 14, 1988 dismissing the case for lack of
jurisdiction.17 The Court of Appeals in a Decision dated June 26, 1989 reversed and held that the
Regional Trial Court had jurisdiction to hear and decide the case involving "title and possession to
real property within its jurisdiction."18 The case was then remanded for further proceedings on the
merits.
On March 9, 1998, the Regional Trial Court rendered a Decision setting aside the resolution of the
NHA and the decision of the Office of the President awarding the subject lots in favor of Francisca
Herrera. It declared the deeds of sale executed by NHA in favor of Herrera's heirs null and void. The
Register of Deeds of Laguna, Calamba Branch was ordered to cancel the Transfer Certificate of Title
issued. Attorney's fees were also awarded to private respondent.
The Regional Trial Court ruled that the "Sinumpaang Salaysay" was not an assignment of rights but
a disposition of property which shall take effect upon death. It then held that the said document must
first be submitted to probate before it can transfer property.
Both the NHA and the heirs of Francisca Herrera filed their respective motions for reconsideration
which were both denied on July 21, 1998 for lack of merit. They both appealed to the Court of
Appeals. The brief for the heirs of Francisca Herrera was denied admission by the appellate court in
a Resolution dated June 14, 2002 for being a "carbon copy" of the brief submitted by the NHA and
for being filed seventy-nine (79) days late.
On August 28, 2003, the Court of Appeals affirmed the decision of the Regional Trial Court, viz:
There is no dispute that the right to repurchase the subject lots was awarded to Margarita
Herrera in 1959. There is also no dispute that Margarita executed a "Sinumpaang Salaysay"
on October 7, 1960. Defendant NHA claims that the "Sinumpaang Salaysay" is, in effect, a
waiver or transfer of rights and interest over the subject lots in favor of Francisca Herrera.
This Court is disposed to believe otherwise. After a perusal of the "Sinumpaang Salaysay" of
Margarita Herrera, it can be ascertained from its wordings taken in their ordinary and
grammatical sense that the document is a simple disposition of her estate to take effect after
her death. Clearly the Court finds that the "Sinumpaang Salaysay" is a will of Margarita
Herrera. Evidently, if the intention of Margarita Herrera was to merely assign her right over
the lots to her daughter Francisca Herrera, she should have given her "Sinumpaang
Salaysay" to the defendant NHA or to Francisca Herrera for submission to the defendant
NHA after the full payment of the purchase price of the lots or even prior thereto but she did
not. Hence it is apparent that she intended the "Sinumpaang Salaysay" to be her last will and
not an assignment of rights as what the NHA in its resolution would want to make it appear.
The intention of Margarita Herrera was shared no less by Francisca Herrera who after the
former's demise executed on August 22, 1974 a Deed of Self-Adjudication claiming that she
is her sole and legal heir. It was only when said deed was questioned in court by the
surviving heirs of Margarita Herrera's other daughter, Beatriz Mercado, that Francisca
Herrera filed an application to purchase the subject lots and presented the "Sinumpaang
Salaysay" stating that it is a deed of assignment of rights.19
The Court of Appeals ruled that the NHA acted arbitrarily in awarding the lots to the heirs of
Francisca Herrera. It upheld the trial court ruling that the "Sinumpaang Salaysay" was not an
assignment of rights but one that involved disposition of property which shall take effect upon death.
The issue of whether it was a valid will must first be determined by probate.
Res judicata is a concept applied in review of lower court decisions in accordance with the hierarchy
of courts. But jurisprudence has also recognized the rule of administrative res judicata: "the rule
which forbids the reopening of a matter once judicially determined by competent authority applies as
well to the judicial and quasi-judicial facts of public, executive or administrative officers and boards
acting within their jurisdiction as to the judgments of courts having general judicial powers . . . It has
been declared that whenever final adjudication of persons invested with power to decide on the
property and rights of the citizen is examinable by the Supreme Court, upon a writ of error or a
certiorari, such final adjudication may be pleaded as res judicata."20 To be sure, early jurisprudence
were already mindful that the doctrine of res judicata cannot be said to apply exclusively to decisions
rendered by what are usually understood as courts without unreasonably circumscribing the scope
thereof and that the more equitable attitude is to allow extension of the defense to decisions of
bodies upon whom judicial powers have been conferred.
In Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals,21 the Court held that the rule
prescribing that "administrative orders cannot be enforced in the courts in the absence of an express
statutory provision for that purpose" was relaxed in favor of quasi-judicial agencies.
In fine, it should be remembered that quasi-judicial powers will always be subject to true judicial
power—that which is held by the courts. Quasi-judicial power is defined as that power of adjudication
of an administrative agency for the "formulation of a final order."22 This function applies to the
actions, discretion and similar acts of public administrative officers or bodies who are required to
investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them,
as a basis for their official action and to exercise discretion of a judicial nature.23 However,
administrative agencies are not considered courts, in their strict sense. The doctrine of separation of
powers reposes the three great powers into its three (3) branches—the legislative, the executive,
and the judiciary. Each department is co-equal and coordinate, and supreme in its own sphere.
Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its
agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is
empowered to "determine whether or not there has been grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."24 Courts have an expanded role under the 1987 Constitution in the resolution of
societal conflicts under the grave abuse clause of Article VIII which includes that duty to check
whether the other branches of government committed an act that falls under the category of grave
abuse of discretion amounting to lack or excess of jurisdiction.25
Next, petitioner cites Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of 198026 where
it is therein provided that the Intermediate Appellate Court (now, Court of Appeals) shall exercise the
"exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards, of
the Regional Trial Courts and Quasi-Judicial agencies, instrumentalities, boards or commissions,
except those falling within the jurisdiction of the Supreme Court in accordance with the
Constitution…"27 and contends that the Regional Trial Court has no jurisdiction to rule over awards
made by the NHA.
Well-within its jurisdiction, the Court of Appeals, in its decision of August 28, 2003, already ruled that
the issue of the trial court's authority to hear and decide the instant case has already been settled in
the decision of the Court of Appeals dated June 26, 1989 (which has become final and executory on
August 20, 1989 as per entry of judgment dated October 10, 1989).28 We find no reason to disturb
this ruling. Courts are duty-bound to put an end to controversies. The system of judicial review
should not be misused and abused to evade the operation of a final and executory judgment.29 The
appellate court's decision becomes the law of the case which must be adhered to by the parties by
reason of policy.30
Next, petitioner NHA contends that its resolution was grounded on meritorious grounds when it
considered the application for the purchase of lots. Petitioner argues that it was the daughter
Francisca Herrera who filed her application on the subject lot; that it considered the respective
application and inquired whether she had all the qualifications and none of the disqualifications of a
possible awardee. It is the position of the petitioner that private respondent possessed all the
qualifications and none of the disqualifications for lot award and hence the award was not done
arbitrarily.
The petitioner further argues that assuming that the "Sinumpaang Salaysay" was a will, it could not
bind the NHA.31That, "insofar as [the] NHA is concerned, it is an evidence that the subject lots were
indeed transferred by Margarita Herrera, the original awardee, to Francisca Herrera was then
applying to purchase the same before it."32
We are not impressed. When the petitioner received the "Sinumpaang Salaysay," it should have
noted that the effectivity of the said document commences at the time of death of the author of the
instrument; in her words "sakaling ako'y bawian na ng Dios ng aking buhay…" Hence, in such
period, all the interests of the person should cease to be hers and shall be in the possession of her
estate until they are transferred to her heirs by virtue of Article 774 of the Civil Code which provides
that:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and
obligations to the extent of the value of the inheritance, of a person are transmitted
through his death to another or others either by his will or by operation of law.33
By considering the document, petitioner NHA should have noted that the original applicant has
already passed away. Margarita Herrera passed away on October 27, 1971.34 The NHA issued its
resolution35 on February 5, 1986. The NHA gave due course to the application made by Francisca
Herrera without considering that the initial applicant's death would transfer all her property, rights
and obligations to the estate including whatever interest she has or may have had over the disputed
properties. To the extent of the interest that the original owner had over the property, the same
should go to her estate. Margarita Herrera had an interest in the property and that interest should go
to her estate upon her demise so as to be able to properly distribute them later to her heirs—in
accordance with a will or by operation of law.
The death of Margarita Herrera does not extinguish her interest over the property. Margarita Herrera
had an existing Contract to Sell36 with NHA as the seller. Upon Margarita Herrera's demise, this
Contract to Sell was neither nullified nor revoked. This Contract to Sell was an obligation on both
parties—Margarita Herrera and NHA. Obligations are transmissible.37 Margarita Herrera's obligation
to pay became transmissible at the time of her death either by will or by operation of law.
If we sustain the position of the NHA that this document is not a will, then the interests of the
decedent should transfer by virtue of an operation of law and not by virtue of a resolution by the
NHA. For as it stands, NHA cannot make another contract to sell to other parties of a property
already initially paid for by the decedent. Such would be an act contrary to the law on succession
and the law on sales and obligations.38
When the original buyer died, the NHA should have considered the estate of the decedent as the
next "person"39likely to stand in to fulfill the obligation to pay the rest of the purchase price. The
opposition of other heirs to the repurchase by Francisca Herrera should have put the NHA on guard
as to the award of the lots. Further, the Decision in the said Civil Case No. B-1263 (questioning the
Deed of Self-Adjudication) which rendered the deed therein null and void40 should have alerted the
NHA that there are other heirs to the interests and properties of the decedent who may claim the
property after a testate or intestate proceeding is concluded. The NHA therefore acted arbitrarily in
the award of the lots.
We need not delve into the validity of the will. The issue is for the probate court to determine. We
affirm the Court of Appeals and the Regional Trial Court which noted that it has an element of
testamentary disposition where (1) it devolved and transferred property; (2) the effect of which shall
transpire upon the death of the instrument maker.41
IN VIEW WHEREOF, the petition of the National Housing Authority is DENIED. The decision of the
Court of Appeals in CA-G.R. No. 68370 dated August 28, 2003, affirming the decision of the
Regional Trial Court of San Pedro, Laguna in Civil Case No. B-2780 dated March 9, 1998, is hereby
AFFIRMED.
No cost.
SO ORDERED.
QUISUMBING, J.,
Chairperson,
- versus - CARPIO MORALES,
TINGA,
*
CHICO-NAZARIO, and
VELASCO, JR., JJ.,
GMA NETWORK, INC.,
Respondent. Promulgated:
December 23, 2008
x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
On August 19, 1995, the petitioner, GMA NETWORK, INC., (GMA, for brevity),
a domestic corporation, filed an application for collective approval of various
amendments to its Articles of Incorporation and By-Laws with the respondent
Securities and Exchange Commission, (SEC, for brevity). The amendments
applied for include, among others, the change in the corporate name of petitioner
from Republic Broadcasting System, Inc. to GMA Network, Inc. as well as the
extension of the corporate term for another fifty (50) years from and after June 16,
2000.
Upon such filing, the petitioner had been assessed by the SECs Corporate and
Legal Department a separate filing fee for the application for extension of corporate
term equivalent to 1/10 of 1% of its authorized capital stock plus 20% thereof or
an amount of P1,212,200.00.
On September 26, 1995, the petitioner informed the SEC of its intention to contest
the legality and propriety of the said assessment. However, the petitioner requested
the SEC to approve the other amendments being requested by the petitioner
without being deemed to have withdrawn its application for extension of corporate
term.
On October 20, 1995, the petitioner formally protested the assessment amounting
to P1,212,200.00 for its application for extension of corporate term.
On February 20, 1996, the SEC approved the other amendments to the petitioners
Articles of Incorporation, specifically Article 1 thereof referring to the corporate
name of the petitioner as well as Article 2 thereof referring to the principal purpose
for which the petitioner was formed.
On March 19, 1996, the petitioner requested for an official opinion/ruling from the
SEC on the validity and propriety of the assessment for application for extension
of its corporate term.
An appeal from the aforequoted ruling of the respondent SEC was subsequently
taken by the petitioner on the ground that the assessment of filing fees for the
petitioners application for extension of corporate term equivalent to 1/10 of 1% of
the authorized capital stock plus 20% thereof is not in accordance with law.
On September 26, 2001, following three (3) motions for early resolution filed by
the petitioner, the respondent SEC En Banc issued the assailed order dismissing
the petitioners appeal, the dispositive portion of which provides as follows:
SO ORDERED.[2]
In its petition for review[3] with the Court of Appeals, GMA argued that its
application for the extension of its corporate term is akin to an amendment and not
to a filing of new articles of incorporation. It further averred that SEC Memorandum
Circular No. 2, Series of 1994, which the SEC used as basis for
assessing P1,212,200.00 as filing fee for the extension of GMAs corporate term, is
not valid.
The appellate court agreed with the SECs submission that an extension of the
corporate term is a grant of a fresh license for a corporation to act as a juridical being
endowed with the powers expressly bestowed by the State. As such, it is not an
ordinary amendment but is analogous to the filing of new articles of incorporation.
However, the Court of Appeals ruled that Memorandum Circular No. 2, Series
of 1994 is legally invalid and ineffective for not having been published in accordance
with law. The challenged memorandum circular, according to the appellate court, is
not merely an internal or interpretative rule, but affects the public in general. Hence,
its publication is required for its effectivity.
In its Memorandum[5] dated September 6, 2005, the SEC argues that it issued the
questioned memorandum circular in the exercise of its delegated legislative power
to fix fees and charges. The filing fees required by it are allegedly uniformly imposed
on the transacting public and are essential to its supervisory and regulatory functions.
The fees are not a form of penalty or sanction and, therefore, require no publication.
For its part, GMA points out in its Memorandum,[6] dated September 23, 2005,
that SEC Memorandum Circular No. 1, Series of 1986 refers to the filing fees for
amended articles of incorporation where the amendment consists of extending the
term of corporate existence. The questioned circular, on the other hand, refers only
to filing fees for articles of incorporation. Thus, GMA argues that the former circular,
being the one that specifically treats of applications for the extension of corporate
term, should apply to its case.
Assuming that Memorandum Circular No. 2, Series of 1994 is applicable,
GMA avers that the latter did not take effect and cannot be the basis for the
imposition of the fees stated therein for the reasons that it was neither filed with the
University of the Philippines Law Center nor published either in the Official Gazette
or in a newspaper of general circulation as required under existing laws.
It should be mentioned at the outset that the authority of the SEC to collect
and receive fees as authorized by law is not in question. [7] Its power to collect fees
for examining and filing articles of incorporation and by-laws and amendments
thereto, certificates of increase or decrease of the capital stock, among others, is
recognized. Likewise established is its power under Sec. 7 of P.D. No. 902-A to
recommend to the President the revision, alteration, amendment or adjustment of the
charges which it is authorized to collect.
The subject of the present inquiry is not the authority of the SEC to collect and
receive fees and charges, but rather the validity of its imposition on the basis of a
memorandum circular which, the Court of Appeals held, is ineffective.
Republic Act No. 3531 (R.A. No. 3531) provides that where the amendment
consists in extending the term of corporate existence, the SEC shall be entitled to
collect and receive for the filing of the amended articles of incorporation the same
fees collectible under existing law as the filing of articles of incorporation.[8] As is
clearly the import of this law, the SEC shall be entitled to collect and receive the
same fees it assesses and collects both for the filing of articles of incorporation and
the filing of an amended articles of incorporation for purposes of extending the term
of corporate existence.
The SEC, effectuating its mandate under the aforequoted law and other
pertinent laws,[9] issued SEC Memorandum Circular No. 1, Series of 1986, imposing
the filing fee of 1/10 of 1% of the authorized capital stock but not less than P300.00
nor more than P100,000.00 for stock corporations, and 1/10 of 1% of the authorized
capital stock but not less than P200.00 nor more than P100,000.00 for stock
corporations without par value, for the filing of amended articles of incorporation
where the amendment consists of extending the term of corporate existence.
Several years after, the SEC issued Memorandum Circular No. 2, Series of
1994, imposing new fees and charges and deleting the maximum filing fee set forth
in SEC Circular No. 1, Series of 1986, such that the fee for the filing of articles of
incorporation became 1/10 of 1% of the authorized capital stock plus 20% thereof
but not less than P500.00.
A reading of the two circulars readily reveals that they indeed pertain to
different matters, as GMA points out. SEC Memorandum Circular No. 1, Series of
1986 refers to the filing fee for the amendment of articles of incorporation to extend
corporate life, while Memorandum Circular No. 2, Series of 1994 pertains to the
filing fee for articles of incorporation. Thus, as GMA argues, the former circular,
being squarely applicable and, more importantly, being more favorable to it, should
be followed.
What this proposition fails to consider, however, is the clear directive of R.A.
No. 3531 to impose the same fees for the filing of articles of incorporation and the
filing of amended articles of incorporation to reflect an extension of corporate
term. R.A. No. 3531 provides an unmistakable standard which should guide the SEC
in fixing and imposing its rates and fees. If such mandate were the only
consideration, the Court would have been inclined to rule that the SEC was correct
in imposing the filing fees as outlined in the questioned memorandum
circular, GMAs argument notwithstanding.
However, we agree with the Court of Appeals that the questioned
memorandum circular is invalid as it does not appear from the records that it has
been published in the Official Gazette or in a newspaper of general
circulation. Executive Order No. 200, which repealed Art. 2 of the Civil Code,
provides that laws shall take effect after fifteen days following the completion of
their publication either in the Official Gazette or in a newspaper of general
circulation in the Philippines, unless it is otherwise provided.
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed by
the legislature.
The questioned memorandum circular, furthermore, has not been filed with
the Office of the National Administrative Register of the University of the
Philippines Law Center as required in the Administrative Code of 1987.[12]
In Philsa International Placement and Services Corp. v. Secretary of Labor
and Employment,[13] Memorandum Circular No. 2, Series of 1983 of the Philippine
Overseas Employment Administration, which provided for the schedule of
placement and documentation fees for private employment agencies or authority
holders, was struck down as it was not published or filed with the National
Administrative Register.
SO ORDERED.
FIRST DIVISION
MARICHU G. EJERA, Petitioner, v. BEAU HENRY L. MERTO AND ERWIN VERGARA, Respondents.
DECISION
BERSAMIN, J.:
A public servant who has an issue against a directive for her re-assignment must exhaust her available
administrative remedies before resorting to judicial action. The non-exhaustion of available administrative
remedies is fatal to the resort to judicial action.
This appeal by petition for review on certiorari assails the decision promulgated on July 23, 2003,1whereby
the Court of Appeals (CA) affirmed the order issued on October 22, 2001 by the Regional Trial Court, Branch
33, in Dumaguete City (RTC) dismissing the petitioner�s suit for injunction and damages on the ground of
non-exhaustion of administrative remedies.2 She had commenced the suit to restrain the respondents from
investigating her refusal to comply with the office orders re-assigning her to a station other than her current
place of work.chanro bleslaw
Antecedents
The petitioner held the position of Agricultural Center Chief I in the Office of the Provincial Agriculturist in
Negros Oriental.3 Her position was equivalent to the position of Senior Agriculturist, the next-in-rank to the
position of Supervising Agriculturist. Upon the retirement of the Supervising Agriculturist, she applied for
that position, but one Daisy Kirit was eventually appointed. She filed a protest against the appointment of
Kirit before the Civil Service Commission (CSC) Regional Office in Cebu City,4 but that said office dismissed
her protest on May 24, 2000.5 The Central CSC Office affirmed the dismissal on July 25, 2001 under its
Resolution No. 011253.6 chan roble slaw
Meanwhile, on September 11, 2000, respondent Provincial Agriculturist Beau Henry L. Merto issued Office
Order No. 008 (Amending Office Order No. 008, Series of 2000, Re: Assignment/Re-assignment of BADC
Area Coordinators and Development Team Members)7 �[i]n the interest of the service and to provide
intensive agricultural extension services to residents of interior barangays under the Barangay Agricultural
Development Center (BADC) Program in the province, which is aimed at achieving Food Security and
Poverty Alleviation.� Provincial Governor George P. Arnaiz of Negros Oriental was furnished a copy of Office
Order No. 008.
To take effect on October 2, 2000, Office Order No. 008 stated: chanRoblesv irt ual Lawlib rary
All Fishery Technologists presently assigned in the coastal areas, and in further pursuant to Special Order
No. 001, Series of 2000 approved by the Provincial Governor, shall now radiate and devote 60% of their
official time to their respective assigned BADC sites to provide technical assistance to participants in
freshwater fish production. However, they shall maintain their present station as their official duty station.
It has been an established policy of the present provincial administration to provide regular and adequate
agricultural extension services to residents of remote interior barangays which are economically depressed
but with potentials for agricultural development. The deployment of Agricultural and Fishery Technologists in
the above mentioned barangays/sitios will improve farming activities of the residents in the long term and
eventually trigger other developments that will improve their quality of life.8
The petitioner was one of the personnel re-assigned under Office Order No. 008. She was designated therein
as the team leader in Lake Balanan and Sandulot in the Municipality of Siaton. When she refused to obey the
office order, Merto ordered her on March 12, 2001 to explain in writing within 72 hours why no
administrative disciplinary action should be taken against her.9 After she did not submit her explanation,
Merto and respondent Atty. Erwin B. Vergara, the Provincial Legal Officer, summoned her to a conference.
She and her counsel, Atty. Lenin R. Victoriano, attended the conference, but later on walked out allegedly
because Vergara refused to record her objections to the questions she was being asked to answer.
On April 16, 2001,10 the petitioner filed in the RTC her complaint for �final injunction with temporary
restraining order and/or preliminary injunction, and damages,� averring that Merto had issued Office Order
No. 008 because he had so bitterly resented her attacks against him before the CSC Regional Office; that
her reassignment was a virtual �banishment� because her position required her to stay in Dumaguete
City;� that the re-assignment was a �gross and blatant violation of the �Omnibus Rules on Appointments
and Other Personnel Actions�� prohibiting whimsical and indiscriminate reassignments; that on account of
her refusal to obey Office Order No. 008, Merto had charged her administratively; that Merto had no power
to investigate, because the Provincial Governor was the proper disciplining authority; that the letter of Merto
requiring her to explain violated Rule II, Section B of CSC Memorandum Circular No. 19, Series of 1999
requiring complaints to be under oath; that Merto connived with Vergara, who had issued a �Notice of
Conference� on March 30, 2001 setting the preliminary conference on April 5, 2001; and that the
conference could not be terminated when she and her counsel walked out due to the refusal of Vergara to
allow the recording of the objections of her counsel.
The petitioner further averred that the RTC could rule on the basic ground that the respondents had no
power to banish her to the far-flung areas of Municipality of Siaton through the �illegal, whimsical and
malicious� Office Order No. 008; and that they acted in bad faith and with malice in violation of Article 19
and Article 20 of the Civil Code, thereby entitling her to damages. For reliefs, she prayed: chanRoble svirtual Lawlib rary
(1) That, pending trial, a temporary restraining order and/or preliminary injunction be immediately issued,
ordering the defendants to cease and desist from investigating plaintiff for refusal to obey Office Order No.
008, Series of 2000, issued by defendant Beau Henry L. Merto, and to refrain from committing any and all
acts which might impair the efficacy of said temporary restraining order and/or preliminary injunction;
(2) That, after trial, judgment issue, declaring said Office Order No. 008, Series of 2000, as a� violation of
the Administrative Code of 1987, as implemented by the �Omnibus Rules on Appointments and Other
Personnel Actions� issued by the Civil Service Commission, therefore, null and void;
(4) That, likewise after trial, defendants be ordered jointly and severally to pay plaintiff P500,000.00 moral
damages, P200,000.00 exemplary damages, and P50,000.00 attorney�s fees and litigation expenses, plus
the costs.
Plaintiff respectfully prays for such other relief just and equitable.11
At the hearing on the issuance of the temporary restraining order, the RTC proposed the possible
reconsideration of Office Order No. 008 especially because the petitioner complained of ill-health. The
respondents expressed willingness to consider the proposal of the RTC, and promised to confer with the
Provincial Governor. Later on, however, they manifested that they had apprised the Provincial Governor
about the proposal but, with the Provincial Governor running for re-election, they could submit an approved
written proposal only after the elections.12 The RTC granted their prayer for an extension of time to submit
their written proposal for an amicable settlement.13 chan roble slaw
Shortly after the elections, the petitioner filed a motion to declare the respondents in default for failing to
answer the complaint.14 The RTC held in abeyance the resolution of the motion in view of the proposals and
counterproposals regarding a compromise.15 Later on, however, the respondents manifested that because
the possible compromise would involve an order for a transfer or detail of the petitioner to another place,
they and the Provincial Governor could not act because the Omnibus Election Codeprohibited the
appointment, promotion, and transfer of civil servants during the campaign period from January 2, 2001 to
June 13, 2001 pursuant to COMELEC Resolution No. 3401.16 Accordingly, the RTC declared the respondents
in default.17
chan robles law
Prior to the ex parte hearing of the case on the merits, the petitioner moved for the admission of a
supplemental complaint in order to implead Gregorio P. Paltinca, the Officer-in-Charge of the Office of the
Provincial Agriculturist, for issuing on June 29, 2001 Office Order No. 005, Series of 2001, to amend Office
Order No. 008.18 Office Order No. 005 was re-assigning her to Barangays Balanan, Sandulot, and Jumalon in
the Municipality of Siaton as her official duty stations.19 chanrob lesla w
The supplemental complaint stated that Office Order No. 005, to take effect on July 2, 2001, had not been
posted in the bulletin board of the Office of the Provincial Agriculturist; that she had not been furnished a
copy of the order; that OIC Paltinca had acted with malice and evident bad faith by his failure to notify her
of the re-assignment, which was �worse than the original re-assignment� by Merto, as it constituted her
�banishment� from her office in Dumaguete City; that the re-assignment had violated Book V, Section 12
(2) and (3) of the Administrative Code of 1987 prohibiting re-assignments that were indiscriminately and
whimsically done; that although the appointing and disciplining authority was the Provincial Governor, who
had approved Office Order No. 005, Paltinca should be impleaded because it was he who had thereby
violated the Administrative Code of 1987; and that she had� refused to obey the two office orders for
justifiable reasons because both were null and void ab initio as far as she was concerned.20 cha nrob leslaw
Paltinca moved to dismiss the supplemental complaint on the ground that the admission of the petitioner
that the Provincial Governor, not he, was her appointing and disciplining authority exposed her lack of cause
of action; that the non-inclusion of the Provincial Governor as the real party in interest was a fatal error;
and that the failure of the petitioner to exhaust administrative remedies before going to court was also a
ground for the dismissal of the case.21 chanrob leslaw
The petitioner opposed Paltinca�s motion to dismiss, contending that the Provincial Governor was neither
an indispensable nor a necessary party inasmuch as Office Order No. 005 could be declared null and void
without impleading the Provincial Governor, who could always intervene if he so desired; that there was no
need for the exhaustion of administrative remedies because the issue was a purely legal one, i.e., the nullity
of the office orders in question; and that the motion to dismiss was premature because the trial court had
not yet admitted the supplemental complaint.22 chanro bleslaw
After the RTC deemed the motion to dismiss submitted for resolution,23 Vergara filed a manifestation
informing the RTC of the dismissal by the CSC Central Office of the petitioner�s appeal (CSC Resolution No.
011253). Vergara argued that she had utilized the pendency of the appeal as her legal excuse in disobeying
Office Order No. 008, which her affected co-employees had dutifully obeyed; and that the dismissal of her
appeal removed any valid reason or legal ground for her to disobey the office orders that the Provincial
Governor had issued �for the good of the service and to promote our food security.�24 chanrobles law
The petitioner responded to the manifestation of Vergara, stating that she had moved for the
reconsideration of CSC Resolution No. 011253, and that the outcome of her appeal in the CSC did not affect
the case because the issue involved was the legality of her re-assignment.25 chan roble slaw
On October 22, 2001, the RTC dismissed the case, holding on the legality of Office Order No. 008 and Office
Order No. 005 as follows: chanRob lesvi rtual Lawli brary
Section 7, Rule 1 of the Memorandum Circular No. 19, series of 1999 provides: Heads of departments,
agencies, provinces, cities, municipalities and other instrumentalities shall have concurrent jurisdiction with
the Commission, over their respective officers and employees. In the case at bar, it is the Chief Executive
who has the power of disciplining over his subordinates. But issuance of Office Order No. 008 is not a
penalty. Section 5, paragraph 3, Rule VII of the Omnibus Rules Implementing Book V of Executive Order No.
292, provides: Transfer shall not be considered disciplinary when made in the interest of public service, in
which case, the employee concerned shall be informed of the reasons therefor. If the imployee (sic) believes
that there is no justification for the transfer, he may appeal his case to the Commission.26
On the allegation of the petitioner that the �complaint� of Merto asking her to explain why she should not
be disciplined for her refusal to obey Office Order No. 008, the RTC declared: chanRoblesv irt ual Lawlib rary
This Court agrees with the plaintiff that a complaint against a civil servant shall not be given due course
unless it is in writing and subscribed and sworn to by the complainant. However, in cases initiated by the
proper disciplining authority, the complaint need not be under oath (Section 8, Rule 11, Memorandum
Circular No. 19, series of 1999). This is explained in Maloga v. Gella, 15 SCRA 370, which held that head or
chief of office of the bureau or office is deemed to be acting in his official capacity and under his oath of
office.
Lastly, the RTC opined that the petitioner should have first gone to the CSC to challenge the legality of
Office Order No. 008 and Office Order No. 005 prior to her resort to the courts; and that, therefore, she had
not exhausted all her administrative remedies considering that her case did not fall under any of the
exceptions to the application of the doctrine on the exhaustion of administrative remedies. chan rob leslaw
Decision of the CA
Not satisfied, the petitioner appealed to the CA, contending that: chanRoblesvi rt ualLaw lib rary
I.
THE LOWER COURT ERRED IN DISMISSING THE CASE AGAINST DEFENDANTS-APPELLEES BEAU HENRY L.
MERTO AND ERWIN VERGARA FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES WHEN SAID
DEFENDANTS-APPELLEES HAVE BEEN DECLARED IN DEFAULT. THUS, THEY NEVER RAISED THE ISSUE OF
NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES AND ARE, THEREFORE, DEEMED TO HAVE WAIVED
SUCH DEFENSE;
II.
THE LOWER COURT ERRED IN DISMISSING THE CASE AS AGAINST DEFENDANT-APPELLEE GREGORIO P.
PALTINCA FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES WHEN THE SAID COURT HAS NOT EVEN
ACTED YET ON THE MOTION OF THE PLAINTIFF-APPELLANT TO ADMIT THE SUPPLEMENTAL COMPLAINT
AGAINST HIM. THEREFORE, THE MOTION OF DEFENDANT-APPELLEEE GREGORIO P. PALTINCA TO DISMISS
THE CASE ON THE GROUND OF FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IS PREMATURE.� THE
TRIAL COURT, FOR REASONS UNKNOWN, WAS TOO PRECIPITATE IN DISMISSING THE CASE; AND
III.
IN ANY EVENT, THE LOWER COURT ERRED IN DISMISSING THE CASE FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES BECAUSE THE ISSUE IS PURELY A LEGAL ONE AND NOTHING OF AN
ADMINISTRATIVE NATURE IS TO BE AND CAN BE DONE. MOREOVER, THE CONTROVERTED ACT IS
PATENTLY ILLEGAL.27
On July 23, 2003, the CA affirmed the RTC,28 ruling that the legality of Office Order No. 008 and Office Order
No. 005 could not be denied because they were �intended for public service.� It observed that: chanRoblesv irt ual Lawlib rary
x x x x. The impugned Office Orders were issued by defendants-appellees Merto and Paltinca in their
capacity as heads of the Office of the Provincial Agriculturist� and were duly� approved by the Provincial
Governor. More importantly, these Office Orders do not single out plaintiff-appellee for transfer to the
interior localities of the province. They cannot therefore be considered as her personal banishment as a
consequence of the protest she initiated for the appointment of Kirit.29
It pointed out that the petitioner should have appealed her transfer to the CSC conformably with
the Omnibus Rules Implementing Book V of the Administrative Code of 1987 that mandated an
administrative appeal or remedy before a resort to judicial action instead of directly resorting to the court
action.
On the petitioner�s contention that the RTC precipitately acted on Paltinca�s motion to dismiss because it
had yet to admit her supplemental complaint, the CA observed: cha nRoblesv irt ual Lawlib rary
Indeed, the trial court did not explicitly resolve to admit, in a separate order, plaintiff-appellant�s
Supplemental Complaint against defendant-appellee Paltinca prior to the latter�s filing of a Motion to
Dismiss the said supplemental complaint against him. To Our mind, however, the procedural lapse did not
prejudice plaintiff-appellant�s substantive rights. First, it must be noted that by filing the Supplemental
Complaint against defendant-appellee Paltinca, plaintiff-appellant had intended it all along to be admitted by
the trial court. Second, when plaintiff-appellant moved for the resolution of the Motion to Dismiss and her
Opposition thereto, she, in effect, impliedly conceded the admission of the Supplemental Complaint subject
of the pending incidents for, otherwise, what was there to dismiss and to oppose the dismissal of. Third, the
trial court in fact indirectly admitted the Supplemental Complaint when it dismissed the case against all the
defendants. Fourth and more importantly, even had the trial court decided to deny the Motion to Dismiss
on the ground of prematurity, there was nothing to prevent the newly impleaded defendant from raising
anew the defense of non-exhaustion of administrative remedies in his answer and the same would have
been upheld and ultimately resulted in the dismissal of the case not only as against him but even as against
the original defendants. Finally, jurisprudence dictates that departures from procedure may be forgiven
where they do not appear to have impaired the substantive rights of the parties. As We have earlier noted,
We perceive no impairment of plaintiff-appellant�s substantive rights with the non-issuance by the trial
court of a separate order admitting the supplemental complaint.30
As regards the petitioner�s position that the respondents waived the defense of her non-exhaustion of
administrative remedies by not filing their answer, the CA pronounced: chanRoblesvi rtua lLawl ib rary
Under paragraph c, Section 3, Rule 9 of the 1997 Revised Rules on Civil Procedure, when a common cause
of action is alleged against several defendants, some of whom filed an answer and the others failed to do so,
thus, were declared in default, the court shall try the case against all defendants, defaulted and not
defaulted, upon the answer thus filed and render judgment upon the evidence presented. Clearly, the
answer of a non-defaulting defendant, such as that of the additional defendant Paltinca, inures to the benefit
of those defaulted, like the original defendants Merto and Vergara, since they all share a common fate in the
action commenced by plaintiff-appellee. The trial court, therefore, did not err in appreciating the defense of
non-exhaustion of administrative remedies raised by defendant-appellee Paltinca in favor of his co-
defendants-appellees Merto and Vergara who had been declared in default by the trial court.
The petitioner moved for reconsideration, but the CA denied her motion.31 cha nrob leslaw
Issues
The petitioner submits that the CA erred in holding that: (a) her case did not constitute an exception to the
rule on the exhaustion of administrative remedies; (b) a motion to dismiss could be acted upon even without
an order admitting the supplemental complaint; and (c) the respondents as defaulted defendants could not
benefit from the special defense of her non-exhaustion of administrative remedies raised by Paltinca, the
non-defaulting defendant.32 chanro bl eslaw
I
Petitioner�s non-exhaustion of her available
administrative remedies was fatal to her cause
The petitioner alleges that Office Order No. 008 and Office Order No. 005 were illegal for violating the rule
against indiscriminate and whimsical reassignment enunciated in the Administrative Code of 1987; that the
issuances� were� really� intended for her, who was� based in Dumaguete City, �manifestly in the guise
of assigning/reassigning her to the Barangay Agricultural Development Project to the far flung isolated
mountainous areas in Sandulot and Jumalon, Siaton, Negros Oriental;� that the respondents could not issue
the office orders because �the transfer of an employee without her consent is arbitrary for it is tantamount
to removal without cause and therefore invalid as it is violative of her security of tenure;� that the transfer
done without her consent amounted to her removal from office; that the legal issue she raised could be
threshed out only by a court of justice, not by an administrative body; that her allegation that the office
orders were �contrary to law and jurisprudence on the matter� only meant that she was raising a question
of law, which ruled out administrative intervention; that in keeping with the broad discretion of courts in
urgent matters, she would suffer an irreparable damage or injury unless there was judicial intervention; and
that the fact that the office orders were intended for public service did not shield them from judicial scrutiny.
The petitioner argues that the declaration of the respondents in default resulted in the waiver of their
defense of non-exhaustion of administrative remedies; and that the court had then no legal justification to
dismiss the case on that ground inasmuch as the respondents did not file a motion to set aside the order of
default.
In their comment, the respondents counter that the arguments of the petitioner had been thoroughly
discussed and passed upon by the CA; and that she did not show that her appeal was one that the Court
could take cognizance of.
In her reply, the petitioner insisted that the decision of the CA was rendered with grave abuse of discretion
because the rule on exhaustion of administrative remedies was not absolute; that there were exceptions to
the rule, such as when the question litigated was a purely legal one, or when applying the rule would not
provide plain, speedy and adequate remedy, or when its application would cause great and irreparable
damage; that a ground for judicial review would exist when an administrative determination was made
without or in excess of authority; that Office Order No. 008 and Office Order No. 005 were issued without or
in excess of authority; and that the CA overlooked that her right to security of tenure and right to due
process of law would be violated unless she went to court.
Firstly, Section 26, Chapter 5, Title I-A, Book V of the Administrative Code of 1987 lists the personnel
actions that may be taken in the government service, namely: (1) appointment through certification; (2)
promotion; (3) transfer; (4) reinstatement; (5) reemployment; (6) detail; and (7) reassignment.
The subject of the assailed office orders was a reassignment, which is not to be confused with a transfer.
The office orders themselves indicated that the personnel action involved was a reassignment, not a
transfer, for, indeed, the petitioner was being moved from the organizational unit of the Office of the
Provincial Agriculturist in Dumaguete City to that in the barangays of the Municipality of Siaton.
xxxx
(3) Transfer. A transfer is a movement from one position to another which is of equivalent rank,
level, or salary without break in service involving the issuance of an appointment.
It shall not be considered disciplinary when made in the interest of public service, in which case, the
employee concerned shall be informed of the reasons therefor. If the employee believes that there is no
justification for the transfer, he may appeal his case to the Commission.
The transfer may be from one department or agency to another or from one organizational unit to another
in the same department or agency: Provided, however, That any movement from the non-career service to
the career service shall not be considered a transfer. (Emphasis supplied.)
xxxx
(7) Reassignment. An employee may be reassigned from one organizational unit to another in the
same agency: Provided, That such reassignment shall not involve a reduction in rank, status or salary.
(Emphasis supplied.)
xxxx
The foregoing definition of reassignment has been adopted by the CSC in Section 10 of Rule VII (Other
Personnel Action)33 of the Omnibus Rules Implementing Book V of the Administrative Code of 1987
(Omnibus Rules), declaring that a reassignment �is the movement of an employee from one organizational
unit to another in the same department or agency which does not involve a reduction in rank, status or
salary and does not require the issuance of an appointment.�34 chanrob leslaw
Rule III of CSC Memorandum Circular No. 40, Series of 1998 (Revised Omnibus Rules on Appointments and
Other Personnel Actions) includes reassignment in the enumeration of personnel movements that do not
require the issuance of a new appointment, to wit: chanRoblesvi rt ualLaw lib rary
SEC. 6. Other Personnel Movements. The following personnel movements which will not require issuance of
an appointment shall nevertheless require an office order by duly authorized official.
a. Reassignment � movement of an employee from one organizational unit to another in the same
department or agency which does not involve a reduction in rank, status or salary. If reassignment is
without the consent of the employee being reassigned, it shall be allowed only for a maximum
period of one year. Reassignment is presumed to be regular and made in the interest of public
service unless proven otherwise or if it constitutes constructive dismissal.
Constructive dismissal exists when an employee quits his work because of the agency head�s
unreasonable, humiliating, or demeaning actuations which render continued work impossible.
Hence, the employee is deemed to have been illegally dismissed. This may occur although there is no
diminution or reduction of salary of the employee. It may be a transfer from a position of dignity to a
more servile or menial job.
Reassignment of small salaried employees is not permissible if it causes significant financial dislocation.
Sufficient reasons to warrant the continued reassignment of the employee and performance of functions
other than those attached to the position must be established. (Emphasis in the original; bold italics
supplied.)
That the reassignment was made without the petitioner�s consent can be deduced from her refusal to
report to the station of her new assignment. Nonetheless, there is no record showing that she ever claimed
that the reassignment involved a reduction in rank, status or salary. In addition, she was but one of several
employees re-assigned pursuant to the questioned office orders. In view of these circumstances, she could
not decline the reassignment unless she would have a valid personal reason to refuse to abide by the office
orders. Yet, it was only during the trial that she revealed that her refusal to accept the re-assignment had
been because of her poor health condition, i.e.,� due to her having had three caesarean sections and a
myoma extraction, her obstetrician had advised her to refrain from extraneous activities including riding in
the habal-habal (hired motorcycle) which was the only means of transportation to the barangays of the
Municipality of Siaton.35 But she lost the opportunity to ventilate her reason for refusing the reassignment by
walking out of the conference instead of explaining her refusal to follow Office Order No. 008.
Secondly, under the Administrative Code of 1987, the CSC has the power and function to �[p]rescribe,
amend and enforce rules and regulations for carrying into effect the provisions of the Civil Service Law and
other pertinent laws.�36 It also has the complementing power to render opinions and rulings �on all
personnel and other Civil Service matters which shall be binding on all heads of departments, offices and
agencies and which may be brought to the Supreme Court (now Court of Appeals) on certiorari.�37 cha nro bleslaw
Pursuant to its rule-making authority, the CSC promulgated the Omnibus Rules, whose Rule XII, governing
complaints and grievances, defines a complaint as �an employee�s expressed (written or spoken) feelings
of dissatisfaction with some aspects of his working conditions, relationships or status which are outside his
control. This does not include those involving disciplinary actions which are governed by separate
rules.�38 The same rule characterizes grievance as �a complaint in writing which has, in the first instance
and in the employee�s opinion, been ignored, overridden or dropped without due consideration.� ChanRobles Virtualawl ibrary
The reassignment of the petitioner was a �personnel� and �Civil Service� matter to be properly addressed
in accordance with the rules and guidelines prescribed by the CSC. Her resort to judicial intervention could
not take the place of the grievance procedure then available to her. Her having shrouded her complaint in
the RTC with language that presented a legal issue against the assailed office order of Merto did not excuse
her premature resort to judicial action.
For one, the petitioner was aware that Merto�s superior was the Provincial Governor, an official who could
competently redress her grievance. She could have then challenged both the wisdom and the legality of
Office Order No. 008, as well as the propriety of her reassignment to a station outside of Dumaguete City,
before the Provincial Governor himself.39 For her to do so was appropriate because of the need to resolve a
local problem like her reassignment �within the local government.�40 chanrob leslaw
The petitioner should also not ignore that Merto had issued Office Order No. 008 in his capacity as Provincial
Agriculturist in order to implement the policy of the Provincial Government of Negros Oriental to provide
regular and adequate agricultural extension services to residents of remote interior barangays that were
economically depressed but with potentials for agricultural development. In that context, only the Provincial
Governor could competently determine the soundness of Office Order No. 008 or the propriety of its
implementation, for the Provincial Governor had the power to supervise and control �programs, projects,
services, and activities� of the province pursuant to Section 465 of Republic Act No. 7160 (Local
Government Code), which pertinently states: chanRob lesvi rtua lLawl ibra ry
Section 465. The Chief Executive: Powers, Duties, Functions, and Compensation.
(a) x x x x.
(b) For efficient, effective and economical governance the purpose of which is the general welfare of the
province and its inhabitants pursuant to Section 16 of this Code,41 the provincial governor shall: cha nrob lesvi rtua llawlib ra ry
(1)� Exercise general supervision and control over all programs, projects, services, and activities
of the provincial government, and in this connection, shall:
(i) Determine the guidelines of provincial policies and be responsible to the Sangguniang Panlalawigan for
the program of government;
(ii) Direct the formulation of the provincial development plan, with the assistance of the provincial
development council, and upon approval thereof by the Sangguniang Panlalawigan, implement the same;
(iii) Present the program and propose policies and projects for the consideration of the Sangguniang
Panlalawigan at the opening of the regular session of the Sangguniang Panlalawigan every calendar year
and as often as may be deemed necessary as the general welfare of the inhabitants and the needs of the
provincial government may require;
x x x x. (Bold emphasis supplied)
Thirdly, the rule requiring the exhaustion of administrative remedies rests on the principle that the
administrative agency, if afforded a complete chance to pass upon the matter again, will decide the same
correctly. There are both legal and practical reasons for the rule. The administrative process is intended to
provide less expensive and speedier solutions to disputes. Where the enabling statute indicates a procedure
for administrative review and provides a system of administrative appeal or reconsideration, therefore, the
courts � for reasons of law, comity and convenience � will not entertain a case unless the available
administrative remedies have been resorted to and the appropriate authorities have been given an
opportunity to act and correct the errors committed in the administrative forum. 42 chanrobles la w
The importance and value of the exhaustion of administrative remedies as a condition before resorting to
judicial action cannot be brushed aside. As the Court points out in Universal Robina Corp. (Corn Division) v.
Laguna Lake Development Authority:43 chan roble slaw
The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of
the rule is that courts must allow administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is
obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and
convenience also impel courts of justice to shy away from a dispute until the system of administrative
redress has been completed.
The petitioner contends, however, that her case came under the exceptions to the application of the rule for
the exhaustion of administrative remedies considering that her judicial challenge in the RTC related to the
legality of Office Order No. 008 and Office Order No. 005.
It is true that the doctrine of exhaustion of administrative remedies is not an ironclad rule, but recognizes
exceptions, specifically: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where
the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is
unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where� the
amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the
question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where
judicial intervention is urgent; (g) where the application of the doctrines may cause great and irreparable
damage; (h) where the controversial acts violate due process; (i) where the issue of non-exhaustion of
administrative remedies has been rendered moot; (j) where strong public interest is involved; and (l) in quo
warranto proceedings.44 chan roble slaw
The exceptions did not cover the petitioner�s case. In her complaint, she assailed Office Order No. 008 on
three basic legal grounds, namely: (a) the re-assignment, being �whimsical and indiscriminate,� violated
the Omnibus Rules on Appointments and Other Personnel Actions; (b) Merto had no power to investigate
her, considering that the Provincial Governor was the �proper disciplining authority;� and (c) whether the
letter of Merto requiring her to explain her refusal to follow Office Order No. 008 should be under oath. Still,
her immediate resort to the RTC remained premature, because the legal issues she seemingly raised were
admittedly interlaced with factual issues, like whether or not Merto had issued Office Order No. 008 because
of her having attacked him in her protest against Kirit as the appointee to the position of Supervising
Agriculturist, and whether or not her reassignment constituted banishment from her office in Dumaguete
City. She further averred that the reassignment had been whimsical and indiscriminate, an averment that
surely called for factual basis. It ought to be beyond question that the factual issues could only be settled by
a higher policy-determining provincial official like the Provincial Governor by virtue of his authority,
experience and expertise to deal with the issues. The Provincial Governor should have been given a very
meaningful opportunity to resolve the matter and to exhaust all opportunities for its resolution before
bringing the action in court.45 chan robles law
The rule is that judicial intervention should only be availed of after all administrative remedies had been
exhausted. The Judiciary must not intervene because Office Order No. 008 and Office Order No. 005 both
concerned the implementation of a provincial executive policy. According to Dimson (Manila), Inc. v. Local
Water Utilities Administration:46 chan roble slaw
x x x. The doctrine of exhaustion of administrative remedies is a judicial recognition of certain matters that
are peculiarly within the competence of the administrative agency to address. It operates as a shield that
prevents the overarching use of judicial power and thus hinders courts from intervening in matters of
policy infused with administrative character. The Court has always adhered to this precept, and it has
no reason to depart from it now. (Bold emphasis supplied.)
Moreover, the non-observance of the doctrine of exhaustion of administrative remedies resulted in the
complaint having no cause of action.47 Hence, the RTC and the CA correctly dismissed the case.
Verily, had the petitioner followed the grievance procedure under the CSC�s Omnibus Rules, her next step
would have been to elevate her case to the CSC itself,48 the constitutional body charged with the exclusive
jurisdiction not only over disciplinary actions against government officials and employees but also over cases
involving personnel actions.
In Corsiga v. Judge Defensor,49 which concerned the reassignment of an engineer in the National Irrigation
Authority, the Court ruled: chanRob lesvi rtu alLawli bra ry
Section 13 Rule VII of the Rules Implementing Book V of Executive Order No. 292 (the Adm. Code of 1987)
provides how appeal can be taken from a decision of a department or agency head. It states that such
decision shall be brought to the Merit System Protection Board (now the CSC En Banc per CSC Resolution
No. 93-2387 dated June 29, 1993). It is the intent of the Civil Service Law, in requiring the establishment of
a grievance procedure in Rule XII, Section 6 of the same rules, that decisions of lower level officials be
appealed to the agency head, then to the Civil Service Commission. Decisions of the Civil Service
Commission, in turn, may be elevated to the Court of Appeals. Under this set up, the trial court does
not have jurisdiction over personnel actions and, thus, committed an error in taking jurisdiction
over Civil Case No. 22462. The trial court should have dismissed the case on motion of petitioner and let
private respondent question RMO No. 52 before the NIA Administrator, and then the Civil Service
Commission. As held in Mantala v. Salvador,50cases involving personnel actions, reassignment
included, affecting civil service employees, are within the exclusive jurisdiction of the Civil
Service Commission. (Emphasis supplied.)
II.
Paltinca�s motion to dismiss could be resolved
before the admission of the supplemental complaint
The petitioner insists that the RTC erroneously resolved Paltinca�s motion to dismiss without first admitting
her supplemental pleading.
The insistence is not correct. The petitioner filed her supplemental complaint to assail Office Order No. 005,
and thereby raised issues identical to those raised in her original complaint involving Office Order No. 008.
Hence, the RTC could already resolve Paltinca�s motion to dismiss even without first admitting the
supplemental complaint. Unlike an amended complaint, her supplemental complaint could �exist side-by-
side� with the original complaint, because the supplemental complaint averred facts supervening from the
filing of the complaint.51 Rule 10 of the 1997 Rules of Civil Procedure expressly provides: cha nRoblesv irt ual Lawlib rary
Section 6. Supplemental pleadings. � Upon motion of a party the court may, upon reasonable notice and
upon such terms as are just, permit him to serve a supplemental pleading setting forth transactions,
occurrences or events which have happened since the date of the pleading sought to be supplemented. The
adverse party may plead thereto within ten (10) days from notice of the order admitting the supplemental
pleading.
The defense of non-exhaustion of her administrative remedies raised by Paltinca as the non-defaulting
defendant inured to the benefit of the respondents who had been declared in default. For one, there was a
common cause of action against the respondents and Paltinca.52 The non-exhaustion was fatal to such
common cause of action.53 Moreover, such benefit inuring to the respondents despite default was predicated
on Section 3, Rule 9 of the 1997 Rules of Civil Procedure, to wit: chanRoble svirtual Lawli bra ry
Section 3. Default; declaration of. � If the defending party fails to answer within the time allowed therefore,
the court shall, upon motion of the claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment
granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court. cralawred
x x x x.
(c) Effect of partial default. � When a pleading asserting a claim states a common cause of action against
several defending parties, some of whom answer and the others fail to do so, the court shall try the case
against all upon the answers thus filed and render judgment upon the evidence presented. cralawre d
x x x x.
WHEREFORE, the Court DENIES the petition for review on certiorari for its lack of merit; AFFIRMS the
decision of the Court of Appeals promulgated on July 23, 2003; and ORDERS the petitioner to pay the costs
of suit.
SO ORDERED. cralawlawlibra ry
RESOLUTION
YNARES-SANTIAGO, J.:
the Court in a resolution dated September 3, 2002. GSIS posited that the other
benefits not passed upon in the main judgment should be understood by
respondents as having been impliedly denied by this Court. It also sought
clarification of our decision insofar as it declared that there was no identity of
subject matter between the COA proceedings, from which the first petition
stemmed, and respondents claim under the second petition, which emanated
from an order of the GSIS Board of Trustees (Board). As for the damages
claimed by respondents, GSIS insists that it made the deductions in good faith
for these were done in accordance with COA directives.
Respondents filed a reply to the comment of GSIS on September 9, 2002.
[3]
Meanwhile, respondents filed a second motion, this time for leave to file a
motion for discretionary and partial execution (motion for execution). They
[4]
prayed that GSIS be ordered to effect the refund, as finally adjudged in our
decision, pending resolution of their amendatory motion as to the other
deducted amounts. We granted the motion for execution on September 3, 2002.
Subsequently, on December 26, 2002, counsel for respondents, Atty.
Agustin Sundiam, filed a motion for entry and enforcement of attorneys
lien (motion for charging lien) and a supplement to this motion on January 10,
[5] [6]
2003. He sought entry of a charging lien in the records of this case pursuant to
Section 37 of Rule 138. He prayed for an order directing the GSIS to deduct, as
his professional fees, 15% from respondents refund vouchers since the GSIS
was already in the process of releasing his clients checks in compliance with
our judgment in the first petition. The payment scheme was allegedly authorized
by the Board of Directors of his clients, the GSIS Retirees Association, Inc.
(GRIA), through a board resolution that he has attached to the motion.
[7]
Atty. Sundiams motion for charging lien was opposed by petitioner GSIS on
the ground that it was through its efforts, and not Atty. Sundiams, that the
retirees were able to obtain a refund. Meanwhile, the GRIA confirmed the
[8]
payment scheme it adopted with Atty. Sundiam and prayed for its approval. [9]
On January 21, 2003, respondents again filed a motion praying for the
[11]
foregoing motions contending that the new deductions are legitimate. The
deductions pertain to car loan arrearages, disallowed employees compensation
claims and the like. As for the dividends on the Provident Fund contributions,
respondents are not entitled to the same because while the first petition was
pending, the contributions were not actually remitted to the fund but were
withheld by COA pursuant to its earlier disallowance.
On October 2, 2003, respondents filed another motion for an order to
[13]
compel the GSIS to pay dividends on the Provident Fund contributions pending
resolution of their other motions. They also sought refund of Permanent Partial
Disability (PPD) benefits that GSIS supposedly paid to some of the
respondents, but once again arbitrarily deducted from the amount which the
Court ordered to be refunded.
In a minute resolution dated November 11, 2003, we denied the last
[14]
motion for lack of merit. We likewise denied with finality respondents motion for
reconsideration from the denial of said motion.[15]
for a ruling to be first made by the Board. It is the latter that is vested by law
with exclusive and original jurisdiction to settle any dispute arising under RA
8291, as well as other matters related thereto. [17]
However, both the GSIS and respondents have extensively discussed the
merits of the case in their respective pleadings and did not confine their
arguments to the issue of jurisdiction. Respondents, in fact, submit that we
should resolve the main issue on the ground that it is a purely legal question.
Respondents further state that a remand of the case to the Board would merely
result in unnecessary delay and needless expense for the parties. They thus
urge the Court to decide the main question in order to finally put an end to the
controversy.
Indeed, the principal issue pending before the Board does not involve any
factual question, as it concerns only the correct application of the last paragraph
of Section 39, RA 8291. The parties agreed that the lone issue is whether COA
disallowances could be legally deducted from retirement benefits on the ground
that these were respondents monetary liabilities to the GSIS under the said
provision. There is no dispute that the amounts deducted by GSIS represented
COA disallowances. Thus, the only question left for the Board to decide is
whether the deductions are allowed under RA 8291.
Under certain exceptional circumstances, we have taken cognizance of
questions of law even in the absence of an initial determination by a lower court
or administrative body. In China Banking Corporation v. Court of Appeals, the[18]
Court held:
At the outset, the Courts attention is drawn to the fact that since the filing of this suit
before the trial court, none of the substantial issues have been resolved. To avoid and
gloss over the issues raised by the parties, as what the trial court and respondent Court
of Appeals did, would unduly prolong this litigation involving a rather simple case of
foreclosure of mortgage. Undoubtedly, this will run counter to the avowed purpose of
the rules, i.e., to assist the parties in obtaining just, speedy and inexpensive
determination of every action or proceeding. The Court, therefore, feels that the
central issues of the case, albeit unresolved by the courts below, should now be settled
specially as they involved pure questions of law. Furthermore, the pleadings of the
respective parties on file have amply ventilated their various positions and arguments
on the matter necessitating prompt adjudication.
likewise held that the remand of a case is not necessary where the court is in a
position to resolve the dispute based on the records before it. The Court will
decide actions on the merits in order to expedite the settlement of a controversy
and if the ends of justice would not be subserved by a remand of the case.
Here, the primary issue calls for an application of a specific provision of RA
8291 as well as relevant jurisprudence on the matter. No useful purpose will
indeed be served if we remand the matter to the Board, only for its decision to
be elevated again to the Court of Appeals and subsequently to this
Court. Hence, we deem it sound to rule on the merits of the controversy rather
than to remand the case for further proceedings.
The last paragraph of Section 39, RA 8291 specifically provides:
xxxxxxxxx
The funds and/or the properties referred to herein as well as the benefits, sums or
monies corresponding to the benefits under this Act shall be exempt from attachment,
garnishment, execution, levy or other processes issued by the courts, quasi-judicial
agencies or administrative bodies including Commission on Audit (COA)
disallowances and from all financial obligations of the members, including his
pecuniary accountability arising from or caused or occasioned by his exercise or
performance of his official functions or duties, or incurred relative to or in connection
with his position or work except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.
x x x we are of the opinion that the exemption should be liberally construed in favor
of the pensioner. Pension in this case is a bounty flowing from the graciousness of the
Government intended to reward past services and, at the same time, to provide the
pensioner with the means with which to support himself and his family. Unless
otherwise clearly provided, the pension should inure wholly to the benefit of the
pensioner. It is true that the withholding and application of the amount involved was
had under section 624 of the Administrative Code and not by any judicial process, but
if the gratuity could not be attached or levied upon execution in view of the
prohibition of section 3 of Act No. 4051, the appropriation thereof by administrative
action, if allowed, would lead to the same prohibited result and enable the respondents
to do indirectly what they can not do directly under section 3 of Act No. 4051. Act
No. 4051 is a later statute having been approved on February 21, 1933, whereas the
Administrative Code of 1917 which embodies section 624 relied upon by the
respondents was approved on March 10 of that year. Considering section 3 of Act No.
4051 as an exception to the general authority granted in section 624 of the
Administrative Code, antagonism between the two provisions is avoided.
(Underscoring supplied)
The above ruling was reiterated in Tantuico, Jr. v. Domingo, where the [24]
Court similarly declared that benefits under retirement laws cannot be withheld
regardless of the petitioners monetary liability to the government.
The policy of exempting retirement benefits from attachment, levy and
execution, as well as unwarranted deductions, has been embodied in a long
line of retirement statutes. Act No. 4051, which provides for the payment of
[25]
SEC. 23. Exemptions from legal process and liens. No policy of life insurance issued
under this Act, or the proceeds thereof, except those corresponding to the annual
premium thereon in excess of five hundred pesos per annum, when paid to any
member thereunder, shall be liable to attachment, garnishment, or other process, or to
be seized, taken, appropriated, or applied by any legal or equitable process or
operation of law to pay any debt or liability of such member, or his beneficiary, or any
other person who may have a right thereunder, either before or after payment; nor
shall the proceeds thereof, when not made payable to a named beneficiary, constitute
a part of the estate of the member for payment of his debt.
The latest GSIS enactment, RA 8291, provides for a more detailed and
[29]
wider range of exemptions under Section 39. Aside from exempting benefits
from judicial processes, it likewise unconditionally exempts benefits from quasi-
judicial and administrative processes, including COA disallowances, as well as
all financial obligations of the member. The latter includes any pecuniary
accountability of the member which arose out of the exercise or performance of
his official functions or duties or incurred relative to his position or work. The
only exception to such pecuniary accountability is when the same is in favor of
the GSIS.
Thus, monetary liability in favor of GSIS refers to indebtedness of the
member to the System other than those which fall under the categories of
pecuniary accountabilities exempted under the law. Such liability may include
unpaid social insurance premiums and balances on loans obtained by the
retiree from the System, which do not arise in the performance of his duties and
are not incurred relative to his work. The general policy, as reflected in our
retirement laws and jurisprudence, is to exempt benefits from all legal
processes or liens, but not from outstanding obligations of the member to the
System. This is to ensure maintenance of the GSIS fund reserves in order to
guarantee fulfillment of all its obligations under RA 8291.
Notwithstanding the foregoing, however, we find it necessary to nonetheless
differentiate between those benefits which were properly disallowed by the COA
and those which were not.
Anent the benefits which were improperly disallowed, the same rightfully
belong to respondents without qualification. As for benefits which were
justifiably disallowed by the COA, the same were erroneously granted to and
received by respondents who now have the obligation to return the same to the
System.
It cannot be denied that respondents were recipients of benefits that were
properly disallowed by the COA. These COA disallowances would otherwise
have been deducted from their salaries, were it not for the fact that respondents
retired before such deductions could be effected. The GSIS can no longer
recover these amounts by any administrative means due to the specific
exemption of retirement benefits from COA disallowances. Respondents
resultantly retained benefits to which they were not legally entitled which, in
turn, gave rise to an obligation on their part to return the amounts under the
principle of solutio indebiti.
Under Article 2154 of the Civil Code, if something is received and unduly
[30]
delivered through mistake when there is no right to demand it, the obligation to
return the thing arises. Payment by reason of mistake in the construction or
application of a doubtful or difficult question of law also comes within the scope
of solutio indebiti.
[31]
In the instant case, the confusion about the increase and payment of
benefits to GSIS employees and executives, as well as its subsequent
disallowance by the COA, arose on account of the application of RA 6758 or
the Salary Standardization Law and its implementing rules, CCC No. 10. The
complexity in the application of these laws is manifested by the several cases
that have reached the Court since its passage in 1989. The application of RA
[32]
6758 was made even more difficult when its implementing rules were nullified
for non-publication. Consequently, the delivery of benefits to respondents
[33]
Conformably, any fees due to Atty. Sundiam for his professional services
may be charged against respondents retirement benefits. The arrangement,
however, must be covered by a proper agreement between him and his clients
under (2) above.
As to whether respondents are entitled to dividends on the provident fund
contributions, the same is not within the issues raised before the Court. The
second petition refers only to the legality of the deductions made by GSIS from
respondents retirement benefits. There are factual matters that need to be
threshed out in determining respondents right to the payment of dividends, in
view of the GSIS assertion that the management contributions were not actually
remitted to the fund. Thus, the payment of dividends should be the subject of a
separate claim where the parties can present evidence to prove their respective
assertions. The Court is in no position to resolve the matter since the material
facts that would prove or disprove the claim are not on record.
In the interest of clarity, we reiterate herein our ruling that there is no identity
of subject matter between the COA proceedings, from which the first petition
stemmed, and respondents claim of refund before the Board. While the first
petition referred to the propriety of the COA disallowances per se, respondents
claim before the Board pertained to the legality of deducting the COA
disallowances from retirement benefits under Section 39 of RA 8291.
Finally, on respondents claim that the GSIS acted in bad faith when it
deducted the COA disallowances from their retirement benefits, except for bare
allegations, there is no proof or evidence of the alleged bad faith and partiality
of the GSIS. Moreover, the latter cannot be faulted for taking measures to
ensure recovery of the COA disallowances since respondents have already
retired and would be beyond its administrative reach. The GSIS merely acted
upon its best judgment and chose to err in the side of prudence rather than
suffer the consequence of not being able to account for the COA disallowances.
It concededly erred in taking this recourse but it can hardly be accused of malice
or bad faith in doing so.
WHEREFORE, in view of the foregoing, the April 16, 2002 Decision in G.R.
Nos. 138381 and 141625 is AMENDED. In addition to the refund of amounts
corresponding to benefits allowed in G.R. No. 138381, the GSIS is ordered to
REFUND all deductions from retirement benefits EXCEPT amounts
representing monetary liability of the respondents to the GSIS as well as all
other amounts mutually agreed upon by the parties.
SO ORDERED.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CORONA, J.:
When the law is clear, there is no other recourse but to apply it regardless of
its perceived harshness. Dura lex sed lex. Nonetheless, the law should never be
applied or interpreted to oppress one in order to favor another. As a court of law and
of justice, this Court has the duty to adjudicate conflicting claims based not only on
the cold provision of the law but also according to the higher principles of right and
justice.
On May 26, 2003, City Schools Division Superintendent Nelly B. Beloso appointed
respondent Jeane O. Basallote to the position of Administrative Officer II, Item No.
OSEC-DECSB-ADO2-390030-1998, of the Department of Education (DepEd),
Tabaco National High School in Albay.[2]
Subsequently, in a letter dated June 4, 2003,[3] the new City Schools Division
Superintendent, Ma. Amy O. Oyardo, advised School Principal Dr. Leticia B.
Gonzales that the papers of the applicants for the position of Administrative Officer
II of the school, including those of respondent, were
being returned and that a school ranking should be
accomplished and submitted to her office for review. In addition, Gonzales was
advised that only qualified applicants should be endorsed.
Respondent tried to obtain Gozales signature but the latter refused despite repeated
requests. When respondent informed Oyardo of the situation, she was instead
advised to return to her former teaching position of Teacher I. Respondent followed
the advice.
In its decision, the Ombudsman found Oyardo and Gonzales administratively liable
for withholding information from respondent on the status of her appointment, and
suspended them from the service for three months. Diaz was absolved of any
wrongdoing.[5]
Respondent also filed a protest with CSC Regional Office V. But the protest was
dismissed on the ground that it should first be submitted to the Grievance Committee
of the DepEd for appropriate action.[6]
On motion for reconsideration, the protest was reinstated but was eventually
dismissed for lack of merit.[7] Respondent appealed the dismissal of her protest to
the CSC Regional Office which, however, dismissed the appeal for failure to show
that her appointment had been received and attested by the CSC.[8]
Respondent elevated the matter to the CSC. In its November 29, 2005 resolution, the
CSC granted the appeal, approved respondents appointment and recalled the
approval of petitioners appointment.[9]
Aggrieved, petitioner filed a petition for certiorari in the Court of Appeals (CA)
claiming that the CSC acted without factual and legal bases in recalling his
appointment. He also prayed for the issuance of a temporary restraining order and a
writ of preliminary injunction.
In its September 26, 2006 decision,[10] the CA denied the petition and upheld
respondents appointment which was deemed effective immediately upon its issuance
by the appointing authority on May 26, 2003. This was because respondent had
accepted the appointment upon her assumption of the duties and responsibilities of
the position.
The CA found that respondent possessed all the qualifications and none of the
disqualifications for the position of Administrative Officer II; that due to the
respondents valid appointment, no other appointment to the same position could be
made without the position being first vacated; that the petitioners appointment to the
position was thus void; and that, contrary to the argument of petitioner that he had
been deprived of his right to due process when he was not allowed to participate in
the proceedings in the CSC, it was petitioner who failed to exercise his right by
failing to submit a single pleading despite being furnished with copies of the
pleadings in the proceedings in the CSC.
The CA opined that Diaz unreasonably refused to affix her signature on respondents
PDF and to submit respondents appointment to the CSC on the ground of non-
submission of respondents PDF. The CA ruled that the PDF was not even required
to be submitted and forwarded to the CSC.
Petitioner filed a motion for reconsideration but his motion was denied on February
8, 2007.[11]
Petitioner maintains that respondent was not validly appointed to the position of
Administrative Officer II because her appointment was never attested by the CSC.
According to petitioner, without the CSC attestation, respondents appointment as
Administrative Officer II was never completed and never vested her a permanent
title. As such, respondents appointment could still be recalled or withdrawn by the
appointing authority. Petitioner further argues that, under the Omnibus Rules
Implementing Book V of Executive Order (EO) No. 292,[13] every appointment is
required to be submitted to the CSC within 30 days from the date of issuance;
otherwise, the appointment becomes ineffective.[14] Thus, respondents appointment
issued on May 23, 2003 should have been transmitted to the CSC not later than June
22, 2003 for proper attestation. However, because respondents appointment was not
sent to the CSC within the proper period, her appointment ceased to be effective and
the position of Administrative Officer II was already vacant when petitioner was
appointed to it.
In her comment,[15] respondent points out that her appointment was wrongfully not
submitted by the proper persons to the CSC for attestation. The reason given by
Oyardo for the non-submission of respondents appointment papers to the CSC the
alleged failure of respondent to have her PDF duly signed by Gonzales was not a
valid reason because the PDF was not even required for the attestation of respondents
appointment by the CSC.
After due consideration of the respective arguments of the parties, we deny the
petition.
The law on the matter is clear. The problem is petitioners insistence that the
law be applied in a manner that is unjust and unreasonable.
Section 11. An appointment not submitted to the [CSC] within thirty (30)
days from the date of issuance which shall be the date appearing on the fact of the
appointment, shall be ineffective. xxx
Petitioner is wrong.
The real issue in this case is whether the deliberate failure of the appointing
authority (or other responsible officials) to submit respondents appointment paper to
the CSC within 30 days from its issuance made her appointment ineffective and
incomplete. Substantial reasons dictate that it did not.
Before discussing this issue, however, it must be brought to mind that CSC
resolution dated November 29, 2005 recalling petitioners appointment and
approving that of respondent has long become final and executory.
Sections 16 and 18, Rule VI of the Omnibus Rules provide the proper remedy
to assail a CSC decision or resolution:
Section 16. An employee who is still not satisfied with the decision
of the [Merit System Protection Board] may appeal to the [CSC] within
fifteen days from receipt of the decision.
In this case, petitioner did not file a petition for reconsideration of the CSC
resolution dated November 29, 2005 before filing a petition for review in the CA.
Such fatal procedural lapse on petitioners part allowed the CSC resolution dated
November 29, 2005 to become final and executory.[17] Hence, for all intents and
purposes, the CSC resolution dated November 29, 2005 has become immutable and
can no longer be amended or modified.[18] A final and definitive judgment can no
longer be changed, revised, amended or reversed.[19] Thus, in praying for the
reversal of the assailed Court of Appeals decision which affirmed the final and
executory CSC resolution dated November 29, 2005, petitioner would want the
Court to reverse a final and executory judgment and disregard the doctrine of
immutability of final judgments.
While Section 18 of the Omnibus Rules does not supplant the mode of appeal
under Rule 43, we cannot disregard Section 16 of the Omnibus Rules, which requires
that a petition for reconsideration should be filed, otherwise, the CSC decision will
become final and executory, viz.:
Thus, absent any definitive ruling that the second paragraph of Section 16 is
not mandatory and the filing of a petition for reconsideration may be dispensed with,
then the Court must adhere to the dictates of Section 16 of the Omnibus Rules.
Sec. 12. Powers and Functions. - The Commission shall have the
following powers and functions:
xxx xxx xxx
(14) Take appropriate action on all appointments and other personnel
matters in the Civil Service, including extension of Service beyond
retirement age;
(15) Inspect and audit the personnel actions and programs of the
departments, agencies, bureaus, offices, local government units and other
instrumentalities of the government including government -owned or
controlled corporations; conduct periodic review of the decisions and
actions of offices or officials to whom authority has been delegated by the
Commission as well as the conduct of the officials and the employees in
these offices and apply appropriate sanctions whenever necessary.
PD 807 and EO 292 are not inconsistent insofar as they require CSC action
on appointments to the civil service. This is evident from the recognition accorded
by EO 292, specifically under Section 12 (14) and (15) thereof, to the involvement
of the CSC in all personnel actions and programs of the government. However, while
a restrictive period of 30 days within which appointments must be submitted to
the CSC is imposed under the last sentence of Section 9(h) of PD 807, none was
adopted by Section 12 (14) and (15) of EO 292. Rather, provisions subsequent to
Section 12 merely state that the CSC (and its liaison staff in various departments and
agencies) shall periodically monitor, inspect and audit personnel
actions.[29] Moreover, under Section 9(h) of PD 807, appointments not submitted
within 30 days to the CSC become ineffective, no such specific adverse effect is
contemplated under Section 12 (14) and (15) of EO 292. Certainly, the two
provisions are materially inconsistent with each other. And to insist on reconciling
them by restoring the restrictive period and punitive effect of Section 9(h) of PD
807, which EO 292 deliberately discarded, would be to rewrite the law by mere
judicial interpretation.[30]
Not even the historical development of civil service laws can justify the
retention of such restrictive provisions. Public Law No. 5,[31] the law formally
establishing a civil service system, merely directed that all heads of offices notify
the Philippine Civil Service Board in writing without delay of all appointments x x
x made in the classified service.[32] The Revised Administrative Code of 1917 was
even less stringent as approval by the Director of the Civil Service of appointments
of temporary and emergency employees was required only when practicable.
Finally, Republic Act (RA) 2260[33] imposed no period within which appointments
were attested to by local government treasurers to whom the CSC delegated its
authority to act on personnel actions but provided that if within 180 days after receipt
of said appointments, the CSC shall not have made any correction or revision, then
such appointments shall be deemed to have been properly made. Consequently, it
was only under PD 807 that submission of appointments for approval by the CSC
was subjected to a 30-day period. That, however, has been lifted and abandoned by
EO 292.
Under the facts obtaining in this case, respondent promptly assumed her duties
as Administrative Officer II when her appointment was issued by the appointing
authority. Thus, her appointment took effect immediately and remained effective
until disapproved by the CSC.[34] Respondents appointment was never disapproved
by the CSC. In fact, the CSC was deprived of the opportunity to act promptly as it
was wrongly prevented from doing so. More importantly, the CSC subsequently
approved respondents appointment and recalled that of petitioner, which recall
has already become final and immutable.
The obvious misgiving that comes to mind is why Gonzales and Oyardo were
able to promptly process petitioners appointment and transmit the same to the CSC
for attestation when they could not do so for respondent. There is no doubt that office
politics was moving behind the scenes.
The purpose of the requirement to submit the appointment to the CSC is for
the latter to approve or disapprove such appointment depending on whether the
appointee possesses the appropriate eligibility or required qualifications and whether
the laws and rules pertinent to the process of appointment have been
followed.[40] With this in mind, respondents appointment should all the more be
deemed valid.
Respondents papers were in order. What was sought from her (the position
description form duly signed by Gonzales) was not even a prerequisite before her
appointment papers could be forwarded to the CSC. More significantly, respondent
was qualified for the position. Thus, as stated by the CA:
Taken in its entirety, this case shows that the lack of CSC approval was
not due to any negligence on respondents part. Neither was it due to the
tolerance, acquiescence or mistake of the proper officials. Rather, the
underhanded machinations of Gonzales and Oyardo, as well as the gullibility
of Diaz, were the major reasons why respondents appointment was not even
forwarded to the CSC.
Petitioner herself would not appear to be all that blameless. She assumed
the position four months after her appointment was issued or months after
that appointment had already lapsed or had become ineffective by
operation of law. Petitioner's appointment was issued on 01 July 1990, but
it was only on 31 May 1991 that it was submitted to the CSC, a fact which
she knew, should have known or should have at least verified considering
the relatively long interval of time between the date of her appointment
and the date of her assumption to office.[45]
The Court also found that [t]here (was) nothing on record to convince us that
the new OMA Director (had) unjustly favored private respondent nor (had) exercised
his power of appointment in an arbitrary, whimsical or despotic manner.[46]
Therefore, the lack of CSC approval in Favis and Tomali should be taken only
in that light and not overly stretched to cover any and all similar cases involving the
30-day rule. Certainly, the CSC approval cannot be done away with. However, an
innocent appointee like the respondent should not be penalized if her papers (which
were in the custody and control of others who, it turned out, were all scheming
against her) did not reach the CSC on time. After all, her appointment was
subsequently approved by the CSC anyway.
Under Article 1186 of the Civil Code, [t]he condition shall be deemed fulfilled
when the obligor voluntarily prevents its fulfillment. Applying this to the
appointment process in the civil service, unless the appointee himself is negligent in
following up the submission of his appointment to the CSC for approval, he should
not be prejudiced by any willful act done in bad faith by the appointing authority to
prevent the timely submission of his appointment to the CSC. While it may be argued
that the submission of respondents appointment to the CSC within 30 days was one
of the conditions for the approval of respondents appointment, however, deliberately
and with bad faith, the officials responsible for the submission of respondents
appointment to the CSC prevented the fulfillment of the said condition. Thus, the
said condition should be deemed fulfilled.
The Court has already had the occasion to rule that an appointment remains
valid in certain instances despite non-compliance of the proper officials with the
pertinent CSC rules. In Civil Service Commission v. Joson, Jr.,[47] the CSC
challenged the validity of the appointment of Ong on the ground that, among others,
it was not reported in the July 1995 Report of Personnel Action (ROPA), thus
making such appointment ineffective. The subject rule provided that an appointment
issued within the month but not listed in the ROPA for the said month shall become
ineffective thirty days from issuance. Rejecting the CSCs contention, the Court held
that there was a legitimate justification for such delayed observance of the rule:
The Court reached the same conclusion in the recent case of Chavez v.
Ronidel[49] where there was a similar inaction from the responsible officials which
resulted in non-compliance with the requirement:
Lastly, we agree with the appellate court that respondent's
appointment could not be invalidated solely because of [Presidential
Commission for the Urban Poors (PCUPs)] failure to submit two copies
of the ROPA as required by CSC Resolution No. 97368. xxxx
Moreover, it bears pointing out that only a few days after the
[petitioner] assumed his new post as PCUP Chairman, he directed the
PCUP to hold the processing of [respondent's] appointment papers in
abeyance, until such time that an assessment thereto is officially released
from his office. Unfortunately, up to this very day, the [respondent] is still
defending her right to enjoy her promotional appointment as DMO
V. Naturally, her appointment failed to comply with the PCUP's
reportorial requirements under CSC Resolution No. 97-3685 precisely
because of the [petitioner's] inaction to the same.
We believe that the factual circumstances of this case calls for the
application of equity. To our minds, the invalidation of the
[respondent's] appointment due to a procedural lapse which is
undoubtedly beyond her control, and certainly not of her own making
but that of the [petitioner], justifies the relaxation of the provisions of
CSC Board Resolution No. 97-3685, pars. 6,7 and 8. Hence, her
appointment must be upheld based on equitable considerations, and that
the non-submission of the ROPA and the certified true copies of her
appointment to the CSCFO within the period stated in the aforequoted
CSC Resolution should not work to her damage and prejudice.
Besides, the [respondent] could not at all be faulted for negligence as
she exerted all the necessary vigilance and efforts to reap the blessings
of a work promotion. Thus, We cannot simply ignore her plight. She
has fought hard enough to claim what is rightfully hers and, as a matter of
simple justice, good conscience, and equity, We should not allow
Ourselves to prolong her agony.
Respondent deserves the same sympathy from the Court because there was
also a telling reason behind the non-submission of her appointment paper within the
30-day period.
The relevance of Joson and Chavez to this case cannot be simply glossed
over. While the agencies concerned in those cases were accredited agencies of the
CSC which could take final action on the appointments, that is not the case here.
Thus, any such differentiation is unnecessary. It did not even factor in the Courts
disposition of the issue in Joson and Chavez. What is crucial is that, in those cases,
the Court upheld the appointment despite the non-compliance with a CSC rule
because (1) there were valid justifications for the lapse; (2) the non-compliance was
beyond the control of the appointee and (3) the appointee was not negligent. All
these reasons are present in this case, thus, there is no basis in saying that the afore-
cited cases are not applicable here. Similar things merit similar treatment.
Thus, the Court ruled in De Rama v. Court of Appeals[51] that it is the CSC
which is authorized to recall an appointment initially approved when
such appointment and approval are proven to be in disregard of applicable provisions
of the civil service law and regulations.
In sum, the appointment of petitioner was inconsistent with the law and well-
established jurisprudence. It not only disregarded the doctrine of immutability of
final judgments but also unduly concentrated on a narrow portion of the provision
of law, overlooking the greater part of the provision and other related rules and using
a legal doctrine rigidly and out of context. Its effect was to perpetuate an injustice.
SO ORDERED.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court
assailing the Decision1 dated April 28, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 56345
which affirmed with modification the Decision2 of the Regional Trial Court, Branch 41, San Fernando,
Pampanga (RTC) in Civil Case No. 10538, granting the complaint for Specific Performance and
Damages filed by Carlito Lacap (respondent) against the Republic of the Philippines (petitioner).
The District Engineer of Pampanga issued and duly published an "Invitation To Bid" dated January
27, 1992. Respondent, doing business under the name and style Carwin Construction and
Construction Supply (Carwin Construction), was pre-qualified together with two other contractors.
Since respondent submitted the lowest bid, he was awarded the contract for the concreting
of Sitio 5 Bahay Pare.3 On November 4, 1992, a Contract Agreement was executed by respondent
and petitioner.4 On September 25, 1992, District Engineer Rafael S. Ponio issued a Notice to
Proceed with the concreting of Sitio 5 Bahay Pare.5 Accordingly, respondent undertook the works,
made advances for the purchase of the materials and payment for labor costs.6
On October 29, 1992, personnel of the Office of the District Engineer of San Fernando, Pampanga
conducted a final inspection of the project and found it 100% completed in accordance with the
approved plans and specifications. Accordingly, the Office of the District Engineer issued Certificates
of Final Inspection and Final Acceptance.7
Thereafter, respondent sought to collect payment for the completed project.8 The DPWH prepared
the Disbursement Voucher in favor of petitioner.9 However, the DPWH withheld payment from
respondent after the District Auditor of the Commission on Audit (COA) disapproved the final release
of funds on the ground that the contractor’s license of respondent had expired at the time of the
execution of the contract. The District Engineer sought the opinion of the DPWH Legal Department
on whether the contracts of Carwin Construction for various Mount Pinatubo rehabilitation projects
were valid and effective although its contractor’s license had already expired when the projects were
contracted.10
In a Letter-Reply dated September 1, 1993, Cesar D. Mejia, Director III of the DPWH Legal
Department opined that since Republic Act No. 4566 (R.A. No. 4566), otherwise known as the
Contractor’s License Law, does not provide that a contract entered into after the license has expired
is void and there is no law which expressly prohibits or declares void such contract, the contract is
enforceable and payment may be paid, without prejudice to any appropriate administrative liability
action that may be imposed on the contractor and the government officials or employees
concerned.11
In a Letter dated July 4, 1994, the District Engineer requested clarification from the DPWH Legal
Department on whether Carwin Construction should be paid for works accomplished despite an
expired contractor’s license at the time the contracts were executed.12
In a First Indorsement dated July 20, 1994, Cesar D. Mejia, Director III of the Legal Department,
recommended that payment should be made to Carwin Construction, reiterating his earlier legal
opinion.13 Despite such recommendation for payment, no payment was made to respondent.
Thus, on July 3, 1995, respondent filed the complaint for Specific Performance and Damages
against petitioner before the RTC.14
On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed a Motion
to Dismiss the complaint on the grounds that the complaint states no cause of action and that the
RTC had no jurisdiction over the nature of the action since respondent did not appeal to the COA the
decision of the District Auditor to disapprove the claim.15
Following the submission of respondent’s Opposition to Motion to Dismiss,16 the RTC issued an
Order dated March 11, 1996 denying the Motion to Dismiss.17 The OSG filed a Motion for
Reconsideration18 but it was likewise denied by the RTC in its Order dated May 23, 1996.19
On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of
administrative remedies and the doctrine of non-suability of the State.20
Following trial, the RTC rendered on February 19, 1997 its Decision, the dispositive portion of which
reads as follows:
WHEREFORE, in view of all the foregoing consideration, judgment is hereby rendered in favor of the
plaintiff and against the defendant, ordering the latter, thru its District Engineer at Sindalan, San
Fernando, Pampanga, to pay the following:
a) ₱457,000.00 – representing the contract for the concreting project of Sitio 5 road, Bahay Pare,
Candaba, Pampanga plus interest at 12% from demand until fully paid; and
SO ORDERED.21
The RTC held that petitioner must be required to pay the contract price since it has accepted the
completed project and enjoyed the benefits thereof; to hold otherwise would be to overrun the long
standing and consistent pronouncement against enriching oneself at the expense of another.22
Dissatisfied, petitioner filed an appeal with the CA.23 On April 28, 2003, the CA rendered its Decision
sustaining the Decision of the RTC. It held that since the case involves the application of the
principle of estoppel against the government which is a purely legal question, then the principle of
exhaustion of administrative remedies does not apply; that by its actions the government is estopped
from questioning the validity and binding effect of the Contract Agreement with the respondent; that
denial of payment to respondent on purely technical grounds after successful completion of the
project is not countenanced either by justice or equity.
The CA rendered herein the assailed Decision dated April 28, 2003, the dispositive portion of which
reads:
WHEREFORE, the decision of the lower court is hereby AFFIRMED with modification in that the
interest shall be six percent (6%) per annum computed from June 21, 1995.
SO ORDERED.24
THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT HAS NO CAUSE OF
ACTION AGAINST PETITIONER, CONSIDERING THAT:
Petitioner contends that respondent’s recourse to judicial action was premature since the proper
remedy was to appeal the District Auditor’s disapproval of payment to the COA, pursuant to Section
48, Presidential Decree No. 1445 (P.D. No. 1445), otherwise known as the Government Auditing
Code of the Philippines; that the COA has primary jurisdiction to resolve respondent’s money claim
against the government under Section 2(1),26 Article IX of the 1987 Constitution and Section 2627 of
P.D. No. 1445; that non-observance of the doctrine of exhaustion of administrative remedies and the
principle of primary jurisdiction results in a lack of cause of action.
Respondent, on the other hand, in his Memorandum28 limited his discussion to Civil Code provisions
relating to human relations. He submits that equity demands that he be paid for the work performed;
otherwise, the mandate of the Civil Code provisions relating to human relations would be rendered
nugatory if the State itself is allowed to ignore and circumvent the standard of behavior it sets for its
inhabitants.
The general rule is that before a party may seek the intervention of the court, he should first avail of
all the means afforded him by administrative processes.29 The issues which administrative agencies
are authorized to decide should not be summarily taken from them and submitted to a court without
first giving such administrative agency the opportunity to dispose of the same after due
deliberation.30
Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of
primary jurisdiction, which are based on sound public policy and practical considerations, are not
inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the
part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal,
amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will
irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to
make the rule impractical and oppressive; (e) where the question involved is purely legal and will
ultimately have to be decided by the courts of justice;32 (f) where judicial intervention is urgent; (g)
when its application may cause great and irreparable damage; (h) where the controverted acts
violate due process; (i) when the issue of non-exhaustion of administrative remedies has been
rendered moot;33 (j) when there is no other plain, speedy and adequate remedy; (k) when strong
public interest is involved; and, (l) in quo warranto proceedings.34Exceptions (c) and (e) are
applicable to the present case.
Notwithstanding the legal opinions of the DPWH Legal Department rendered in 1993 and 1994 that
payment to a contractor with an expired contractor’s license is proper, respondent remained unpaid
for the completed work despite repeated demands. Clearly, there was unreasonable delay and
official inaction to the great prejudice of respondent.
Furthermore, whether a contractor with an expired license at the time of the execution of its contract
is entitled to be paid for completed projects, clearly is a pure question of law. It does not involve an
examination of the probative value of the evidence presented by the parties. There is a question of
law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to
the truth or the falsehood of alleged facts.35 Said question at best could be resolved
only tentatively by the administrative authorities. The final decision on the matter rests not with them
but with the courts of justice. Exhaustion of administrative remedies does not apply, because nothing
of an administrative nature is to be or can be done.36 The issue does not require technical knowledge
and experience but one that would involve the interpretation and application of law.
Thus, while it is undisputed that the District Auditor of the COA disapproved respondent’s claim
against the Government, and, under Section 4837 of P.D. No. 1445, the administrative remedy
available to respondent is an appeal of the denial of his claim by the District Auditor to the COA
itself, the Court holds that, in view of exceptions (c) and (e) narrated above, the complaint for
specific performance and damages was not prematurely filed and within the jurisdiction of the RTC
to resolve, despite the failure to exhaust administrative remedies. As the Court aptly stated in
Rocamora v. RTC-Cebu (Branch VIII):38
The plaintiffs were not supposed to hold their breath and wait until the Commission on Audit and the
Ministry of Public Highways had acted on the claims for compensation for the lands appropriated by
the government. The road had been completed; the Pope had come and gone; but the plaintiffs had
yet to be paid for the properties taken from them. Given this official indifference, which apparently
would continue indefinitely, the private respondents had to act to assert and protect their interests.39
On the question of whether a contractor with an expired license is entitled to be paid for completed
projects, Section 35 of R.A. No. 4566 explicitly provides:
SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to
submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a
supervisory capacity of a construction work within the purview of this Act, without first securing a
license to engage in the business of contracting in this country; or who shall present or file the
license certificate of another, give false evidence of any kind to the Board, or any member thereof in
obtaining a certificate or license, impersonate another, or use an expired or revoked certificate or
license, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a
fine of not less than five hundred pesos but not more than five thousand pesos. (Emphasis supplied)
The "plain meaning rule" or verba legis in statutory construction is that if the statute is clear, plain
and free from ambiguity, it must be given its literal meaning and applied without interpretation.40 This
rule derived from the maxim Index animi sermo est (speech is the index of intention) rests on the
valid presumption that the words employed by the legislature in a statute correctly express its
intention or will and preclude the court from construing it differently. The legislature is presumed to
know the meaning of the words, to have used words advisedly, and to have expressed its intent by
use of such words as are found in the statute.41 Verba legis non est recedendum, or from the words
of a statute there should be no departure.42
The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void
contracts entered into by a contractor whose license had already expired. Nonetheless, such
contractor is liable for payment of the fine prescribed therein. Thus, respondent should be paid for
the projects he completed. Such payment, however, is without prejudice to the payment of the fine
prescribed under the law.
Besides, Article 22 of the Civil Code which embodies the maxim Nemo ex alterius incommode debet
lecupletari (no man ought to be made rich out of another’s injury) states:
Art. 22. Every person who through an act of performance by another, or any other means, acquires
or comes into possession of something at the expense of the latter without just or legal ground, shall
return the same to him.
This article is part of the chapter of the Civil Code on Human Relations, the provisions of which were
formulated as "basic principles to be observed for the rightful relationship between human beings
and for the stability of the social order, x x x designed to indicate certain norms that spring from the
fountain of good conscience, x x x guides human conduct [that] should run as golden threads
through society to the end that law may approach its supreme ideal which is the sway and
dominance of justice."43 The rules thereon apply equally well to the Government.44 Since respondent
had rendered services to the full satisfaction and acceptance by petitioner, then the former should be
compensated for them. To allow petitioner to acquire the finished project at no cost would
undoubtedly constitute unjust enrichment for the petitioner to the prejudice of respondent. Such
unjust enrichment is not allowed by law.
WHEREFORE, the present petition is DENIED for lack of merit. The assailed Decision of the Court
of Appeals dated April 28, 2003 in CA-G.R. CV No. 56345 is AFFIRMED. No pronouncement as to
costs.
SO ORDERED.
ECOND DIVISION
-versus-
-versus-
Present:
Promulgated:
July 2, 2010
x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This is a petition for review on certiorari[1] under Rule 45 of the 1997 Rules of Civil
Procedure seeking, among others, to annul and set aside the Decisions dated
January 6, 2005[2] and April 20, 2005[3] and Resolutions dated March 10, 2005[4] and
June 29, 2005[5] rendered by the Court of Appeals (CA), reversing and setting aside
the Writ of Preliminary Injunction issued by the Regional Trial Court[6] (RTC), Branch
37, Manila.
The father of petitioners Geraldine Gaw Guy and Grace Guy Cheu became a
naturalized[7] Filipino citizen sometime in 1959. The said petitioners, being minors
at that time, were also recognized[8] as Filipino citizens.
Respondent Atty. Alvin Agustin T. Ignacio, filed a Complaint[9] dated March 5, 2004
for blacklisting and deportation against petitioners Geraldine and Grace before the
Bureau of Immigration (BI) on the basis that the latter two are Canadian citizens
who are illegally working in the Philippines, petitioners having been issued
Canadian passports.
CONTRARY TO LAW.
As a remedy, petitioners filed a Petition for Certiorari with Damages and a Prayer
for Issuance of a Temporary Restraining Order and Preliminary Injunction[14] dated
May 31, 2004 before the RTC of Manila, Branch 37.[15]
The trial court, after hearing petitioner's application for issuance of a temporary
restraining order (TRO) and writ of preliminary injunction, issued an Order[16] dated
June 28, 2004, the dispositive portion of which reads:
SO ORDERED.
On July 5, 2004, public respondents filed their Answer[17] and on July 13, 2004, filed
a Supplement (To the Special and Affirmative Defenses/Opposition to the Issuance
of a Writ of Preliminary Injunction).[18] The parties were then directed to file their
respective memoranda as to the application for issuance of a writ of preliminary
injunction and public respondents' special and affirmative defenses. On July 16,
2004, public respondents as well as the petitioners,[19] filed their respective
Memoranda.[20] On the same day, respondent Atty. Ignacio filed his Answer[21] to
the petition.
In an Order[22] dated July 19, 2004, the trial court granted the application for
preliminary injunction enjoining public respondents from further continuing with
the deportation proceedings. The Order reads, in part:
In view of the foregoing, the Court finds that, indeed, there exists a
pressing reason to issue a writ of preliminary injunction to protect the
rights of the petitioners pending hearing of the main case on the merits
and unless this Court issues a writ, grave irreparable injury would be
caused against the petitioners.
SO ORDERED.
On January 6, 2005, the Ninth Division of the CA granted the petition filed by
respondent Atty. Ignacio and annulled the writ of preliminary injunction issued by
the trial court, the dispositive portion of the Decision[27] reads:
WHEREFORE, the instant petition is GRANTED and the Order of the
Regional Trial Court, Branch 37, Manila, dated July 19, 2004, is
hereby ANNULLED and SET ASIDE.
SO ORDERED.
Thereafter, the CA's Eighth Division rendered its own Decision[32] dated April 29,
2005 granting the petition therein and nullifying the Orders dated June 28 and July
19, 2004 in Civil Case No. 04-110179, the dispositive portion of which reads as
follows:
SO ORDERED.
Petitioners filed their Motion for Reconsideration[33] from the said Decision, which
the CA denied in its Resolution[34] dated June 21, 2005.
Thus, petitioners filed before this Court a Petition for Review on Certiorari[35] dated
July 12, 2005 seeking to reverse and set aside the said Decision and Resolution
rendered by the Eighth Division of the CA and is now docketed as G.R. No.
168622. In its Resolution[36] dated August 10, 2005, the Court dismissed the said
petition and said dismissal, despite petitioners' motion for reconsideration,[37] was
affirmed in a Resolution[38] dated October 17, 2005. This Court, however, upon
another motion for reconsideration[39] filed by the petitioners, reinstated the
petition and ordered its consolidation with G.R. No. 167824.[40]
I.
A.
CONSIDERING THAT PROOF OF PETITIONERS' PHILIPPINE
CITIZENSHIP IS SUBSTANTIAL, PETITIONERS ARE ALLOWED
UNDER THIS HONORABLE COURT'S RULING IN BID V. DELA
ROSA, SUPRA, TO SEEK INJUNCTIVE RELIEF FROM THE
REGIONAL TRIAL COURT TO ENJOIN THE DEPORTATION
PROCEEDINGS CONDUCTED AGAINST THEM.
B.
II.
III.
After a careful study of the arguments presented by the parties, this Court finds the
petition meritorious.
Petitioners rely on Board of Commissioners (CID) v. Dela Rosa,[44] wherein this
Court ruled that when the claim of citizenship is so substantial as to reasonably
believe it to be true, a respondent in a deportation proceeding can seek judicial
relief to enjoin respondent BOC from proceeding with the deportation case. In
particular, petitioners cited the following portions in this Court's decision:
True, it is beyond cavil that the Bureau of Immigration has the
exclusive authority and jurisdiction to try and hear cases against an
alleged alien, and in the process, determine also their citizenship (Lao vs.
Court of Appeals, 180 SCRA 756 [1089]. And a mere claim of citizenship
cannot operate to divest the Board of Commissioners of its jurisdiction
in deportation proceedings (Miranda vs. Deportation Board, 94 Phil. 531
[1951]).
The present case, as correctly pointed out by petitioners and wrongfully found by
the CA, falls within the above-cited exception considering that proof of their
Philippine citizenship had been adduced, such as, the identification
numbers[46] issued by the Bureau of Immigration confirming their Philippine
citizenship, they have duly exercised and enjoyed all the rights and privileges
exclusively accorded to Filipino citizens, i.e., their Philippine passports[47] issued by
the Department of Foreign Affairs.
In BOC v. Dela Rosa, it is required that before judicial intervention is sought, the
claim of citizenship of a respondent in a deportation proceeding must be so
substantial that there are reasonable grounds to believe that such claim is
correct. In the said case, the proof adduced by the respondent therein was so
substantial and conclusive as to his citizenship that it warranted a judicial
intervention. In the present case, there is a substantial or conclusive evidence that
petitioners are Filipino citizens. Without necessarily judging the case on its merits,
as to whether petitioners had lost their Filipino citizenship by having a Canadian
passport, the fact still remains, through the evidence adduced and undisputed by
the respondents, that they are naturalized Filipinos, unless proven otherwise.
However, this Court cannot pass upon the issue of petitioners' citizenship as this
was not raised as an issue. The issue in this petition is on the matter of jurisdiction,
and as discussed above, the trial court has jurisdiction to pass upon the issue
whether petitioners have abandoned their Filipino citizenship or have acquired
dual citizenship within the confines of the law.
In this regard, it must be remembered though that this Court's ruling in Dwikarna
v. Domingo did not abandon the doctrine laid down in BOC v. Dela Rosa. The
exception remains. Dwikarna merely reiterated the doctrine of primary jurisdiction
when this Court ruled that if the petitioner is dissatisfied with the decision of the
Board of Commissioners of the Bureau of Immigration, he can move for its
reconsideration and if his motion is denied, then he can elevate his case by way
of a petition for review before the Court of Appeals, pursuant to Section 1, Rule
43 of the Rules of Civil Procedure. However, utmost caution must be exercised in
availing of the exception laid down in BOC v. Dela Rosa in order to avoid trampling
on the time-honored doctrine of primary jurisdiction. The court cannot or will not
determine a controversy involving a question which is within the jurisdiction of the
administrative tribunal prior to resolving the same, where the question demands
the exercise of sound administrative discretion requiring special knowledge,
experience and services in determining technical and intricate matters of fact.[48] In
cases where the doctrine of primary jurisdiction is clearly applicable, the court
cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction
over which is initially lodged with an administrative body of special competence.[49]
Above all else, this Court still upholds the doctrine of primary jurisdiction. As
enunciated in Republic v. Lacap:[50]
The general rule is that before a party may seek the intervention of the
court, he should first avail of all the means afforded him by
administrative processes.[51] The issues which administrative agencies are
authorized to decide should not be summarily taken from them and
submitted to a court without first giving such administrative agency the
opportunity to dispose of the same after due deliberation.[52]
Corollary to the doctrine of exhaustion of administrative remedies is the
doctrine of primary jurisdiction; that is, courts cannot or will not
determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that
question by the administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact.[53]
SO ORDERED.
DECISION
SERENO, J.:
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing
the Decision2of the Court of Appeals in C.A.-G.R. CV No. 82268, dated 25 September 2006.
On 19 June 1992, petitioner Angelito M. Twaño, then Officer-in-Charge (OIC)-District Engineer of the
Department of Public Works and Highways (DPWH) 2nd Engineering District of Pampanga sent an
Invitation to Bid to respondent Arnulfo D. Aquino, the owner of A.D. Aquino Construction and
Supplies. The bidding was for the construction of a dike by bulldozing a part of the Porac River at
Barangay Ascomo-Pulungmasle, Guagua, Pampanga.
Subsequently, on 7 July 1992, the project was awarded to respondent, and a "Contract of
Agreement" was thereafter executed between him and concerned petitioners for the amount of
PhP1,873,790.69, to cover the project cost.
By 9 July 1992, the project was duly completed by respondent, who was then issued a Certificate of
Project Completion dated 16 July 1992. The certificate was signed by Romeo M. Yumul, the Project
Engineer; as well as petitioner Romeo N. Supan, Chief of the Construction Section, and by petitioner
Twaño.
Respondent Aquino, however, claimed that PhP1,262,696.20 was still due him, but petitioners
refused to pay the amount. He thus filed a Complaint3 for the collection of sum of money with
damages before the Regional Trial Court of Guagua, Pampanga. The complaint was docketed as
Civil Case No. 3137.
Petitioners, for their part, set up the defense4 that the Complaint was a suit against the state; that
respondent failed to exhaust administrative remedies; and that the "Contract of Agreement" covering
the project was void for violating Presidential Decree No. 1445, absent the proper appropriation and
the Certificate of Availability of Funds.5
SO ORDERED. 6
It is to be noted that respondent was only asking for PhP1,262,696.20; the award in paragraph 1
above, however, conforms to the entire contract amount.
On appeal, the Court of Appeals reversed and set aside the Decision of the lower court and
disposed as follows:
The assailed decision of the court a quo is hereby REVERSED AND SET ASIDE.
In line with the pronouncement in Department of Health vs. C.V. Canchela & Associates,
Architects,7 the Commission on Audit (COA) is hereby ordered to determine and ascertain with
dispatch, on a quantum meruit basis, the total obligation due to the plaintiff-appellee for his
undertaking in implementing the subject contract of public works, and to allow payment thereof,
subject to COA Rules and Regulations, upon the completion of the said determination.
No pronouncement as to costs.
SO ORDERED.8
Dissatisfied with the Decision of the Court of Appeals, petitioners are now before this Court, seeking
a reversal of the appellate court’s Decision and a dismissal of the Complaint in Civil Case No. G-
3137. The Petition raises the following issues:
1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE DOCTRINE
OF NON-SUABILITY OF THE STATE HAS NO APPLICATION IN THIS CASE.
2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING THE
COMPLAINT FOR FAILURE OF RESPONDENT TO EXHAUST ALL ADMINISTRATIVE
REMEDIES.
3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN ORDERING THE COA TO ALLOW
PAYMENT TO RESPONDENT ON A QUANTUM MERUIT BASIS DESPITE THE LATTER’S
FAILURE TO COMPLY WITH THE REQUIREMENTS OF PRESIDENTIAL DECREE NO. 1445.
After a judicious review of the case, the Court finds the Petition to be without merit.
Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was
done without exhausting administrative remedies. Petitioners aver that respondent should have first
filed a claim before the Commission on Audit (COA) before going to the courts. However, it has been
established that the doctrine of exhaustion of administrative remedies and the doctrine of primary
jurisdiction are not ironclad rules. In Republic of the Philippines v. Lacap,9 this Court enumerated the
numerous exceptions to these rules, namely: (a) where there is estoppel on the part of the party
invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to
lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably
prejudice the complainant; (d) where the amount involved is relatively so small as to make the rule
impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to
be decided by the courts of justice; (f) where judicial intervention is urgent; (g) where the application
of the doctrine may cause great and irreparable damage; (h) where the controverted acts violate due
process; (i) where the issue of non-exhaustion of administrative remedies has been rendered moot;
(j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is
involved; and (l) in quo warranto proceedings. In the present case, conditions (c) and (e) are
present.
The government project contracted out to respondent was completed almost two decades ago. To
delay the proceedings by remanding the case to the relevant government office or agency will
definitely prejudice respondent. More importantly, the issues in the present case involve the validity
and the enforceability of the "Contract of Agreement" entered into by the parties. These are
questions purely of law and clearly beyond the expertise of the Commission on Audit or the DPWH.
In Lacap, this Court said:
... It does not involve an examination of the probative value of the evidence presented by the parties.
There is a question of law when the doubt or difference arises as to what the law is on a certain state
of facts, and not as to the truth or the falsehood of alleged facts. Said question at best could be
resolved only tentatively by the administrative authorities. The final decision on the matter rests not
with them but with the courts of justice. Exhaustion of administrative remedies does not apply,
because nothing of an administrative nature is to be or can be done. The issue does not require
technical knowledge and experience but one that would involve the interpretation and application of
law. (Emphasis supplied.)
Secondly, in ordering the payment of the obligation due respondent on a quantum meruit basis, the
Court of Appeals correctly relied on Royal Trust Corporation v. COA,10 Eslao v. COA,11 Melchor v.
COA,12 EPG Construction Company v. Vigilar,13 and Department of Health v. C.V. Canchela &
Associates, Architects.14 All these cases involved government projects undertaken in violation of the
relevant laws, rules and regulations covering public bidding, budget appropriations, and release of
funds for the projects. Consistently in these cases, this Court has held that the contracts were void
for failing to meet the requirements mandated by law; public interest and equity, however, dictate
that the contractor should be compensated for services rendered and work done.
Specifically, C.V. Canchela & Associates is similar to the case at bar, in that the contracts involved in
both cases failed to comply with the relevant provisions of Presidential Decree No. 1445 and the
Revised Administrative Code of 1987. Nevertheless, "(t)he illegality of the subject Agreements
proceeds, it bears emphasis, from an express declaration or prohibition by law, not from any intrinsic
illegality. As such, the Agreements are not illegal per se, and the party claiming thereunder may
recover what had been paid or delivered."15
The government project involved in this case, the construction of a dike, was completed way back on
9 July 1992. For almost two decades, the public and the government benefitted from the work done
by respondent. Thus, the Court of Appeals was correct in applying Eslao to the present case. In
Eslao, this Court stated:
...the Court finds that the contractor should be duly compensated for services rendered, which were
for the benefit of the general public. To deny the payment to the contractor of the two buildings which
are almost fully completed and presently occupied by the university would be to allow the
government to unjustly enrich itself at the expense of another. Justice and equity demand
compensation on the basis of quantum meruit. (Emphasis supplied.)
Neither can petitioners escape the obligation to compensate respondent for services rendered and
work done by invoking the state’s immunity from suit. This Court has long established in Ministerio v.
CFI of Cebu,16 and recently reiterated in Heirs of Pidacan v. ATO,17 that the doctrine of governmental
immunity from suit cannot serve as an instrument for perpetrating an injustice to a citizen. As this
Court enunciated in EPG Construction:18 1avvphi 1
To our mind, it would be the apex of injustice and highly inequitable to defeat respondent’s
right to be duly compensated for actual work performed and services rendered, where both
the government and the public have for years received and accepted benefits from the
project and reaped the fruits of respondent’s honest toil and labor.
Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty
and conveniently hide under the State's cloak of invincibility against suit, considering that this
principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute
for it does not say that the state may not be sued under any circumstance.
Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity
from suit vis a vis the payment of just compensation for expropriated property, this Court
nonetheless finds the doctrine enunciated in the aforementioned cases applicable to the instant
controversy, considering that the ends of justice would be subverted if we were to uphold, in
this particular instance, the State's immunity from suit.
To be sure, this Court — as the staunch guardian of the citizens' rights and welfare — cannot
sanction an injustice so patent on its face, and allow itself to be an instrument in the
perpetration thereof. Justice and equity sternly demand that the State's cloak of invincibility
against suit be shred in this particular instance, and that petitioners-contractors be duly
compensated — on the basis of quantum meruit — for construction done on the public works
housing project. (Emphasis supplied.)
WHEREFORE, in view of the foregoing, the Petition is DENIED for lack of merit. The assailed
Decision of the Court of Appeals in CA-G.R. No. 82268 dated 25 September 2006 is AFFIRMED.
SO ORDERED.