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ASSIGNMENT NO 4
Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial Bus Operators
Association of the Philippines (PBOAP)
G.R. No. 115381 December 23, 1994
Kapunan, J.
FACTS:
! public utilities privately owned and operated businesses whose service are essential to the general
public; enterprises which specially cater to the needs of the public and conducive to their comfort and
convenience
! DOTC Sec. issued Memorandum Circular No. 90-395 to then LTFRB Chairman allowing provincial bus
operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official
rate for a period of 1 year
! PBOAP pursuant to Memo. Cir. it filed an application for fare rate increase. An across-the-board
increase of eight and a half centavos (P0.085) per kilometer for all types of provincial buses with a
minimum-maximum fare range of fifteen (15%) percent over and below the proposed basic per kilometer
fare rate, with the said minimum-maximum fare range applying only to ordinary, first class and premium
class buses and a fifty-centavo (P0.50) minimum per kilometer fare for aircon buses, was sought
! respondent LTFRB rendered a decision granting the fare rate increase in accordance with a specified
schedule of fares on a straight computation method
! DOTC Sec. issued Department Order No. 92-587 defining the policy framework on the regulation of
transport services. It provides inter alia that Passenger fares shall also be deregulated, except for the
lowest class of passenger service (normally third class passenger transport) for which the government
will fix indicative or reference fares. Operators of particular services may fix their own fares within a
range 15% above and below the indicative or reference rate.
! LTFRB issued Memorandum Circular No. 92-009 promulgating the guidelines for the implementation of
DOTC Department Order No. 92-587, which provides, among others, that:
The issuance of a Certificate of Public Convenience is determined by public need. The presumption of
public need for a service shall be deemed in favor of the applicant, while burden of proving that there is
no need for the proposed service shall be the oppositors.
The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys
shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative
or reference rate as the basis for the expanded fare range
! PBOAP - availing itself of the deregulation policy of the DOTC allowing provincial bus operators to
collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the
purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent
of the existing fares
! KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares.
ISSUE: WON the above memoranda, circulars and/or orders of the DOTC and the LTFRB which, among
others, (a) authorize provincial bus and jeepney operators to increase or decrease the prescribed
transportation fares without application therefor with the LTFRB and without hearing and approval thereof
by said agency is in violation of Sec. 16(c) of CA 146, and in derogation of LTFRBs duty to fix and
determine just and reasonable fares by delegating that function to bus operators, and (b) establish a
presumption of public need in favor of applicants for certificates of public convenience and place on the
oppositor the burden of proving that there is no need for the proposed service, in patent violation not only
of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating that fares should be
just and reasonable
HELD: Yes.
! Section 16(c) of the Public Service Act, as amended, reads:

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Sec. 16. Proceedings of the Commission, upon notice and hearing. The Commission shall have power,
upon proper notice and hearing in accordance with the rules and provisions of this Act, subject to the
limitations and exceptions mentioned and saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or schedules thereof, as
well as commutation, mileage kilometrage, and other special rates which shall be imposed, observed, and
followed thereafter by any public service: Provided, That the Commission may, in its discretion, approve
rates proposed by public services provisionally and without necessity of any hearing; but it shall call a
hearing thereon within thirty days thereafter, upon publication and notice to the concerns operating in the
territory affected: Provided, further, That in case the public service equipment of an operator is used
principally or secondarily for the promotion of a private business, the net profits of said private business
shall be considered in relation with the public service of such operator for the purpose of fixing the rates.
! LTFRB is authorized under EO 202, s. 1987 to determine, prescribe, approve and periodically review and
adjust, reasonable fares, rates and other related charges, relative to the operation of public land
transportation services provided by motorized vehicles
! LTFRB not authorized to delegate that power to a common carrier, a transport operator, or other public
service
! authority given by the LTFRB to the provincial bus operators to set a fare range over and above the
authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation of legislative
authority
! rate should not be confiscatory as would place an operator in a situation where he will continue to
operate at a loss; rate should enable public utilities to generate revenues sufficient to cover operational
costs and provide reasonable return on the investments
! CPC - authorization granted by the LTFRB for the operation of land transportation services for public
use as required by law. Pursuant to Section 16(a) of the Public Service Act, as amended, the following
requirements must be met before a CPC may be granted, to wit: (i) the applicant must be a citizen of the
Philippines, or a corporation or co-partnership, association or joint-stock company constituted and
organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up capital must
belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of undertaking
the proposed service and meeting the responsibilities incident to its operation; and (iii) the applicant must
prove that the operation of the public service proposed and the authorization to do business will promote
the public interest in a proper and suitable manner; there must be proper notice and hearing before the
PSC can exercise its power to issue a CPC
! LTFRB Memorandum Circular No. 92-009, Part IV is incompatible and inconsistent with Section
16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must
prove by proper notice and hearing that the operation of the public service proposed will promote public
interest in a proper and suitable manner. On the contrary, the policy guideline states that the presumption
of public need for a public service shall be deemed in favor of the applicant.
G.R. No. 17122

February 27, 1922

THE
UNITED
vs.
ANG TANG HO, defendant-appellant.

STATES, plaintiff-appellee,

FACTS:
The Philippine Legislature passed Act No. 2868, entitled "An Act penalizing the monopoly and holding of,
and speculation in, palay, rice, and corn under extraordinary circumstances, regulating the distribution and
sale thereof, and authorizing the Governor-General, with the consent of the Council of State, to issue the
necessary rules and regulations therefor, and making an appropriation for this purpose," the material
provisions of which are as follows:
Section 1. The Governor-General is hereby authorized, whenever, for any cause, conditions arise
resulting in an extraordinary rise in the price of palay, rice or corn, to issue and promulgate, with

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the consent of the Council of State, temporary rules and emergency measures for carrying out the
purpose of this Act, to wit:
(a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn.
(b) To establish and maintain a government control of the distribution or sale of the commodities
referred to or have such distribution or sale made by the Government itself.
(c) To fix, from time to time the quantities of palay rice, or corn that a company or individual may
acquire, and the maximum sale price that the industrial or merchant may demand.
On August 1, 1919, the Governor-General issued a proclamation fixing the price at which rice should be
sold. Thereafter, Ang Tang Ho, herein accused sold to Pedro Trinidad, one ganta of rice at the price of
eighty centavos (P.80), which is a price greater than that fixed by Executive Order No. 53 of the GovernorGeneral of the Philippines, dated the 1st of August, 1919, under the authority of section 1 of Act No. 2868.
On August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging him with the sale
of rice at an excessive price. He was found guilty of the charged, hence this case.
ISSUE: Whether or not there is a valid delegation of legislative power.
HELD:
No. It will be noted that section 1 authorizes the Governor-General, with the consent of the Council of
State, for any cause resulting in an extraordinary rise in the price of palay, rice or corn, to issue and
promulgate temporary rules and emergency measures for carrying out the purposes of the Act. By its very
terms, the promulgation of temporary rules and emergency measures is left to the discretion of the
Governor-General. The Legislature does not undertake to specify or define under what conditions or for
what reasons the Governor-General shall issue the proclamation, but says that it may be issued "for any
cause," and leaves the question as to what is "any cause" to the discretion of the Governor-General. The
Act also says: "For any cause, conditions arise resulting in an extraordinary rise in the price of palay, rice
or corn." The Legislature does not specify or define what is "an extraordinary rise." That is also left to the
discretion of the Governor-General. The Act also says that the Governor-General, "with the consent of the
Council of State," is authorized to issue and promulgate "temporary rules and emergency measures for
carrying out the purposes of this Act." It does not specify or define what is a temporary rule or an
emergency measure, or how long such temporary rules or emergency measures shall remain in force and
effect, or when they shall take effect. That is to say, the Legislature itself has not in any manner specified or
defined any basis for the order, but has left it to the sole judgement and discretion of the Governor-General
to say what is or what is not "a cause," and what is or what is not "an extraordinary rise in the price of rice,"
and as to what is a temporary rule or an emergency measure for the carrying out the purposes of the Act.
Under this state of facts, if the law is valid and the Governor-General issues a proclamation fixing the
minimum price at which rice should be sold, any dealer who, with or without notice, sells rice at a higher
price, is a criminal. There may not have been any cause, and the price may not have been extraordinary,
and there may not have been an emergency, but, if the Governor-General found the existence of such facts
and issued a proclamation, and rice is sold at any higher price, the seller commits a crime.
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATION
COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE
REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY,
respondents.

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GR NO. 77457
March 20, 1987
Cruz, J.
FACTS:
"Strike but hear me first!"
Executive Order: no carabao regardless of age, sex, physical condition or purpose and no carabeef shall be
transported from one province to another. The carabao or carabeef transported in violation of this Executive
Order as amended shall be subject to confiscation and forfeiture by the government, to be distributed to
charitable institutions and other similar institutions as the Chairman of the National Meat Inspection
Commission may ay see fit, in the case of carabeef, and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos.
The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13, 1984,
when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the
above they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of the
above measure. The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ
of replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case,
the court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered
the confiscation of the bond. The court also declined to rule on the constitutionality of the executive order,
as raise by the petitioner, for lack of authority and also for its presumed validity. CA upheld the trial court.
The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes outright
confiscation of the carabao or carabeef being transported across provincial boundaries. His claim is that the
penalty is invalid because it is imposed without according the owner a right to be heard before a competent
and impartial court as guaranteed by due process. He complains that the measure should not have been
presumed, and so sustained, as constitutional. There is also a challenge to the improper exercise of the
legislative power by the former President under Amendment No. 6 of the 1973 Constitution.
ISSUE: Whether E.O. 626-A is unconstitutional. (The necessity of the previous publication of the measure
in the Official Gazette before it could be considered enforceable.)
HELD: YES. While it is true that laws are presumed to be constitutional, that presumption is not by any
means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their invalidity, and of
the need to declare them so, then "will be the time to make the hammer fall, and heavily," to recall Justice
Laurel's trenchant warning.
The challenged measure is denominated an executive order but it is really presidential decree, promulgating
a new rule instead of merely implementing an existing law. It was issued by President Marcos not for the
purpose of taking care that the laws were faithfully executed but in the exercise of his legislative authority
under Amendment No. 6. It was provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature failed or was unable to act
adequately on any matter that in his judgment required immediate action, he could, in order to meet the
exigency, issue decrees, orders or letters of instruction that were to have the force and effect of law.
It is part of the art of constitution-making that the provisions of the charter be cast in precise and
unmistakable language to avoid controversies that might arise on their correct interpretation. That is the

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Ideal. In the case of the due process clause, however, this rule was deliberately not followed and the
wording was purposely kept ambiguous.
The due process clause was kept intentionally vague so it would remain also conveniently resilient. This
was felt necessary because due process is not, like some provisions of the fundamental law, an "iron rule"
laying down an implacable and immutable command for all seasons and all persons. Flexibility must be the
best virtue of the guaranty.
The minimum requirements of due process are notice and hearing which, generally speaking, may not be
dispensed with because they are intended as a safeguard against official arbitrariness. It is a gratifying
commentary on our judicial system that the jurisprudence of this country is rich with applications of this
guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play.
This is not to say that notice and hearing are imperative in every case for, to be sure, there are a number of
admitted exceptions. The conclusive presumption, for example, bars the admission of contrary evidence as
long as such presumption is based on human experience or there is a rational connection between the fact
proved and the fact ultimately presumed therefrom. (Eg. Nuisances per se)
To justify the State in thus interposing its authority in behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals.
In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the poor man's
tractor, so to speak, has a direct relevance to the public welfare and so is a lawful subject of Executive
Order No. 626. But while conceding that the amendatory measure has the same lawful subject as the
original executive order, we cannot say with equal certainty that it complies with the second requirement,
viz., that there be a lawful method. We note that to strengthen the original measure, Executive Order No.
626-A imposes an absolute ban not on the slaughter of the carabaos but on their movement, providing that
"no carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be transported
from one province to another." The object of the prohibition escapes us. The reasonable connection
between the means employed and the purpose sought to be achieved by the questioned measure is missing
We do not see how the prohibition of the inter-provincial transport of carabaos can prevent their
indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in one
province than in another. Obviously, retaining the carabaos in one province will not prevent their slaughter
there, any more than moving them to another province will make it easier to kill them there. As for the
carabeef, the prohibition is made to apply to it as otherwise, so says executive order, it could be easily
circumvented by simply killing the animal. Perhaps so. However, if the movement of the live animals for
the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either
to prohibit their transfer as, not to be flippant dead meat.
Even if a reasonable relation between the means and the end were to be assumed, we would still have to
reckon with the sanction that the measure applies for violation of the prohibition. The penalty is outright
confiscation of the carabao or carabeef being transported, to be meted out by the executive authorities,
usually the police only. In the Toribio Case, the statute was sustained because the penalty prescribed was
fine and imprisonment, to be imposed by the court after trial and conviction of the accused. Under the
challenged measure, significantly, no such trial is prescribed, and the property being transported is
immediately impounded by the police and declared, by the measure itself, as forfeited to the government.

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In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were
returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond of
P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when ordered by the
trial court. The executive order defined the prohibition, convicted the petitioner and immediately imposed
punishment, which was carried out forthright. The measure struck at once and pounced upon the petitioner
without giving him a chance to be heard, thus denying him the centuries-old guaranty of elementary fair
play.
We also mark, on top of all this, the questionable manner of the disposition of the confiscated property as
prescribed in the questioned executive order. It is there authorized that the seized property shall "be
distributed to charitable institutions and other similar institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as
the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.) The phrase "may
see fit" is an extremely generous and dangerous condition, if condition it is. One searches in vain for the
usual standard and the reasonable guidelines, or better still, the limitations that the said officers must
observe when they make their distribution. There is none. Their options are apparently boundless. Who
shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the
officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in
their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping
authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate
and therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of the police power because the
method employed to conserve the carabaos is not reasonably necessary to the purpose of the law and,
worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is
denied the right to be heard in his defense and is immediately condemned and punished. The conferment on
the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear
encroachment on judicial functions and militates against the doctrine of separation of powers. There is,
finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted
unlimited discretion in the distribution of the properties arbitrarily taken. For these reasons, we hereby
declare Executive Order No. 626-A unconstitutional.
The strength of democracy lies not in the rights it guarantees but in the courage of the people to invoke
them whenever they are ignored or violated. Rights are but weapons on the wall if, like expensive tapestry,
all they do is embellish and impress. Rights, as weapons, must be a promise of protection. They become
truly meaningful, and fulfill the role assigned to them in the free society, if they are kept bright and sharp
with use by those who are not afraid to assert them.
Department of Agrarian Reform, represented by Secretary Jose Mari B. Ponce (OIC)
vs
Delia T. Sutton, Ella T. Sutton-Soliman and Harry T. Sutton
G.R. No.162070
Facts:

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the Decision
and Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004,
respectively, which declared DAR Administrative Order (A.O.) No. 9, series of 1993, null and
void for being violative of the Constitution.

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The case involves a land in Aroroy, Masbate, inherited by respondents which has been devoted
exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian
reform program of the government, respondents made a voluntary offer to sell (VOS) their
landholdings to petitioner DAR to avail of certain incentives under the law.
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the
Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage
farms used for raising livestock, poultry and swine.
On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, the
Court ruled that lands devoted to livestock and poultry-raising are not included in the definition of
agricultural land and declared as unconstitutional certain provisions of the CARL insofar as they
included livestock farms in the coverage of agrarian reform. In view of this, respondents filed with
petitioner DAR a formal request to withdraw their VOS as their landholding was devoted
exclusively to cattle-raising and thus exempted from the coverage of the CARL.
On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected
respondents' land and found that it was devoted solely to cattle-raising and breeding. He
recommended to the DAR Secretary that it be exempted from the coverage of the CARL.
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and
requested the return of the supporting papers they submitted in connection therewith. Petitioner
ignored such request.
On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that only portions
of private agricultural lands used for the raising of livestock, poultry and swine as of June 15,
1988 shall be excluded from the coverage of the CARL. In determining the area of land to be
excluded, the A.O. fixed the following retention limits, viz.: 1:1 animal-land ratio and a ratio of
1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded
from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final
and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire
landholding is exempted from the CARL.
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order partially granting
the application of respondents for exemption from the coverage of CARL. Applying the retention
limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents' land for
grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the
rest of respondents' landholding to be segregated and placed under Compulsory Acquisition.
Respondents moved for reconsideration, contending that their entire landholding should be
exempted as it is devoted exclusively to cattle-raising. Said motion was denied. Respondents filed
a notice of appeal with the Office of the President assailing: (1) the reasonableness and validity of
DAR A.O. No. 9, s. 1993, which provided for a ratio between land and livestock in determining
the land area qualified for exclusion from the CARL, and (2) the constitutionality of DAR A.O.
No. 9, s. 1993, in view of the Luz Farms case which declared cattle-raising lands excluded from
the coverage of agrarian reform. The OP affirmed the impugned order. On appeal to CA, the CA
ruled in favor of respondents and declared A.O. No. 9, Series of 1993 as void.

Issue:

Whether or not DAR Administrative Order No. 09, Series of 1993 which prescribes a maximum
retention for owners of lands devoted to livestock raising is constitutional?

Held:

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The impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate
livestock farms by including them in the coverage of agrarian reform and prescribing a maximum
retention limit for their ownership. However, the deliberations of the 1987 Constitutional
Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock,
swine and poultry-raising. The Court clarified in the Luz Farms case that livestock, swine and
poultry-raising are industrial activities and do not fall within the definition of "agriculture" or
"agricultural activity." The raising of livestock, swine and poultry is different from crop or tree
farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this
enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities,
drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and
generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment
like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated
water tanks, pumphouses, sprayers, and other technological appurtenance.
Petitioner DAR has no power to regulate livestock farms which have been exempted by the
Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the
assailed A.O.
Moreover, it is a fundamental rule of statutory construction that the reenactment of a statute by
Congress without substantial change is an implied legislative approval and adoption of the
previous law. On the other hand, by making a new law, Congress seeks to supersede an earlier
one. In the case at bar, after the passage of the 1988 CARL, Congress enacted R.A. No. 7881
which amended certain provisions of the CARL. Specifically, the new law changed the definition
of the terms "agricultural activity" and "commercial farming" by dropping from its coverage lands
that are devoted to commercial livestock, poultry and swine-raising. With this significant
modification, Congress clearly sought to align the provisions of our agrarian laws with the intent
of the 1987 Constitutional Commission to exclude livestock farms from the coverage of agrarian
reform.
It is doctrinal that rules of administrative bodies must be in harmony with the provisions of the
Constitution. They cannot amend or extend the Constitution. To be valid, they must conform to
and be consistent with the Constitution. In case of conflict between an administrative order and the
provisions of the Constitution, the latter prevails. The assailed A.O. of petitioner DAR was
properly stricken down as unconstitutional as it enlarges the coverage of agrarian reform beyond
the scope intended by the 1987 Constitution.

Solicitor General vs. Metropolitan Manila Authority


Facts:
On July 13, 1990 the Court held in the case of Metropolitan Traffic Command, West Traffic
District vs. Hon. Arsenio M. Gonong, that the confiscation of the license plates of motor vehicles for traffic
violations was not among the sanctions that could be imposed by the Metro Manila Commission under PD
1605 and was permitted only under the conditions laid down by LOI 43 in the case of stalled vehicles
obstructing the public streets. Even the confiscation of drivers licenses for traffic violations was not
directly prescribed or allowed by the decree. After no motion for reconsideration of the decision was filed
the judgment became final and executor.
Withstanding the Gonong decision still violations of the said decision transpired, wherein there
were several persons who sent complaint letters to the Court regarding the confiscation of drivers licenses
and removal of license plate numbers.

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On May 24, 1990 the MMA issued Ordinance No. 11, Series of 1991, authorizing itself to detach
license plate/tow and impound attended/unattended/abandoned motor vehicles illegally parked or
obstructing the flow of traffic in Metro Manila.
On July 2, 1991, the Court issued a resolution regarding the matter which stated that the
Ordinance No. 11, Section 2 appears to be in conflict with the decision of the Court, and that the Court has
received several complaints against the enforcement of such ordinance.
Issue:
W/N Ordinance No. 11 Series of 1991 and Ordinance No. 7, Series of 1998 are valid in the
exercise of such delegated power to local government acting only as agents of the national legislature?
Held:
No, the Court rendered judgment: 1) declaring Ordinance No. 11, Series of 1991, of the MMA and
Ordinance No. 7, Series of 1998, of the Municipality of Mandaluyong, Null and Void; and 2) enjoining all
law-enforcement authorities in Metropolitan Manila from removing the license plates of motor vehicles
(except when authorized under LOI43) and confiscating drivers licenses for traffic violations within the
said area.
To test the validity of said acts the principles governing municipal corporations was applied,
according to Elliot for a municipal ordinance to be valid the following requisites should be complied: 1)
must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must not be
partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6)
must be general and consistent with public policy.
In the Gonong decision it was shown that the measures under consideration did not pass the first
criterion because it did not conform to existing law. PD 1605 does not allow either the removal of license
plates or the confiscation of drivers licenses for traffic violations committed in Metropolitan Manila.
There is nothing in the decree authorizing the MMA to impose such sanctions. Thus Local political
subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national
legislature (except only that the power to create their own sources of revenue and to levy taxes is conferred
by the Constitution itself). They are mere agents vested with what is called the power of subordinate
legislation. As delegates of the Congress, the local government unit cannot contravene but must obey at all
times the will of the principal. In the case at bar the enactments in question, which are merely local in
origin, cannot prevail against the decree, which has the force and effect of a statute.
[G.R. No. 92174. December 10, 1993.]
BOIE-TAKEDA CHEMICALS, INC., petitioner, vs. HON. DIONISIO C. DE LA SERNA, Acting
Secretary of the Department of Labor and Employment, respondent.
Facts for G.R. No. 92174:
A routine inspection was conducted in the premises of Boie-Takeda Chemicals, Inc. by Labor and
Development Officer Reynaldo B. Ramos. Finding that Boie-Takeda had not been including the
commissions earned by its medical representatives in the computation of their 13th month pay, Ramos
served a Notice of Inspection Results on Boie-Takeda through its president, Mr. Benito Araneta, requiring
Boie-Takeda within ten (10) calendar days from notice to effect restitution or correction of "the

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underpayment of 13th month pay for the year(s) 1986, 1987 and 1988 of Med Rep in the total amount of
P558,810.89
Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results, and expressing the
view "that the commission paid to our medical representatives are not to be included in the computation of
the 13th month pay . . . (since the) law and its implementing rules speak of REGULAR or BASIC salary
and therefore exclude all other remunerations which are not part of the REGULAR salary." It pointed out
that, "If no sales is (sic) made under the effort of a particular representative, there is no commission during
the period when no sale was transacted, so that commissions are not and cannot be legally defined as
regular in nature."
Regional Director Luna C. Piezas directed Boie-Takeda to appear before his Office. On the appointed
dates, however, and despite due notice, no one appeared for Boie-Takeda, and the matter had perforce to be
resolved on the basis of the evidence at hand. On July 24, 1989, Director Piezas issued an Order directing
Boie-Takeda to pay the said amount.
Facts for G.R. No. 102552:
A similar Routine Inspection was conducted in the premises of Philippine Fuji Xerox Corp due t o the
Underpayment of 13th month pay of 62 employees, more or less. Philippine Fuji Xerox was requested to
effect rectification and/or restitution of the noted violation within five (5) working days from notice.
No action having been taken thereon by Philippine Fuji Xerox, Mr. Eduardo G. Gonzales, President of
Philxerox Employees Union, wrote then Labor Secretary Franklin Drilon requesting a follow-up of the
inspection findings. Messrs. Nicolas and Gonzales were summoned to appear before Labor Employment
and Development Officer Mario F. Santos, NCR Office, Department of Labor for a conciliation conference.
When no amicable settlement was reached, the parties were required to file their position papers.
Issue:
What item or items of employee remuneration should go into the computation of thirteenth month pay?
Held:
Contrary to respondents' contention, Memorandum Order No. 28 did not repeal, supersede or abrogate P.D.
851. As may be gleaned from the language of Memorandum Order No. 28, it merely "modified" Section 1
of the decree by removing the P1,000.00 salary ceiling. The concept of 13th Month Pay as envisioned,
defined and implemented under P.D. 851 remained unaltered, and while entitlement to said benefit was no
longer limited to employees receiving a monthly basic salary of not more than P1,000.00, said benefit was,
and still is, to be computed on the basic salary of the employee-recipient as provided under P.D. 851. Thus,
the interpretation given to the term "basic salary" as defined in P.D. 851 applies equally to "basic salary"
under Memorandum Order No. 28.
The term "basic salary" is to be understood in its common, generally-accepted meaning, i.e., as a rate of
pay for a standard work period exclusive of such additional payments as bonuses and overtime.
In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or
guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work
period. Commissions are given for extra efforts exerted in consummating sales or other related transactions.
They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary."
In including commissions in the computation of the 13th month pay, the second paragraph of Section 5 (a)
of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept

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of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to
or detract from the provisions of the law it is designed to implement. Administrative regulations
adopted under legislative authority by a particular department must be in harmony with the
provisions of the law they are intended to carry into effect. They cannot widen its scope. An
administrative agency cannot amend an act of Congress.
G.R. No. 124873. July 14, 1999
UNITED BF HOMEOWNERS ASSOCIATION, and HOME INSURANCE AND GUARANTY
CORPORATION, petitioners, vs. BF HOMES, INC.,respondents.
PARDO, J.
FACTS:
Petitioner United BF Homeowners Association, Inc. (UBFHAI) is the umbrella organization and sole
representative of all homeowners in the BF Homes Paraaque Subdivision, 765 hectare subdivision located
in the south of Manila. Respondent BF Homes, Inc. (BFHI) is the owner-developer of the said subdivision,
which first opened in 1968.
In 1988, because of financial difficulties, the Securities and Exchange Commission (SEC) placed
respondent BFHI under receivership to undergo a 10 year rehabilitation program, and appointed Atty.
Florencio B. Orendain receiver. The program was composed of two stages: (1) payment of obligations to
external creditors; and (2) payment of obligations to Banco Filipino.
When Atty. Florencio B. Orendain took over management of respondent BFHI in 1988, several things were
not in order in the subdivision. Preliminary to the rehabilitation, Atty. Orendain entered into an agreement
with the two major homeowners associations, the BF Paraaque Homeowners Association, Inc. (BFPHAI)
and the Confederation of BF Homeowners Association, Inc. (CBFHAI), for the creation of a single,
representative homeowners association and the setting up of an integrated security program that would
cover the 8 entry and exit points to and from the subdivision. On December 20, 1988, this tripartite
agreement was reduced into a memorandum of agreement, and amended on March 1989.
Pursuant to these agreements, on May 18, 1989, petitioner UBFHAI was created and registered with the
Home Insurance and Guaranty Corporation (HIGC), and recognized as the sole representative of all the
homeowners association inside the subdivision.
Respondent BFHI, through its receiver, turned over to petitioner UBFHAI the administration and operation
of the subdivisions clubhouse at #37 Pilar Banzon Street, and a strip of open space in Concha Cruz Garden
Row, on June 23, 1989 and May, 1993, respectively.
On November 7, 1994, the first receiver was relieved and a new committee of receivers, composed of
respondent BFHIs eleven (11) members of the board of directors was appointed.
On April 7, 1995, based on BFHIs title to the main roads, the newly appointed committee of receivers sent
a letter to the different homeowners association in the subdivision informing them that as a basic
requirement for BFHIs rehabilitation, respondent BFHI would be responsible for the security of the
subdivision in order to centralize it and abate the continuing proliferation of squatters.
On the same day, petitioner UBFHAI filed with the HIGC a petition for mandamus with preliminary
injunction against respondent BFHI. Petitioner UBFHAI alleged that the committee of receivers illegally
revoked their security agreement with the previous receiver. They complained that even prior to said date,
the new committee of receivers committed the following acts: (1) deferred petitioner UBFHAIs purchase
of additional pumps; (2) terminated the collection agreement for the community assessment forged by the
petitioner UBFHAI with the first receiver; (3) terminated the administration and maintenance of the
Concha Cruz Garden Row; (4) sent a letter to petitioner UBFHAI stating that it recognized BFPHAI only,

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and that the subdivisions clubhouse was to be administered by it only; and (5) took over the administration
of security in the main avenues in the subdivision.
On April 11, 1995, the HIGC issued ex parte a temporary restraining order. Particularly, respondent BFHI
was enjoined from:
taking over the Clubhouse located at 37 Pilar Banzon St., BF Homes Paraaque, Metro Manila, taking
over security in all the entry and exit points and main avenues of BF Homes Paraaque Subdivision,
impeding or preventing the execution and sale at auction of the properties of BF Paraaque Homeowners
Association, Inc., in HIGC HOA-90-138 and otherwise repudiating or invalidating any contract or
agreement of petitioner with the former receiver/BFHI concerning funding or delivery of community
services to the homeowners represented by the latter.
On April 24, 1995, without filing an answer to petitioner UBFHAIs petition with the HIGC, respondent
BFHI filed with the Court of Appeals a petition for prohibition for the issuance of preliminary injunction
and temporary restraining order, to enjoin HIGC from proceeding with the case.
On May 2, 1995, the HIGC issued an order deferring the resolution of petitioner UBFHAIs application for
preliminary injunction, until such time that respondent BFHIs application for prohibition with the
appellate court has been resolved. When the twenty-day (20) effectivity of the temporary restraining order
had lapsed, the HIGC ordered the parties to maintain the status quo.
Meanwhile, on November 27, 1995, the Court of Appeals promulgated its decision granting respondent
BFHIs petition for prohibition, prohibiting the public respondent Roberto C. Abrajano from proceeding
with the hearing of HIGC CASE NO. HOA-95-027. Consequently, the public respondent was ordered to
DISMISS HIGC CASE NO. HOA-95-027 for lack of jurisdiction.
The appellate court denied petitioners motion for reconsideration. Hence, this petition for review on
certiorari.
ISSUES: 1. Whether or not the Rules of procedure promulgated by the HIGC, specifically Section 1(b),
Rule II of the Rules of Procedure in the Settlement of Homeowners Disputes is valid;
2. Whether or not the acts committed by the respondent constitute an attack on petitioners corporate
existence.
HELD:
1.

NO. In the present case, the HIGC went beyond the authority provided by the law when it
promulgated the revised rules of procedure. There was a clear attempt to unduly expand the
provisions of Presidential Decree 902-A. As provided in the law, insofar as the associations
franchise or corporate existence is involved, it is only the State, not the general public or other
entity that could question this.
The rule-making power of a public administrative body is a delegated legislative power, which it
may not use either to abridge the authority given it by Congress or the Constitution or to enlarge
its power beyond the scope intended. Constitutional and statutory provisions control what rules
and regulations may be promulgated by such a body, as well as with respect to what fields are
subject to regulation by it. It may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute, particularly the statute it is administering or which
created it, or which are in derogation of, or defeat, the purpose of a statute. A statutory grant of
powers should not be extended by implication beyond what may be necessary for their just and
reasonable execution.
Originally, administrative supervision over homeowners associations was vested by law with the
Securities and Exchange Commission. On May 3, 1979, pursuant to Executive Order 535, this
function was delegated to the HIGC. By virtue of this amendatory law, the HIGC not only
assumed the regulatory and adjudicative functions of the SEC over homeowners

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associations, but also the original and exclusive jurisdiction to hear and decide cases
involving:
(b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members or associates; between any or all of them and the corporation, partnership
or association of which they are stockholders, members or associates respectively; and between
such corporation, partnership or association and the state insofar as it concerns their individual
franchise or right to exist as such entity.
On December 21, 1989, the HIGC adopted its rules of procedure in the hearing of homeowners
disputes. Section 1(b), Rule II enumerated the types of disputes over which the HIGC has
jurisdiction, and these include:
Section 1. Types of Disputes- The HIGC or any person, officer, body, board, or committee duly
designated or created by it shall have jurisdiction to hear and decide cases involving the following:
xxx
(b) Controversies arising out of intra-corporate relations between and among members of the
association, between any and/or all of them and the association of which they are members, and
insofar as it concerns its right to exist as a corporate entity, between the association and the
state/general public or other entity.
Neither can the HIGC claim original and exclusive jurisdiction over the petition for mandamus
under the two other types of disputes enumerated in Presidential Decree 902-A and in the revised
rules. The dispute is not one involving the members of the homeowners association nor it is one
between any and/or all of the members and the associations of which they are members. The
parties are the homeowners association and the owner-developer, acting at the same time as the
corporations committee of receivers.
To reiterate, the HIGC exercises a very limited jurisdiction over homeowners disputes. The law
confined this authority to controversies that arise out of the following intra-corporate relations:
(1) between and among members of the association; (2) between any and/or all of them and the
association of which they are members; and (3) insofar as it concerns its right to exist as a
corporate entity, between the association and the state. None of the parties to the litigation can
enlarge or diminish it or dictate when it shall attach or when it shall be removed.
Jurisdiction is defined as the power and authority of a court to hear, try and decide a case.
Jurisdiction over the subject matter is conferred by the Constitution or by law. Nothing can
change the jurisdiction of the court over the subject matter. That power is a matter of legislative
enactment which none by the legislature may change.
2. Whether or not the acts committed or threatened to be committed by the respondent against
the petitioner would constitute an attack on the latters corporate existence would be immaterial.
The HIGC has no jurisdiction to hear and resolve the dispute.
Having dispensed with the question of jurisdiction, there is no need for the HIGC to proceed
with the hearing of HIGC-HOA 95-027. It would just be an exercise in futility since it has no
jurisdiction.
Furthermore, it was apparent that the board of directors of respondent BFHI, acting as the
committee of receivers, was only trying to find ways and means to rehabilitate the corporation so
that it can pay off its creditors. The revocation of the security agreements and the removal of
administration and maintenance of certain property that are still under the name of respondent
BFHI, were acts done in pursuance of the rehabilitation program. All the security agreements
and undertakings were contractual in nature, which respondent BFHI, acting as a committee of
receivers and being the successor of the former receiver, could very well alter or modify.

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WHEREFORE, the Court DENIES the petition for review on certiorari, for lack of merit. The
decision and resolution appealed from in CA-G. R. SP. NO. 37072 are AFFIRMED.
LUPANGCO vs. COURT OF APPEALS
Gancayco, 1988
FACTS
In October 1986, the PROFESSIONAL REGULATION COMMISSION (PRC) issued Resolution 105
(Additional Instructions to Examinees) to all applying for admission to take the licensure exams in
accountancy. Resolution 105 provides:
No examinee shall attend any review class, briefing, conference or the like conducted by, or shall receive
any handout, review material or any tip from any school, college or university or any review center or the
like or any reviewer, lecturer, instructor official or employee of any of the aforementioned or similar
institutions during the THREE DAYS IMMEDIATELY PROCEEDING EVERY EXAMINATION DAY
INCLUDING EXAMINATION DAY.
On October 16, 1986, the petitioners, all reviewees preparing to take the licensure exam in accountancy
scheduled on October 25 and November 2, filed with the RTC of Manila a complaint for injunction w/ the
issuance of a writ of preliminary injunction against PRC to restrain it from enforcing the said resolution and
to declare the same unconstitutional.

PRC filed a motion to dismiss on the ground that the lower court had no jurisdiction to review and to enjoin
the enforcement of its resolution. Lower court declared it had jurisdiction to try the case, and enjoined PRC
from enforcing Resolution 105 which it declared unconstitutional.
PRC filed with the CA to nullify the above order. CA ruled in its favor, and directed the lower court to
dismiss the civil case for want of jurisdiction over the subject matter. CA held that the PRC and RTC are
co-equal bodies. Co-equal bodies have no power to control each other or interfere with each others acts.
CA cited National Electrification Administration v. Mendoza where the Court held that a CFI cannot
interfere with orders of the SEC, the two being co-equal bodies.
Hence, this petition.
ISSUE(s)
Is the RTC of the same category as the PRC so that it cannot pass upon the validity of the administrative
acts of the latter?
Can PRC lawfully prohibit the examiniees from attending review classes, et al three days before exam day?
RULING: SC rules in favor of petitioner. RTC has jurisdiction to entertain the civil case and enjoin PRC
from enforcing the resolution.
The reason why the SC ruled that the CFI cannot interfere with the orders of the SEC was that this was so
provided for by law.
"
"
"

Pineda v. Lantin: Whenever a party is aggrieved by or disagree with an order/ruling of the SEC, he
cannot seek relief from courts of general jurisdiction. Remedy is to go to SC on a petition for
review.
Philippine Pacific Fishing Co. v. Luna: If an order of the SEC is erroneous, the appropriate
remedity is first, within SEC itself, then to the SC.
Basis: Rules of Court and PD 902-A, the law creating the new SEC

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SEC and PRC are not in the same category. There is NO LAW providing for the next course of action for a
party who wants to question a ruling/order of the PRC. There is no provision in PD 223 creating the PRC
that orders or resolutions of the PRC are appealable either to the CA or SC. Thus, the civil case filed to
enjoin the enforcement of the Resolution should fall within the general jurisdiction of the CFI/RTC.
What is clear from PD 223 is that the PRC is attached to the Office of the President for general direction
and coordination.
"
"

Medallla v. Sayo: Even acts of the President may be reviewed by the CFI
Republic v. Presiding Judge, CFI of Lanao del Norte: The respondent Court is not only right but
duty bound to take cognizance of cases of this nature wherein a constitutional and statutory right is
allegedly infringed by the administrative action of a government office. CFI have original
jurisdiction over all civil actions in which the subject of the litigation is not capable of pecuniary
estimation.

SC: No cogent reason why Resolution 105 issued by PRC should be exempted from the general jurisdiction
of the RTC.

PRC further contends that under BP 129, it is the CA which has jurisdiction over the case.
"
"

"

SC: In order to invoke the exclusive appellate jurisdiction of the CA as provided for in Sec.
9, BP 129, there has to be a FINAL ORDER or RULING which resulted from proceedings
wherein the admin body involved exercised its quasi-judicial functions.
Quasi-judicial: a term applied to the action, discretion, etc. of public admin officers or bodies
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
(Blacks Law Dictionary).
Quasi-judicial adjudication: a determination of rights, privileges, and duties resulting in a decision
or order which applies to a specific situation. (Gonzales, Admin Law). This does not cover rules
and regulations of general applicability issued by the admin body to implement its purely
administrative policies and functions like Resolution No. 105 which was adopted by PRC as
a measure to preserve the integrity of licensure exams.

On the validity of Resolution No. 105


"
"
"
"

"

Its good aim cannot be a cloak to conceal its constitutional infirmities. It is unreasonable in that an
examinee cannot even attend any review class, etc.
Its unreasonableness is more obvious in that one who is caught committing the prohibited acts will
be barred from taking future exams by the PRC.
It is inconceivable how the Commission can manage to have a watchful eye on each and every
examinee during the three days before the exam period.
Administrative authorities should not act arbitrarily and capriciously in the issuance of rules
and regulations. To be valid, such rules and regulations must be reasonable and fairly
adapted to the end in view. If shown to bear no reasonable relation to the purposes for which
they are authorized to be issued, then they must be held to be invalid. (Gonzales, Admin
Law)
Resolution No. 105 is not only unreasonable and arbitrary. It also infringes on the
examinees right to liberty guaranteed by the Constitution. PRC has NO AUTHORITY to
dictate on the reviewees as to how they should prepare themselves for the licensure exams.
They cannot be retrained from taking all the lawful steps needed to assure the fulfillment of
their ambition to become public accountants. They have every right to make use of their

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"

faculties in attaining success in their endeavors. They should be allowed to enjoy their
freedom to acquire useful knowledge that will promote their personal growth.
Resolution No. 105 also violates the academic freedom of the schools concerned.

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. vs. HON. RUBEN D. TORRES,


as Secretary of the Department of Labor and Employment, and JOSE N. SARMIENTO, as
Administrator of the Philippine Overseas Employment Administration
GR NO. 101279. AUGUST 6, 1992
GRIO-AQUINO
This petition for prohibition with temporary restraining order was filed by the Philippine Association of
Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and
Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or
POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA
Memorandum Circular Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private
employment agencies of Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the
facilities of the POEA, the task of processing and deploying such workers.
FACTS: PASEI is the largest national organization of private employment and recruitment agencies duly
licensed and authorized by the POEA to engage in the business of obtaining overseas employment for
Filipino landbased workers including domestic helpers.
On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids
employed in HK, DOLE Sec. Torres issued Dept. Order. No. 16, Series of 1991, temporarily suspending
the recruitment by private employment agencies of Filipino domestic helpers going to HK. DOLE,
through the POEA, took over the business of deploying such HK-bound workers.
ISSUES: On September 2, 1991, PASEI filed this petition for prohibition to annul the DOLE and POEA
circulars and to prohibit their implementation for the ff. reasons:
1.
2.
3.

Torres and Sarmiento acted with grave abuse of discretion and/or in excess of their rule-making
authority in issuing said circulars;
The assailed DOLE and POEA circulars are contrary to the Constitution, unreasonable, unfair, and
oppressive;
The requirements of publication and filing with the Office of the National Administrative Register
were not complied with.

HELD: 1 / 2 NO. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities.
Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate the
recruitment and placement activities of all agencies within the coverage of this title [Regulation of
Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the provisions of this title.
On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive
Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development
Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment
Services, is broad and far-ranging for:

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1.

2.

3.

Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the
power and duty, among others, to establish and maintain a registration and/or licensing system to
private sector participation in the recruitment and placement of workers, locally and overseas, (Art.
15, Labor Code)
It assumed from the defunct Overseas Employment Development Board the power and duty, among
others, to recruit and place workers for overseas employment of Filipino contract workers, on a
government to government arrangement and in such other sectors as policy may dictate (Art. 17,
Labor Code)
From the National Seamen Board, the POEA took over, among others, to regulate and supervise the
activities of agents or representatives of shipping companies in the hiring of seamen for overseas
employment; and secure the best possible terms of employment for contract seamen workers and
secure compliance therewith." (Art. 20, Labor Code)

The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not


unconstitutional, unreasonable, and oppressive. It has been necessitated by the growing complexity
of the modern society. More and more administrative bodies are necessary to help in the regulation
of societys ramified activities. "Specialized in the particular field assigned to them, they can deal
with the problems thereof with more expertise and dispatch than can be expected from the
legislature or the courts of justice".
The assailed circulars do not prohibit PASEI from engaging in the recruitment and deployment of Filipino
landbased workers for overseas employment. The administrative issuances discloses that they fall within
the administrative and policing poers expressly or by necessary implication conferred upon Torres and
Sarmiento.
The power to restrict and regulate conferred by Art. 36 of the Labor Code involves a grant of police
power.
To restrict means to confine, limit, or stop. The power to regulate means the power to protect, foster,
promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the
utility and of its patrons.
As the SolGen aptly observed: said administrative order merely restricted the scope or area of PASEIs
business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong
Kong till after the establishment of the `mechanisms that will enhance the protection of Filipino domestic
helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic
helpers for Hongkong, PASEI may still deploy other class of Filipino workers either for Hongkong and
other countries and all other classes of Filipino workers for other countries. Said administrative issuances,
intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement
and documentation fees, travel fees and other charges committed by private employment agencies
recruiting and deploying domestic helpers to Hongkong. They are reasonable, valid and justified under the
general welfare clause of the Constitution, since the recruitment and deployment business, as it is
conducted today, is affected with public interest.
The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is
merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the
tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by
private employment agencies are hereby temporarily suspended effective July 1. 1991. It is limited in
scope, being confined to recruitment of domestic helpers going to HK only.

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The justification for the takeover of the processing and deploying of domestic helpers for Hongkong
resulting from the restriction of the scope of petitioners business is confined solely to the unscrupulous
practice of private employment agencies victimizing applicants for employment as domestic helpers for
Hongkong and not the whole recruitment business in the Philippines.
The questioned circulars are therefore a valid exercise of the police power as delegated to the executive
branch of Government.
3. YES. Nevertheless, they are legally invalid, defective and unenforceable for lack of proper
publication and filing in the Office of the National Administrative Register as required in Article 2 of the
Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative
Code of 1987 which provide:
Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the
Official Gazette, unless it is otherwise provided. . . . ." (Civil Code.)
Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with
the administration and enforcement of this Code or any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days
after announcement of their adoption in newspapers of general circulation." (Labor Code, as amended)
Section 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3)
certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are
not filed within three (3) months shall not thereafter be the basis of any sanction against any party or
persons." (Chapter 2, Book VII of the Administrative Code of 1987)
Section 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent
with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided
unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health,
safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The
agency shall take appropriate measures to make emergency rules known to persons who may be affected by
them." (Chapter 2, Book VII of the Administrative Code of 1987)
Administrative rules and regulations must also be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the personnel
of the administrative agency and not the public, need not be published. Neither is publication
required of the so-called letters of instructions issued by administrative superiors concerning the
rules or guidelines to be followed by their subordinates in the performance of their duties.
Publication must be in full or it is no publication at all since its purpose is to inform the public of the
content of the laws.
For lack of proper publication, the administrative circulars in question may not be enforced and
implemented.
WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order
No. 16, Series of 1991, and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, by the public
respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication
and filing under the aforementioned laws of the land.

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G.R. No. L-16704

March 17, 1962

VICTORIAS MILLING COMPANY, INC. vs. SOCIAL SECURITY COMMISSION


BARRERA, J.:
FACTS: The Social Security Commission (SSC) issued its Circular No. 22 of the following tenor:
Effective November 1, 1958, all Employers in computing the premiums due the System, will take
into consideration and include in the Employee's remuneration all bonuses and overtime pay, as
well as the cash value of other media of remuneration. All these will comprise the Employee's
remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a
maximum of P500 for any one month.
Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., wrote SSC in effect
protesting against the circular as contradictory to a previous Circular No. 7, expressly excluding overtime
pay and bonus in the computation of the employers' and employees' respective monthly premium
contributions. It further questioned the validity of the circular for lack of authority on the part of the
SSC to promulgate it without the approval of the President and for lack of publication in the Official
Gazette.
SSC ruled that Circular No. 22 is not a rule or regulation that needed the approval of the
President and publication in the Official Gazette to be effective, but a mere administrative
interpretation of the statute, a mere statement of general policy or opinion as to how the law should
be construed. This prompted Victorias to appeal before the Supreme Court.
ISSUE: Whether or not Circular No. 22 is a rule or regulation, as contemplated in Section 4(a) of Republic
Act 1161 empowering SSC "to adopt, amend and repeal subject to the approval of the President such rules
and regulations as may be necessary to carry out the provisions and purposes of this Act."
HELD: NO. Circular No. 22 is merely an administrative interpretation of a law and not a rule or
regulation. Thus, publication in the Official Gazette and approval of the President are not necessary.
Difference between administrative rules or regulations and administrative interpretation of law:
When an administrative agency promulgates rules and regulations, it "makes" a new law with the
force and effect of a valid law, while when it renders an opinion or gives a statement of policy; it merely
interprets a pre-existing law. Rules and regulations when promulgated in pursuance of the procedure or
authority conferred upon the administrative agency by law, partake of the nature of a statute, and
compliance therewith may be enforced by a penal sanction provided in the law. This is so because statutes
are usually couched in general terms, after expressing the policy, purposes, objectives, remedies and
sanctions intended by the legislature. The details and the manner of carrying out the law are often times left
to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and
regulations are the product of a delegated power to create new or additional legal provisions that have the
effect of law.
A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and
its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement
with the policy stated therein or its innate wisdom. On the other hand, administrative interpretation of the
law is at best merely advisory, for it is the courts that finally determine what the law means.

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Circular No. 22 in question was issued by SSC, in view of the amendment of the provisions of the
Social Security Law defining the term "compensation" contained in Section 8 (f) of Republic Act No. 1161
which, before its amendment, reads as follows: .
(f) Compensation All remuneration for employment include the cash value of any remuneration
paid in any medium other than cash except (1) that part of the remuneration in excess of P500
received during the month; (2) bonuses, allowances or overtime pay; and (3) dismissal and all
other payments which the employer may make, although not legally required to do so.
Republic Act No. 1792 changed the definition of "compensation" to:
(f) Compensation All remuneration for employment include the cash value of any remuneration
paid in any medium other than cash except that part of the remuneration in excess of P500.00
received during the month.
It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay
given in addition to the regular or base pay were expressly excluded, or exempted from the definition of the
term "compensation", such exemption or exclusion was deleted by the amendatory law. It thus became
necessary for the SSC to interpret the effect of such deletion or elimination. Circular No. 22 was, therefore,
issued to advise employers-members of SSC of what, in the light of the amendment of the law, they should
include in determining the monthly compensation of their employees upon which the social security
contributions should be based. It did not add any duty or detail that was not already in the law as amended.
It merely stated and circularized the opinion of the Commission as to how the law should be construed.
Santiago vs. Comelec
G.R. No. 127325
Facts:
December 6, 1996, private respondent Atty. Jesus S. Delfin (founding member of the Movement for
Peoples Initiative) filed with COMELEC a Petition to Amend the Constitution, to Lift Term Limits of
Elective Officials, by Peoples Initiative wherein Delfin asked the COMELEC for an order
1. Fixing the time and dates for signature gathering all over the country;
2. Causing the necessary publications of said Order and the attached Petition for Initiative on
the 1987 Constitution, in newspapers of general and local circulation;
3. Instructing Municipal Election Registrars in all Regions of the Philippines, to assist
Petitioners and volunteers, in establishing signing stations at the time and on the dates
designated for the purpose.

The provisions sought to be amended are Sections 4 and 7 of Article VI,Section 4 of Article VII,
and Section 8 of Article X of the Constitution. Elfin contended that R.A. No. 6735 provides
for three systems of initiative, namely, initiative on the Constitution, on statutes, and on local
legislation.

Petitioners Senator Miriam Defensor Santiago, Alexander Padilla, and Maria Isabel Ongpin -filed this special civil action for prohibition raising the following arguments:

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1.

The constitutional provision on peoples initiative to amend the Constitution can only be
implemented by law (enabling law) to be passed by Congress and in this case there is none.

2.

R.A. No. 6735 failed to provide any subtitle on initiative on the Constitution, unlike in the
other modes of initiative thus the matter of peoples initiative to amend the Constitution was
left to some future law.

3.

COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern the conduct of
initiative on the Constitution and initiative and referendum on national and local laws,
is ultra vires insofar as initiative on amendments to the Constitution is concerned, since the
COMELEC has no power to provide rules and regulations for the exercise of the right of
initiative to amend the Constitution. Only Congress is authorized by the Constitution to
pass the implementing law.

4.

The peoples initiative is limited to amendments to the Constitution, not


to revision thereof. Extending or lifting of term limits constitutes a revision and is,
therefore, outside the power of the peoples initiative.

This Court (a) required the respondents to comment on the petition within a non-extendible period of
ten days from notice; and (b) issued a temporary restraining order, effective immediately and
continuing until further orders, enjoining public respondent COMELEC from proceeding with the
Delfin Petition, and private respondents Alberto and Carmen Pedrosa from conducting a signature
drive for peoples initiative to amend the Constitution.
Delfin filed a comment and contended that the claim that COMELEC Resolution No. 2300 is ultra
vires is contradicted by (a) Section 2, Article IX-C of the Constitution, which grants the COMELEC
the power to enforce and administer all laws and regulations relative to the conduct of an election,
plebiscite, initiative, referendum, and recall; and (b) Section 20 of R.A. 6735, which empowers the
COMELEC to promulgate such rules and regulations as may be necessary to carry out the purposes of
the Act.
Issues:

1.

Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition solely
intended to obtain an order (a) fixing the time and dates for signature gathering; (b) instructing
municipal election officers to assist Delfin's movement and volunteers in establishing signature
stations; and (c) directing or causing the publication of, inter alia, the unsigned proposed Petition
for Initiative on the 1987 Constitution.

2.

Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and Regulations
Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum on
National and Local Laws) regarding the conduct of initiative on amendments to the Constitution
is valid, considering the absence in the law of specific provisions on the conduct of such
initiative.

Held:
The rule is that what has been delegated, cannot be delegated or as expressed in a Latin
maxim: potestas delegata non delegari potest.The recognized exceptions to the rule are as follows:
(1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the Constitution;

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(2) Delegation of emergency powers to the President under Section 23(2) of Article VI of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.
Empowering the COMELEC, an administrative body exercising quasi-judicial functions, to
promulgate rules and regulations is a form of delegation of legislative authority under no. 5
above. However, in every case of permissible delegation, there must be a showing that the delegation itself
is valid. It is valid only if the law (a) is complete in itself, setting forth therein the policy to be executed,
carried out, or implemented by the delegate; and (b) fixes a standard -- the limits of which are sufficiently
determinate and determinable -- to which the delegate must conform in the performance of his functions. A
sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the legislative command
is to be effected.
Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No. 6735 miserably
failed to satisfy both requirements in subordinate legislation. The delegation of the power to the
COMELEC is then invalid.

COMELEC RESOLUTION NO. 2300, INSOFAR AS IT PRESCRIBES RULES AND


REGULATIONS ON THE CONDUCT OF INITIATIVE ON AMENDMENTS TO THE
CONSTITUTION, IS VOID.
It logically follows that the COMELEC cannot validly promulgate rules and regulations to implement
the exercise of the right of the people to directly propose amendments to the Constitution through the
system of initiative. It does not have that power under R.A. No. 6735. Reliance on the COMELECs
power under Section 2(1) of Article IX-C of the Constitution is misplaced, for the laws and regulations
referred to therein are those promulgated by the COMELEC under (a) Section 3 of Article IX-C of the
Constitution, or (b) a law where subordinate legislation is authorized and which satisfies the
completeness and the sufficient standard tests.

ASSIGNMENT NO 5
PEOPLE VS. MACEREN
Administrative regulations adopted under legislative authority by a particular department must be in
harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its
general provisions. By such regulations, the law itself cannot be extended. An administrative agency cannot
amend an act of Congress.
FACTS: The respondents were charged with violating Fisheries Administrative Order No. 84-1 which
penalizes electro fishing in fresh water fisheries. This was promulgated by the Secretary of Agriculture and
Natural Resources and the Commissioner of Fisheries under the old Fisheries Law and the law creating the
Fisheries Commission. The municipal court quashed the complaint and held that the law does not clearly
prohibit electro fishing, hence the executive and judicial departments cannot consider the same. On appeal,

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the CFI affirmed the dismissal. Hence, this appeal to the SC.
ISSUE: Whether the administrative order penalizing electro fishing is valid?
HELD: NO. The Secretary of Agriculture and Natural Resources and the Commissioner of Fisheries
exceeded their authority in issuing the administrative order. The old Fisheries Law does not expressly
prohibit electro fishing. As electro fishing is not banned under that law, the Secretary of Agriculture and
Natural Resources and the Commissioner of Fisheries are powerless to penalize it. Had the lawmaking
body intended to punish electro fishing, a penal provision to that effect could have been easily embodied in
the old Fisheries Law. The lawmaking body cannot delegate to an executive official the power to declare
what acts should constitute an offense. It can authorize the issuance of regulations and the imposition of the
penalty provided for in the law itself. Where the legislature has delegated to executive or administrative
officers and boards authority to promulgate rules to carry out an express legislative purpose, the rules of
administrative officers and boards, which have the effect of extending, or which conflict with the authority
granting statute, do not represent a valid precise of the rule-making power
US VS. PANLILIO
The orders (rules and regulations) of an administrative officers or body issued pursuant to a statute have the
force of law but are not penal in nature and a violation of such orders is not a offense punishable by law
unless the statute expressly penalizes such violation.
FACTS: The accused was convicted of violation of Act 1760 relating to the quarantining of animals
suffering from dangerous communicable or contagious diseases and sentencing him to pay a fine of P40
with subsidiary imprisonment in case of insolvency and to pay the costs of trial. It is alleged that the
accused illegally and without being authorized to do so, and while quarantine against the said carabaos
exposed to rinderpest was still in effect, permitted and ordered said carabaous to be taken from the corral in
which they were quarantined and drove them from one place to another. The accused contends that the
facts alleged in the information and proved on the trial do not constitute a violation of Act No. 1760
ISSUE: Whether accused can be penalized for violation of the order of the Bureau of Agriculture?
HELD: NO. Nowhere in the law is the violation of the orders of the Bureau of Agriculture prohibited or
made unlawful, nor is there provided any punishment for a violation of such orders. Section 8 of Act No.
1760 provides that any person violating any of the provisions of the Act shall, upon conviction, be
punished. However, the only sections of the Act which prohibit acts and pronounce them as unlawful are
Sections 3, 4 and 5. This case does not fall within any of them. A violation of the orders of the Bureau of
Agriculture, as authorized by paragraph, is not a violation of the provision of the Act. The orders of the
Bureau of Agriculture, while they may possibly be said to have the force of law, are statutes and
particularly not penal statutes, and a violation of such orders is not a penal offense unless the statute itself
somewhere makes a violation thereof unlawful and penalizes it. Nowhere in Act No. 1760 is a violation of
the orders of the Bureau of Agriculture made a penal offense, nor is such violation punished in any way
therein. However, the accused did violate Art. 581, 2 of the Penal Code which punishes any person who
violates regulations or ordinances with reference to epidemic disease among animals.
G.R. No. L-44291; August 15, 1936
PEOPLE, plaintiff-appellant vs. AUGUSTO A. SANTOS, defendant-appellee
VILLA-REAL, J.:
FACTS:
On June 18, 1930, the provincial fiscal of Cavite filed against Augusto A. Santos an information re:
violation of section 28 of Fish and Game Administrative Order No. 2 and penalized by section 28. On April
29, 1935, within 1,500 yards north of Cavalry Point, Corregidor Island, Province of Cavite, Santos, the
registered owner of two fishing motor boats Malabon II and Malabon III, had said boat manned and
operated by his fishermen, fish, loiter and anchor without permission from the Secretary of Agriculture and

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Commerce within three (3) kilometers from the shore line of the Island of Corregidor over which the naval
and military authorities of the United States exercise jurisdiction.
Section 28 of Administrative Order No. 2 provides: No boats licensed in accordance with the provisions of
Act No. 4003 and this order to catch, collect, gather, take, or remove fish and other sea products from
Philippine waters shall be allowed to fish, loiter, or anchor within 3 kilometers of the shore line of islands
and reservations over which jurisdiction is exercised by naval or military authorities of the United States,
particularly Corregidor: Provided, That boats not subject to license under Act No. 4003 and this order
may fish within the areas mentioned above only upon receiving written permission therefor, which
permission may be granted by the Secretary of Agriculture and Commerce upon recommendation of the
military or naval authorities concerned. A violation may be proceeded against under section 45 of the
Federal Penal Code. The above quoted provisions of Administrative Order No. 2 were issued by the then
Secretary of Agriculture and Natural Resources by virtue of the authority vested in him by section 4 of Act
No. 4003.
ISSUE:
Whether Admin Order No. 2 is valid. NO
HELD:
NO. Act No. 4003 contains no similar provision prohibiting boats not subject to license from fishing within
three kilometers of the shore line of islands and reservations over which jurisdiction is exercised by naval
and military authorities of the United States, without permission from the Secretary of Agriculture and
Commerce upon recommendation of the military and naval authorities concerned. Inasmuch as the only
authority granted to the Secretary of Agriculture and Commerce, by section 4 of Act No. 4003, is to issue
from time to time such instructions, orders, rules, and regulations consistent with said Act, as may be
necessary and proper to carry into effect the provisions thereof and for the conduct of proceedings arising
under such provisions; and inasmuch as said Act No. 4003, as stated, contains no provisions similar to
those contained in the above quoted conditional clause of section 28 of Administrative Order No. 2, the
conditional clause in question supplies a defect of the law, extending it. This is equivalent to legislating on
the matter, a power which has not been and cannot be delegated to him, it being exclusively reserved to the
then Philippine Legislature by the Jones Law, and now to the National Assembly by the Constitution of the
Philippines. Such act constitutes not only an excess of the regulatory power conferred upon the Secretary of
Agriculture and Commerce, but also an exercise of a legislative power which he does not have, and
therefore said conditional clause is null and void and without effect. Information dismissed.
PEREZ V LPG REFILLERSASSOCIATION OF THE PHILIPPINES,INC
492 SCRA 638
QUISUMBING; Aug 28, 2007
Facts: Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing, adulteration,
underdelivery, and underfilling of petroleum products, as well as possession for trade of adulterated
petroleum products and of underfilled liquefied petroleum gas (LPG) cylinders. The saidlaw sets the
monetary penalty for violators to a minimum of P20,000 and a maximum of P50,000.4- On June 9, 2000,
Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33. It is alleged that Circular No.
2000-06-010 (theassailed Circular) listed prohibited acts andpunishable offenses which are brand-new
or which were not provided for by B.P. Blg. 33, as amended;and that B.P. Blg. 33 enumerated and
specifically defined the prohibited/punishable acts under thelaw and that the punishable offenses in the
assailed Circular are not included in the law.
Issue : Whether or Not the circular is valid
Held: Yes- For an administrative regulation, such as the Circular in this case, to have the force of penal
law, (1) the violation of the administrative regulation must be made a crime by the delegating
statute itself; and (2) the penalty for such violation must be provided by the statuteitself.1.The Circular

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satisfies the first requirement. B.P.Blg. 33, as amended, criminalizes illegal trading, adulteration,
underfilling, hoarding, and overpricing of petroleum products. Under this general description of what
constitutes criminal acts involving petroleum products, the Circular merely lists the various modes by
which the said criminal acts may be perpetrated, namely: no price display board, no weighing scale, no tare
weight or incorrect tare weight markings, no authorized LPG seal, no trade name, unbranded LPG
cylinders, no serial number, no distinguishing color, no embossed identifying markings on cylinder,
underfilling LPG cylinders, tampering LPG cylinders, and unauthorized decanting of LPG cylinders.
These specific acts and omissions are obviously within the contemplation of the law, which seeks to curb
the pernicious practices of some petroleum merchants.2.As for the second requirement, we find that the
Circular is in accord with the law. Under B.P. Blg.33, as amended, the monetary penalty for any person
who commits any of the acts aforestated is limited to a minimum of P20,000 and a maximum of P50,000.
Under the Circular, the maximum pecuniary penalty for retail outlets is P20,000, an amount within the
range allowed by law. However, for the refillers, marketers, and dealers, the Circular is silent as to
any maximum monetary penalty. This mere silence, nonetheless, does not amount to violation of the
aforesaid statutory maximum limit. Further, the mere fact that the Circular provides penalties on aper
cylinder basis does not in itself run counter to the law since all that B.P. Blg. 33 prescribes arethe minimum
and the maximum limits of penalties.- Clearly, it is B.P. Blg. 33, as amended, which defines what constitute
punishable acts involving petroleum products and which set the minimum and maximum limits for the
corresponding penalties. The Circular merely implements the said law, albeit it is silent on the
maximum ecuniary penalty for refillers, marketers, and dealers. Nothing in the Circular contravenes the
law
PEOPLE v. QUE PO LAY
94 PHIL 640 (1954)
Circular of the Central Bank was not published in the Official Gazette.
Facts: Q is appealing from the decision of the Court of First Instance of Manila, finding him guilty of
violating Central Bank Circular No. 20 in connection with Section 34 of Republic Act No. 265, and
sentencing him to suffer six months imprisonment, to pay a fine of P1,000 with subsidiary imprisonment in
case of insolvency, and to pay the costs. The charge was that the appellant who was in possession of foreign
exchange failed to sell the same to the Central Bank through its agents within one day following the receipt
of such foreign exchange as required by Circular No. 20.
The appeal is based on the claim that said Circular No. 20 was not published in the Official Gazette prior to
the act or omission imputed to the appellant, and that consequently, said circular had no force and effect.
It is contended that Commonwealth Act No. 638 and Act No. 2930 both require said circular to be
published in the Official Gazette, it being an order or notice of general applicability. The Solicitor General
answering this contention says the Commonwealth Act No. 638 and Act No. 2930 do not require the
publication in the Official Gazette of said circular issued for the implementation of a law in order to have
force and effect.
Issue: May Q be held liable for violation of Circular No. 20?
Field: No. (1) Publication of statutes in Official Gazette required for their effectivity. "The Solicitor
General is correct in saying that the laws in question do not require the publication of the circulars,
regulations or notices therein mentioned in order to become binding and effective. All that said two laws
provide is that laws, resolutions, decisions of the Supreme Court and Court of Appeals, notices and
documents required by law to be published shall be published in the Official Gazette but said two laws do
not say that unless so published they will be of no force and effect. In other words, said two Acts merely
enumerate and make a list of what should be published in the Official Gazette, presumably, for the
guidance of the different branches of the Government issuing the same, and of the Bureau of Printing.

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However, Section 11 of the Revised Administrative Code provides that statutes passed by
Congress shall, in the absence of special provision, take effect at the beginning of the fifteenth day after the
completion of the publication of the statute in the Official Gazette. Article 2 of the New Civil Code
(Republic Act No. 386.) equally provides that laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it is otherwise provided.73
ItistruethatCircularNo.20oftheCentralBankisnotastatute or law but being issued for the implementation of
the law authorizing its issuance, it has the force and effect of law according to settled jurisprudence." (See
U.S. v. Tupasi Molina, 29 Phil. 119 and authorities cited therein.)
(2) Rights of the people to be informed of contents of penal statutes. "Moreover, as a rule, circulars and
regulations like the Circular No. 20 of the Central Bank in question which prescribes a penalty for its
violation should be published before becoming effective, this, on the general principle and theory that
before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must
first be published and the people officially and specifically informed of said contents and its penalties."

CORONA v. HARBOR PILOTS ASSOCIATION
G.R. No. 111953. December 12, 1997
FACTS:
PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92 [7] on July 15, 1992, whose avowed
policy was to instill effective discipline and thereby afford better protection to the port users through the
improvement of pilotage services. This was implemented by providing therein that all existing regular
appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain
valid up to 31 December 1992 only and that all appointments to harbor pilot positions in all pilotage
districts shall, henceforth, be only for a term of one (1) year from date of effectivity subject to yearly
renewal or cancellation by the Authority after conduct of a rigid evaluation of performance.
On August 12, 1992, respondents United Harbor Pilots Association and the Manila Pilots Association,
through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92 before the Department of Transportation
and Communication, but they were informed by then DOTC Secretary Jesus B. Garcia that the matter of
reviewing, recalling or annulling PPAs administrative issuances lies exclusively with its Board of
Directors as its governing body.
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08-92 [8] which laid down the
criteria or factors to be considered in the reappointment of harbor pilots, viz.: (1) Qualifying Factors: [9]
safety record and physical/mental medical exam report and (2) Criteria for Evaluation: [10] promptness in
servicing vessels, compliance with PPA Pilotage Guidelines, number of years as a harbor pilot, average
GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age.
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its implementing memoranda
and circulars, Secretary Corona opined that:
The exercise of ones profession falls within the constitutional guarantee against wrongful deprivation of,
or interference with, property rights without due process. In the limited context of this case, PPA-AO 0492 does not constitute a wrongful interference with, let alone a wrongful deprivation of, the property rights
of those affected thereby. As may be noted, the issuance aims no more than to improve pilotage services
by limiting the appointment to harbor pilot positions to one year, subject to renewal or cancellation after a
rigid evaluation of the appointees performance.
PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their profession in
PPAs jurisdictional area.

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Since the PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of Public
Works and Highways, the Department of Finance, and the Department of Environment and Natural
Resources, as well as the Director-General of the National Economic Development Agency, the
Administrator of the Maritime Industry Authority (MARINA), and the private sector representative who,
due to his knowledge and expertise, was appointed by the President to the Board, he concluded that the law
has been sufficiently complied with by the PPA in issuing the assailed administrative order.
ISSUE: Validity of PPA-AO 04-92
HELD:
There is no dispute that pilotage as a profession has taken on the nature of a property right. Even
petitioner Corona recognized this when he stated in his March 17, 1993, decision that (t)he exercise of
ones profession falls within the constitutional guarantee against wrongful deprivation of, or interference
with, property rights without due process. [20] He merely expressed the opinion that (i)n the limited
context of this case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone a wrongful
deprivation of, the property rights of those affected thereby, and that PPA-AO 04-92 does not forbid, but
merely regulates, the exercise by harbor pilots of their profession. As will be presently demonstrated,
such supposition is gravely erroneous and tends to perpetuate an administrative order which is not only
unreasonable but also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed individuals. Licensure is the
granting of license especially to practice a profession. It is also the system of granting licenses (as for
professional practice) in accordance with established standards. [21] A license is a right or permission
granted by some competent authority to carry on a business or do an act which, without such license, would
be illegal.
Their license is granted in the form of an appointment which allows them to engage in pilotage until they
retire at the age 70 years. This is a vested right.
It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor pilots to enjoy their
profession before their compulsory retirement. In the past, they enjoyed a measure of security knowing that
after passing five examinations and undergoing years of on-the-job training, they would have a license
which they could use until their retirement, unless sooner revoked by the PPA for mental or physical
unfitness. Under the new issuance, they have to contend with an annual cancellation of their license which
can be temporary or permanent depending on the outcome of their performance evaluation. Veteran pilots
and neophytes alike are suddenly confronted with one-year terms which ipso facto expire at the end of that
period. Renewal of their license is now dependent on a rigid evaluation of performance which is
conducted only after the license has already been cancelled. Hence, the use of the term renewal. It is this
pre-evaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally
infirm. In a real sense, it is a deprivation of property without due process of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already covered by PPA-AO No. 0385, which is still operational. Respondents are correct in pointing out that PPA-AO No. 04-92 is a
surplusage [23] and, therefore, an unnecessary enactment.
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. HON. COURT OF APPEALS, HON.
COURT OF TAX APPEALS and FORTUNE TOBACCO CORPORATION, respondents.
G.R. No. 119761. August 29, 1996
FACTS:

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The new law became effective on 03 July 1993. It amended Section 142(c)(1) of the National Internal
Revenue Code. About a month after the enactment (Republic Act No. 7654) and two (2) days before the
effectivity of RA 7654, Revenue Memorandum Circular No. 37-93 ("RMC 37-93"), was issued by the BIR.
'HOPE,' 'MORE' and 'CHAMPION' being manufactured by Fortune Tobacco Corporation are hereby
considered locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax on
cigarettes.
On 30 July 1993, the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to
P9,598,334.00.
Petitioner opines that RMC 37-93 is merely an interpretative ruling of the BIR which can thus become
effective without any prior need for notice and hearing, nor publication, and that its issuance is not
discriminatory since it would apply under similar circumstances to all locally manufactured cigarettes.
HELD:
The CIR may not disregard legal requirements or applicable principles in the exercise of its quasilegislative powers.
A legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by
providing the details thereof. In the same way that laws must have the benefit of public hearing, it is
generally required that before a legislative rule is adopted there must be hearing.
It should be understandable that when an administrative rule is merely interpretative in nature, its
applicability needs nothing further than its bare issuance for it gives no real consequence more than what
the law itself has already prescribed. When, upon the other hand, the administrative rule goes beyond
merely providing for the means that can facilitate or render least cumbersome the implementation of the
law but substantially adds to or increases the burden of those governed, it behooves the agency to accord at
least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new
issuance is given the force and effect of law.
A reading of RMC 37-93, particularly considering the circumstances under which it has been issued,
convinces us that the circular cannot be viewed simply as a corrective measure (revoking in the process the
previous holdings of past Commissioners) or merely as construing Section 142(c)(1) of the NIRC, as
amended, but has, in fact and most importantly, been made in order to place "Hope Luxury," "Premium
More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands
and to thereby have them covered by RA 7654. Specifically, the new law would have its amendatory
provisions applied to locally manufactured cigarettes which at the time of its effectivity were not so
classified as bearing foreign brands. Prior to the issuance of the questioned circular, "Hope Luxury,"
"Premium More," and "Champion" cigarettes were in the category of locally manufactured cigarettes not
bearing foreign brand subject to 45% ad valorem tax. Hence, without RMC 37-93, the enactment of RA
7654, would have had no new tax rate consequence on private respondent's products. Evidently, in order
to place "Hope Luxury," "Premium More," and "Champion" cigarettes within the scope of the amendatory
law and subject them to an increased tax rate, the now disputed RMC 37-93 had to be issued. In so doing,
the BIR not simply interpreted the law; verily, it legislated under its quasi-legislative authority. The due
observance of the requirements of notice, of hearing, and of publication should not have been then ignored
THE CHAIRMAN. So you have specific information on Fortune Tobacco alone. You don't have specific
information on other tobacco manufacturers. Now, there are other brands which are similarly
situated. They are locally manufactured bearing foreign brands. And may I enumerate to you all these

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brands, which are also listed in the World Tobacco Directory x x x. Why were these brands not reclassified
at 55 if your want to give a level playing field to foreign manufacturers?
G.R. No. 78385 August 31, 1987
PHILIPPINE
CONSUMERS
FOUNDATION,
vs.
THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent.

INC., petitioner,

FACTS:
Petitioner Philippine Consumers Foundation, Inc. is a non-stock, non-profit corporate entity duly organized
and existing under the laws of the Philippines. The herein respondent Secretary of Education, Culture and
Sports is a ranking cabinet member who heads the Department of Education, Culture and Sports of the
Office of the President of the Philippines.
On February 21, 1987, the Task Force on Private Higher Education created by the Department of
Education, Culture and Sports submitted a report entitled "Report and Recommendations on a Policy for
Tuition and Other School Fees." The report favorably recommended to the DECS the following courses of
action with respect to the Government's policy on increases in school fees for the school year 1987 to 1988.
The DECS took note of the report of the Task Force and on the basis of the same, the DECS, through the
respondent Secretary of Education, Culture and Sports, issued an Order authorizing, inter alia, the 15% to
20% increase in school fees as recommended by the Task Force. The petitioner sought a reconsideration of
the said Order, apparently on the ground that the increases were too high. Thereafter, the DECS issued
Department Order No. 37 dated April 10, 1987 modifying its previous Order and reducing the increases to
a lower ceiling of 10% to 15%, accordingly. Despite this reduction, the petitioner still opposed the
increases. On April 23, 1987, the petitioner, through counsel, sent a telegram to the President of the
Philippines urging the suspension of the implementation of Department Order No. 37. However no
favorable response was obtained by petitioner.
Thus, on May 20, 1987, the petitioner, allegedly on the basis of the public interest, went to this Court and
filed the instant Petition for prohibition, seeking that judgment be rendered declaring the questioned
Department Order unconstitutional. They alleged students and parents are interested parties that should be
afforded an opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that
the questioned Order constitutes a denial of substantive and procedural due process of law.
ISSUE:
1) Whether or not DO 37 is invalid
2) Whether or not notice and hearing is required.
HELD:
1) The SC ruled against petitioner. We are not convinced by the argument that the power to regulate
school fees "does not always include the power to increase" such fees. Section 57 (3) of Batas
Pambansa Blg. 232, otherwise known as The Education Act of 1982, vests the DECS with the
power to regulate the educational system in the country. In the absence of a statute stating
otherwise, this power includes the power to prescribe school fees. No other government agency
has been vested with the authority to fix school fees and as such, the power should be considered
lodged with the DECS if it is to properly and effectively discharge its functions and duties under
the law.

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2) No. The petitioner invokes the due process clause of the Constitution against the alleged
arbitrariness of the assailed Department Order. The petitioner maintains that the due process
clause requires that prior notice and hearing are indispensable for the Department Order to be
validly issued. The function of prescribing rates by an administrative agency may be either a
legislative or an adjudicative function. If it were a legislative function, the grant of prior notice and
hearing to the affected parties is not a requirement of due process. As regards rates prescribed by
an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are
essential to the validity of such rates. When the rules and/or rates laid down by an administrative
agency are meant to apply to all enterprises of a given kind throughout the country, they may
partake of a legislative character. Where the rules and the rates imposed apply exclusively to a
particular party, based upon a finding of fact, then its function is quasi-judicial in character. The
assailed Department Order prescribes the maximum school fees that may be charged by all private
schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not
essential to the validity of its issuance.
LINA v. CARIO
G.R. No. 100127. April 23, 1993
FACTS:
Petitioner disputes the legal authority of respondent Cario to issue DECS Order No. 30, series of 1991,
dated 11 March 1991, entitled "Guidelines on Tuition and/or other School Fees in Private Schools,
Colleges and Universities for School Year 1991-1992." DECS Order No. 30 allows private schools to
increase tuition and other school fees, subject to the guidelines there set out. The complete text of DECS
Order No. 30 is reproduced here for ready reference.
Petitioner basically denies the legal authority of respondent Secretary to issue DECS Order No. 30. It is the
contention of petitioner that respondent Secretary at the time of issuing DECS Order No. 30, no longer
possessed legal authority to do so, considering that authority to promulgate rules and regulations relating to
the imposition of school fees had been transferred to the State Assistance Council ("SAC") by Republic Act
No. 67Z8
It is claimed by petitioner, however, that the ruling in Phil. Consumers was superseded by R.A. No. 6728
which expressly conferred authority to promulgate rules and regulations upon the SAC.
Petitioner also contends that DECS Order No. 30 is inconsistent with Section 10 of R.A. No. 67Z8. In
DECS Order No. 30 (Section 1 [d], supra), respondent Secretary exempted increases in school fees other
than tuition fee (or "other school fees" as distinguished from "tuition fee") from application of the
consultation requirement.
ISSUE: Whether DECS Order No. 30 is valid, that is, whether respondent DECS Secretary has the legal
authority to issue DECS Order No. 30 prescribing guidelines concerning increases in tuition and other
school fees
HELD:
After careful examination of the provisions of both P.D. No. 451 and BP. Blg. 232, and the opinions of the
Court in the Phil. Consumer case and the Cebu Institute case, as well the lengthy pleadings filed by the
parties and the intervenors, the Court considers that the legal authority of respondent DECS Secretary to set

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maximum permissible rates or levels of tuition and other school fees, and to issue guidelines for the
imposition and collection thereof, like DECS Order No. 30, must be sustained.
Under Pres. Dec. No. 451, the authority to regulate the imposition of tuition and other school fees or
charges by private schools is lodged with the Secretary of Education and Culture (Sec. 1), where section 42
of B.P. Blg. 232 liberalized the procedure by empowering each private school to determine its rate of
tuition and other school fees or charges.
First, the legislative authority under Pres. Dec. No. 451 retained the power to apportion the incremental
proceeds of the tuition fee increases; such power is delegated to the Ministry of Education and Culture
under B.P Blg. 232. Second, Pres. Dec. No. 451 limits the application or use of the increment to salary or
wage increase, institutional development, student assistance and extension services and return on
investment, whereas B.P. Blg. 232 gives the MECS discretion to determine the application or use of the
increments. Third, the extent of the application or use of the increment under Pres. Dec. 451 is fixed at the
pre-determined percentage allocations: 60% for wage and salary increases, 12% for return in investment
and the balance of 28% to institutional development, student assistance and extension services, while under
B.P. Blg. 232, the extent of the allocation or use of increment is likewise left to the discretion of the MECS.
Secondly, an examination of the precise language of Section 42 of B.P. Blg. 232 shows that there is really
nothing in Section 42 which must be read as eliminating the power of the DECS Secretary in respect of the
fixing of maximum tuition and other school fees vested in him by P.D. No. 451. Under Section 42, a
private school may determine for itself in the first instance the rate of tuition and other school fees or
charges that it deems appropriate. Such determination by the private school is not, however, binding and
conclusive as against the secretary of Education, Culture and Sports. The rates and charges adopted by such
private school "shall be collectible, and their application or use authorized" provided that such rates and
charges are in accord with rules and regulations promulgated by the DECS.
We do not read the first sentence of Section 42 as granting an unlimited power to private schools to
establish any rate of tuition and other school fees and charges that it may desire and to enforce collection of
such fees or charges from students. We think it entirely clear that the second sentence of Section 42 is a
limiting provision, that is, a provision which, far from authorizing a private school to adopt any level of
tuition and other school fees or charges no matter how exorbitant, subjects the schedule of rates and
charges adopted by a particular school to the rules and regulations promulgated by the DECS.
The Court believes that petitioner's argument cogent though it may be as a social and economic
comment is most appropriately addressed. not to a court which must take the law as it is actually written,
but rather to the legislative authority which can, if it wishes, change the language and content of the law.
As Section 10 of R.A. No. 6728 now stands, we have no authority to strike down paragraph 1 (d) of DECS
Order No. 30 as inconsistent with the requirements of Section 10.
July 18, 1991
G.R. No. 96266
ERNESTO M. MACEDA, petitioner,
vs.
ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL
PETROLEUM CORPORATION AND PETRON CORPORATION, respondents.
FACTS:

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Private respondents oil companies filed with the ERB their respective applications on oil price increases.
On September 21, 1990, the ERB issued an order granting a provisional increase of P1.42 per liter.
Petitioner Maceda filed a petition for Prohibition on September 26, 1990 seeking to nullify the provisional
increase. We dismissed the petition on December 18, 1990, reaffirming ERB's authority to grant
provisional increase even without prior hearing, pursuant to Sec. 8 of E.O. No. 172, clarifying as follows:
What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not
preclude the Board from ordering, ex-parte, a provisional increase, as it did here, subject to its final
disposition of whether or not:
(1)
(2)
(3)

to make it permanent;
to reduce or increase it further; or
to deny the application.

Section 3, paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued
by the courts, which are given ex-parte and which are subject to the resolution of the main case.
Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the
other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the
jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the
requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to
increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The
Board, of course, is not prevented from conducting a hearing on the grant of provisional authority-which is
of course, the better procedure however, it cannot be stigmatized later if it failed to conduct one.
In the same order of September 21, 1990, authorizing provisional increase, the ERB set the applications for
hearing with due notice to all interested parties on October 16, 1990. Petitioner Maceda failed to appear at
said hearing as well as on the second hearing on October 17, 1990. Hearing was postponed to November 5,
1990, on written notice of petitioner Maceda. On November 5, 1990, the three oil companies filed their
respective motions for leave to file or admit amended/supplemental applications to further increase the
prices of petroleum products. The ERB admitted the respective supplemental/amended petitions on
November 6, 1990 at the same time requiring applicants to publish the corresponding Notices of Public
Hearing in two newspapers of general circulation. Petitioner Maceda maintains that this order of proof
deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to
cross-examine each of the witnesses of Caltex and Shell. He points out that this relaxed procedure resulted
in the denial of due process.
ISSUE: Whether ERB has the authority to grant the provisional increase in oil price
HELD: YES.
EXAMINATION OF WITNESS
Maceda was not denied of his right to due process. The order of testimony both with respect to the
examination of the particular witness and to the general course of the trial is within the discretion of the
court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the
rules is not improper. Such a relaxed procedure is especially true in administrative bodies, such as the ERB
which in matters of rate or price fixing is considered as exercising a quasi-legislative, not quasi-judicial,
function As such administrative agency, it is not bound by the strict or technical rules of evidence
governing court proceedings.

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In fact, Section 2, Rule I of the Rules of Practice and Procedure Governing Hearings Before the ERB
provides that
These Rules shall govern pleadings, practice and procedure before the Energy Regulatory Board in all
matters of inquiry, study, hearing, investigation and/or any other proceedings within the jurisdiction of the
Board. However, in the broader interest of justice, the Board may, in any particular matter, except itself
from these rules and apply such suitable procedure as shall promote the objectives of the Order.
SUBSTANTIAL EVIDENCE TO SUPPORT PROVISIONAL RELIEF:
The Solicitor General likewise commented:
Among the pieces of evidence considered by ERB in the grant of the contested provisional relief were:
(1)
(2)
(3)

certified copies of bins of lading issued by crude oil suppliers to the private respondents;
reports of the Bankers Association of the Philippines on the peso-dollar exchange rate at the
BAP oil pit; and
OPSF status reports of the Office of Energy Affairs.

The ERB was likewise guided in the determination of international crude oil prices by traditional
authoritative sources of information on crude oil and petroleum products, such as Platt's Oilgram and
Petroleum Intelligence Weekly
We concede ERB's authority to grant the provisional increase in oil price.
The rise in crude oil importation costs, which as earlier mentioned, reached an average of $30.3318 per
barrel at $25.551/US $ in September-October 1990; the huge OPSF deficit which, as reported by the Office
of Energy Affairs, has amounted to P5.7 Billion (based on filed claims only and net of the P5 Billion
OPSF) as of September 30, 1990, and is estimated to further increase to over P10 Billion by end December
1990; the decision of the government to discontinue subsidizing oil prices in view of inflationary pressures;
the apparent inadequacy of the proposed additional P5.1 Billion government appropriation for the OPSF
and the sharp drop in the value of the peso in relation to the US dollar to P28/US $, this Board is left with
no other recourse but to grant applicants oil companies further relief by increasing the prices of petroleum
products sold by them.
We shall thus respect the ERB's Order of December 5, 1990 granting a provisional price increase on
petroleum products premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk
for a subsidy on sale to NPC (p. 167, Rollo), since the oil companies are "entitled to as much relief as the
fact alleged constituting the course of action may warrant.
ASSIGNMENT NO 6
Presidential Anti-Dollar Salting Task Force v. CA, 171 SCRA 348 (1989)
FACTS:
The PASTF was created by virtue of PD 1936 to serve as the President''s arm called upon to combat the
vice of dollar salting or the blackmarketing and salting of foreign exchange.
ISSUE: W/N the PASTF is "such other officer as may be authorized by law" to issue warrants under the
1973 Constitition.

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RULING: NO. The Court, in reviewing the powers of the PASTF under its enabling law, sees nothing that
will reveal a legislative intendement to confer upon the body, quasi-judicial responsiibilities relative to
offenses punishable by PD 1883. Its undertaking is simply to determine w/n probable cause exists to
warrant the filing of charges with the proper court, meaning to say, to conduct an inquiry preliminary to a
judicial recourse, and to recommend action of appropriate authorities. The Court agrees that PASTF
exercises, or was meant to exercise, prosecutorial powers, and on that ground, it cannot be said to be a
neutral and detached judge to determine the existence of probable cause for purposes of arrest or search.
Unlike a magistrate, a prosecutor is naturally interested in the success of his case. Although his office "is to
see to it that justice if done and not necessarily to secure the conviction of the accused," he stands
invariably, as the accused''s adversary and his accuser. To permit him to issue warrrants and indeed,
warrants of arrest, is to make him both judge and jury in his own right, when he is neither. This makes to
our mind and to that extent, PD 1636 as amended by PD 2002, unconstitutional. The "responsible officer"
referred to under the Cosntitution is one not only possessing the necessary skills and competence but more
significantly, the neutrality and independence comparable to the impartiality presumed of a judicial officer.

[G.R. Nos. 92319-20. October 2, 1990.]


EDUARDO M. COJUANGCO, JR., petitioner, vs. PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT (PCGG) AND HON. FRANCISCO I. CHAVEZ in his capacity as
Solicitor General, and the HON. OMBUDSMAN, respondents, MARIA CLARA L.
LOBREGAT and JOSE R. ELEAZAR, JR., intervenors.

Gancayco, J.
Facts:
Corazon Aquino directed the Solicitor General to prosecute all persons involved in the misuse of coconut
levy funds. Pursuant to the above directive the Solicitor General created a task force to conduct a thorough
study of the possible involvement of all persons in the anomalous use of coconut levy funds. The Solicitor
General filed two criminal complaints with respondent and these were assigned to prosecutor Cesario del
Rosario for preliminary investigation (I.S. Nos. 74 and 75).
Cojuangco filed a petition for TRO witht the SC. He alleges that the PCGG may not conduct a preliminary
investigation of the complaints filed by the Solicitor General without violating petitioner's rights to due
process and equal protection of the law, and that the PCGG has no right to conduct such preliminary
investigation. However, this was denied by the SC.
Later on, PCGG issued an order stating that a prima facie case has been established against all the
respondents in I.S. Nos. 74 and 75 , including Hermenegildo Zayco, to warrant the filing of an information
for a violation of Section 3(1) in relation to Section 3(i) thus making them liable under Section 3(a) of RA
3019, to be well-founded.
Two informations were filed by the PCGG with the Sandiganbayan against petitioner and all other
respondents named in I.S. Nos. 74 and 75.
Meanwhile, the Solicitor General filed with the PCGG several other complaints against petitioner and
several others bearing on the misuse of the coconut levy funds. Two of these complaints were docketed as
I.S. Nos. 79 and 82.
Cojuangco filed a supplemental petition informing the Court of the filing of said informations and the
additional complaints aforestated. He prays that a temporary restraining order be issued enjoining
respondents and other persons acting under their orders or in their behalf from continuing with the
preliminary investigation of as well as taking further action in I.S. Nos. 79 and 82 and similar cases filed
with the PCGG. Petitioner also prays that, after hearing, the PCGG be prohibited from continuing with the

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preliminary investigation of I.S. Nos. 79 and 82 and that it be ordered to forward the records of the case to
the Ombudsman for appropriate action, and to pay the costs of the suit.
Issues:
(1) Whether or not the Presidential Commission on Good Government (PCGG) has the power to conduct a
preliminary investigation of the anti-graft and corruption cases filed by the Solicitor General against
Eduardo Cojuangco, Jr. and other respondents for the alleged misuse of coconut levy funds; and
(2) On the assumption that it has jurisdiction to conduct such a preliminary investigation, whether or not its
conduct constitutes a violation of petitioner's rights to due process and equal protection of the law
Held:
1. Yes. Based on Sections 2(b) and 3(a) of Executive Order No. 1 and Sections 1 and 2 of Executive Order
No. 14, it is clear that the PCGG has the power to investigate and prosecute such ill-gotten wealth cases of
the former President, his relatives and associates, and graft and corrupt practices cases that may be assigned
by the President to the PCGG to be filed with the Sandiganbayan. No doubt, the authority to investigate
extended to the PCGG includes the authority to conduct a preliminary investigation.
Thus, the Tanodbayan lost the exclusive authority to conduct the preliminary investigation of
these types of cases by the promulgation of the said Executive Order Nos. 1 and 14 whereby the PCGG was
vested concurrent jurisdiction with the Tanodbayan to conduct such preliminary investigation and to
prosecute said cases before the Sandiganbayan. The power of the PCGG to conduct a preliminary
investigation of the aforementioned types of cases has been recognized by this Court in Bataan Shipyard
and Engineering Co. Inc. (BASECO) vs. PCGG.
Under Section 15(1) of Republic Act No. 6770 aforecited, the Ombudsman has primary
jurisdiction over cases cognizable by the Sandiganbayan so that it may take over at any stage from any
investigatory agency of the government, the investigation of such cases. The authority of the Ombudsman
to investigate offenses involving public officers or employees is not exclusive but is concurrent with other
similarly authorized agencies of the government. Such investigatory agencies referred to include the PCGG
and the provincial and city prosecutors and their assistants, the state prosecutors and the judges of the
municipal trial courts and municipal circuit trial courts. 12
In other words, the aforestated provision of the law has opened up the authority to conduct
preliminary investigation of offenses cognizable by the Sandiganbayan to all investigatory agencies of the
government duly authorized to conduct a preliminary investigation under Section 2, Rule 112 of the 1985
Rules of Criminal Procedure with the only qualification that the Ombudsman may take over at any stage of
such investigation in the exercise of his primary jurisdiction.
2. Yes, there is a violation of the right o hte petitioner to due process and equal protection of the law.
As correctly pointed out by petitioner, an indispensable requisite of due process is that the person who
presides and decides over a proceeding, including a preliminary investigation, must possess the cold
neutrality of an impartial judge. The authority of a prosecutor or investigating officer duly empowered to
preside or to conduct a preliminary investigation is no less than that of a municipal judge or even a regional
trial court judge. While the investigating officer, strictly speaking is not a "judge," by the nature of his
functions he is and must be considered to be a quasi judicial officer.
Insofar as the general power of investigation vested in the PCGG is concerned, it may be divided into two
stages. The first stage of investigation which is called the criminal investigation stage is the fact-finding
inquiring which is usually conducted by the law enforcement agents whereby they gather evidence and
interview witnesses after which they assess the evidence and if they find sufficient basis, file the complaint
for the purpose of preliminary investigation. The second stage is the preliminary investigation stage of the
said complaint. It is at this stage, as above discussed, where it is ascertained if there is sufficient evidence
to bring a person to trial.
In the petition before this Court, it is not denied that the PCGG conducted the appropriate criminal

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investigation of petitioner and intervenors as a law enforcer. In the process it sequestered all the properties
of the petitioner after a prima facie finding that the same amount to ill-gotten wealth and/or were acquired
in relation to allegedly anomalous disposition or misuse of the coconut levy funds.
The Court cannot close its eyes to the glaring fact that in earlier instances, the PCGG had already found a
prima facie case against the petitioner and intervenors when, acting like a judge, it caused the sequestration
of the properties and the issuance of the freeze order of the properties of petitioner. Thereafter, acting as a
law enforcer, in collaboration with the Solicitor General, the PCGG gathered the evidence and upon finding
cogent basis therefor filed the aforestated civil complaint. Consequently the Solicitor General filed a series
of criminal complaints.

G.R. No. L-25024 March 30, 1970


TEODORO C. SANTIAGO, JR. Minor, Represented by his Mother, Mrs. Angelita C.
Santiago, petitioner-appellant,
vs.
MISS JUANITA BAUTISTA, ROSALINDA ALPAS, REBECCA MATUGAS, MILKITA INAMAC,
ROMEO AGUSTIN, AIDA CAMINO, LUNA SARMAGO, AURORA LORENA, SOLEDAD
FRANCISCO and MR. FLOR MARCELO
Barredo, J.:

FACTS: Teodoro Santiago, Jr. was a pupil in Grade Six at the public school named Sero Elementary
School in Cotabato City. As the school year 1964-1965 was then about to end, the "Committee On The
Rating Of Students For Honor" was constituted by the teachers concerned at said school for the purpose of
selecting the "honor students" of its graduating class. With the school Principal, Mrs. Aurora Lorena, as
chairman, and Juanita Bautista, Rosalinda Alpas, Rebecca Matugas, Milkita Inamac, Romeo Agustin, Aida
Camino and Luna Sarmago, as members, the above-named committee deliberated and finally adjudged
Socorro Medina, Patricia Ligat and Teodoro C. Santiago, Jr. as first, second and third honors,
respectively. The school's graduation exercises were thereafter set for May 21, 1965; but three days before
that date, the "third placer" Teodoro Santiago, Jr., represented by his mother, and with his father as counsel,
sought the invalidation of the "ranking of honor students" thus made, by instituting the above-mentioned
civil case in the Court of First Instance of Cotabato, against the above-named committee members along
with the District Supervisor and the Academic Supervisor of the place.
The complaint alleges that
1.

2.

3.

Teodoro Santiago, Jr. had been a consistent honor pupil from Grade I to Grade V of the Sero
Elementary School, while Patricia Ligat (second placer in the disputed ranking in Grade VI) had
never been a close rival of petitioner before, except in Grade V wherein she ranked third; that
Santiago, Jr. had been prejudiced, while his closest rival had been so much benefited, by the
circumstance that the latter, Socorro Medina, was coached and tutored during the summer vacation
of 1964 by Mrs. Alpas who became the teacher of both pupils in English in Grade VI, resulting in
the far lead Medina obtained over the other pupil;
that the committee referred to in this case had been illegally constituted as the same was
composed of all the Grade VI teachers only, in violation of the Service Manual for Teachers of the
Bureau of Public Schools which provides that the committee to select the honor students should be
composed of all teachers in Grades V and VI;
respondents have exercised grave abuse of discretion and irregularities, such as the changing of
the final ratings on the grading sheets of Socorro Medina and Patricia Ligat from 80% to 85%,

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4.

5.
6.

and some teachers giving petitioner a starting grade of 75% in Grade VI, which proves that there
has already an intention to pull him to a much lower rank at the end of the school year;
that several district examinations outside of teachers' daily units and other than periodical tests
were given, ratings in which were heavily considered in the determination of periodical ratings,
whereas according to the Academic Supervisor and Acting Division Superintendent of schools of
the place such district examinations were not advisable;
that there was a unanimous agreement and understanding among the respondent teachers to insult
and prejudice the second and third honors by rating Socorro Medina with a perfect score, which is
very unnatural;
that the words "first place" in petitioner's certificate in Grade I was erased and replaced with the
words "second place", which is an instance of the unjust and discriminating abuses committed by
the respondent teachers in the disputed selection of honor pupils they made; th

Petitioner personally appealed the matter to the School Principal, to the District Supervisor, and to the
Academic Supervisor, but said officials "passed the buck to each other" to delay his grievances, and as to
appeal to higher authorities will be too late, there is no other speedy and adequate remedy under the
circumstances.
They prayed the court, among others, to set aside the final list of honor students in Grade VI of the Sero
Elementary School for that school year 1964-1965, and, during the pendency of the suit, to enjoin the
respondent teachers from officially and formally publishing and proclaiming the said honor pupils in Grade
VI in the graduation exercises the school was scheduled to hold on the 21st of May of that year 1965.
The lower court denied the injunction as the same would be shocking to the people who are looking
forward to the event. Respondents moved to dismiss the petition. This was granted by the lower court since
the petition does not comply with the second paragraph of Sec. 1 of Rule 65 because it has not been
accompanied by a certified true copy of the judgment or order subject thereof
1.

Was the case rightfully dismissed?


YES. In this jurisdiction certiorari is a special civil action instituted against 'any tribunal, board, or
officer exercising judicial functions.' (Section 1, Rule 67.) A judicial function is an act performed
by virtue of judicial powers; the exercise of a judicial function is the doing of something in the
nature of the action of the court (34 C.J. 1182). In order that a special civil action of certiorari may
be invoked in this jurisdiction the following circumstances must exist:
(1) that there must be a specific controversy involving rights of persons or property and
said controversy is brought before a tribunal, board or officer for hearing and
determination of their respective rights and obligations.
- 'Judicial action is an adjudication upon the rights of parties who in general appear or are
brought before the tribunal by notice or process, and upon whose claims some decision or
judgment is rendered. 'It may be said generally that the exercise of judicial function is to
determine what the law is, and what the legal rights of parties are, with respect to a matter in
controversy; and whenever an officer is clothed with that authority, and undertakes to
determine those questions, he acts judicially.
(2)
the tribunal, board or officer before whom the controversy is brought must have the
power and authority to pronounce judgment and render a decision on the controversy
construing and applying the laws to that end.
- involving the exercise of judgment and discretion in the determination of questions of right in
specific cases affecting the interest of persons or property
(3)
the tribunal, board or officer must pertain to that branch of the sovereign power
which belongs to the judiciary, or at least, which does not belong to the legislative or
executive department.

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- It is clear, however, that it is the nature of the act to be performed, rather than of the office,
board, or body which performs it, that determines whether or not it is the discharge of a judicial or
quasi-judicial function. It is not essential that the proceedings should be strictly and technically
judicial, in the sense in which that word is used when applied to the courts of justice, but it is
sufficient if they are quasi judicial. It is enough if the officers act judicially in making their
decision, whatever may be their public character. ...'
- 'The precise line of demarkation between what are judicial and what are administrative or
ministerial functions is often difficult to determine. The exercise of judicial functions may involve
the performance of legislative or administrative duties, and the performance of administrative or
ministerial duties, may, in a measure, involve the exercise of judicial functions. It may be said
generally that the exercise of judicial functions is to determine what the law is, and what the legal
rights of parties are, with respect to a matter in controversy; and whenever an officer is clothed
with that authority, and undertakes to determine those questions, he acts judicially.'

It is evident, upon the foregoing authorities, that the so called committee on the rating of students for honor
whose actions are questioned in this case exercised neither judicial nor quasi judicial functions in the
performance of its assigned task.
There is nothing on record about any rule of law that provides that when teachers sit down to assess the
individual merits of their pupils for purposes of rating them for honors, such function involves the
determination of what the law is and that they are therefore automatically vested with judicial or quasi
judicial functions. Worse still, this Court has not even been appraised by appellant of the pertinent
provisions of the Service Manual of Teachers for Public Schools appellees allegedly violated in the
composition of the committee they constituted thereunder, and, in the performance of that committee's
duties.
We are inclined to sustain the order of dismissal appealed from for failure on the part of appellant to
comply with the requirements of Section 1 of Rule 65. It might be true, as pointed out by appellant, that he
received a copy of the programme of the graduation exercises held by the Sero Elementary School in the
morning of the very day of that graduation exercises, implying that he could not have attached then a copy
thereof (to show the decision of the committee of teachers in the ranking of students complained of) to his
petition. The stubborn fact remains, however, that appellant had known of such decision of the said
committee of teachers much earlier, as shown by the circumstance that according to him, even before the
filing of his petition with the lower court on the 19th of May, 1965, he had personally appealed the said
committee's decision with various higher authorities of the above-named school, who merely passed the
buck to each other. Moreover, appellant mentions in his petition various other documents or papers as
the Service Manual for Teachers allegedly violated by appellees in the constitution of their committee;
altered grading sheets; and erasures in his Grade I certificate which appellant never bothered to attach to
his petition. There could be no doubt then that he miserably failed to comply with the requirement of Rule
65 above-mentioned. With this conclusion, it is no longer necessary to pass upon the other two errors
assigned by appellant.
GR NO. 77707. AUGUST 8, 1988
PEDRO W. GUERZON (petitioner) vs. COURT OF APPEALS, BUREAU OF ENERGY
UTILIZATION, F.C. CAASI, JR., and PILIPINAS SHELL PETROLEUM CORPORATION
(repondents)

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FACTS: On January 9, 1981, Pedro Guerzon executed with Basic Landoil Energy Corporation (which was
later acquired by Pilipinas Shell Petroleum Corporation) a contract denominated as Service Station Lease
for the use and operation of Shells properties, facilities, and equipment, which included 4 pieces fuel
dispensing pumps and 1 piece air compressor for 5 years from January 15, 1981 and ending on January 14,
1986.
On January 7, 1981, Guerzon likewise executed with (later) Shell a Dealers Sales Contract for the sale
by Guerzon of Shells petroleum and other products in the leased service station which contract expired on
April 12, 1986.
On April 13, 1981 the Bureau of Energy Utilization (BEU) approved the Dealers Sales Contract pursuant
to which Guerzon was appointed dealer of Shells gasoline and other petroleum products which he was to
sell at the gasoline station in CDO City. BEU issued a Certificate of Authority in favor of Guerzon which
had a 5-year validity in line with the terms of the contract.
Par. 9 of the Service Station Lease Contract provides: The cancellation or termination of the Dealer's Sales
Contract executed between the COMPANY and the LESSEE on January 7, 1981 shall automatically cancel
this Lease.
As early as January 2, 1986 Shell through its District ManagerReseller Mindanao wrote to Guerzon
informing him that it was not renewing the Dealer's Sales Contract which was to expire on April 12, 1986
together with the service station lease and reminding him to take appropriate steps to wind up his business
activities at the station and, on the appropriate date to hand over the station with all its facilities and
equipment to the representative of Shell. A copy of this letter was furnished BEU, through the latter's
Mindanao Division Office. On April 12, 1986, Shell wrote Guerzon reiterating the decision not to extend
the Dealer's Sales Contract, demanding the surrender of the station premises and all company owned
equipment to Shells representative.
On April 15, 1986, BEU, through Caasi, Jr., officer- in-charge of its Mindanao Division Office, issued the
assailed order directing Guerzon as follows:
(1) immediately vacate the service station abovementioned and turn it over to Pilipinas Shell
Petroleum Corporation; and
(2) show cause in writing, under oath within ten (10) days from receipt hereof why no
administrative and/or criminal proceedings shall be instituted against you for the
aforesaid violation.
The order directed that a copy of the same be furnished the PCINP Commander of CDO City, requesting
prompt and effective enforcement of the directive and submitting to the BEU of the result of the action
taken thereon.
On April 22, 1986, pursuant to the order of April 15, 1986, Shell, accompanied by law enforcement
officers, was able to secure possession of the gasoline station in question together with the requisite
equipment and accessories, and turned them over to the control of the personnel of Shell who accompanied
them.
On May 9, 1986, Guerzon filed with the RTC of Misamis Oriental a complaint for certiorari, injunction
and damages with preliminary mandatory injunction to annul the disputed order dated April 15, 1986
of F.C. Caasi, Jr., but on September 18,1986 this complaint was dismissed for lack of jurisdiction to annul
the order of a quasi-judicial body of equivalent category as the RTC.

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Thus, Guerzon filed in the CA a petition for certiorari with a prayer for preliminary mandatory
injunction against Shell, F.C. Caasi, Jr. and the BEU seeking the annulment of Caasi, Jr.'s order dated
April 15, 1986 and the restoration to Guerzon of possession of the service station and the equipment
removed therefrom.
In a decision promulgated on February 10, 1987, the CA denied due course and dismissed the petition after
holding the disputed order valid and the proceedings undertaken to implement the same sanctioned by PD
No. 1206, as amended.
Hence, this petition for review.
The Solicitor General contends that since Guerzon's license to sell petroleum products expired on April
12,1986, when his dealership and lease contracts expired, as of the following day, April 13, 1986 he was
engaged in illegal trading in petroleum products in violation of Batas Pambansa Blg. 33. The pertinent
provisions of B.P. No. 33 state:
Sec. 2. Prohibited Acts.The following acts are prohibited and penalized:
(a) Illegal trading in petroleum and/or petroleum products;
Sec. 3. Definition of terms.For the purposes of this Act, the si following terms shall be understood to
mean:
Illegal trading in petroleum and/or petroleum products-the sale or distribution of petroleum products for
profit without license or authority from the Government; non-issuance of receipts by licensed traders;
misrepresentation as to quality and/or quantity; an sa oil companies, distributors and/or dealers violative
of government rules and regulations.
Thus, concludes the Solicitor General, the Bureau of Energy nation had the power to issue, and was
justified in issuing, the order to vacate pursuant to Presidential Decree No. 1206, as amended, the
pertinent portion of which provides:
Sec. 7. Bureau of Energy Utilization.There is created in the Department a Bureau of Energy Utilization,
hereafter referred to in this Section as the Bureau, which shall have the following powers and functions,
among others:
e. After due notice and hearing, impose and collect a fine not exceeding One Thousand Pesos, for every
violation or non- compliance with any term or condition of any certificate, license, or permit issued by the
Bureau or of any of its orders, decisions, rules and regulations.
The fine so imposed shall be paid to the Bureau, and failure to pay the fine within the time specified in the
order or decision of the Bureau or failure to cease and discontinue the violation or noncompliance shall be
deemed good and sufficient reason for the suspension, closure or stoppage of operations of the
establishment of the person guilty of the violation or non-compliance. In case the violation or default is
committed by a corporation or association, the manager or person who has charge of the management of
the corporation or association and the officers or directors thereof who have ordered or authorized the
violation or default shall be solidarily liable for the payment of the fine.
The Bureau shall have the power and authority to issue corresponding writs of execution directing the City
Sheriff or provincial Sheriff or other peace officers whom it may appoint to enforce the fine or the order of
closure, suspension or stoppage of operations. Payment may also be enforced by appropriate action

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brought in a court of competent jurisdiction. The remedy provided herein shall not be a bar to or affect any
other remedy under existing laws, but shall be cumulative and additional to such remedies;
ISSUE: Whether the Bureau of Energy Utilization, the agency charged with regulating the operations and
trade practices of the petroleum industry, has the power to order a service station operator-lessee to vacate
the service station and to turn over its possession to the oil company-lessor upon the expiration of the
dealership and lease agreements.
HELD: From a cursory reading of the assailed order, it is readily apparent that the order is premised on
Guerzon's refusal to vacate the service station in spite of the expiration and non-renewal of his dealership
and lease agreements with Shell. Nowhere in the order is it stated that Guerzon had engaged in illegal
trading in petroleum products or had committed any other violation of B.P. Blg. 33. The order merely
makes a vague reference to a "violation of BEU laws, rules and regulations" without stating the specific
provision violated. That Guerzon had engaged in illegal trading in petroleum products cannot even be
implied from the wording of the assailed order.
But then, even if Guerzon was indeed engaged in illegal trading in petroleum products, there was no basis
under B.P. Blg. 33 to order him to vacate the service station and to turn it over to Shell. Illegal trading in
petroleum products is a criminal act wherein the injured party is the State. Shell is not even alleged by the
Solicitor General as a private party prejudiced and, therefore, it can claim no relief if a criminal case is
instituted.
Even on the assumption that Guerzon's continued occupancy and operation of the service station
constituted a violation of a law or regulation, still the Court has no recourse but to rule against the legality
of the order, the Bureau of Energy Utilization not being empowered to issue it. Section 7 of P.D. No. 1206,
as amended, is very clear as to the courses of action that the Bureau of Energy Utilization may take in case
of a violation or non- compliance with any term or condition of any certificate, license or permit issued by
the Bureau or any of its orders, decisions, rules or regulations.
The Bureau may: (1) impose a fine not exceeding P1,000.00; and (2) in case of failure to pay the fine
imposed or to cease and discontinue the violation or non-compliance, order the suspension, closure or
stoppage of operations of the establishment of the guilty party.
Its authority is limited to these 2 options. It can do no more, as there is nothing in P.D. No. 1206, as
amended, which empowers the Bureau to issue an order to vacate in case of a violation.
As it is, jurisdiction to order a lessee to vacate the leased premises is vested in the civil courts in an
appropriate case for unlawful detainer or accion publiciana [Secs. 19(2) and 33(2), B.P. Blg. 129, as
amended.] There is nothing in P.D. No. 1206, as amended, that would suggest that the same or similar
jurisdiction has been granted to the BEU.
It is a fundamental rule that an administrative agency has only such powers as are expressly granted
to it by law and those that are necessarily implied in the exercise thereof. That issuing the order to
vacate was the most effective way of stopping any illegal trading in petroleum products is no excuse for a
deviation from this rule. Otherwise, adherence to the rule of law would be rendered meaningless.
Moreover, contrary to the Solicitor General's theory, the text of the assailed order leaves no room for doubt
that it was issued in connection with an adjudication of the contractual dispute between Shell and Guerzon.

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But then the BEU, like its predecessor, the defunct Oil Industry Commission, has no power to decide
contractual disputes between gasoline dealers and oil companies, in the absence of an express provision of
law granting to it such power.
As explicitly stated in the law, in connection with the exercise of quasi-judicial powers, the Bureau's
jurisdiction is limited to cases involving violation or non-compliance with any term or condition of
any certificate, license or permit issued by it or of any of its orders, decisions, rules or regulations.
F.C. Caasi, Jr., in issuing the assailed order, acted beyond his authority and overstepped the powers granted
by P.D. No. 1206, as amended. The assailed order was, therefore, null and void.
Even if the issuance of the order to vacate was within the authority of Caasi, Jr., still its nullity is apparent
because of the failure to comply with the requirement of notice and hearing.
That P.D. No. 1206, as amended, requires notice and hearing before any administrative penalty provided in
Sec. (7)e may be imposed is patent. Sec. (7)e provides for a gradation of penalties of which the imposition
of a fine in an amount not exceeding P1,000.00 is the least severe, and requires that even before a fine is
imposed notice and an opportunity to be heard be given to the offender.
While the order dated April 15, 1986 is null and void, the SC, however, found itself unable to issue the writ
of mandatory injunction prayed for ordering Shell to restore possession of the service station and the
equipment and facilities therein to Guerzon who himself had admitted in his petition that his dealership and
lease agreements with Shell had already expired. Recognized the validity of the termination of the
agreements, he requested for their renewal. However, this request was denied. Undeniably, after April 12,
1986, any right Guerzon had to possess the service station and the equipment and facilities therein had been
extinguished. No basis for an affirmative relief therefore exist.
However, the right of Guerzon to the possession of the service station and the equipment and facilities
having been extinguished, the prayer for the issuance of a writ of mandatory injunction is DENIED.
NOTE:
B.P. Blg. 33 penalizes a person guilty of illegal trading in petroleum products with a fine of not less than
P2,000.00 but not more than P10,000.00, or imprisonment of at least 2 months but not more than 1 year, or
both, in the discretion of the court. Furthermore, the Petroleum products subject of the offense shall be
forfeited in favor of the Government, provided that if the products have already been delivered and paid the
payment shall be the subject of the forfeiture, and if the seller who has not yet delivered has been fully paid,
he shall return the payment received to the buyer. If the offender is a trader his license shall also be
cancelled. [Sec. 7]
SMART AND PILTEL v.NTC; GLOBE AND ISLACOM v. NTC
Ynares-Santiago, 2003
FACTS
The National Telecommunications Commission issued in June 2000 Memorandum Circular No. 13-6-2000
promulgating rules and regulations on the billing of telecommunications services. In August 2000, the NTC
issued a Memorandum to all cellular mobile telephone services operators which contained measures to
minimize if not totally eliminate the incidence of stealing cellular phone units. This was followed by
another Memorandum in October addressed to all public telecom entities.
Petitioners Isla Communications Company Inc., and Pilipino Telephone Corporation filed against the NTC
and its officials an action for declaration of the Billing Circulation and the October Memo, alleging that

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NTC has no jurisdiction to regulate the sale of consumer goods such as the prepaid call cards since such
jurisdiction belongs to the DTI under the Consumer Act of the Philippnes, the the Billing Circular is
violative of the constitutional prohibition against deprivation of property without due process of law; and
that the Circular will result in the impairment of the viability of the prepaid cellular service by unduly
prolonging the validity and expiration of prepaid SIM and call cards, and that the requirements of
identification of prepaid card buyers and call balance announcement are unreasonable. Globe and Smart
filed for motions for leave to intervene.
RTC issued a TRO enjoining NTC from implementing the said memoranda. NTC filed a motion to dismiss
on the ground of petitioners failure to exhaust administrative remedies. RTC denied the motion to dismiss,
enjoining NTC from implementing the memoranda.
CA, on the other hand, set aside the RTC decision and dismissed the assailed issuances of the NTC. Hence,
the instant petitions for review.
CA ruled:
(1) NTC and not the regular courts has jurisdiction over the case
(2) Smart and Globe failed to exhaust an available administrative remedy
(3) The Billing Circular is constitutional
ISSUE
Whether the doctrines of primary jurisdiction and exhaustion of admin remedies apply
RULING
In questioning the validity or constitutionality of a rule or regulation issued by an admin agency, a party
need not exhaust administrative remedies before going to court. This principle applies only where the act of
the admin agecny concerned was pursuant to its QJ function and not when the assailed act pertained to its
QL power.
Even assuming arguendo that the principle of exhaustion of administrative remedies apply in this case,
records show that petitioners sufficiently complied with this requirement. Petitioners registered their
protests to the proposed billing guidelines during the drafting and deliberation stages.
The doctrine of primary jurisdiction applies only where the administrative agency exercises its QJ function.
Thus, in cases involving specialized disputes the practice has been to refer the same to an administrative
agency of special competence pursuant to the doctrine of primary jurisdiction. Courts 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 admin tribunal, where the question demands the exercise of sound admin
tribunal to determine technical and intricate matters of fact. However, where what is assailed is the validity
of a rule issued by an admin agency in the performance of its QL function, the regular courts have
jurisdiction to pass uon the same.
In the case at bar, the issuance of the NTC Memos was pursuant to its QL or rule-making power. As such,
petitioners were justified in invoking the power of the RTC to assail the validity of the issuances.
In their complaint before the RTC, petitioners averred that the Circular contravened Civil Code provisions
on sales and violated the constitutional prohibition against deprivation of property. These are within the
competence of the trial judge. Contrary to CA finding, the issues raised in the complaint do not entail
highly technical matters. What is required of the judge is a basic familiarity with the workings of the
cellular telephone service, and this is judicially known to be within the knowledge of a good percentage of
our population, and expertise in fundamental principles of civil law and constitution.
G.R. No. L-50444 August 31, 1987

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ANTIPOLO REALTY CORPORATION vs .THE NATIONAL HOUSING AUTHORITY


FELICIANO, J.:
FACTS: By virtue of a Contract to Sell, Jose Hernando acquired prospective and beneficial ownership
over Lot. No. 15, Block IV of the Ponderosa Heights Subdivision in Antipolo, Rizal, from the petitioner
Antipolo Realty Corporation. Mr. Hernando transferred his rights over said lot to private respondent
Virgilio Yuson. However, for failure of Antipolo Realty to develop the subdivision project in accordance
with its undertaking under Clause 17 of the Contract to Sell, Mr. Yuson paid only the arrearages pertaining
to the period up to, and including, the month of August 1972 and stopped all monthly installment payments
falling due thereafter. The president of Antipolo Realty sent a notice to private respondent Yuson advising
that the required improvements in the subdivision had already been completed, and requesting resumption
of payment of the monthly installments. For his part, Mr. Yuson replied that he would conform with the
request as soon as he was able to verify the truth of the representation in the notice. In a second letter,
Antipolo Realty reiterated its request that Mr. Yuson resume payment of his monthly installments, citing
the decision rendered by the National Housing Authority (NHA) declaring Antipolo Realty to have
"substantially complied with its commitment to the lot buyers pursuant to the Contract to Sell executed by
and between the lot buyers and the respondent." In addition, a formal demand was made for full and
immediate payment.
Mr. Yuson refused to pay the September 1972-October 1976 monthly installments but agreed to
pay the post October 1976 installments. Antipolo Realty responded by rescinding the Contract to Sell, and
claiming the forfeiture of all installment payments previously made by Mr. Yuson. Aggrieved by the
rescission of the Contract to Sell, Mr. Yuson brought his dispute with Antipolo Realty before NHA.
Antipolo Realty filed a Motion to Dismiss on the ground that the regular courts has jurisdiction and not
NHA. The motion was denied. NHA rendered a decision ordering the reinstatement of the Contract to Sell.
Antipolo Realty filed a motion for reconsideration but it was also denied. Antipolo Realty then filed this
Petition for certiorari and Prohibition with Writ of Preliminary Injunction before the Supreme Court.
PETITIONERS CONTENTION: NHA had not only acted on a matter beyond its competence, but had
also, in effect, assumed the performance of judicial or quasi-judicial functions which the NHA was not
authorized to perform.
ISSUE: Whether or not NHA is authorized to perform quasi-judicial functions?
HELD: YES. Many administrative agencies exercise and perform adjudicatory powers and functions,
though to a limited extent only. Limited delegation of judicial or quasi-judicial authority to administrative
agencies is well recognized in our jurisdiction, basically because the need for special competence and
experience has been recognized as essential in the resolution of questions of complex or specialized
character and because of a companion recognition that the dockets of our regular courts have remained
crowded and clogged.
In general the quantum of judicial or quasi-judicial powers which an administrative agency may
exercise is defined in the enabling act of such agency. In other words, the extent to which an administrative
entity may exercise such powers depends largely, if not wholly, on the provisions of the statute creating or
empowering such agency.
Thus, the extent to which the NHA has been vested with quasi-judicial authority must be determined by
referring to the terms of Presidential Decree No. 957, known as "The Subdivision and Condominium
Buyers' Decree." Section 3 of this statute provides as follows:
National Housing Authority. The National Housing Authority shall have exclusive
jurisdiction to regulate the real estate trade and business in accordance with the
provisions of this decree.

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Presidential Decree No. 1344 clarified and spelled out the quasi-judicial dimensions of the grant of
regulatory authority to the NHA in the following quite specific terms:
SECTION 1. In the exercise of its functions to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims filed by sub- division lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by
buyers of subdivision lots or condominium units against the owner, developer, dealer,
broker or salesman.
The substantive provisions being applied and enforced by the NHA in the instant case are found in Section
23 of Presidential Decree No. 957 which reads:
Sec. 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a
subdivision or condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due notice to the owner
or developer, desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans and
within the time limit for complying with the same. Such buyer may, at his option, be
reimbursed the total amount paid including amortization and interests but excluding
delinquency interests, with interest thereon at the legal rate.
Having failed to comply with its contractual obligation to complete certain specified improvements in the
subdivision within the specified period of two years from the date of the execution of the Contract to Sell,
petitioner was not entitled to exercise its options under Clause 7 of the Contract. Hence, petitioner could
neither rescind the Contract to Sell nor treat the instalment payments made by the private respondent as
forfeited in its favour.
ASSIGNMENT NO 7
PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA, ARMAN
QUELING, ROLANDO NIETO, RICARDO BARTOLOME, ELUVER GARCIA, EDUARDO
GARCIA and NELSON MANALASTAS, petitioners, vs. COCA-COLA BOTTLERS PHILS., INC.,
respondent.
G.R. No. 153660. June 10, 2003
FACTS:
On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola Bottlers, Inc., and its officers,
Lipercon Services, Inc., Peoples Specialist Services, Inc., and Interim Services, Inc., filed a complaint
against respondents for unfair labor practice through illegal dismissal, violation of their security of tenure
and the perpetuation of the Cabo System. They thus prayed for reinstatement with full back wages, and
the declaration of their regular employment status.

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In substance, the complainants averred that in the performance of their duties as route helpers, bottle
segregators, and others, they were employees of respondent Coca-Cola Bottlers, Inc. They further
maintained that when respondent company replaced them and prevented them from entering the company
premises, they were deemed to have been illegally dismissed.
In lieu of a position paper, respondent company filed a motion to dismiss complaint for lack of jurisdiction
and cause of action, there being no employer-employee relationship between complainants and Coca-Cola
Bottlers, Inc., and that respondents Lipercon Services, Peoples Specialist Services and Interim Services
being bona fide independent contractors, were the real employers of the complainants
Labor Arbiter ruled that in contrast with the negative declarations of respondent companys witnesses who,
as district sales supervisors of respondent company denied knowing the complainants personally, the
testimonies of the complainants were more credible as they sufficiently supplied every detail of their
employment, specifically identifying who their salesmen/drivers were, their places of assignment, aside
from their dates of engagement and dismissal.
As a consequence, the appellate court dismissed their complaints for lack of sufficient evidence. In the
same Decision however, complainants Eddie Ladica, Arman Queling and Rolando Nieto were declared
regular employees since they were the only ones subjected to cross-examination.
However, the testimonies of private respondents Romero, Espina, and Bantolino were not subjected to
cross-examination, as should have been the case, and no explanation was offered by them or by the labor
arbiter as to why this was dispensed with. Since they were represented by counsel, the latter should have
taken steps so as not to squander their testimonies. But nothing was done by their counsel to that effect
Petitioners argue that the Court of Appeals should not have given weight to respondents claim of failure to
cross-examine them. They insist that, unlike regular courts, labor cases are decided based merely on the
parties position papers and affidavits in support of their allegations and subsequent pleadings that may be
filed thereto. As such, according to petitioners, the Rules of Court should not be strictly applied in this case
specifically by putting them on the witness stand to be cross-examined because the NLRC has its own rules
of procedure which were applied by the Labor Arbiter in coming up with a decision in their favor.
ISSUE: Cross-examination
HELD:
Ruled that it was not necessary for the affiants to appear and testify and be cross-examined by counsel for
the adverse party. To require otherwise would be to negate the rationale and purpose of the summary nature
of the proceedings mandated by the Rules and to make mandatory the application of the technical rules of
evidence.
Labor Arbiter and the NLRC are authorized to adopt reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law and procedure, all in the interest of due
process. We find no compelling reason to deviate therefrom.
To reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law and
procedure and the rules obtaining in courts of law. Indeed, the Revised Rules of Court and prevailing
jurisprudence may be given only stringent application, i.e., by analogy or in a suppletory character and
effect. The submission by respondent, that an affidavit not testified to in a trial, is mere hearsay evidence
and has no real evidentiary value, cannot find relevance in the present case considering that a criminal
prosecution requires a quantum of evidence different from that of an administrative proceeding. Under the
Rules of the Commission, the Labor Arbiter is given the discretion to determine the necessity of a formal

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trial or hearing. Hence, trial-type hearings are not even required as the cases may be decided based on
verified position papers, with supporting documents and their affidavits.
G.R. No. 110571; March 10, 1994
FIRST LEPANTO CERAMICS, INC., petitioner vs. CA and MARIWASA MANUFACTURING,
INC., respondents
NOCON, J.:
FACTS:
The Board of Investments (BOI) granted 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 for MR of the said BOI decision. Soon rebuffed in its
bid for reconsideration, Mariwasa filed a petition for review with CA pursuant to Circular 1-91.
CA temporarily restrained the BOI from implementing its decision. FLCI filed a "Motion to Dismiss
Petition and to Lift Restraining Order" on the ground that CA has no appellate jurisdiction over BOI Case,
the same being exclusively vested with the Supreme Court pursuant to Article 82 of the Omnibus
Investments Code of 1987. It was denied. Thus, the petition for certiorari and prohibition.
FLCI argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa Bilang 129 and Circular 191, "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 the SC.
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, which allowed appeals from final orders or
decisions of any quasi-judicial agency to the Court of Appeals or the Supreme Court.
ISSUE:
Where and in what manner appeals from decisions of the Board of Investments (BOI) should be filed?
HELD:
CA. Clearly evident in 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.
However, it cannot be denied that the lawmaking system of the country is far from perfect. 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. But
this is clearly not in consonance with the present procedure before this Court.
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.
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.

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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. More importantly, BOI does not fall within the purview of the exclusions listed in
Section 2 of the circular.
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. Petition DISMISSED. TRO LIFTED.

G.R. No. 69871 August 24, 1990


ANITA VILLA, petitioner,
vs.
MANUEL LAZARO, as Presidential Assistant for Legal Affairs, Office of the President, and the
HUMAN SETTLEMENTS REGULATORY COMMISSION, respondents.
FACTS:
On January 18, 1980, Anita Villa was granted a building permit to construct a funeral parlor at Santiago
Boulevard in Gen. Santos City. 1 The permit was issued by the City Engineer after the application was
"processed by Engineer Dominador Solana of the City Engineer's Office, and on the strength of the
Certification of Manuel Sales, City Planning and Development Coordinator that the "project was in
consonance with the Land Use Plan of the City and within the full provision of the Zoning
Ordinance". 2 With financing obtained from the Development Bank of the Philippines, Villa commenced
construction of the building.
On October of that same year, as the funeral parlor was nearing completion, a suit for injunction was
brought against Villa by Dr. Jesus Veneracion, the owner of St. Elizabeth Hospital, standing about 132.36
meters from the funeral parlor. After appropriate proceedings and trial, judgment on the merits was
rendered on November 17, 1981, dismissing Veneracion's complaint as well as the counterclaim pleaded by
Villa.
Veneracion did not appeal from this adverse judgment which therefore became final. Instead, he brought
the matter up with the Human Settlements Regulatory Commission. The complaint, as will at once be
noted, is substantially the same as that filed by him with the Court of First Instance and dismissed after
trial. Furthermore, neither he nor the Commission, as will hereafter be narrated, ever made known this
second complaint to Villa until much, much later, after the respondent Commission had rendered several
adverse rulings to her.
ISSUE:
Whether or not Villa was accorded due process of law in the subsequent administrative proceedings.

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HELD:
These facts present a picture of official incompetence of gross negligence and abdication of duty, if not of
active bias and partiality, that is most reprehensible. The result has been to subvert and put to naught the
Judgment rendered in a suit regularly tried and decided by a court of justice, to deprive one party of rights
confirmed and secured thereby and to accord her adversary, in a different forum, the relief he had sought
and been denied in said case.

There was absolutely no excuse for initiating what is held out as an administrative proceeding against Villa
without informing her of the complaint which initiated the case; for conducting that inquiry in the most
informal manner by means only of communications requiring submission of certain documents, which left
the impression that compliance was all that was expected of her and with which directives she promptly
and religiously complied; assuming that one of the documents thus successively submitted had been
received, but given the fact that on at least two occasions, their transmission had been preceded by
telegrams announcing that they would follow by mail, for failing to call Villa's attention to their non-receipt
or to make any other attempt to trace their whereabouts; for ruling against Villa on the spurious premise
that she had failed to submit the documents required; and for maintaining to the very end that pretense of
lack of compliance even after being presented with a fourth set of documents and the decision in the court
case upholding her right to operate her funeral parlor in its questioned location.
Petitioner is plainly the victim of either gross ignorance or negligence or abuse of power, or a combination
of both. All of the foregoing translate to a denial of due process against which the defense of failure to take
timely appeal will not avail.
UTE PATEROK vs. BUREAU OF CUSTOMS Hon Salvador Mison
G.R. Nos. 90660-61 January 21, 1991 SARMIENTO, J
Certiorari filed by Ute Paterok seeking the annulment of Customs forfeiture order against the shipment of
1MB in favor of the government.
In March 1986, Paterok shipped from Germany to the Philippines 2 containers, one with used household
goods and the other with 2 used automobiles (one Bourgetti and one MB 450 SLC). 1st container and the
Bourgetti were released; MB however, remained under custody.
In December 1987, after earnest efforts to secure the release, Ute received notice of hearing, that seizure
proceedings were being initiated against the MB for violation of BP73 in relation to Tariff and Customs
Code of the Phils (TCCP), and Central Bank Circular (CBC) 1069.
While pending, the petitioner received only on April, 1988, a letter 4 informing her that a decision ordering
the forfeiture had been rendered. The petitioner had not been informed that a separate seizure case was filed
on the same Mercedes Benz in question before the said District Collector, an office likewise under the
Bureau of Customs. The petitioner later found out that on November 13, 1986, a Notice of Hearing set on
December 2, 1986, concerning the said Mercedes Benz, was posted on the bulletin board of the Bureau of
Customs at Port Area, Manila.
Ute then filed a motion for new trial before the Collector of Customs, Port of Manila, but the latter, denied
the same, invoking failure despite the posting of the notice on the bulletin board.

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Moreover, the Collector of Customs contended that reopening of the case was an exercise in futility
considering that it had an engine displacement of more than 2800cc thus under prohibited importation
pursuant to B.P. Blg. 73.
Petition for review with Dep. Finance, letter to Cancio Garcia, the Assistant Executive Secretary for Legal
Affairs, OP requesting for a speedy resolution of the said petition.
DECISION rendered affirming the previous order of the Collector of Customs.
Hence, this petition for certiorari alleging that:1 Customs erred in ruling that a notice of hearing posted in
bulletin board is sufficient notice, and failure of petitioner to appear caused her default
Yes. Notice of hearing posted on the bulletin board of the public respondent in a forfeiture proceeding
where the owner of the alleged prohibited article is known does not constitute sufficient compliance with
proper service of notice and proc. due process.
In this case, the facts show that the petitioner could not have been unknown. The petitioner had previous
transactions with Customs and in fact, the latter had released the earlier containers. If only the public
respondents had exercised reasonable diligence then, petitioner would have been afforded the opportunity
to be heard and to present defense = the essence of procedural due process.
Despite procedural infirmity aforementioned, for which the Court expresses its rebuke, the petition
nonetheless can not be granted. This brings us to the 2nd & 3rd assignments of error raised by the petitioner.
Batas Pambansa Blg. 73, (3) a law promoting energy conservation, provides that MB is liable for seizure
and forfeiture by the public respondents.
The law is clear and when there is no distinction on the term "importation", we must not distinguish. "Ubi
lex non distinguit nec nos distinguiere debemus."
Finally, the petitioner invokes Sec. 2307 of the TCCP, as amended by EO38 which provides an alternative
in lieu of forfeiture : payment of fine or redemption of the forfeited property. But redemption shall not be
allowed in any case where the importation is absolutely prohibited
There is nothing in the Code that authorizes the Collector to release the contraband in favor of an importer.
He must make sure that the engine is changed before it is allowed to ply Philippine soil. In all cases,
forfeiture is a must. Petition for certiorari is DISMISSED
padilla j dissents The MB in the case at bar,
having been admittedly imported, but not manufactured or assembled in violation of Sec. 3(a) of BP 73, is
not, therefore, subject to confiscation and forfeiture in favor of the Government.
ARSENIO LUMIQUED Regional Director, DAR CA vs. Honorable APOLONIO EXEVEA
G.R. No. 117565
November 18, 1997
ROMERO, J.:
Arsenio P. Lumiqued was the Regional Director of DAR-CAR until FVR dismissed him pursuant to AO52.
In view of his death, his heirs instituted this petition for certiorari and mandamus.

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The dismissal was due to 3 complaints filed by DAR-CAR Regional Cashier and priv. resp. Jeannette
Obar-Zamudio DAR Discipline Board.
The first complaint charged Lumiqued with malversation through falsification of official documents. He
committed at least 93 counts of falsification by padding gasoline and vulcanizing receipts, and was
reimbursed 45k. He seldom made field trips and stayed in the office, thus impossible to consume 120 L of
gasoline he claimed everyday.
2nd complaint accused him with violation of COA rules and regs, that from April to October 1989, he
made unliquidated cash advances in the total amount of 116k and deliberately concealed such thru
falsification of accounting entries.
3rd charged him with oppression and harassment; he retaliated due to her charges by relieving her from her
post as Regional Cashier without just cause.
Posted to DOJ for appropriate action, Acting Justice Secretary Eduardo Montenegro issued DO145 creating
a committee to investigate the complaints. Said order appointed Regional State Prosecutor Apolinario
Exevea as committee chairman with City Prosecutor Balajadia and ProvProsecutor Cabading as members.
Ordered to investigate within thirty days from receipt of the order, and to submit their report and
recommendation within fifteen days from its conclusion.
The investigating committee accordingly issued a subpoena directing Lumiqued to submit his counteraffidavit but he filed instead an urgent motion to defer submission of his counter-affidavit pending actual
receipt of two of private respondent's complaints. The committee granted the motion and gave him a fiveday extension.
He alleged that said cases were filed against him to extort money and were initiated in connivance with a
certain Benedict Ballug of Tarlac and a certain Benigno Aquino III. He claimed that the apparent weakness
of the charge was bolstered by private respondent's execution of an affidavit of desistance.
GAS: he says such consumption was warranted as it was the aggregate consumption of the five service
vehicles issued under his name. As these receipts were merely turned over to him by drivers for
reimbursement, it was not his obligation but that of auditors and accountants to determine whether they
were falsified.
COA: he presented a certification 7 of DAR-CAR Administrative Officer Deogracias F. Almora that he had
no outstanding cash advances on record.
Oppression and harassment: she was not terminated but relieved of her duties due to her prolonged
absences. LOA apps denied and no med cert
Committee hearings were conducted but he was not assisted by counsel. On the second hearing date, he
moved to reset to enable him to employ the services of counsel. The committee granted the motion, but
neither Lumiqued nor his counsel appeared on the date he himself had chosen, so the committee deemed
the case submitted for resolution.
He filed an urgent motion for additional hearing, 8 alleging that he suffered a stroke on said date. Motion
was forwarded to the Office of the State Prosecutor because the investigation had already been terminated.
Committee rendered report finding Lumiqued liable for all the charges against him (Gross Dishonesty and
Grave Misconduct), recommending removal without prejudice to crim charges

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Drilon says that the filing of the affidavit of desistance would not prevent the issuance of a resolution
because it also concerns his fitness to remain in public office."
MFR thru efforts of Undersec Esguerra. Committee however stated it had no more authority to act as such
had been forwarded to OP and that their authority under Department Order No. 145 ceased when they
transmitted
their
report
to
DOJ.
FVR issued A.O. No. 52, finding Lumiqued administratively liable for dishonesty in the alteration gas
receipts, and dismissing him from the service, & forfeited retirement & other benefits.
Unsatisfactorily established: harassment & cash advances
Petition for appeal / MFR: premised on the affidavit of a certain Dwight L. Lumiqued, a former driver of
the DAR-CAR, who confessed to having authored the falsification of gasoline receipts and attested to
petitioner being an "honest man" DENIED
Second MFR: alleging he was denied the constitutional right to counsel during the hearing. But before
motion could be resolved, HE DIED. Still DENIED
CERTIORARI and MANDAMUS seeking reversal; retirement benefits and other benefits payable to his
heirs; + backwages
Petitioners fault the investigating committee for its failure to inform him of his right to counsel during the
hearing.
These arguments are untenable and misplaced. The right to counsel, which cannot be waived unless the
waiver is in writing and in the presence of counsel, is a right afforded a suspect or an accused during
custodial investigation. It is not an absolute right and may, thus, be invoked or rejected in a criminal
proceeding and, with more reason, in an administrative inquiry. In the case at bar, petitioners invoke the
right of an accused in criminal proceedings to have competent and independent counsel of his own choice.
Lumiqued, however, was not accused of any crime in the proceedings below. The investigation conducted
by the committee created by Department Order No. 145 was for the purpose of determining if he could be
held administratively liable under the law for the complaints filed against him.
Petitioners' misconception on the nature of the investigation 25 conducted against Lumiqued appears to have
been engendered by the fact that the DOJ conducted it. By its power to "perform such other functions as
may be provided by law," 27 prosecutors may be called upon to conduct administrative investigations.
Accordingly, the ***While investigations conducted by an administrative body may at times be akin to a
criminal proceeding, the fact remains that under existing laws, a party in an administrative inquiry may or
may not be assisted by counsel, irrespective of the nature of the charges and of the respondent's capacity to
represent himself, and no duty rests on such a body to furnish the person being investigated with counsel.
Excerpts of transcript clearly show that he was confident of his capacity and so opted to represent himself.
Lumiqued, a Regional Director of a major department in the executive branch of the government, graduated
from the University of the Philippines (Los Baos) with the degree of Bachelor of Science major in
Agriculture, was a recipient of various scholarships and grants, and underwent training seminars both here
and abroad. Hence, he could have defended himself if need be, without the help of counsel, if truth were on
his side. This, apparently, was the thought he entertained during the hearings he was able to attend.
Beyond repeatedly reminding him that he could avail himself of counsel and as often receiving the reply
that he is confident of his ability to defend himself, the investigating committee could not do more. One can
lead a horse to water but cannot make him drink.

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Case Digests

The right to counsel is not indispensable to due process unless required by the Constitution or the law.
administrative proceedings, the essence of due process is simply the opportunity to explain one's side.

In

The instant petition, which is aimed primarily at the "payment of retirement benefits and other benefits,"
plus back wages from the time of Lumiqued's dismissal until his demise, must, therefore, fail.
WHEREFORE, the instant petition for certiorari and mandamus is hereby DISMISSED
HAYDEE C. CASIMIRO, in her capacity as Municipal Assessor of San Jose, Romblon, Province of
Romblon, petitioner, vs. FILIPINO T. TANDOG, in his capacity as the Municipal Mayor of San Jose,
Romblon, respondent.
G.R. No. 146137. June 08, 2005
FACTS:
On 04 September 1996, Administrative Officer II Nelson M. Andres, submitted a report[2] based on an
investigation he conducted into alleged irregularities in the office of petitioner Casimero. The report spoke
of an anomalous cancellation of Tax Declarations No. 0236 in the name of Teodulo Matillano and the
issuance of a new one in the name of petitioners brother Ulysses Cawaling and Tax Declarations No. 0380
and No. 0376 in the name of Antipas San Sebastian and the issuance of new ones in favor of petitioners
brother-in-law Marcelo Molina.
Immediately thereafter, respondent Mayor Tandog issued Memorandum Order No. 13[3] dated 06
September 1996, placing the petitioner under preventive suspension for thirty (30) days. Three (3) days
later, Mayor Tandog issued Memorandum Order No. 15, directing petitioner to answer the charge of
irregularities in her office. In her answer,[4] petitioner denied the alleged irregularities claiming, in
essence, that the cancellation of the tax declaration in favor of her brother Ulysses Cawaling was done prior
to her assumption to office as municipal assessor, and that she issued new tax declarations in favor of her
brother-in-law Marcelo Molina by virtue of a deed of sale executed by Antipas San Sebastian in Molinas
favor.
On 23 October 1996, thru Memorandum Order No. 17,[5] respondent Mayor extended petitioners
preventive suspension for another thirty (30) days effective 24 October 1996 to give him more time to
verify and collate evidence relative to the alleged irregularities.
On 28 October 1996, Memorandum Order No. 18[6] was issued by respondent Mayor directing petitioner
to answer in writing the affidavit-complaint of Noraida San Sebastian Cesar and Teodulo Matillano.
Noraida San Sebastian Cesar[7] alleged that Tax Declarations No. 0380 and No. 0376 covering parcels of
land owned by her parents were transferred in the name of a certain Marcelo Molina, petitioners brotherin-law, without the necessary documents. Noraida Cesar further claimed that Marcelo Molina had not yet
paid the full purchase price of the land covered by the said Tax Declarations.
In response to Memorandum Order No. 18, petitioner submitted a letter[9] dated 29 October 1996, stating
that with respect to the complaint of Noraida San Sebastian Cesar, she had already explained her side in the
letter dated 26 September 1996.
Not satisfied, respondent Mayor created a fact-finding committee to investigate the matter. After a series
of hearings, the committee, on 22 November 1996, submitted its report[10] recommending petitioners
separation from service, the dispositive portion of which reads:

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Evaluating the facts above portrayed, it is clearly shown that Municipal Assessor Haydee Casimero is
guilty of malperformance of duty and gross dishonesty to the prejudice of the taxpayers of San Jose,
Romblon who are making possible the payments of her salary and other allowances. Consequently, we are
unanimously recommending her separation from service.
Based on the above recommendation, respondent Mayor issued Administrative Order No. 1[11] dated 25
November 1996 dismissing petitioner.
ISSUE: whether or not petitioner was afforded procedural and substantive due process when she was
terminated from her employment as Municipal Assessor of San Jose, Romblon.
HELD:
SECTION 1. No person shall be deprived of life, liberty, or property without due process of law.
In order to fall within the aegis of this provision, two conditions must concur, namely, that there is
deprivation of life, liberty and property and such deprivation is done without proper observance of due
process. When one speaks of due process, however, a distinction must be made between matters of
procedure and matters of substance.
The essence of procedural due process is embodied in the basic requirement of notice and a real
opportunity to be heard.[18] In administrative proceedings, such as in the case at bar, procedural due
process simply means the opportunity to explain ones side or the opportunity to seek a reconsideration of
the action or ruling complained of.
To be heard does not mean only verbal arguments in court; one may be heard also thru pleadings. Where
opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of
procedural due process
In administrative proceedings, procedural due process has been recognized to include the following:
(1)
(2)
(3)
(4)

the right to actual or constructive notice of the institution of proceedings which may affect a
respondents legal rights;
a real opportunity to be heard personally or with the assistance of counsel, to present
witnesses and evidence in ones favor, and to defend ones rights;
a tribunal vested with competent jurisdiction and so constituted as to afford a person charged
administratively a reasonable guarantee of honesty as well as impartiality; and
a finding by said tribunal which is supported by substantial evidence submitted for
consideration during the hearing or contained in the records or made known to the parties
affected

In the case at bar, what appears in the record is that a hearing was conducted on 01 October 1996, which
petitioner attended and where she answered questions propounded by the members of the fact-finding
committee. Records further show that the petitioner was accorded every opportunity to present her
side. She filed her answer to the formal charge against her. After a careful evaluation of evidence
adduced, the committee rendered a decision, which was affirmed by the CSC and the Court of Appeals,
upon a move to review the same by the petitioner. Indeed, she has even brought the matter to this Court for
final adjudication.
Well-entrenched is the rule that substantial proof, and not clear and convincing evidence or proof beyond
reasonable doubt, is sufficient basis for the imposition of any disciplinary action upon an employee. The

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standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the
employee is responsible for the misconduct and his participation therein renders him unworthy of trust and
confidence demanded by his position
Two alleged irregularities provided the dismissal from service of herein petitioner:
1.
2.

The cancellation of complainant Teodulo Matillanos tax declaration and the issuance of a
new one in favor of petitioners brother Ulysses Cawaling; and
The cancellation of the tax declaration in the name of complainant Noraida San Sebastian
Cesars parent in favor of petitioners brother-in-law, Marcelo Molina.

Dishonesty is considered as a grave offense punishable by dismissal for the first offense under Section 23,
Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 292 and Other Pertinent
Civil Service Laws. It is beyond cavil that petitioners acts displayed want of honesty.

G.R. No. 143964 July 26, 2004


GLOBE TELECOM, INC., petitioner,
vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A.
SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and NESTOR DACANAY, and
SMART COMMUNICATIONS, INC. respondents.

Facts:
Globe and private respondent Smart Communications, Inc. are both grantees of valid and subsisting
legislative franchises, authorizing them, among others, to operate a Cellular Mobile Telephone System
("CMTS"), utilizing the Global System for Mobile Communication ("GSM") technology. Among the
inherent services supported by the GSM network is the Short Message Services (SMS),also known
colloquially as "texting," which has attained immense popularity in the Philippines as a mode of electronic
communication.
On 4 June 1999, Smart filed a Complaint with NTC to interconnect Smart's and Globe's GSM networks,
particularly their respective SMS or texting services. The Complaint arose from the inability of the two
leading CMTS providers to effect interconnection. Smart alleged that Globe, with evident bad faith and
malice, refused to grant Smart's request for the interconnection of SMS. But NTC also declared that both
Smart and Globe have been providing SMS without authority from it, in violation of Section 420 (f) of MC
No. 8-9-95 which requires PTEs intending to provide value-added services (VAS) to secure prior approval
from
NTC
through
an
administrative
process.
Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition to nullify and set aside the
Order and to prohibit NTC from taking any further action in the case. It reiterated its previous arguments
that the complaint should have been dismissed for failure to comply with conditions precedent and the nonforum shopping rule. It also claimed that NTC acted without jurisdiction in declaring that it had no
authority to render SMS, pointing out that the matter was not raised as an issue before it at all. Finally,
Globe alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for
which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process.

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After the Court of Appeals denied the Motion for Partial Reconsideration, Globe elevated the controversy
to the Supreme Court.

Globe contends that the Court of Appeals erred in holding that the NTC has the power under Section 17 of
the Public Service Law[34] to subject Globe to an administrative sanction and a fine without prior notice and
hearing in violation of the due process requirements; that specifically due process was denied Globe
because the hearings actually conducted dwelt on different issues; and, the appellate court erred in holding
that any possible violation of due process committed by NTC was cured by the fact that NTC refrained
from issuing a Show Cause Order with a Cease and Desist Order, directing instead the parties to secure the
requisite authority within thirty days.

Issue:
Whether

NTC

acted

with

due

process

in

levying

the

fine

against

Globe;

Held:
In summary: (i) there is no legal basis under the PTA or the memorandum circulars promulgated by the
NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS
should be made with proper regard for due process and in conformity with the PTA; (ii) the
assailed Order violates due process for failure to sufficiently explain the reason for the decision rendered,
for being unsupported by substantial evidence, and for imputing violation to, and issuing a corresponding
fine on, Globe despite the absence of due notice and hearing which would have afforded Globe the right to
present evidence on its behalf.
NTC violated cardinal rights of due process of Globe in the promulgation of the assailed Order.
The NTC Order is not supported by substantial evidence. Neither does it sufficiently explain the reasons for
the decision rendered.
Globe and Smart were denied opportunity to present evidence on the issues relating to the nature of VAS
and the prior approval.
Until the promulgation of the assailed Order Globe and Smart were never informed of the fact that their
operation of SMS without prior authority was at all an issue for consideration. As a result, neither Globe or
Smart was afforded an opportunity to present evidence in their behalf on that point.
NTC asserts that since Globe and Smart were required to submit their respective Certificates of Public
Convenience and Necessity and franchises, the parties were sufficiently notified that the authority to
operate such service was a matter which NTC could look into. This is wrong-headed considering the
governing law and regulations. It is clear that before NTC could penalize Globe and Smart for unauthorized
provision of SMS, it must first establish that SMS is VAS. Since there was no express rule or regulation on
that question, Globe and Smart would be well within reason if they submitted evidence to establish that
SMS was not VAS. Unfortunately, no such opportunity arose and no such arguments were raised simply
because Globe and Smart were not aware that the question of their authority to provide SMS was an issue
at all. Neither could it be said that the requisite of prior authority was indubitable under the existing rules
and regulations. Considering the prior treatment towards Islacom, Globe (and Smart, had it chosen to do so)
had every right to rely on NTCs disposal of Islacoms initiative and to believe that prior approval was not
necessary.

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Case Digests

The opportunity to adduce evidence is essential in the administrative process, as decisions must be rendered
on the evidence presented, either in the hearing, or at least contained in the record and disclosed to the
parties affected.[88] The requirement that agencies hold hearings in which parties affected by the agencys
action can be represented by counsel may be viewed as an effort to regularize this struggle for advantage
within a legislative adversary framework.[89] It necessarily follows that if no evidence is procured pertinent
to a particular issue, any eventual resolution of that issue on substantive grounds despite the absence of
evidence is flawed.
SUNTAY VS. PEOPLE OF THE PHILIPPINES
Padilla, J. | June 29, 1957
FACTS:
-
-
-

-
-

In 1954, Dr. Antonio Nubal, father of Alicia Nubal (16 year old minor), filed a complaint
against Emilio Suntay. The complained alleged that Suntay took Alicia from her school in St.
Paul Pasig, and took her to UP Diliman, and there had carnal knowledge of her.
In 1955, Suntay applied for and was granted a passport by the Department of Foreign Affairs.
Suntay left the Philippines and went to San Francisco.
The private prosecutor filed a motion praying that the Court issue and order directing the
concerned government agencies (i.e. DFA, NBI) to, essentially, bring the accused back to the
Philippines so that he can be made to answer for the charges against him. This motion was
granted.
The Secretary then cabled the Ambassador to the US instructing him to order the Counsel
General in San Francisco to cancel the passport issued to Suntay and to compel him to return
to the Philippines.
However, this order was not carried out in view of the present petition filed by Suntay.
Suntays complain alleged that:
o While the court may review the action of the Secretary of Foreign Affairs in
cancelling a passport and grant relief when the Secretarys discretion is abused, the
court cannot take the discretionary power away from the Secretary and itself order a
passport to be cancelled.
o And while the Secretary had discretion in the cancellation of passports, such
discretion cannot be exercised until after hearing, because the right to travel or
stay abroad is a personal liberty protected by the Constitution.

ISSUE and HOLDING:


- WON the court acted within its jurisdiction YES
- WON hearing is required NO
RATIO:
-
-
-

Suntay in this case is charged with seduction. The order of the court directing the DFA to take
proper steps in order that Suntay may be brought back to the Philippines is not beyond or in
excess of its jurisdiction.
When by law jurisdiction is conferred on a court or juridical officer, all auxiliary writs,
processes and other means necessary to carry in to effect may be employed by such court or
officer.
In issuing the order, the Secretary was convinced that a miscarriage of justice would result by
his inaction and as he issued it in the exercise of his sound discretion, he cannot be enjoined
from carrying it out.

-
On the issue on the necessity of a hearing:
- Hearing would have been proper and necessary if the reason for the cancellation of the
passport were not clear but doubtful.

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But where the holder of a passport is facing criminal charges in our courts and left the country
to evade criminal prosecution, the Secretary of Foreign Affairs, in the exercise of his
discretion to revoke a passport already issued, cannot be held to have acted whimsically in
cancelling such passport.
When discretion is exercised by an officer vested with it upon an undisputed fact, hearing
may be dispensed with by such officer as a prerequisite to the cancellation of his passport.

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI)


TELECOMMUNICATIONS COMMISSION (NTC) and JUAN A. ALEGRE
G.R. No. 93237 November 6, 1992

vs.

NATIONAL

Facts: Private respondent Juan A. Alegre's wife, Dr. Jimena Alegre, sent two (2) RUSH telegrams through
petitioner RCPI's facilities in Taft Ave., Manila at 9:00 in the morning of 17 March 1989 to his sister and
brother-in-law in Valencia, Bohol and another sister-in-law in Espiritu, Ilocos Norte.
Both telegrams did not reach their destinations on the expected dates. So, private respondent filed a lettercomplaint against RCPI with National Telecommunications Commission (NTC) for poor service, with a
request for the imposition of the appropriate punitive sanction against the company. Taking cognizance of
the complaint, NTC directed RCPI to answer the complaint and set the initial hearing.
NTC held that RCPI was administratively liable for deficient and inadequate service under Section 19(a) of
C.A. 146 and imposed the penalty of fine payable within thirty (30) days from receipt in the aggregate
amount of one thousand pesos.
Hence, RCPI filed this petition for review invoking C.A. 146 Sec. 19(a) which limits the jurisdiction of the
Public Service Commission (precursor of the NTC) to the fixing of rates.
ISSUE: Whether or not Public Service Commission (precursor of the NTC) has jurisdiction to impose
fines
HELD: The decision appealed from is reversed and set aside for lack of jurisdiction of the NTC to render
it.
NTC has no jurisdiction to impose a fine. Under Section 21 of C. A. 146, as amended, the Commission was
empowered to impose an administrative fine in cases of violation of or failure by a public service to comply
with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission.
Petitioner operated under a legislative franchise, so there were no terms nor conditions of any certificate
issued by the Commission to violate. Neither was there any order, decision or regulation from the
Commission applicable to petitioner that the latter had allegedly violated, disobeyed, defied or disregarded.
No substantial change has been brought about by Executive Order No. 546 invoked by the Solicitor
General's Office to bolster NTC's jurisdiction. The Executive Order is not an explicit grant of power to
impose administrative fines on public service utilities, including telegraphic agencies, which have failed to
render adequate service to consumers. Neither has it expanded the coverage of the supervisory and
regulatory power of the agency. There appears to be no alternative but to reiterate the settled doctrine in
administrative law that:
Too basic in administrative law to need citation of jurisprudence is the rule that jurisdiction and powers of
administrative agencies, like respondent Commission, are limited to those expressly granted or necessarily
implied from those granted in the legislation creating such body; and any order without or beyond such
jurisdiction is void and ineffective (Globe Wireless case).
MANILA INTERNATIONAL AIRPORT AUTHORITY vs. AIRSPAN CORPORATION

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G.R. No. 157581. December 1, 2004


FACTS:
The schedule of aggregate dues collectible for the use of petitioners properties, facilities, and services are
divided into: (1) aeronautical fees; (2) rentals; (3) business concessions; (4) other airport fees and charges;
and (5) utilities.[2]
On May 19, 1997, petitioner issued Resolution No. 97-51[3] announcing an increase in the rentals of its
terminal buildings, VIP lounge, other airport buildings and land, as well as check-in and concessions
counters. Business concessions, particularly concessionaire privilege fees, were also increased.
On April 2, 1998, petitioner passed Resolution No. 98-30[4] adopting twenty percent (20%) of the increase
recommended by Punongbayan and Araullo,[5] to take effect immediately on June 1, 1998. Thus,
petitioner issued the corresponding Administrative Order No. 1, Series of 1998 to reflect the new schedule
of fees, charges, and rates
On February 5, 1999, petitioner issued Resolution No. 99-11,[7] which further increased the other airport
fees and charges, specifically for parking and porterage services, and the rentals for hangars. Accordingly,
petitioner amended Administrative Order No. 1, Series of 1998
Respondents requested that the implementation of the new fees, charges, and rates be deferred due to lack
of prior notice and hearing.
ISSUE: WHETHER OR NOT PRIOR NOTICE AND CONDUCT OF PUBLIC HEARING ARE
REQUIRED BEFORE PETITIONER CAN INCREASE ITS RATES AND CHARGES FOR THE USE
OF ITS FACILITIES
HELD:
[Arguments]
First issue, petitioner contends that its charter authorizes it to increase its fees, charges, and rates without
need of public hearing. It maintains that its service is not a public utility where fees, charges, and rates are
subject to state regulation.
Respondents counter that petitioner comes within the purview of the Administrative Code as an attached
agency of the Department of Transportation and Communications (DOTC) and that in case of conflict with
the charter of an attached agency, the Administrative Code prevails. Respondents insist that petitioner can
only recommend a possible increase, but the same must first be approved by the head of the DOTC

SC: Thus, under the original Charter of the MIAA, petitioner was given blanket authority to adjust its fees,
charges, and rates. However, E.O. No. 903 limited such authority to a mere recommendatory
power. Hence, petitioners Charter itself, as amended, directly vests the power to determine revision of
fees, charges, and rates in the ministry head and even requires approval of the Cabinet.
Worth noting, its Charter[22] established MIAA as an attached agency of the Ministry of Transportation
and Communications (now Department of Transportation and Communications). Hence, the ministry
head who has the power to determine the revision of fees, charges, and rates of the MIAA is now the
DOTC Secretary. Clearly, petitioner has no authority to increase its fees, charges, or rates as the power to
do so is vested solely in the DOTC Secretary, although petitioners prerogative to recommend possible
increases thereon is of course recognized.

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As an attached agency of the DOTC, the MIAA is governed by the Administrative Code of 1987.[23] The
Administrative Code specifically requires notice and public hearing in the fixing of rates:
BOOK VII. Administrative Procedure
SEC. 9. Public Participation. - (2) In the fixing of rates, no rule or final order shall be valid unless the
proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks
before the first hearing thereon.
It follows that the rate increases imposed by petitioner are invalid for lack of the required prior notice and
public hearing. They are also ultra vires because, to begin with, petitioner is not the official authorized to
increase the subject fees, charges, or rates, but rather the DOTC Secretary.
To conclude, petitioners Resolutions Nos. 98-30 and 99-11 and the corresponding administrative orders,
which increased the fees, charges, and rates specified therein, without the required prior notice and hearing
as well as approval of the DOTC Secretary, are null and void. The RTC Decision, which permanently
enjoined petitioner from collecting said increases and ordered refund to respondents of the amounts paid
pursuant to the said Resolutions, must be upheld. However, any refund should cover only the differential
brought about by the unauthorized increases contained in said Resolutions.
Petitioner is not at liberty to increase fees, charges, or rates at will, without due regard to parameters set by
laws and regulations. Among the considerations mentioned in E.O. No. 903 are that fees and charges
should reflect adequately the costs and increases in price levels and the volume of traffic. For any change
in its fees, charges, or rates without due regard to valid limitations can create a profound impact on the
countrys economy in general and air transport in particular.
No one needs reminding that higher prices and more unemployment are the last things our countrys
challenged economy needs at this time. Balancing of interests among the parties concerned, in a public
hearing, is obviously called for.

ASSIGNMENT NO 8
NICOS INDUSTRIAL CORP. v CA
G.R. No. 88709
February 11, 1992
FACTS:

On January 24, 1980, NICOS Industrial Corporation obtained a loan of P2,000,000.00 from
private respondent United Coconut Planters Bank and to secure payment thereof executed a real
estate mortgage on two parcels of land located at Marilao, Bulacan

On July 11, 1983, the mortgage was foreclosed for non-payment of the loan, a sheriff's sale was
held without re-publication of the required notices after the original date for the auction was
changed without the knowledge or consent of the mortgagor. UCPB was the highest and lone
bidder and the mortgaged lands were sold to it for P3,558,547.64.

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On August 29, 1983, UCPB sold all its rights to the properties to private respondent Manuel Co,
who on the same day transferred them to Golden Star Industrial Corporation, another private
respondent, a writ of possession was issued to it on November 4, 1983.

On September 6, 1984, NICOS and the other petitioners, filed their action for "annulment of
sheriff's sale, recovery of possession, and damages, with prayer for the issuance of a preliminary
prohibitory and mandatory injunction."

On April 30, 1986, Golden Star and Evangelista filed a 7-page demurrer to the evidence where
they argued that the action was a derivative suit that came under the jurisdiction of the Securities
and Exchange Commission; that the mortgage had been validly foreclosed; that the sheriff's sale
had been held in accordance with Act 3135; that the notices had been duly published in a
newspaper of general circulation; and that the opposition to the writ of possession had not been
filed on time. No opposition to the demurrer having been submitted despite notice thereof to the
parties, Judge Nestor F. Dantes considered it submitted for resolution.

The petitioners claim that it is not a reasoned decision and does not clearly and distinctly explain
how it was reached by the trial court. They also stress that the sheriff's sale was irregular because
the notices thereof were published in a newspaper that did not have general circulation and that the
original date of the sheriff's sale had been changed without its consent, the same having been
allegedly given by a person not authorized to represent NICOS. Complaint was dismissed.

June 6, 1986, the petitioners complaint was dismissed.

A careful perusal of the challenged order will show that the complaint was dismissed not only for
lack of jurisdiction but also because of the insufficiency of the evidence to prove the invalidity of
the sheriff's sale. Regarding this second ground, all the trial court did was summarily conclude
"from the very evidence adduced by the plaintiff" that the sheriff's sale "was in complete accord
with the requirements of Section 3, Act 3135." It did not bother to discuss what that evidence was
or to explain why it believed that the legal requirements had been observed.

HELD:
It is a requirement of due process that the parties to a litigation be informed of how it was decided, with an
explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot simply
say that judgment is rendered in favor of X and against Y and just leave it at that without any justification
whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal to a higher
court, if permitted, should he believe that the decision should be reversed. A decision that does not clearly
and distinctly state the facts and the law on which it is based leaves the parties in the dark as to how it was
reached and is especially prejudicial to the losing party, who is unable to pinpoint the possible errors of the
court for review by a higher tribunal.
It is important to observe at this point that the constitutional provision does not apply to interlocutory
orders, such as one granting a motion for postponement or quashing a subpoena, because it "refers only to
decisions on the merits and not to orders of the trial court resolving incidental matters.
The Supreme Court disposes of the bulk of its cases by minute resolutions and decrees them as final and
executory, as where a case is patently without merit, where the issues raised are factual in nature, where the
decision appealed from is supported by substantial evidence and is in accord with the facts of the case and

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the applicable laws, where it is clear from the records that the petitions were filed merely to forestall the
early execution of judgment and for non-compliance with the rules. The resolution denying due course or
dismissing a petition always gives the legal basis.
The order in the case at bar does not come under either of the above exceptions. As it is settled that an order
dismissing a case for insufficient evidence is a judgment on the merits, 6 it is imperative that it be a
reasoned decision clearly and distinctly stating therein the facts and the law on which it is based.
While it is true that the case before us does not involve the life or liberty of the defendant, as in Escober,
there is still no reason for the constitutional short-cut taken by the trial judge. The properties being litigated
are not of inconsequential value; they were sold for three and a half million pesos in 1983 and doubtless
have considerably appreciated since then, after more than eight years. These facts alone justified a more
careful and thorough drafting of the order, to fully inform the parties and the courts that might later be
called upon to review it of the reasons why the demurrer to the evidence was sustained and the complaint
dismissed.
t is expected that this requirement will allay the suspicion that no study was made of the decision of the
lower court and that its decision was merely affirmed without a proper examination of the facts and the law
on which it was based. The proximity at least of the annexed statement should suggest that such an
examination has been undertaken. It is, of course, also understood that the decision being adopted should,
to begin with, comply with Article VIII, Section 14 as no amount of incorporation or adoption will rectify
its violation.
G.R. No. 95694. October 9, 1997
VICENTE VILLLAFLOR, substituted by his heirs, petitioner, vs. COURT OF APPEALS and
NASIPIT LUMBER CO., INC., respondents.
Cirilo Piencenaves, Claudio Otero, Hermogenes Patete and Fermin Bocobo sold their respective parcels of
agricultural land (adjacent to each other) to Vicente Villaflor. The latter leased to Nasipit Lumber Co.,
Inc. a parcel of land, containing an area of two (2) hectares, together with all the improvements existing
thereon, for a period of five (5) years subject to the agreement that the Lessee is authorized and
empowered to build and construct additional houses in addition to the 33 houses or buildings mentioned in
the next preceding paragraph, provided however, that for every additional house or building constructed the
Lessee shall pay unto the Lessor an amount of fifty centavos (50) per month for every house or
building. The Lessee is empowered and authorized by the Lessor to sublot (sic) the premises hereby leased
or assign the same or any portion of the land hereby leased to any person, firm and corporation; and that
improvements shall become the property of the Lessor upon the termination of this lease without obligation
on the part of the latter to reimburse the Lessee for expenses.
On July 7, 1948, in an Agreement to Sell , Villaflor conveyed to Nasipit Lumber, two (2) parcels of land
and other improvements and accessions thereon with an additional agreement that Nasipit shall continue to
occupy the said land not as a mere lessee but as a prospective owner. Villaflor filed Sales Application V807with the Bureau of Lands, Manila, to purchase under the provisions of Chapter V, XI or IX of CA 141
(The Public LandsAct), as amended, the tract of public lands. Paragraph 6 of the Application, states: I
understand that this application conveys no right to occupy the land prior to its approval, and I recognize
that the land covered by the same is of public domain and any and all rights I may have with respect thereto
by virtue of continuous occupation and cultivation are here by relinquished to the Government. On 7
December 1948, Villaflor and Nasipit Lumber executedan Agreement, confirming the Agreement to Sell
of 7 July1948, but with reference to the Sales Application filed with the Bureau of Land. The Report by the
public land inspector (District Land Office, Bureau of Lands, inButuan) contained an endorsement of the
said officer recommending rejection of the Sales Application of Villaflor for having leased the property to

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another even before he had acquired transmissible rights thereto. Villaflor, through a letter informed
Bureau of Lands that he has been occupying said property as private owner. Nasipit also supported such
claim.
Villaflor won the public bidding of property covered in the Sales application and executed a
document, denominated as a Deed of Relinquishment of Rights, in favor on Nasipit Lumber, in
consideration of the amount of P5,000that was to be reimbursed to the former a Nasipit Lumber filed a
SalesApplication over the 2 parcels of land, covering an area of 140hectares, more or less. This application
was also numbered V-807. On 17 August 1950 the Director of Lands issued an Order of Award in favor
of Nasipit Lumber; and its application was entered in the record as Sales Entry V-407.On27 November
1973, Villafor wrote a letter to Nasipit Lumber, reminding the latter of their verbal agreement in 1955; but
the new set of corporate officers refused to recognize Villaflors claim. The Court ruled in favor of
respondent Nasipit and was affirmed on appeal relying on the factual findings of the Bureau of Land.
Issue:
Did the Court of Appeals err in adopting or relying on the factual findings of the Bureau of Lands,
especially those affirmed by the Minister (now Secretary) of Natural Resources and the trial court?
Held:
Doctrine of Primary Jurisdiction (or Prior Resort).
Underlying the rulings of the trial and appellate courts is the doctrine of primary
jurisdiction; i.e., courts cannot and will not resolve a controversy involving a question which is within the
jurisdiction of an administrative tribunal, especially 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.[21]
In recent years, it has been the jurisprudential trend to apply this doctrine to cases involving matters
that demand the special competence of administrative agencies even if the question involved is also judicial
in character. It applies where a claim is originally cognizable in the courts, and comes into play whenever
enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been
placed within the special competence of an administrative body; in such case, the judicial process is
suspended pending referral of such issues to the administrative body for its view.[22]
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.
The rationale underlying the doctrine of primary jurisdiction finds application in this case, since the
questions on the identity of the land in dispute and the factual qualification of private respondent as an
awardee of a sales application require a technical determination by the Bureau of Lands as the
administrative agency with the expertise to determine such matters. Because these issues preclude prior
judicial determination, it behooves the courts to stand aside even when they apparently have statutory
power to proceed, in recognition of the primary jurisdiction of the administrative agency.[26]

Petitioner initiated his action with a protest before the Bureau of Lands and followed it through in the
Ministry of Natural Resources and thereafter in the Office of the President. Consistent with the doctrine of
primary jurisdiction, the trial and the appellate courts had reason to rely on the findings of these specialized
administrative bodies.

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The primary jurisdiction of the director of lands and the minister of natural resources over the issues
regarding the identity of the disputed land and the qualification of an awardee of a sales patent is
established by Sections 3 and 4 of Commonwealth Act No. 141, also known as the Public Land Act
Thus, the Director of Lands, in his decision, said:[28]
Our Supreme Court has recognized that the Director of Lands is a quasi-judicial officer who passes on
issues of mixed facts and law (Ortua vs. Bingson Encarnacion, 59 Phil 440). Sections 3 and 4 of the Public
Land Law thus mean that the Secretary of Agriculture and Natural Resources shall be the final arbiter on
questions of fact in public land conflicts (Heirs of Varela vs. Aquino, 71 Phil 69; Julian vs. Apostol, 52 Phil
442).
Reliance by the trial and the appellate courts on the factual findings of the Director of Lands and the
Minister of Natural Resources is not misplaced. By reason of the special knowledge and expertise of said
administrative agencies over matters falling under their jurisdiction, they are in a better position to pass
judgment thereon; thus, their findings of fact in that regard are generally accorded great respect, if not
finality,[29] by the courts.[30] The findings of fact of an administrative agency must be respected as long as
they are supported by substantial evidence, even if such evidence might not be overwhelming or even
preponderant. It is not the task of an appellate court to weigh once more the evidence submitted before the
administrative body and to substitute its own judgment for that of the administrative agency in respect of
sufficiency of evidence.[31]However, the rule that factual findings of an administrative agency are accorded
respect and even finality by courts admits of exceptions.
In this instance, both the principle of primary jurisdiction of administrative agencies and the doctrine
of finality of factual findings of the trial courts, particularly when affirmed by the Court of Appeals as in
this case, militate against petitioners cause. Indeed, petitioner has not given us sufficient reason to deviate
from them.
LAGUNA CATV NETWORK, INC. vs. HON. ALEX E. MARAAN
G.R. No. 139492
November 19, 2002
FACTS:
o

Private respondents filed with the DOLE Region IV separate complaints for underpayment of wages and
non-payment of other employee benefits against their employer, Laguna CATV.

Private respondents filed their separate complaints pursuant to Article 128 of the Labor Code, as amended
by Republic Act No. 7730.

DOLE Region IV conducted an inspection within the premises of Laguna CATV and found that the latter
violated the laws on payment of wages and other benefits.

Thereupon, DOLE Region IV requested Laguna CATV to correct its violations but the latter refused,
prompting the Regional Director to set the case for summary investigation.

Thereafter, he issued an Order directing Laguna CATV to pay the concerned employees the sum of
P261,009.19 representing their unpaid claims.

Forthwith, Laguna CATV filed a motion for reconsideration.

In view of Laguna CATVs failure to comply with the Order directing it to pay the unpaid claims of its
employees, DOLE Regional Director Maraan issued a writ of execution ordering the Sheriff to collect in
cash from Laguna CATV the amount specified in the writ or, in lieu thereof, to attach its goods and chattels
or those of its owner, Dr. Bernardino Bailon.

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Laguna CATV and Dr. Bailon (owner) filed a motion to quash the writ of execution, notice of levy and sale
on execution and garnishment of bank deposits.

Regional Director Maraan issued an Order denying the motion to quash the writ of execution, stating that
Laguna CATV failed to perfect its appeal because it did not comply with the mandatory requirement of
posting a bond equivalent to the monetary award of P261,009.19; and that the writ of execution should be
considered as an overt denial of Laguna CATVs motion for reconsideration.

Instead of appealing to the Secretary of Labor, Laguna CATV filed with the CA a motion for
extension of time to file a petition for review.

Laguna CATV was of the view that an appeal to the Secretary of Labor would be an exercise in futility
considering that the said appeal will be filed with the Regional Office and it will surely be disapproved.

The CA denied Laguna CATVs motion for extension and dismissing the case.

The Appellate Court found, among others, that it failed to exhaust administrative remedies.

Laguna CATV filed a motion for reconsideration but was denied by the Court of Appeals in its Resolution
dated July 22, 1999.

Hence, it filed a petition for review on certiorari to the SC.

ISSUE:
o

Whether or not Laguna CATV failed to exhaust all administrative remedies. YES
RULING:

The SC ruled that Laguna CATV failed to exhaust all administrative remedies.

As provided under Article 128 of the Labor Code, as amended, an order issued by the duly authorized
representative of the Secretary of Labor may be appealed to the latter.

Thus, petitioner should have first appealed to the Secretary of Labor instead of filing with the Court of
Appeals a motion for extension of time to file a petition for review.

Courts, for reasons of law, comity and convenience, should not entertain suits unless the available
administrative remedies have first been resorted to and the proper authorities have been given an
appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative
forum.

The SC, in a long line of cases, has consistently held that if a remedy within the administrative machinery
can still be resorted to by giving the administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction, then such remedy should be exhausted first before the courts
judicial power can be sought.

The party with an administrative remedy must not merely initiate the prescribed administrative
procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial
intervention in order to give the administrative agency an opportunity to decide the matter itself
correctly and prevent unnecessary and premature resort to the court.

The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a
complete chance to pass upon the matter will decide the same correctly.

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Therefore, petitioner should have completed the administrative process by appealing the questioned Orders
to the Secretary of Labor.

The following are the allowed certain exceptions to the doctrine of exhaustion of administrative remedies:
1) when there is a violation of due process;
2) when the issue involved is a purely legal question;
3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
4) when there is estoppel on the part of the administrative agency concerned;
5) when there is irreparable injury;
6) when the respondent is a Department Secretary whose acts as an alter ego of the President
bears the implied and assumed approval of the latter;
7) when to require exhaustion of administrative remedies would be unreasonable;
8) when it would amount to a nullification of a claim;
9) when the subject matter is a private land in land case proceedings;
10) when the rule does not provide a plain, speedy, adequate remedy;
11) when there are circumstances indicating the urgency of judicial intervention;
12) when no administrative review is provided by law;
13) where the rule of qualified political agency applies; and
14) when the issue of non-exhaustion of administrative remedies has been rendered moot,
Laguna CATV fails to show that the instant case falls under any of the exceptions. Its contention that an
appeal to the Secretary of Labor would be futile as it will surely be disapproved, is purely conjectural and
definitely misplaced.
G.R. No. L-16969; April 30, 1966
R. MARINO CORPUS, plaintiff-appellant vs. MIGUEL CUADERNO, SR., defendant-appellee
MAKALINTAL, J.:
FACTS:
Miguel Cuaderno, Sr. was the Governor of the Central Bank of the Philippines. In 1949, R. Marino Corpus
was appointed Economist in the Department of Economic Research of said bank. He then received
promotions in position and salary. By 1954, he was Director of the Department of Loans and Credit and
Rural Banks Administration. A number of employees of the bank filed an administrative complaint against
him. He was suspended from office without pay. He was reinstated but in 1958, several of his coemployees again filed an administrative complaint against him, alleging a number of acts of misfeasance.
The Monetary Board suspended him.
Corpus instituted the present action, alleging that his suspension was unwarranted and had been brought
about by Cuaderno's malicious machinations. Cuaderno alleged libel against Corpus.
The MB considered Corpus resigned as of the date of his suspension because his continuance at work will
be prejudicial to the bank. The lower court absolved Cuaderno from liability but ordered Corpus to pay
damages, libel having been duly proven.

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ISSUE:
Whether Cuaderno is liable for damages for illegally causing Corpus suspension and eventual removal.
HELD:
NO. Corpus had been removed not for any of the charges in the administrative complaint against him in
1958 but by reason of loss of confidence by the Governor of the Bank. Loss of confidence alone is not a
sufficient and legitimate cause for removal even if the position involved belongs to the category of policydetermining, primarily confidential or highly technical positions referred to in the Constitution. Corpus
reinstatement in the service was ordered.
Both acts of suspension were by the Monetary Board, not by Cuaderno. All that may be said about his
actuations is that he lost confidence in Corpus in view of the charges filed against him in 1958; and
although they were not substantiated, Cuadeno believed in good faith that such loss of confidence was
sufficient reason to recommend appellant's removal. Lower court decision affirmed.
JOVENTINO MADRIGAL vs. PROV. GOV. ARISTEO M. LECAROZ
G.R. No. L-46218 October 23, 1990
FACTS:
On November 25, 1971, public respondents Governor Aristeo M. Lecaroz, Vice-Governor Celso Zoleta,
Jr., Provincial Board of Marinduque members Domingo Riego and Marcial Principe abolished petitionerappellat Joventino Madrigal's possitionas a permanent construction capataz in the office of the Provincial
Engineer from the annual Roads Bridges Fund Budget for fiscal year 1971-1972 (p.2, Records) by virtue of
Resolution No. 204. The abolition was allegedly due to the poor financial condition of the province and it
appearing that his position was not essential
On April 22, 1972, Madrigal appealed to the Civil Service Commission. On August 7, 1973, he transmitted
a follow-up letter to the Commission regarding his appeal.
On March 16, 1976, the trial court issued an order dismissing the petition on the ground that Madrigal's
cause of action was barred by laches.
Madrigal alleges that the one (1) year period prescribed in an action for quo warranto is not applicable in
an action for mandamus because Rule 65 of the Rules of Court does not provide for such prescriptive
period. The declaration by the trial court that the pendency of administrative remedies does not operate to
suspend the period of one (1) year within which to file the petition for mandamus, should be confined to
actions for quo warranto only. On the contrary, he contends that exhaustion of administrative remedies is a
condition sine qua non before one can petition for mandamus
On the part of public respondents, they aver that it has become an established part of our jurisprudence,
being a public policy repeatedly cited by the courts in myriad of mandamus cases, that actions for
reinstatement should be brought within one year from the date of dismissal, otherwise, they will be barred
by laches. The pendency of an administrative remedy before the Commission does not stop the running of
the one (1) year period within which a mandamus case for reinstatement should be filed.
HELD:
in actions of quo warranto involving right to an office, the action must be instituted within the period of
one year. This has been the law in the island since 1901, the period having been originally fixed in Section
216 of the Code of Civil Procedure (Act No. 190). We find this provision to be an expression of policy on

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the part of the State that persons claiming a right to an office of which they are illegally dispossessed
should immediately take steps to recover said office and that if they do not do so within a period of one
year, they shall be considered as having lost their right thereto by abandonment. There are weighty reasons
of public policy and convenience that demand the adoption of a similar period for persons claiming rights
to positions in the civil service. There must be stability in the service so that public business may (sic) be
unduly retarded; delays in the statement of the right to positions in the service must be discouraged. The
following considerations as to public officers, by Mr. Justice Bengzon
And this one (1) year period is not interrupted by the prosecution of any administrative remedy (Torres v.
Quintos, 88 Phil. 436). Actually, the recourse by Madrigal to the Commission was unwarranted. It is
fundamental that in a case where pure questions of law are raised, the doctrine of exhaustion of
administrative remedies cannot apply because issues of law cannot be resolved with finality by the
administrative officer. Appeal to the administrative officer of orders involving questions of law would be
an exercise in futility since administrative officers cannot decide such issues with finality
Madrigal loses sight of the fact that the claim for back salaries and damages cannot stand by itself. The
principal action having failed, perforce, the incidental action must likewise fail. Needless to state, the claim
for back salaries and damages is also subject to the prescriptive period of one (1) year
MARIA NATIVIDAD VDA. DE
COMMISSION, respondent-appellant.

TAN,

petitioner-appellee,

vs. VETERANS

BACKPAY

G.R. No. L-12944


March 30, 1959
FACTS:
On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the Court of First Instance
of Manila a verified petition for mandamus seeking an order to compel the respondent-appellant Veterans
Back Pay Commission. (to declare deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a Chinese national,
entitled to backpay rights, privileges, and prerogatives under Republic Act No. 304)
On June 18, 1955, the Secretary and the Chief of Office Staff of Veterans Back Pay Commission sent a
letter to General Vicente Lopez of the United States-Chinese Volunteers in the Philippines apprising the
latter that the Commission has reaffirmed its resolution granting the back pay to alien members
On February 13, 1957, the respondent Veterans Back Pay Commission, through its Secretary & Chief of
Office Staff, made a formal reply to the aforesaid claim of the herein petitioner denying her request on the
ground that aliens are not entitled to back pay
HELD:
We find no merit in the appeal. As to the claim that mandamus is not the proper remedy to correct the
exercise of discretion of the Commission, it may well be remembered that its discretion is limited to the
facts of the case, i.e., in merely evaluating the evidence whether or not the claimant is a member of a
guerrilla force duly recognized by the United States Army. Nowhere in the law is the respondent
Commission given the power to adjudicate or determine rights after such facts are established. Having been
satisfied that deceased Tan Chiat Bee was an officer of a duly recognized guerrilla outfit, certified to by the
Armed Forces of the Philippines, having served under the United States-Chinese Volunteers in the

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Philippines, a guerrilla unit recognized by the United States army and forming part of the Philippine Army,
it becomes the ministerial duty of the respondent to give due course to his widow's application
The law is contained in Republic Act Nos. 304 and 897 is explicit enough, and it extends its benefits to
members of "guerrilla forces duly recognized by the Army of the United States." From the plain and clear
language thereof, we fail to see any indication that its operation should be limited to citizens of the
Philippines only, for all that is required is that the guerrilla unit be duly recognized by the Army of the
United States
It is further contended by the Commission that the petitioner should have first exhausted her administrative
remedies by appealing to the President of the Philippines, and that her failure to do so is a bar to her action
in court (Montes vs. The Civil Service Board of Appeals, 101 Phil., 490; 54 Off. Gaz. [7] 2174. The
respondent Commission is in estoppel to invoke this rule, considering that in its resolution (Annex F of the
Stipulation of Facts) reiterating its obstinate refusal to abide by the opinion of the Secretary of Justice, who
is the legal adviser of the Executive Department, the Commission declared that
The opinions promulgated by the Secretary of Justice are advisory in nature, which may either be accepted
or ignored by the office seeking the opinion, and any aggrieved party has the court for recourse, (Annex F)
thereby leading the petitioner to conclude that only a final judicial ruling in her favor would be accepted by
the Commission.
UP BOARD OF REGENTS vs. RASUL
G.R. No. 91551 August 16, 1991
FACTS:
On June 26, 1986, plaintiff Dr. Felipe A. Estrella, Jr., was appointed by the defendant Board of
Regents BOR as Director of the Philippine General Hospital, to take effect "1 September 1986 until 30
April 1992". Barely two (2) weeks after assuming the presidency of the University of the Philippines
defendant Jose V. Abueva submitted a memorandum to the Board of Regents to reorganize the U.P. Manila
including the Philippine General Hospital with a draft resolution for approval of the Board of Regents,
recommending that certain key positions of UP Manila including that of plaintiff be declared vacant.
On March 20, 1988, the defendant Board of Regent upon recommendation of defendants Abueva
and Domingo approved the so-called reorganization plan for the Philippine General Hospital. A
memorandum creating the Nomination Committee for the UP-PGH Medical Center Director was created
and was scheduled to nominate plaintiff's replacement as Director. Consequently on May 2, 1988, plaintiff
filed with this Court, his complaint for Injunction with Preliminary Injunction of temporary restraining
Order, seeking to enjoin defendants from proceeding with the nomination of UP- PGH medical Center
Director, in order to forestall the consequent removal/dismissal of the plaintiff Dr. Felipe A. Estrella, Jr.,
incumbent PGH Director, even before the expiration of his term of office on April 30, 1992 without any
cause provided by law.
RTC Pasig rendered decision in favor of Estrella. Respondent Judge, based on the evidence
presented, concluded that the reorganization of PGH was done in bad faith. Accordingly, the lower court
ruled that respondent Dr. Estrella cannot be removed from office as a result of such defective abolition of
the position to which he was appointed. That the proposed reorganizational structure merely involves
changes of designations and enlargement of functions and powers. If the reorganization plan results in
abolishing the position of the plaintiff and in putting in his place another one, with substantially the same
duties, not to say qualifications, in the name of leadership, it will surely be considered a device to unseat

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the incumbent and to circumvent the constitutional and statutory prohibition of removal from office of a
civil service officer even without cause provided by law. Plaintiffs position should not therefore be deemed
abolished by mere implication. If the abolition of office is made to circumvent the constitutional security of
tenure of civil service employees, our Supreme Court, has ruled that such abolition is null and void.
Note: Appointees of the LTP Board of Regents enjoy security of tenure during their term of office.
Respondents alleged that the court lacks jurisdiction over the case because Estrella should have
first exhausted administrative remedies before she can bring suit against UP Board of Regents.
ISSUE:
Whether the judge committed grave abuse of discretion amounting to lack of jurisdiction in
holding that respondent Estrella need not exhaust administrative remedies before he can bring suit against
the UP Board of Regents, et al.
HELD:
NO. The judge DID NOT commit grave abuse of discretion. We hold that this case has special
circumstances that made it fall under the jurisprudentially accepted exceptions to the rule. As the facts
show, respondent Dr. Estrella was about to be replaced by the Nomination Committee. He must have
believed that airing his protest with the Board of Regents would only be fruitless and that unless he goes to
the courts, irreparable damage or injury on his part will be caused by the implementation of the proposed
reorganization.
NATIONAL FOOD AUTHORITY vs. THE HON. COURT OF APPEALS
G.R. Nos. 115121-25. February 9, 1996
FACTS:
The case at bar involves the legality of negotiated security contracts awarded by the National Food
Authority (NFA), a government-owned and controlled corporation and its Administrator, Romeo G. David,
to several private security agencies, in default of a public bidding.
In 1990, the NFA, through then Administrator Pelayo J. Gabaldon, conducted a public bidding to award
security contracts for the protection of its properties and facilities all over the country. Twelve security
agencies were awarded one-year contracts. among whom were private respondents Col. Felix
The review was completed in March 1993 and new terms for accreditation, bidding and hiring of security
agencies were made. The bidding areas were also reclassified and reduced from fourteen NFA regions to
only five NFA areas nationwide. A special order was thereafter issued for the implementation of the new
rules and procedure.
Special Order No. 04-07 was issued under which Administrator David created a Prequalification, Bids and
Awards Committee (PBAC) to undertake the prequalification of prospective bidders, conduct the bidding,
evaluate the bids tendered and recommend to the Administrator the bids accepted.
Meanwhile, however, two of the applicants who failed to prequalify, namely Lanting Security and
Watchman Agency and respondent Lasala, filed separate complaints with the Regional Trial Court, Quezon
City

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Administrator David sent to all incumbent security agencies, including four of herein private respondents,
notices of termination
On August 4, 1993, Administrator David contracted the services of seven new security agencies starting
August 16, 1993 on a month-to-month basis pending resolution of the injunction against the bidding
They argue that the new security agencies were hired as an emergency measure after the contracts with
the incumbent security agencies expired. They claim that without the new security agencies, the properties
of the NFA worth billions of pesos would be exposed to danger of loss and dissipation
HELD: The principle of exhaustion of administrative remedies is not a hard and fast rule. It is subject to
some limitations and exceptions. In this case, private respondents contracts were terminated in the midst of
bidding preparations and their replacements hired barely five days after their termination. In fact,
respondent Masada, a prequalified bidder, submitted all requirements and was preparing for the public
bidding only to find out that contracts had already been awarded by negotiation. Indeed, an appeal to the
NFA Board or Council of Trustees and the Secretary of Agriculture pursuant to the provisions of the
Administrative Code of 1987 was not a plain, speedy and adequate remedy in the ordinary course of the
law. The urgency of the situation compelled private respondents to go to court to stop the implementation
of these negotiated security contracts.
PEDRO GRAVADOR vs. EUTIQUIO MAMIGO
G.R. No. L-24989
July 21, 1967
FACTS:
Pedro Gravador was the principal of the Sta. Catalina Elementary School advised of his separation from the
service on the ground that he had reached the compulsory retirement age of 65. On August 31, 1964 the
petitioner wrote the Director of Public Schools, protesting his forced retirement on the ground that the date
of his birth is not November 26, 1897 but December 11, 1901. On October 19, 1964 the petitioner wrote to
the Division Superintendents of Schools, reiterating his claim that he had not reached the age of 65 and
enclosing some papers in support thereof. Petitioner asked for the dismissal of the appeal on the ground that
the issues posed thereby had become moot with his retirement from the service on December 11, 1966 and
the payment to him of the corresponding retirement benefits. The problem is aggravated by two
uncontroverted facts, namely, that the records of the church where the petitioner was baptized were
destroyed by fire, and that the municipal civil register contains no record of the petitioner's birth.
They argue that these records were made only because it was thought that the pre-war records had been lost
or destroyed, but as some pre-war records had since been located, the date contained in the pre-war records
should be regarded as controlling and that the finding of the Superintendent of Schools that the petitioner
was born on November 26, 1897 is an administrative finding that should not be disturbed by the court.
That the findings of fact of administrative officials are binding on the courts if supported by substantial
evidence, is a settled rule of administrative law, But whether there is substantial evidence supporting the
finding of the Superintendent of Schools is precisely the issue in this case. The school official based his
determination of the petitioner's age on the pre-war records in the preparation of which the petitioner does
not appear to have taken a part.
Still it is argued that the petitioner's action was prematurely brought because he had not availed of all
administrative remedies. This argument is without merit. Suit for quo warranto to recover a public office
must be brought within one year. Before filing this case the petitioner waited for eight months for the

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school officials to act on his protest. To require him to tarry a little more would obviously be unfair to him
since on April 13, 1965, when this case was filed, he had only four months left within which to bring the
case to court. There was neither manner nor form of assurance that the decision of the Director of Public
Schools would be forthcoming. The rule on exhaustion of administrative remedies does not apply where
insistence on its observance would result in the nullification of the claim being asserted.
HILDA RALLA ALMINE vs. HONORABLE COURT OF APPEALS
G.R. No. 80719
September 26, 1989
FACTS:
On December 25, 1975, petitioner filed a sworn application for retention of her riceland or for exemption
thereof from the Operation Land Transfer Program with the then Ministry of Agrarian Reform (MAR),
Regional Office in Tabaco, Albay. After due hearing, Atty. Cidarminda Arresgado of the said office filed
an investigation report dated June 26, 1980 for the cancellation of the Certificate of Land Transfer (CLT) of
private respondent who appears to be petitioner's tenant over her riceland. Upon failure of the Ministry to
take the necessary action, petitioner reiterated her application sometime in 1979-1985 alleging that her
tenant deliberately failed and refused to deliver her landowner's share from 1975 up to the time of the filing
of the said application and that the latter had distributed his landholding to his children. A reinvestigation
was conducted this time by Atty. Seth Evasco who on October 31, 1985 filed his report recommending the
cancellation of private respondent's CLT Said report was elevated to the MAR. In an endorsement dated
November 25, 1985, Regional Director Salvador Pejo manifested his concurrence with the report of Atty.
Evasco holding that the properties of the petitioner consist of 4.3589 hectares as evidenced by Transfer
Certificates of Title Nos. 27167, 27168 and 27344 and hence not covered by the Operation Land Transfer
Program. Juanito L. Lorena, the Officer-in-Charge of MAR likewise concurred therewith. However, in the
order dated February 13, 1986, then Minister Conrado Estrella denied petitioner's application for retention.
ISSUE: Whether a landowner should or should not be allowed to retain his landholdings are exclusively
cognizable by the Minister (now Secretary) of Agrarian Reform whose decision may be appealed to the
Office of the President and not to the Court of Agrarian Relations.
HELD:
There is no appeal from a decision of the President. However, the said decision may be reviewed by the
courts through a special civil action for certiorari, prohibition or mandamus, as the case may be under Rule
65 of the Rules of Court.
Thus, the respondent appellate court erred in holding that it has no jurisdiction over the petition for review
by way of certiorari brought before it of a decision of the Minister of Agrarian Reform allegedly made in
grave abuse of his discretion and in holding that this is a matter within the competence of the Court of
Agrarian Reform. The Court of Appeals has concurrent jurisdiction with this Court and the Regional Trial
Court over petitions seeking the extraordinary remedy of certiorari, prohibition or mandamus.
The failure to appeal to the Office of the President from the decision of the Minister of Agrarian Reform in
this case is not a violation of the rule on exhaustion of administrative remedies as the latter is the alter ego
of the President.
G.R. No. L-42380

June 22, 1990

DATILES AND COMPANY, represented by LORETA DATILES and LARRY DATILES,

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vs.
Honorable MELQUIADES S. SUCALDITO, Presiding Judge of Branch I, Court of First Instance of
Zamboanga del Sur, Honorable MATIAS A. GUIEB, or his Successor-in-Office, Regional Director,
Region No. IX, Bureau of Fisheries and Aquatic Resources and JESUS DEYPALUBOS and DANIEL
CABELIEZA,
Petitioner Datiles and Company has in its favor a fishpond lease agreement where the government 179.9
hectares of public land in Zamboanga, for fishpond purposes which was executed in 1971. In 1973 Datiles
filed a complaint (Civil Case No. 1389) for "Injunction with Writ of Possession with Preliminary and
Prohibitory Injunction, with Damages against Deypalubos and Cabdieza because of their refusal to obey
the orders of the then Philippine Fisheries Commission and Bureau of Fisheries to vacate that portion of the
area covered by lease which they were occupying without a fishpond permit and the knowledge and
consent of petitioner.
Meanwhile, Deypalubos filed a formal protest to the Bureau of Fisheries over the 49-hectare lands they
occupied covered by Datiles contract. On February 1974, the trial court, in CC No. 1389 ordered the
issuance of a writ of preliminary mandatory injunction against both respondents resulting in the restoration
of possession and occupancy of the disputed areas by the Datiles. The Bureau Director held in abeyance the
formal protest until CC no. 1389 shall have been resolved.
On January 1975 the Bureau Director directed Guieb to conduct an immediate formal investigation of those
issues involved in the foregoing resolution and the protest of Mr. Deypalubos ...and not touched upon in
CC No. 1389. Datiles then filed a petition for "Prohibition and/or Injunction with Preliminary Injunction"
(SCC No. 1426) against Guieb. The presiding judge, Judge Sucaldito then issued a restraining order.
Later on Judge Sucaldito then dismissed the case for lack of jurisdiction for failure to exhaust
administrative remedies. Accordingly the restraining order was lifted.
Datiles appeal was denied, but Datiles moved for reconsideration which was given due course.
ISSUE: Whether the investigation is susceptible to prohibition even without prior exhaustion of
administrative remedies. (Since it was submitted that there was no prior exhaustion of administrative
remedies.)
RULING: It is well settled that for prohibition to lie against an executive officer, there should be prior
exhaustion of administrative remedies. It is for the body, board or officer to correct his decision in a given
matter. It follows therefore that there has to be some sort of a decision, order or act, more or less final in
character, that is ripe for review and properly the subject of an appeal to a higher administrative body or
officer, for the principle of exhaustion of administrative remedies to operate. In the present case, however,
there is no administrative order or act as above described, that can be appealed from. The respondent
Regional Director has not rendered any decision, or made any final finding of any sort, and is in fact just
about to conduct an investigation which happens to be the very act sought to be prevented. Consequently,
administrative remedies that must be exhausted, although available, cannot be resorted to. There being
urgency in stopping public respondent Guieb's investigation but no plain, speedy and adequate remedy
in the ordinary course of law, petitioner's recourse to the respondent court for relief by way of a petition
for prohibition was proper.
G.R. No. L-39655 March 21, 1975
ARROW TRANSPORTATION CORPORATION, petitioner, vs. BOARD OF TRANSPORTATION
and SULTAN RENT-A-CAR, INC., respondents.
FACTS:
1. Both petitioner and private respondent Sultan Rent-a-Car are domestic corporations. Arrow has in his
favor a certificate of public convenience (CPN) to operate a public utility bus air-conditioned-auto-truck

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service from Cebu City to Mactan International Airport and vice-versa with the use of twenty (20) units.
2. Sultan filed a petition with the respondent Board for the issuance of a CPN to operate a similar service
on the same line. Eight days later, without the required publication, the Board issued an Order granting it
provisional permit to operate.
3. After filing an MR and for the cancellation of such provisional permit filed but without awaiting final
action thereon, Arrow filed the present petition for certiorari with preliminary injunction, alleging that the
question involved herein is purely legal and that the issuance of the Order without the Board having
acquired jurisdiction of the case yet, is patently illegal or was performed without jurisdiction.
4. In their answer, the respondents denied the need for publication before a provisional permit can be
issued, in light of Presidential Decree No. 101, which authorized respondent Board to grant provisional
permits when warranted by compelling circumstances and to proceed promptly along the method of
legislative inquiry.
HELD:
The question of whether the controversy is ripe for judicial determination was likewise argued by the
parties. For it is undeniable that at the time the petition was filed. there was pending with the respondent
Board a motion for reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection
grounded on prematurity can be raised. Nonetheless, counsel for petitioner would stress that certiorari lies
as the failure to observe procedural due process ousted respondent Board of whatever jurisdiction it could
have had in the premises. This Court was impelled to go into the merits of the controversy at this stage, not
only because of the importance of the issue raised but also because of the strong public interest in having
the matter settled. As was set forth in Executive Order No. 101 which prescribes the procedure to be
followed by respondent Board, it is the policy of the State, as swiftly as possible, to improve the deplorable
condition of vehicular traffic, obtain maximum utilization of existing public motor vehicles and eradicate
the harmful and unlawful trade of clandestine operators, as well as update the standard of those carrying
such business, making it "imperative to provide, among other urgently needed measures, more expeditious
methods in prescribing, redefining, or modifying the lines and mode of operation of public utility motor
vehicles that now or thereafter, may operate in this country.
LUCIANO AZUR and NICOLAS BULALACAO vs. THE PROVINCIAL BOARD, THE
PROVINCIAL TREASURER, THE PROVINCIAL AUDITOR, and THE PROVINCIAL
WARDEN, CAMARINES SUR
G.R. No. L-22333
February 27, 1969
BARREDO J.:
FACTS:
Complaint for reinstatement and collection of salaries and damages was filed before the Court of First
Instance of Camarines Sur
COMPLAINT:

Plaintiffs are provincial guards who have been holding their positions continuously for more than
five years;
They took the Patrolman Qualifying Examination at Naga City on February 27, 1960;
They were notified by the Secretary if the defendant- appellee Provincial Board that their positions
had been abolished by its Resolution No. 16, Series of 1960, and that thirty (30) days thereafter
their work "is already terminated";
On January 30, 1960, Resolution No. 16 was amended by Resolution No. 45 which, "in order to
economize", reduced the forty-five (45) existing positions of provincial guards to thirty-five (35),

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ten (10) positions eliminated and their items abolished "subject to the approval of the Secretary of
Finance"
Said Resolution No. 45 had not been approved by the Secretary of Finance and, was, therefore,
still ineffectual;
The real purpose in separating the ten (10) persons occupying the positions abolished was not to
economize but to have them replaced by persons belonging to the political party of the new
provincial administration;
Prior to the separation of plaintiffs from the service, the provincial administration hired five (5)
new provincial guards who were later on separated for sometime to conceal defendants' intention
to replace plaintiffs, as in fact, they were again allowed to work on March 16, 1960;
The appointment of said five (5) new provincial guards is illegal;
Plaintiffs have been rendering service continuously from February 15, 1960 up to the filing of the
complaint but had not received their salaries because defendants were compelling them to submit
their resignations and clearances before they would be paid;
On February 23, 1960, plaintiffs informed defendants of the illegality of their separation from the
service and demanded their pay for services rendered until they are legally separated by competent
authority but they had not yet been paid on the date the complaint was filed;
Due to their illegal separation from the service and the refusal of defendants to pay their salaries,
they have suffered damages and have, therefore, engaged the services of counsel, for a fee, for the
protection of their rights.

ANSWER:
(1)
(2)
(3)
(4)

Plaintiff, had no cause of action since the complaint admitted that they were still rendering
service;
They have not exhausted all administrative remedies;
The abolition of their positions was legal; and
Not being civil service eligible, they were merely temporary employees whose tenure of office
could not be more than three (3) months unless reappointed at every end of the three months
period, and they were not reappointed "at the beginning of the present administration".

DEFENDANT PRAYED FOR DISMISSAL ON THE GROUND THAT:


Petitioners did not exhaust administrative remedies as required by law, which grounds, as can be readily
noted, were mere reiterations of the affirmative defenses in their answer and in effect, all of them amount to
only one, i.e., that the complaint stated no cause of action.
TRIAL COURT issued the order of dismissal (no cause of action)
PETITIONERS CONTENTION - They maintain that the dismissed complaint contained sufficient
allegations of fact which, if proven, constitute a sufficient cause of action against appellees who have
unjustly and illegally terminated their services.
ISSUES:
a.
b.

Whether or not the plaintiffs have cause of action - YES


Whether or not the defendants may invoke the rule of exhaustion of administrative remedies - NO

HELD:
SUPREME COURT - We hold there is merit in this contention and, therefore, the order of dismissal
appealed from should be set aside.

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1. CAUSE OF ACTION:
They have alleged facts showing that appellees have committed acts constituting "a delict or wrong by
which one party violates the rights of another causing him loss or injury," hence a cause of action has been
alleged by them. When the ultimate facts alleged in the complaint show that plaintiff has a right and that
right has been violated by the defendant, then there is a cause of action.
There is nothing in the complaint to sustain the view that appellants' appointment had lapsed. From the
allegation in their complaint that appellants had been continuously holding their positions for more than
five years, it is not legally deducible that from their first appointment as provincial guards, no new
appointments had been extended to them during their more than five years of continuous service. To
conclude otherwise would be to go beyond the allegations of the complaint and the presumption of
regularity which arises therefrom, and to dismiss the complaint under such circumstances is not legally
sustainable.
On the contrary, precisely because of the allegation in their complaint that they had been serving for more
than five (5) years already, and there being no allegation therein that those who have been appointed to
replace them were eligible, appellants are entitled to the preferential rights
It is indeed clear that, as already stated, after an employee who had been given a temporary appointment
had, for any reason, already served under said appointment, upon the approval of the Civil Service Law, he
acquired a right to continue holding his position until three conditions have been complied with, namely,
(1) he must have been given a qualifying examination within one year from said approval, (2) he either
failed in said examination or failed or refused to take it, and (3) he could be replaced only by one who has
the requisite or appropriate civil service eligibility. Without these conditions, he had the right to continue
in his position even permanently.
2. RULE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES:
Finally, the contention of appellees that appellants have not exhausted available administrative remedies, is
as groundless as all their other previously discussed claims. It is settled that the invoked rule of exhaustion
of administrative remedies is not a hard and fast rule; it admits of exceptions. Admitting the truth of
appellants' allegations in their complaint to the effect that they were separated from the service in patent
violation of the Civil Service Law, which contentions We are upholding on the hypothetical assumption
that the facts alleged in the complaint are true, immediate recourse to the courts of justice by appellants is
not objectionable. One of the well- known exceptions to the rule of exhaustion of administrative remedies
is when the controverted act is patently illegal.
SUPREME COURT: We declare that the court below fell into error in dismissing the complaint of
appellants. We find that if the facts alleged in said complaint are true, and they must be assumed to be so,
for the purposes of the appellees' motion to dismiss, they constitute a sufficient cause of action entitling
appellants to the reliefs prayed for.

SPO3 NOEL CABADA vs. HON. RAFAEL M. ALUNAN


G.R. No. 119645. August 22, 1996
FACTS:
On 29 October 1993, a complaint against the petitioners for Grave Misconduct, Arbitrary Detention, and
Dishonesty was filed with the Office of the Commission on Human Rights in Tacloban City by private

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respondent Mario Valdez.[5] The complaint was referred to the Philippine National Police Eighth Regional
Command (PNP-RECOM 8) which, after conducting its own investigation, filed an administrative charge
of Grave Misconduct against the petitioners and instituted summary dismissal proceedings.
The Office of the Solicitor General seeks to dismiss this petition on the ground of prematurity because the
petitioners failed to exhaust administrative remedies; they should have instead appealed to the Civil Service
Commission (CSC)
HELD:
The plea of the Office of the Solicitor General that the instant action is premature for non-exhaustion of
administrative remedies is thus untenable. We would have sustained it if the Secretary of the DILG was the
one who denied due course to or dismissed the appeal of petitioner Cabada and the petition for review of
petitioner De Guzman. By then, pursuant to Section 91 of the DILG Act of 1990; Section 47, Chapter 6,
Subtitle A, Title I, Book V of the Administrative Code of 1987; and Sections 31 and 32 of the Omnibus
Rules Implementing Book V of Executive Order No. 292, the appeal would have to be filed with the
CSC. And futile would be the petitioners claim in their Reply to the Comment of the OSG that their case
falls within the exceptions to the rule on exhaustion of administrative remedies.
SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION
(PILTEL) vs. NATIONAL TELECOMMUNICATIONS COMMISSION
G.R. No. 151908
August 12, 2003
FACTS: Pursuant to its rule-making and regulatory powers, the National Telecommunications
Commission issued a Memorandum Circulars on the billing of telecommunications services and on
measures in minimizing, if not eliminating, the incidence of stealing of cellular phone unit. Isla
Communications Co., Inc. (IslaCom) and Pilipino Telephone Corporation (PilTel) filed an action for the
declaration of nullity of the memorandum circulars, alleging that NTC has no jurisdiction to regulate the
sale of consumer goods as stated in the subject memorandum circulars. Such jurisdiction belongs to the
DTI under the Consumer Acts of the Philippines. Soon thereafter, Globe Telecom, Inc. and Smart
Communications, Inc. filed a joint motion for leave to intervene and to admit complaint-inintervention. This was granted by the trial court.
The trial court issued a TRO enjoining NTC from implementing the MCs. NTC filed a Motion to Dismiss,
on the ground that petitioners failed to exhaust administrative remedies. The defendant's MD is denied for
lack of merit. NTC filed a MR but was later on denied by the trial court. The CA, upon NTC's filing of a
special action for certiorari and prohibition, reversed the decision of the lower court. Hence this petition.
ISSUE: W/N the CA erred in holding that the private respondents failed to exhaust administrative
remedies?
RULING: Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or
administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and
regulations which results in delegated legislation that is within the confines of the granting statute and the
doctrine of non-delegability and separability of powers.
The rules and regulations that administrative agencies promulgate, which are the product of a delegated
legislative power to create new and additional legal provisions that have the effect of law, should be within
the scope of the statutory authority granted by the legislature to the administrative agency. It is required
that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in
conformity with, the standards prescribed by law. They must conform to and be consistent with the
provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and
statutory provisions control with respect to what rules and regulations may be promulgated by an
administrative body, as well as with respect to what fields are subject to regulation by it. It may not make

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rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly
the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a
statute. In case of conflict between a statute and an administrative order, the former must prevail.
Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasijudicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to
which the legislative policy is to apply and to decide in accordance with the standards laid down by the law
itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial
power when it performs in a judicial manner an act which is essentially of an executive or administrative
nature, where the power to act in such manner is incidental to or reasonably necessary for the performance
of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the
administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold
hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of
discretion in a judicial nature.
The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasijudicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to
refer the same to an administrative agency of special competence pursuant to the doctrine of primary
jurisdiction. The courts 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, and a uniformity of ruling is essential to comply with the premises of the regulatory statute
administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining
whether it should refrain from exercising its jurisdiction until after an administrative agency has determined
some question or some aspect of some question arising in the proceeding before the court. It applies where
the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim
requires the resolution of issues which, under a regulatory scheme, has been placed within the special
competence of an administrative body; in such case, the judicial process is suspended pending referral of
such issues to the administrative body for its view.
However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the
administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an
administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts.
Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty,
international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts. This is within the scope of judicial power, which includes the
authority of the courts to determine in an appropriate action the validity of the acts of the political
departments. Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.

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