Admin Session 1

ADMIN LAW | Nov 14, 2015 1
G.R. No. 114711 February 13, 1997

GARMENTS
and
TEXTILE
vs.
COURT
OF
APPEALS
CORPORATION, respondents.
initial export quota (EQ) allocation by virtue of the resolution of the

Garments & Export Textile Board (GTEB) dated July 30, 1984.
EXPORT
and
BOARD
(GTEB), petitioner,
AMERICAN
INTER-FASHION
G.R. No. 115889 February 13, 1997

AMERICAN
INTER-FASHION
CORPORATION, petitioner,
vs.
GLORIOUS SUN FASHION GARMENTS MANUFACTURING (PHILS.), INC. and
GARMENTS and TEXTILE EXPORT BOARD (GTEB), respondents.
HERMOSISIMA, JR., J.:

The doctrine of "primary jurisdiction" of Government administrative agencies has
herein come into play. Should courts of justice interfere with their purely
administrative and discretionary functions and have supervisory powers over their
proceedings and actions involving the exercise of judgment and findings of fact?
Verily, over matters falling under their jurisdiction, we have repeatedly held that
administrative agencies are in a better position to pass judgment thereon and their
findings of fact in that regard are generally accorded respect, if not finality, by the
courts. 1
In this connection, the Garments and Textile Export Board (GTEB) filed the herein
petition for Certiorari from the January 21, 1994 Decision and the March 22, 1994
Resolution of the Court of Appeals in CA-G.R. SP No. 31596 (G.R. No. 114711). Up
for our resolution likewise is the petition for Certiorari filed by the American InterFashion Corporation (AIFC) against the GTEB Resolution of June 21, 1994 (G.R. No.
115889). These petitions, being interrelated, were ordered consolidated.
Antecedent facts to set us on a proper perspective are those lucidly set out by the
Court of Appeals:
Petitioner American Inter-Fashion Corporation (AIFC) was a
corporation organized under Philippine Laws engaged in the
business of manufacturing and exporting garments. Prior to its
incorporation, the original incorporators of AIFC were awarded the
Before AIFC's incorporation, Glorious Sun, a corporation organized

under Philippine Laws sometime in 1977, was a recipient of a
substantial number of EQ allocations from the GTEB. On April 27,
1984, Glorious Sun was charged before the GTEB in OSC No. 84B-1 with, and was found guilty of, misdeclaration of values of its
imported raw materials resulting in dollar salting, and other related
frauds, in connection with its importations in 1983. As a result, the
EQs of Glorious Sun as well as its license to operate a bonded
manufacturing warehouse were cancelled and its stockholders and
officers were disqualified from engaging in garment exports. Its
export quotas were thereafter given to two newly-formed
corporations the De Soleil Apparel Manufacturing Corporation
(De Soleil) and the herein petitioner American Inter-Fashion
Corporation (AIFC). These corporations were joint ventures of
Hongkong investors and majority stockholders of Glorious Sun on
one hand and, allegedly, one member of the family and one crony
of President Marcos on the other (American Inter-Fashion Corp. vs.
Office of the President, 197 SCRA 409, 413 & 414 [1991]). The
cancelled EQs of Glorious Sun which were given to AIFC pertains
to those under Cat 347/8 equivalent to 113,341-3 dozens which are
the subject of dispute between GTEB and petitioner. Glorious Sun
continues to claim its rights over the aforementioned EQ.
In the meantime, AIFC was able to maintain its EQ from 1984 up to
the time of the filing of this petition (except for a brief period
between 1986 and 1989 when AIFC was placed under
sequestration) by continuously exporting or shipping out at least
95% of its current allocation as required by the rules and
regulations of the GTEB. This fact was not denied by the
respondents.
With the establishment of a new government in 1986, Glorious Sun,
on September 7, 1989, filed an appeal with the Office of the
President, which, in turn, set aside the GTEB decision adverse to
Glorious Sun and remanded the case for genuine hearings where
due process would be accorded both parties (supra). This decision
was upheld by the Supreme Court in a petition docketed as G.R.
No. 92422 and entitled American Inter-Fashion Corporation
vs. Office of the President, GTEB and Glorious Sun. On May 23,

1991 and July 2, 1991, the Supreme Court, after finding that ". . .
American Inter-Fashion . . . was created obviously to be the
recipient of export quotas arbitrarily removed from the rightful
owner [Glorious Sun]", affirmed the decision of the Office of the
President remanding the case for further proceedings to the GTEB
(supra, p. 426).
Pending its appeal to the Office of the President, Glorious Sun filed
before the Securities and Exchange Commission (SEC) a Petition
to Declare the Forfeiture of the Registration of AIFC on June 16,
1987. This was docketed as SEC-AC No. 319. On May 24, 1990,
the PED ordered there revocation of AIFC's registration on the
ground of "fraud". AIFC thereafter appealed to the SEC en banc,
but the latter upheld the revocation on May 22, 1992. The
subsequent Motion for Reconsideration of AIFC was also denied by
the SEC on September 16, 1992.
On September 30, 1992, the Petition for Review filed by AIFC
before this Court docketed as CA-G.R. No. 29017 was denied for
having been filed beyond the reglementary period. This denial was
upheld by the Supreme Court (3rd Division) in a Petition for Review
docketed as G.R. No. 107742. AIFC's subsequent Motion for
Reconsideration was likewise denied on February 17, 1993 and on
July 1, 1993, the Supreme Court, en banc, upheld the cancellation
of petitioner's certificate of registration with finality.
Meanwhile, on August 20, 1992, after further proceedings were
conducted in OSC No. 84-B-1 concerning Glorious Sun's alleged
violations and frauds, the GTEB adopted a resolution which reads
as follows:
"NOW THEREFORE, BE IT RESOLVED, as it is
hereby resolved:
1. The instant case is hereby terminated with
prejudice;
2. The disqualification of Glorious Sun and its
principal stockholders and officers from engaging
in the garments export business is hereby lifted;
3. The bonded manufacturing warehouse license

of Glorious Sun shall be restored subject to the
condition that it shall within a reasonable period
of time, comply with the requirements for the
operation of a BMW, and
4. The Board hereby awards to Glorious Sun the cancelled EQs of
De Soleil Apparel Manufacturing Corporation as follows:
1.1 US Cat 347/348 = 63.839 dozens
1.2 Cat 2 Canada = 123.587 pieces
5. The Board, under existing rules, regulations and policies, is not
in a position to restore the balance of the cancelled quotas.
(NOTE): Because:
1.1 Subject quota is currently being performed by
AIF;
1.2 AIF vigorously contests Glorious Sun's claim
for restoration, on the ground that AIF has
already acquired vested rights over the quota;
1.3 The pending case with SEC (SEC-AC319)
filed by Glorious Sun for cancellation of AIFC's
corporate registration;
1.4 May 22, 1992-SEC, en banc Resolution
cancelling AIFC's registration;
1.5 Pendency of AIFC's appeal with the Court of
Appeals filed on September 25, 1992.
(Comments, Rollo, p. 78).
Incidentally, Glorious Sun also filed on September 21, 1992, GTEB
Case No. 92-50 for the cancellation of the subject quotas allotted to
AIFC and for restoration of the same to Glorious Sun. This case
has not yet been resolved by GTEB.

AIFC, on the other hand, prior to the Supreme Court denial of its
petition for review of the cancellation of its registration, requested
the GTEB to release its EQ allocation for 1993. This request was,
however, refused by the GTEB in a resolution dated January 11,
1993, for the following reasons:
". . . relative to the request of American InterFashion Corp. for the release of its 1993 Initial
EQ/CEA entitlements under Cat. 347/8:
After a thorough discussion on the matter and,
upon motion duly made and seconded, it was
RESOLVED,
That
pending
final
decision/resolution of the Supreme Court in the
case of American Inter-Fashion Corp. (AIFC) vs.
SEC, the request of AIFC for release of its 1993
Initial EQ/CEA entitlements under Cat. 347/8, be,
as it is hereby DEFERRED, pending study by the
Committee created under GTEB Office Order No.
92-1, dated September 11, 1992, and
superseded by Office Order No. 92-2, dated
November 7, 1992, to study and attend to the
request of AIFC pertaining to the release of its
export
quotas
which
shall
submit
its
findings/comments and recommendation on the
matter to the Board in its next meeting. However,
with regard to subject firm's goods ready for
shipment, it can participate in the EQ allocation
(flexibility) when the same is offered to enable
them to fulfill their commitments."
The above-quoted resolution was the subject of the petition filed by
AIFC before the respondent Judge after GTEB refused to lift said
order. This case which was docketed as Special Civil Action Case
No. 93-1173 for Certiorari, prayed for the annulment of GTEB's
aforementioned order, for the issuance of a temporary injunction
restraining the implementation of said order, and for the immediate
release of the regular EQ of AIFC for 1993. A temporary restraining
order (Annex D) was thereafter issued by respondent Judge on
April 13, 1993, enjoining GTEB from implementing its questioned
order and from otherwise delaying the release of AIFC's EQ

entitlement for 1993.
On April 20, 1993, GTEB filed a Motion to Dismiss and also moved
to quash the above-mentioned temporary restraining order.
Thereafter, on May 3, 1993, the respondent Judge issued one of
the Orders herein questioned which reads as follows:
"For resolution is the petitioner's prayer for the
issuance of a writ of a preliminary prohibitory
injunction . . . enjoining the GTEB and all persons
acting under them from implementing the
resolution of the respondent GTEB, suspending
the petitioner's export quota entitlement for 1993
and, a writ of preliminary mandatory injunction
commanding the GTEB to release the petitioner's
1993 initial export quotas.
xxx xxx xxx
It is clear from the express terms of the
questioned Resolution of the respondent
Garments & Textile Export Board that the
petitioner's export quota has not been
"suspended" as claimed by the petitioner but was
merely "deferred" pending a study of certain
matters by the committee created by GTEB. Said
resolution further made provisions for the
petitioner's goods which are ready for shipment
by stating in the questioned resolution that "with
regard to subject firm's goods ready for shipment,
it can participate in the REA flexibility when the
same is offered to enable them to fulfill their
commitments.
Thus it is clear that the respondent GTEB has not
as of this time, suspended or cancelled the
petitioner's Export Quota but merely deferred its
release to the petitioner pending the resolution of
certain matters. As a further indication that the
GTEB has not suspended the petitioner's export
quota, is the fact that it has provided for

temporary measures which allows the petitioner
to ship its products which are ready for shipment
in order not to unduly cause damage to the
petitioner.
WHEREFORE, in view of all the foregoing, the
petitioner's prayer for writs of preliminary
prohibitory and mandatory injunctions are hereby
DENIED." (Annex A; Rollo, pp. 23-24)
AIFC's subsequent motion for reconsideration was likewise denied
(Annex D). Hence, the instant petition.
Despite the Supreme Court's final decision upholding the
cancellation of AIFC's certificate of registration, the latter, on July
13, 1993, filed another Petition for Certiorari before the Supreme
Court docketed as SC-G.R. No. 110771, against SEC and Glorious
Sun, assailing the SEC decision dated May 22, 1992 which ordered
the revocation of AIFC's certificate of registration, and seeking to
stop the cancellation of its certificate of registration. This petition
(G.R. No. 110771) was denied by the Supreme Court on August 11,
1992 on the ground that the questioned decision of the SEC "is the
same decision assailed in a petition for review on certiorari filed
with [the Supreme Court] on 23 November 1992 under Rule 45 of
the Rules of Court, docketed as G.R. No. 107742. Records show
that the petition (in G.R. No. 107742) was denied and a motion for
reconsideration of said denial wasdenied with finality in the
resolution of the Court en banc, dated 01 July 1993' (Annex A to
Respondent's Memorandum; Rollo, p. 326). Petitioner's Motion for
Reconsideration in G.R. No. 110771 is still pending resolution by
the Supreme Court.
In the meantime, AIFC was awarded by the GTEB a REA-Flexibility
quota of exactly the same category and amount as that which is the
subject of this petition the release of which was deferred by the
GTEB. This was done by the GTEB allegedly so as not to prejudice
AIFC's export commitments pending any action on its request for
the release of its 1993 EQs. AIFC had allegedly performed on the
REA-Flex quota since January 1993 up to the present (Annex B to
Respondent's Memorandum). The GTEB also allowed AIFC to
continue importing raw materials "to service the balance of its REAFlex quota" (Annex C; Respondents' Memorandum, p. 17).
Incidentally, the difference between the REA-Flex quota and the

regular quota entitlement, is that the latter may be subject to
restoration for the next quota year depending on performance of
and compliance while the former is only good for one-time use and
may not be carried over to the next quota year (Respondent's
Memorandum,
p.
16; Rollo,
p. 326).
On September 10, 1993, this Court in the instant petition and
through the former Seventeenth Division, required petitioner to
amend its petition to include AIFC-International Fashion
Corporation (hereinafter, AIFC-International) as co-petitioner
considering AIFC's manifestation that it underwent a business
reorganization which resulted in the establishment of AIFCInternational as its wholly-owned subsidiary and the transfer to the
latter of AIFC's regular export allocation with the GTEB (p.
167,Rollo).
Respondent GTEB objected to AIFC's motion to join AIFCInternational as co-petitioner because the latter allegedly does not
have any interest in the case at bar. Furthermore, the SEC had
issued a restraining order on August 31, 1993 enjoining AIFC or
any of its agents from transferring and conveying its assets to
AIFC-International or any other subsidiary of AIFC (Annex A; p.
220, Rollo). The restraining order was issued in connection with
SEC Case No. 08-93-4546 filed by Yeung Chun Kam, Yeung Chun
Ho, and Archie Chan vs. American Inter-Fashion Crop. (Annex B, p.
221, Rollo).
It seems that Yeung Chun Kam, Yeung Chun Ho and Archie Chan
are among the stockholders of petitioner AIFC known as the
"Hongkong Investors" who allegedly own an aggregate thirty-three
percent (33%) of the total subscription of AIFC's capital stock of
P2.5 Million. They alleged in their petition that they voted
against the resolution adopted by AIFC which increased the
corporation's capital stock from P2 Million to P60 Million, which
resolved that the authorized capital stock be paid-up with the
advances of the Campa Group representing 63% of the
subscription of the capital stock of AIFC, and which also resolved
that the corporation's creditors-stockholders would be given the
right to subscribe to the authorized capital stocks by converting
their advances to the Corporation into equity.

The Hongkong group allegedly disagreed with and voted against
the resolution since they wanted the additional paid-up capital to be
entirely in cash with all the stockholders infusing new money. The
resolution was allegedly not implemented, instead, the Hongkong
group claims to have discovered that without their knowledge the
Campa group organized and registered a partnership called
American Inter-fashion Ltd., Co., as well as another subsidiary, the
AIFC-International. Claiming that these acts of establishing the two
business entities violated their rights as minority stockholders of
AIFC, Yeung Chun Ho, Yeung Chun Kam and Archie Chan filed
SEC Case No. 08-93-4546 seeking to restrain the transfer and
conveyance of AIFC's assets to AIFC-International and American
Inter-Fashion Ltd., Co.; to cause the appointment of trustees for the
purpose of the liquidation of AIFC under Sec. 122 of the
Corporation Code; and to order AIFC to provide Yeung Chun Kam
company copies of its financial statements from 1989 to 1993 and
to render an accounting of its operations during the said years
(Rollo, pp. 222 to 235). This case is still pending before the SEC. 2
As can be seen, there were triggered by the controversy of the parties herein
innumerable pleadings and interminable complaints:
On April 7, 1993, AIFC filed a petition for certiorari, prohibition and mandamus under
Rule 65 against the GTEB with the Regional Trial Court of Makati, Branch 138,
entitled "American Inter-Fashion Corporation, Petitioner, v. Garments and Textile
Export Board, Respondent" docketed as Civil Case No. 93-1173 (Annex "D" of
GTEB's petition).
In the said petition AIFC sought to annul, on the alleged ground of lack of jurisdiction
or grave abuse of discretion, the GTEB's Resolution dated January 11, 1993 deferring
AIFC's request for the release of its 1993 EQs (Initial EQ/CEA entitlements under Cat.
347/8) for the reasons therein stated. Said Resolution provided in part:
RESOLVED, that pending final decision/resolution of the Supreme
Court on the case of American Inter-Fashion Corp. (AIFC) vs. SEC,
the request of AIFC for release of its 1993 Initial EQ/CEA
entitlements under Cat. 347/8, be, as it is hereby DEFERRED
pending study by the Committee created under GTEB Office Order
No. 92-1, dated September 11, 1992, and superseded by Office
Order No. 92-2, dated November 17, 1992, to study and attend to
the request of AIFC pertaining to the release of its export quotas
which shall submit its findings/comments and recommendation on
the matter to the Board in its next meeting. However, with regard to
subject firm's goods ready for shipment, it can participate in the
REA flexibility when the same is offered to enable them to fulfill
their commitments.
On April 13, 1993, the trial court issued a temporary restraining order against GTEB
pending hearing on AIFC's application for the issuance of a writ of preliminary
prohibitory injunction.
On April 24, 1993, GTEB filed its "1. Motion to Dismiss the Instant Petition and 2.
Motion to Quash or Recall the Temporary Restraining Order." 3
On April 29, 1993, GTEB filed its "Motion to Resolve Motion to Dismiss Prior to
Hearing of the Petition for Injunction." 4
On or about 19 April 1993, Glorious Sun Fashion Garments Manufacturing (Phils.),
Inc. (Glorious Sun) filed an "Urgent 1) Motion for Leave to Intervene and File Answer
as Respondent-Intervenor and 2) Motion to Quash or Recall Temporary Restraining
Order." This motion was opposed by AIFC.
In its Order dated May 3, 1993, the trial court denied AIFC's application for the
issuance of the writs of preliminary prohibitory and mandatory injunction. The
pertinent portions of the May 3, 1993 Order 5 state:
It is clear from the express terms of the questioned Resolution of
the respondent Garments and Textile Export Board that the
petitioner's export quota has not been "suspended" as claimed by
the petitioner but was only "Deferred" pending a study of certain
matters by the committee created by GTEB. Said resolution further
made provisions for the petitioner's goods which are ready for
shipment by stating in the questioned resolution that "with regard to
subject firm's goods ready for shipment, it can participate in the
REA flexibility when the same is offered to enable them to fulfill
their commitments."
Thus, it is clear that the respondent GTEB has not as of this time,
suspended or cancelled the petitioner's Export Quota but merely
deferred its release to the petitioner pending the resolution of
certain matters. As a further indication that the GTEB has not
suspended the petitioner's export quota, is the fact that it has
provided for temporary measures which allows the petitioner to ship

its products which are ready for shipment in order not to unduly
cause damage to the petitioner.
WHEREFORE, in view of all the foregoing, the petitioner's prayer
for writs of preliminary prohibitory and mandatory injunctions are
hereby DENIED.
Through its Order dated May 25, 1993, 6 the trial court denied AIFC's motion for
reconsideration of the May 3, 1993 Order. As a result thereof, AIFC filed with the
Court of Appeals a petition for certiorari and mandamus from the aforementioned
Orders of the trial court in Civil Case No. 93-1173 (docketed as CA-G.R. SP No.
31596) where it prayed that the May 3, 1993 and May 25, 1993 Orders be set aside
and a writ of mandamus be issued directing the GTEB to release AIFC's EQs for
1993.
Thereafter, AIFC filed a "Manifestation" where it alleged that in July 1993, it
underwent a business reorganization which resulted in the establishment of a whollyowned subsidiary, the AIFC International Fashion Corporation. AIFC further alleged
that its regular export quota allocation with the GTEB was transferred to the aforesaid
subsidiary, for which reason, the said subsidiary may be joined as a co-petitioner in
CA-G.R. SP No. 31596.
After the GTEB filed its "Comments" on the petition in CA-G.R. SP No. 31596 on
August 19, 1993, 7 AIFC filed a "Motion" 8 where it prayed that AIFC International
Fashion Corporation be joined as a co-petitioner. Thereafter, on or about August 26,
1993, AIFC (and AIFC International) filed a "Reply" to the Comments of GTEB. 9
Subsequent to the above, on September 14, 1993, upon being directed by the Court
of Appeals to amend its petition to include "AIFC International Fashion Corporation"
as co-petitioner, AIFC filed an amended petition. 10
After hearing the oral arguments of the GTEB and AIFC, and after receiving their
respective memoranda, 11 as well as other additional pleadings (including an
"Addendum To Respondent's Memorandum" 12 filed by the GTEB for purposes of
informing the Court of Appeals of this Court's September 22, 1993 Resolution issued
in G.R. No. 110771 denying with finality AIFC's motion for reconsideration of the
August 11, 1993 Resolution dismissing the said petition, and affirmed the revocation
of AIFC's certificate of corporate registration), or on January 21, 1994, the Court of
Appeals rendered the Decision subject of GTEB's petition in G.R. No. 114711 in favor
of AIFC and AIFC International, 13 annulling the trial court's Orders of May 3, 1993 and
May 25, 1993 in this wise:
WHEREFORE, the instant petition is GRANTED and the Orders of

the respondent Judge dated May 3, 1993 and May 25, 1993 are
hereby annuled and set aside with no pronouncement as to costs.
On February 11, 1994, the GTEB filed a "Motion For Reconsideration"
January 1994 Decision.
14
of the 21
Shortly thereafter, motions to intervene as well as motions for reconsideration of the

said Decision were filed by Glorious Sun Fashion Garments Manufacturing Co.,
(Phils.) Inc. and by the minority stockholders of AIFC (Yeung Chun Kam, Yeung Chun
Ho and Archie Chan).
On or about January 31, 1994, on the ground that the Court of Appeals in its January
21, 1994 Decision had granted the petition, AIFC and AIFC International filed a
"Motion For Issuance Of Writ Of Mandamus" 15 asking that a writ of mandamus be
issued to compel the GTEB to release EQs for 1993 to AIFC.
On February 15, 1994, the GTEB filed its "Opposition To Petitioners' Motion for
Issuance of Writ of Mandamus. 16
On March 22, 1994, the Court of Appeals issued its Resolution 17 denying (1) AIFC
and AIFC International's motion for the issuance of a writ of mandamus, (2) the
motions for intervention filed by Glorious Sun, and Yeung Chun Kam, et al., and (3)
GTEB's motion for reconsideration. The more pertinent portions of said Resolution
read:
It bears stressing that the subject matter of the petition as well as of
the decision sought to be reconsidered was only the 1993
allocation. Our decision herein did not concern itself with, nor was it
called upon to rule upon, any future allocations the grant or release
of which is the prerogative of the GTEB in accordance with law.
We never ordered the GTEB to release the 1993 allocation to AIFC,
since the lapse of the year 1993 had rendered this issue moot and
academic.
We wish to make it clear that this Court is not intruding in, nor are
we adjudicating upon ourselves, the powers and functions of the
GTEB. The decision to annul the orders in question was called for
in view of the grave abuse of discretion exercised both by GTEB
and the lower court in refusing to release petitioner's 1993

allocations despite the fact that it was clearly entitled to such
release. This is well within the jurisdiction of this Court which has
the authority to check the abuses which may have been committed
by any officer, board or tribunal exercising judicial functions (Sec. 1,
Rule 65, Rules of Court).
Neither are we ordering the GTEB to release or grant export quota
allocations to the transferee of AIFC's 1993 EQ allocations. The
decision never granted such right to the transferee since we know
that this issue is solely within the jurisdiction of the GTEB. What the
decision discussed was petitioner's act of transferring the interest
and assets of the former AIFC to its transferee. We do not consider
this as an adjudication of GTEB functions.
As regards the Motions to Intervene filed by Glorious Sun and
Yeung Chun Kam and company, we find said motions improper.
Intervention is not an independent action but is auxiliary and
supplemental to existing litigation (Clareza vs. Rosales, 2 SCRA
455). The office of a petition forcertiorari is only to check abuses or
excesses in the exercise by a tribunal, board or officer, of its judicial
functions and not to determine the respective rights and interests of
the parties in the subject matter of the litigation. This petition is
therefore not the proper forum for the discussion of the respective
rights either or Glorious Sun or Yeung Chun Kam, and company.
Whether or not Glorious Sun is entitled to quota allocations is an
issue which could be properly raised before the GTEB. And
regarding the interests of Yeung Chun Kam and company vis-avis those of AIFC's, the same should be properly ventilated in
another appropriate proceeding.
Moreover, intervention is generally allowed only before or during
trial (Sec. 2, Rule 12, Rules of Court) unless there are strong
considerations to allow such intervention. None exists in this case.
In view of the denial of the Motions to Intervene filed by Glorious
Sun, Yeung Chun Kam and company, there is no reason for us to
discuss their motions for reconsideration.
WHEREFORE, premises considered, petitioner's Motion for the
issuance of a Writ of Mandamus is DENIED. GTEB's motion for
reconsideration is also DENIED as well as the Motions for
Intervention filed by Glorious Sun, Yeung Chun Kam, Yeung Chun

Ho, and Archie Chan.
GTEB thus filed its petition in G.R. No. 114711, where it prayed:
WHEREFORE, premises considered, it is respectfully prayed that
the 21 January 1994 Decision and 22 March 1994 Resolution of the
Court of Appeals (except insofar as the latter correctly denied AIFC
and AIFC International Fashion Corporation's "Motion For Issuance
Of Writ Of Mandamus') BE ANNULLED AND SET ASIDE; and that
instead a Resolution be issued DISMISSING the petition in CAG.R. SP No. 31596 in its entirety for being moot and academic
and/or for lack of merit.
AIFC's petition in G.R. No. 115889, on the other hand, is an offshoot of the petition
filed by Glorious Sun with the GTEB on 21 September 1992. 18 In said GTEB
petition, 19 Glorious Sun prayed that the export quotas which the GTEB had earlier
awarded to AIFC on August 1, 1984 pursuant to its April 27, 1984 Decision in Adm.
Case No. OSC 84-B-1, be cancelled and returned to Glorious Sun, on the alleged
ground that AIFC was not qualified to the said awards under the policies, rules and
regulations of the GTEB, and more specifically because:
a. AIFC, at the time of the award on August 1, 1984, did not have its
own in-house production capacity; in this connection, AIFC, to this
date, still has no in-house production capacity as it has continued
not owning any factory, plant, or even a single sewing machine, nor
can it show any lease agreement for the use of any manufacturing
facilities;
b. AIFC had no personality at the time of the award on August 1,
1984 as it was not yet a corporation, its incorporation having been
effected only on September 6, 1984; in this connection, on May 22,
1992, the certificate of registration of AIFC was revoked by order of
the Securities and Exchange Commission on the ground that the
same was secured through fraud; and
c. AIFC, upon its incorporation, included as stockholders persons
who were at the time disqualified from engaging in the garments
export business.

The events leading to the filing of GTEB Case No. 92-50 are in turn summed up in the
succeeding paragraphs of Glorious Sun's "Comment on Petition with Memorandum"
dated August 1, 1995: 20
8. On 27 April 1984, the GTEB, on the basis of trumped-up charges
of misdeclaration of importations, issued a Decision in Adm. Case
No. OSC 84-B-1, cancelling the export quotas and export
authorizations of Glorious Sun, and on 01 August 1984 illegally
awarded part thereof to AIFC. The dispositive portion of said
Decision reads thus:
WHEREFORE, the Board finds that the
Respondent firm violated its rules and regulations
on importations and hereby imposes the following
administrative penalties:
1. Cancellation of Export Quotas and Export
Authorizations of the firm and disqualification of
the firm and the major stockholders and officers
from engaging in garment exports;
2. Cancellation of the firm's license to operate a
bonded manufacturing warehouse.
The Board will likewise endorse the case to the
Presidential Anti-Dollar Salting Task Force for
further investigation and prosecution and will
request the Bureau of Customs to seal the firm's
bonded manufacturing warehouse and to conduct
an inventory of the contents thereof.
9. Subsequently, Glorious Sun appealed the said Decision to the
Office of the President. On September 7, 1989, the Office of the
President, in O.P. Case No. 3781, nullified the Decision of the
GTEB in the succeeding manner:
WHEREFORE, the case is hereby remanded to
the Garments and Textile Export Board for further
proceedings, affording the Appellant an
opportunity (a) of full disclosure of all the
evidence and/or GTEB records relative to the
charges in the Show Cause Order dated
February 14, 1984, which evidence/records must

be properly identified and their due execution and
existence duly established by appropriate
competent witnesses, and (b) of rebutting the
same evidence/records through the presentation
of additional evidence, after which the Board
may, on the basis of said evidence and records,
maintain or revise its decision in this case.
10. Thereafter, acting on Motions for Reconsideration of its
September 7, 1989 decision, the Office of the President, on
February 20, 1990, expanded its previous decision. The pertinent
portion of the Resolution denying said motions are hereunder
quoted, to wit:
It is, however, insisted by the movants that the
GTEB decision of April 27, 1984 had already
become final and that Glorious Sun abandoned
its right when it elevated the case to the Supreme
Court by way of certiorari, docketed as G.R. No.
67180, "Glorious Sun Fashion Garments and
Textile Manufacturing Company (Philippines), Inc.
vs. Garments and Textile Export Board, etc. et
al." We disagree. For, as explicitly shown by the
resolution promulgated on June 4, 1984 by the
Supreme Court in the said case and as found by
this Office in the decision presently sought to be
reconsidered, the said April 27, 1984 decision
was rendered by the GTEB in flagrant violation of
Glorious Sun's right to due process. Hence, the
GTEB may be said to have "acted without or in
excess of jurisdiction and with grave abuse of
discretion" (Barranza vs. Campos, Jr. 120 SCRA
881, 888-889) and, therefore, the said decision
is null and void (Bacus vs. Ople, 132 SCRA 690,
710; Free Employees and Workers Assn. [FEWA]
vs. Court of Industrial Relations, 14 SCRA 781,
784-787) as if it was not rendered at all. As
succinctly held by the Supreme Court:
In this jurisdiction, a void
judgment or order is in legal

effect no judgment or order. By
it no rights are divested. From
it no rights can be obtained.
Being worthless, it neither
binds nor bars anyone. All acts
performed under it and all
claims flowing out of it are void
(Paredes vs. Moya, 61 SCRA
525, 533, citing Chavez vs.
Court of Appeals, 24 SCRA
663, 685; Comia vs. Nicolas,
29 SCRA 492, 503-504,
quoting Chavez vs. CA, supra,
and Gomez vs. Concepcion, 47
Phil. 717, 722).
Thus, being null and void,
rendered as it was in violation
of the due process clause
(Bacus vs. Ople, supra) and
consequently for want of
jurisdiction
(Barranza
vs.
Campos, Jr., supra), the GTEB
decision of April 27, 1984 "is
not a decision in contemplation
of law" (Planas vs. Collector of
Internal Revenue, 3 SCRA 395,
399)
and
is,
therefore,
"inexistent" (Free Telephone
Workers Union vs. PLDT, 160
SCRA 43, 46). Consequently,
the same decision can "never
become final" (Manila Railroad
Company vs. Moya, 14 SCRA
358, 363-364), much less
executory (Planas vs. Collector
of Internal Revenue, supra).
Indeed, the parties attempting
to
enforce
(such
void
judgment) may be responsible
as "trespassers" (Comia vs.
Nicolas, supra, at p. 504).
What right then could Glorious

Sun have abandoned when, as
illustrated by the aforecited
authorities, the void and
inexistent GTEB decision of
April 27, 1984 neither vests nor
divests any rights, neither
binds nor bars anyone?
11. The Decision of the Office of the President was in turn upheld
by the Supreme Court in a Resolution dated May 23, 1991 and
another Resolution dated July 2, 1991 in American Inter-Fashion
Corporation v. Office of the President (197 SCRA 409 [1991]). In
said case, the Supreme Court, citing Mabuhay Textile Mills
Corporation v. Ongpin (141 SCRA 437 [1986]), ruled that the export
quota allocations of Glorious Sun had evolved into some form of
property right, which should not be removed from it arbitrarily and
without due process. Thus:
Contrary to the petitioner's posture, the record
clearly manifests that in cancelling the export
quotas of the private respondent GTEB violated
the private respondent's constitutional right to
due process. Before the cancellation in 1984, the
private respondent had been enjoying export
quotas granted to it since 1977. In effect the
private respondent's export quota allocation
which initially was a privilege evolved into some
form of property right which should not be
removed from it arbitrarily and without due
process only to hurriedly confer it on another.
Thus, in the case of Mabuhay Textile Mills
Corporation v. Ongpin (Ibid), we stated:
In the case at bar, the
petitioner was never given the
chance to present its side
before
its
export
quota
allocations were revoked and
its officers suspended. While it
is true that such allocations as
alleged by the Board are mere

privileges which it can revoke
and cancel as it may deem fit,
these privileges have been
accorded to petitioner for so
long that they have become
impressed with property rights
especially since not only do
these privileges determine the
continued existence of the
petitioner with assets of over
P80,000,000.00 but also the
livelihood of some 700,000
workers who are employed by
the petitioner and their families.
. . . (Emphasis supplied).
The decision penned by
Deputy Executive Secretary
Magdangal B. Elma and the
resolution penned by Acting
Deputy Executive Secretary
Mariano Sarmiento II are not
tainted in the slightest by any
grave abuse of discretion. They
outline in detail why the private
respondent was denied due
process when its export quotas
were cancelled by GTEB. The
findings are supported by the
records.
Finally, American Inter-Fashion
is hardly the proper party to
question
the
Malacaang
decision. It was incorporated
after the incidents in this case
happened. It was created
obviously to be the recipient of
export
quotas
arbitrarily
removed from the rightful
owner. It was sequestered
precisely because of the
allegation that it is a crony
corporation which profited from

an act of injustice inflicted on
another private corporation.
xxx xxx xxx
PREMISES
CONSIDERED,
the motion for reconsideration
is GRANTED. The instant
petition is DISMISSED. The
questioned
decision
and
resolution of the Office of the
President
are
hereby
AFFIRMED (American InterFashion Corporation v. Office
of the President, 197 SCRA
409 [1991]).
12. After the aforementioned Decision of the Office of the President
was affirmed by the Supreme Court, and pursuant to the directive
embodied in the said O.P. Decision, the case was remanded to the
GTEB for further proceedings. However, while Glorious Sun
presented additional evidence in support of its position, the GTEB
did not, as it could not, present any evidence relative to the charges
in the show Cause Order dated 14 February 1984. Instead, and in
view of this dearth of evidence against Glorious Sun, the GTEB
encouraged the latter to enter into a compromise agreement.
13. Glorious Sun assented to the execution of a compromise
agreement primarily on the basis of an understanding with the
GTEB that insofar as the balance of the export quotas due to
Glorious Sun was concerned (which quotas AIFC was illegally and
obstinately holding on to), Glorious Sun would be allowed to initiate
separate proceedings for the recovery thereof against AIFC.
Incidentally, this arrangement was rendered necessary by the fact
that AIFC was never a proper party to, and had no personality to
participate in Adm. Case No. OSC 84-B-1.
14. On August 20, 1992, the GTEB finally dismissed the complaint
against Glorious Sun which formed the basis for the April 27, 1984
decision, restoring part of the export quota allocations of Glorious
Sun. The dispositive portion of the said Resolution reads:

NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved
that:
a) The instant case is hereby terminated with
prejudice;
b) The disqualification of Glorious Sun and its
in the garments export business is hereby lifted;
c) The bonded manufacturing warehouse license
of Glorious Sun shall be restored subject to the
condition that it shall within a reasonable period
of time, comply with the requirements for the
operations of a BMW, and
d) The Board hereby awards to Glorious Sun the
canceled EQs of De Soleil Apparel Manufacturing
Corporation as follows:
1. US Cat. 347/348-63,839 dzs.
2. Cat. 2 Canada-123,587 pcs.
e) The Board, under existing rules, regulations
and policies, is not in a position to restore the
balance of the cancelled quotas (p. 4, GTEB
Resolution dated August 20, 1992).
15. It will be noted that the Board restored to Glorious Sun the
portion of the export quotas illegally taken away from Glorious Sun
and given to DE Soleil Apparel Manufacturing Corporation (DSA),
the same having been already taken back by the Board by
cancellation. But, as stated above, with respect to the balance of
the export quotas illegally taken away from Glorious Sun still being
stubbornly illegally held on to by AIFC, additional steps became
necessary for the recovery thereof.
16. Accordingly, on September 21, 1992, Glorious Sun filed GTEB
Case No. 92-50 for the cancellation of the quotas illegally awarded
to AIFC and for the restoration of the said quotas to Glorious Sun.
17. On August 3, 1993, the Hearing Officer submitted his Report

with the recommendation that AIFC's export quotas he
revoked/cancelled and the same be returned or awarded to
Glorious Sun subject to GTEB rules and regulations on
performance and forfeiture. However, instead of approving the
Report of the Hearing Officer assigned to hear the case and who
conducted the proceedings, the GTEB appointed a committee to
prepare a Report.
18. The Committee submitted its Report and Recommendation
under date of May 10, 1994. On June 21, 1994, the GTEB issued a
Resolution adopting and approving in toto the Report and
Recommendation. The pertinent portion of the Resolution reads:
THE FOREGOING PREMISES CONSIDERED, the Board hereby
RESOLVES:
1. That the export quotas and export
authorizations awarded to AIFC be cancelled;
2. That the petition of Glorious Sun to be restored
the export quota allocations which were awarded
to AIFC be denied;
3. That said export quotas and export
authorizations of AIFC be reverted to the
allocable balance (open basket) which shall be
made available to other garment manufacturers,
including Glorious Sun, for application therefor;
and
4. That AIFC's motion to dismiss be denied for
lack of any merit.
19. AIFC filed the instant petition to annul the above-quoted June
21, 1994 Resolution of the GTEB, as well as to compel the latter to
restore the cancelled export authorizations which AIFC claims it is
entitled to.
After Glorious Sun presented evidence in support of its petition in GTEB Case No. 9250, AIFC filed a motion to dismiss the same for lack of jurisdiction. 21 On June 21,

1994, the GTEB issued its resolution subject of AIFC's petition in G.R. No.
115889, 22 the entirety whereof reads as follows:
to file the petition; (2) AIFC failed to exhaust administrative remedies; and (3) AIFC is
guilty of forum-shopping.
RESOLVED, that the findings and recommendation of the

Committee on Administrative Case No. 92-50, as contained in
Annex "C", be, as they are hereby ADOPTED and APPROVED, in
toto, wit:
In view of Our July 20, 1994 Resolution: (1) requiring the respondents in G.R. No.
115889 to comment on the petition, and not to file a motion to dismiss, and (2)
granting AIFC's motion to consolidate, Glorious Sun filed a "Manifestation" on August
15, 1994 whereby it withdrew the aforesaid "Motion for Outright Dismissal of the
Petition (with Opposition to Motion to Consolidate)." At the same time it made
manifest its intention to file a motion for reconsideration of the same July 20, 1994
Resolution insofar as it ordered AIFC's petition in G.R. No. 115889 consolidated with
the GTEB's petition in G.R. No. 114711.
1. That the export quotas and export

authorizations awarded to AIFC be cancelled;
2. That the petition of Glorious Sun to be restored
the export allocations which were awarded to
AIFC be denied;
3. That the said export quotas and export
authorizations of AIFC be reverted to the
allocable balance which shall be made available
to other garment manufacturers, including
Glorious Sun, for application therefor;
4. That AIFC's motion to dismiss be denied for
lack of merit.
Consequently, on 6 July 1994, AIFC filed its petition in G.R. No. 115889, where it
sought to:
(a) annul and set aside the respondent Garments and Textile
Export Board's (GTEB's) resolution dated 21 June 1994 in GTEB
Case No. 92-0, entitled Glorious Sun vs. AIFC, for having been
issued without or in excess of jurisdiction, or in grave abuse of
discretion; and
(b) have respondent GTEB commanded to restore or release
petitioner AIFC's regular export quota entitlement for 1994. 23
Simultaneous with the filing of its petition, AIFC filed a motion to consolidate the said
petition with GTEB's petition in G.R. No. 114711. On July 20, 1994, after praying for
time for the filing thereof, Glorious Sun filed, in G.R. No. 115889, a "Motion for
Outright Dismissal of the Petition (with Opposition to Motion to Consolidate)", where it
sought the dismissal of said petition on the grounds that (1) AIFC has no personality
Accordingly, on September 7, 1994, Glorious Sun filed a

Reconsideration 24 with Motion to Suspend Period to File Comment."
"Motion
for
However, prior to the filing of Glorious Sun's aforesaid "Motion for Reconsideration,
etc.," or on September 5, 1994, we issued our Resolution in the above-numbered
cases, where we resolved to:
(a) NOTE WITHOUT ACTION the motions filed by: (1) Glorious Sun
Fashion Garments Manufacturing in G.R. No. 115889 for first and
second extensions totalling fifteen (15) days from July 13, 1994
within which to file motion to dismiss petition and opposition to the
motion to consolidate; and (2) American Inter-Fashion Corporation
[N.B. this should have read "Glorious Sun Fashion Garments
Manufacturing" in G.R. No. 114711 for the outright dismissal of the
case with opposition to the motion to consolidate, it appearing that
the: (1) motion for outright dismissal with opposition to the motion to
consolidate was withdrawn by private respondent Glorious Sun
Fashion Garments Manufacturing in G.R. No. 115889 through its
manifestation dated August 11, 1994; and (2) motion to consolidate
these cases was granted by the Second Division on July 20, 1994;
(b) GRANT the motions of: (1) private respondent American InterFashion corporation: (aa) for a fourth (final) extension of five (5)
days from July 23, 1994 within which to file comment on the petition
for review on certiorari; and (bb) to admit comment on the petition
in G.R. No. 114711;
(c) NOTE the: (1) urgent motion of petitioner in G.R. No. 115889 to
resolve application for temporary restraining order or injunction; and
(2) comment on the petition with motion for the issuance of a show

cause order filed by private respondent American Inter-Fashion
Corporation in G.R. No. 114711;
Motion for Summary Dismissal and Motion to Cite Petitioner for Direct Contempt (For
Violation of SC Revised Circular 28-91)." 30
(d) require the petitioners [N.B. this should have read petitioner] to
file a REPLY within ten (10) days from notice hereof to the
comment on the petition filed by American Inter-Fashion
Corporation; and
On April 3, 1995, we issued a resolution, the pertinent portions whereof reads:
(e) NOTE the manifestation dated August 12, 1994 by Atty.

Benjamin D. de Asis, manifesting his withdrawal as counsel for
petitioner Garments and Textile Export Board in G.R. No. 114711
but require aforesaid counsel to SUBMIT the conformity of his client
within five (5) days from notice hereof. 25
Considering the allegations contained, the issues raised and the

arguments adduced in the petitions for review on certiorari, as well
as the respective comments of the private respondents thereon and
the replies of petitioner to said comments, the Court Resolved to
give DUE COURSE to the petition, and to require the parties to
FILE their respective MEMORANDA in both cases, within twenty
(20) days from notice.
The Court further Resolved:
Thereafter, Glorious Sun filed on September 22, 1994 with the First Division of this
Court, its "Manifestation and Motion to Suspend Further Proceedings Until After
Resolution by Second Division of Motion for Reconsideration of Order of July 20,
1994 on Consolidation." 26 On the other hand, the GTEB, pursuant to Our above
directive, filed its Reply to AIFC's Comment in G.R. No. 115889.
AIFC, as petitioner in G.R. No. 114711, filed with the Second Division of this Court an
"Urgent Motion to Resolve Application for Injunction," 27 which it followed up with an
"Urgent Motion to Restore Status Quo Ante." 28 The latter motion was filed with the
Third Division of this Court, to whom the above-numbered petitions had, in the
meantime, been assigned. In response to these urgent motions, Glorious Sun filed,
also with the Third Division of this Court, its "Comment (Re: Petitioner's Urgent
Motions: [1] to Resolve Application for Injunction; and [2] to Restore Status Quo
Ante)" where it argued that:
I. The First Division of this Honorable Court, as far back as 05
September 1994, had already acted upon petitioner's urgent motion
for the issuance of a temporary restraining order or injunction, by
merely noting the same.
II. In any event, the instant motions should nevertheless be denied,
there being absolutely no showing that petitioner is clearly entitled
to injunctive relief. 29
Subsequent to the filing of the above pleadings, AIFC filed yet another "Urgent Motion
to Resolve," to which Glorious Sun replied through a pleading denominated as
"Manifestation (Re: Petitioner's March 30, 1995 Urgent Motion to Resolve) with
xxx xxx xxx

(b) to NOTE:
(1) the urgent motion to resolve application for
injunction, dated March 2, 1995, filed by counsel
for petitioner American Inter-Fashion Corporation;
and
(2) the urgent motion to restore status quo ante,
dated March 14, 1995, filed by counsel for
petitioner.
Thereafter, both American Inter-Fashion Corporation and the GTEB filed their
respective Memoranda. On the other hand, on August 4, 1995, Glorious Sun filed its
"Comment on Petition with Memorandum," 31 which pleading included the succeeding
explanatory remarks:
1. At the outset, it should be mentioned that contrary to the 05 April
1995 Resolution of the Honorable Court, Glorious Sun has not yet
filed its comment to American Inter-Fashion Corporation's (AIFC's)
petition in the above-numbered case.
2. On 07 September 1994, Glorious Sun filed a motion for
reconsideration of the order of this Honorable Court which
consolidated the instant petition with the petition of the Garments

and Textile Export Board (GTEB) in G.R. No. 114711. Glorious Sun
included in said motion for reconsideration a "Motion to Suspend
Period to File Comment," pending resolution by the Honorable
Court of the consolidation incident.
3. Subsequent thereto, or on 22 September 1994, Glorious Sun
filed a "Manifestation and Motion to Suspend Further Proceedings
Until After Resolution by Second Division of Motion for
Reconsideration of Order of July 20, 1994 on Consolidation.
4. In view of the filing of the aforementioned motions, Glorious Sun
held off the filing of its comment to the petition until said motions
were resolved by the Honorable Court. To this day, however, no
resolution has as yet been rendered by the Honorable Court
relative to the above-stated motions.
5. We surmise that the comment being referred to by the Honorable
Court as having been filed by Glorious Sun is that which the latter
filed in connection with AIFC's Urgent Motions (1) to Resolve
Application for Injunction; and (2) to Restore Status Quo Ante.
6. Be that as it may, Glorious Sun is filing the instant pleading which
it prays be treated as its comment and memorandum. 32
new corporation" and that it was not the intention of this

Commission to approve the re-registration of the old AIFC.
American Inter-Fashion Corporation (SEC Reg. 12236), whose
corporate registration had been ordered revoked, cannot avoid
liquidation by reason of the revocation of its franchise and it cannot
also be allowed to continue its business by virtue of its so-called
"re-registration."
Viewed in this light, this Commission en banc hereby RECALLS the
certificate of registration issued to American Inter-Fashion
Corporation on October 14, 1993 under SEC Reg. No. AS093008101-A without prejudice to the registration of a new
corporation. 34
In the same "Manifestation," Glorious Sun prayed, among others, for the dismissal of
the above-entitled petitions, citing as ground therefor the above-quoted SEC Order
recalling American Inter-Fashion Corporation's certificate of registration. Thereafter,
American Inter-Fashion Corporation filed its "Counter Manifestation (To Glorious
Sun's Manifestation dated July 15, 1996)," 35 to which Glorious Sun responded by way
of
its
"Reply
(Re:
Counter
-Manifestation). 36
In G.R. No. 114711, the GTEB made the following assignment of errors:
A "Motion for Leave to Intervene and Submit Manifestation" 33 in the above-entitled

cases was subsequently filed by Messrs. Yeung Chun Kam and Yeung Chun Ho, who
purport to be the Hongkong investors referred to by American Inter-Fashion
Corporation in its 23 June 1995 Memorandum.
I. The respondent Court of Appeals erred gravely in failing to rule

that it had no jurisdiction over the petition in CA-G.R. SP No.
31596.
On July 19, 1996, Glorious Sun filed a "Manifestation," whereby it informed this Court
of the May 20, 1996 Order of the Securities and Exchange Commission (SEC), the
entirety whereof reads thus:
II. The respondent Court of Appeals erred gravely in failing to rule

that the petition in CA-G.R. SP No. 31596 did not state a cause of
action against GTEB.
The articles of incorporation of American Inter-Fashion Corporation

(the new AIFC, for short) with SEC Reg. No. AS093-008101-A
reveal that said corporation was formed for the purpose of reregistering American Inter-Fashion Corporation (the old AIFC) with
SEC Reg. No. 12236 registered with the SEC on July 16, 1985 and
that the same appear to have been approved by the Commission
en banc in its Commission meeting held on October 14, 1993. What
was actually approved in said meeting was the "registration of a
III. The respondent Court of Appeals erred gravely in failing to hold

that the 11 January 1993 Resolution issued by GTEB was valid and
in the proper exercise of its administrative discretion and
jurisdiction.
IV. The respondent Court of Appeals erred gravely in failing to hold
that the petition in CA-G.R. SP No. 31596 was rendered moot and
academic in its entirety by the mere passage of the year 1993.

V. The respondent Court of Appeals erred gravely in failing to deny
and/or to dismiss the petition in CA-G.R. SP No. 31596 for lack of
merit. 37
On the other hand, AIFC makes the following assignment of errors in its petition: 38
The GTEB has no jurisdiction to take cognizance of Glorious Sun's
action against AIFC for "recovery" of property. 39
In any case, the GTEB's issuance of a resolution deciding the
action on its "merits" without hearing AIFC's evidence is a violation
of AIFC's right to due process. 40
The GTEB's cancellation of AIFC's EQs is a confiscation of property
without due process of law. 41
THE ISSUES
1. Considering that AIFC's Certificate of Registration had been effectively revoked by
the Securities and Exchange Commission on May 22, 1990, may AIFC still engage in
business and claim entitlement to the export allocations subject of these petitions?
2. Does the Garments and Textile Export Board (GTEB) have the power and authority
to grant or cancel export quotas or authorizations?
3. Did the GTEB, in issuing the assailed Resolutions, afford AIFC the right to due
process?
In said G.R. No. 110711, we recounted the factual circumstances pertinent to the
revocation of AIFC's certificate of registration in the succeeding manner:
The complaint was assigned for investigation and hearing to SEC's
Prosecution and Enforcement Department (PED). On 14 May 1990,
PED issued a resolution recommending the revocation of
petitioner's SEC certificate of registration; however, on 24 May
1990, PED issued an amended resolution this time revoking the
said certificate on the basis of its ruling that "there was in effect no
payment of at least P1,657,000.00 of the P2,500,000.00 supposed
payment on subscription, contrary to the treasurer's affidavit that
the subscription of P2,500,000.00 was fully paid and the payment
had been fully received." In PED's resolution of 15 October 1990,
petitioner's motion for reconsideration was denied.
Acting on petitioner's appeal (docketed as Sec-AC No. 319) from
the said resolutions of PED, the SEC affirmed the same, in its
decisions of 22 May 1992. A copy of which was received by
petitioner on 25 May 1992. Petitioner's motion for reconsideration
was denied by the SEC in the latter's order dated September 16,
1992, copy of which order was received by petitioner's counsel
on September 18, 1992 (three [3] SEC commissioners concurred;
two [2] dissented). On September 25, 1992, petitioner then filed a
petition for review with the Court of Appeals docketed as CA-G.R.
SP No. 29017. But on September 30, 1992, the Court of Appeals
dismissed the petition on the ground that it was filed late (last day
to file petition was on September 19, 1992, but petition was filed
only on September 25, 1992, thus, petition was filed six [6] days
late).
I
This is not the first time that we have been asked to resolve an issue relative to
AIFC's corporate personality. In G.R. No. 110711, entitled "American Inter-Fashion
Corporation v. Securities and Exchange Commission, et al.," this Court en
banc upheld the resolutions of the Prosecution and Enforcement Department (PED)
of the Securities and Exchange Commission (SEC) in PED Case No. 87-0321
revoking AIFC's certificate of registration, on the basis of Glorious Sun's assertions
that AIFC committed fraud and misrepresentation in securing said certificate of
registration, after we had likewise effectively upheld the very same resolutions in an
earlier petition filed by AIFC, entitled "American Inter-Fashion Corporation v. Court of
Appeals, et al." 42
On November 23, 1992, petitioner filed a petition for review (under

Rule 45 of the Rules of Court) with this Court, docketed as G.R. No.
107742 assailing the resolution of the Court of Appeals in said CAG.R. SP No. 29017, and questioning the SEC decision of 22 May
1992 in SEC-AC No. 319. On January 13, 1993, this Court (Third
Division) denied AIFC's petition, thus affirming the Court of Appeals'
assailed resolution of September 30, 1992, on the ground that the
appellate court committed no reversible error in dismissing the
petition in CA-G.R. SP No. 29017. Petitioner's motion for
reconsideration was referred to the Court en banc. On July 1, 1993
the Court en banc denied with finality petitioner's motion for
reconsideration and held that the reason given by petitioner's

counsel for late filing of its petition (i.e. petition was filed late with
the Court of Appeals because petitioner's counsel Atty. Ceniza of
Sycip Law got seriously ill) was not a valid excuse and not a
compelling reason to reconsider the Court's resolution of January
13, 1993.
Petitioner's counsel has filed the present petition (filed on 13 July
1993) under Rule 65 of the Rules of Court, assailing the same PED
resolutions and SEC decision assailed in G.R. No. 107742 (filed
under Rule 45 of the Rules), this time on the ground that they were
issued or rendered without jurisdiction.
As earlier noted, substantially and even principally the same issues
and subject matter are raised and involved in the present petition
(filed under Rule 65 of the Rules of Court) and those in the petition
in G.R. No. 107742 (filed under Rule 45 of the Rules).
In said G.R. No. 107742, petitioner had availed of the remedy of
appeal by certiorari, i.e., appealing from the decision of the Court of
Appeals in CA-G.R. SP No. 29017. Settled is the rule that a special
civil action of certiorari (under Rule 65) is not a substitute for a lost
appeal (Bank of America, et al., vs. CA, G.R. No. 78917, June 8,
1990, 186 SCRA 417).
By the resolution of this Court en banc, dated July 1, 1993,
rendered in G.R. No. 107742, the petitioner's privilege (or
opportunity) to question the SEC decision dated May 22, 1993
rendered in SEC-AC No. 319 was lost when the Court sitting en
banc denied with finality the motion of petitioner to reconsider this
Court's resolution of 13 January 1993, denying its petition for
review (G.R. No. 107742).
Thus, since petitioner had already lost its privilege to question the
SEC resolution dated May 22, 1992, petitioner can no longer assail
the same SEC resolution, not even by certiorari under Rule 65 of
the Rules of Court. A contrary rule would swamp this Court with
petitions for certiorari under Rule 65 after an appeal is lost under
Rule 45 of the Rules. This would subvert the long established
public policy that litigations must come to an end at one time or
other.
But even granting ex gratia arguendo that petitioner can still avail
itself of the remedy of a special civil action of certiorari (under Rule
65) said remedy should be availed of within a reasonable period
from the date of receipt of the assailed order/decision. In Reas
vs. Bonife, we held that "a petition forcertiorari under Rule 65 is
required to be filed within a reasonable period, no time frame being
provided in the Rules within which such petition has to be filed." In
the subsequent case of Philsec Workers' Union vs. Hon. Romeo
A. Young (Resolution dated 22 January 1992, G.R. No. 101734), it
was held that ninety (90) days from notice of the questioned
order/decision is a reasonable period within which to file a petition
for certiorari under Rule 65.
In the present petition, the assailed decision of the respondent SEC
dated May 22, 1992, was received by petitioner's counsel on May
25, 1992, and the SEC's resolution denying petitioner's motion for
reconsideration was received by petitioner on September 18, 1992.
The present petition was filed on July 13, 1993. From September
18, 1992 to July 13, 1993, almost ten (10) months had lapsed.
Undoubtedly, said period of ten (10) months is no longer a
"reasonable period" within which a petition for certiorari under Rule
65 may be filed.
As earlier said the denial of the petition in G.R. No. 107742 is final.
We must all be reminded of the settled rule that once a judgment
has become final, the issues raised therein should be laid to rest.
Hence, the issues raised anew regarding the again assailed
decision of SEC, dated May 22, 1992, in SEC-AC No. 319, are no
longer open to debate and/or adjudication.
ACCORDINGLY, the present petition is DISMISSED. 43
It appears that subsequent to the revocation of AIFC's certificate of registration, or on
October 14, 1993, AIFC registered anew with the SEC, this time under SEC Reg. No.
AS093-008101-A under the name and style: AIFC International Fashion Corporation.
Evidently then, the AIFC which filed the petition in G.R. No. 115889 is the AIFC which
was "re-registered" on the above date, the original AIFC's certificate of registration
having been revoked with finality by virtue of our resolutions referred to in our abovequoted 11 August 1993 Resolution. 44 In the same manner, the AIFC which the GTEB
refers to in its petition in G.R. No. 114711 could not have been any one other than this
same "re-registered" AIFC, said petition having been filed subsequent to the
revocation of the original AIFC's certificate of registration.

It is obvious that the "re-registered" AIFC does not possess the legal personality
necessary for it to prosecute these petitions. In view of the May 20, 1990 Order of the
SEC, "the certificate of registration issued to American Inter-Fashion Corporation on
October 14, 1993 under SEC Reg. No. AS093-008101-A" 45 was revoked. For all legal
intents and purposes. AIFC no longer exists, and it may no longer claim to be entitled
to the export allocations subject of these petitions. After all, it stands to reason that
where there is no claimant, there can be no claim. The AIFC International is a
personality separate and distinct from AIFC. For this reason, we cannot grant to AIFC
International Fashion Corporationthe personality to pursue the petition in G.R. No.
114711. It has not applied for and is thus equally devoid of any personality to lay
claim on the export allocations subject of said petition.
In fine, if only for AIFC's lack of legal personality to maintain its claim relative to the
export allocations subject of these petitions, its petition in G.R. No. 115889 is
rendered dismissible. On the other hand, and in view likewise of this lack of legal
personality, we would be justified in annulling the January 26, 1994 and March 22,
1994 Resolutions of the Court of Appeals in CA-G.R. SP No. 31596, and in
dismissing the said petition, as prayed for by the GTEB in G.R. No. 114711.
II
In support of its assertion that it is "the sole entity possessed with the power,
jurisdiction and discretion to grant and disapprove export allocations such as export
quotas," the GTEB makes reference to Executive Order No. 537, as amended,
including its implementing rules and regulations, and the fact that among the
functions of the GTEB therein enumerated are "the approval of export allocations, as
well as the monitoring, administration and regulation thereof." 46 Citing the doctrine of
primary jurisdiction, the GTEB further argues that being "a highly specialized
administrative agency endowed with regulatory and quasi-judicial powers . . . it enjoys
the fundamental presumption that it has the technical expertise and mastery over
such specialized matters, so much so that its findings as to the latter would ordinarily
deserve the respect of the courts." 47
AIFC, on the other hand, argues that inasmuch as none of the powers specified in
Executive Order 537, specifically Section 3 thereof, gives the GTEB any judicial
powers, nor any specific jurisdiction to hear and decideactions, as the term is
understood under Section 1, Rule 2 of the Rules of Court, and inasmuch as GTEB
Case No. 92-50 is such an action between private litigants, the GTEB has no
jurisdiction over said case. 48 To reinforce its argument, AIFC cites our ruling in Globe
Wireless Ltd. v. PSC. 49 In said case, we held:
Too basic in administrative law to need citation of jurisprudence is

the rule that the jurisdiction and powers of administrative agencies .
. . 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 . . . . 50
For its part, Glorious Sun joins the GTEB in the latter's assertion that it is the GTEB
which has the jurisdiction to act and rule on Glorious Sun's petition for the
cancellation and restoration to it of the quotas awarded to AIFC. Thus it argues:
48. Contrary to AIFC's assertions, it is beyond dispute that the
GTEB has the jurisdiction to act and rule on Glorious Sun's Petition
for the cancellation and restoration to it of the quotas illegally
awarded to AIFC. A simple reference to the pertinent provisions of
the various Executive Orders (E.O.s) relative to the functions of the
GTEB easily reveals as much.
49. Under E.O. No. 952, which amended E.O. Nos. 537 and 823, it
is provided:
Sec 1. Section 3 subparagraphs (a), (h), and (i)
of Executive Order No. 537 [on the powers and
functions of the Board] is hereby amended to
read as follows:
xxx xxx xxx
(h) In case of violations of its rules and
regulations, cancel or suspend quota allocations,
export authorizations and licenses for the
operations of bonded garment manufacturing
warehouses or disqualify the firm and/or its
in garment exports and from doing business with
the Board; . . .
50. Thus, if only on the basis of the above-quoted provision, and
even in the face of the criteria set forth in Globe, it is at once
evident that the power to adjudicate on the question of the AIFC's
entitlement to the subject EQs is "necessarily implied" from the
Board's power to "cancel or suspend quota allocations, export
authorizations and licenses."

xxx xxx xxx
working days from the time

investigation was terminated.
51. However, in addition to the above, E.O. No. 913, entitled

"Strengthening the Rule-Making and Adjudicatory Powers of the
Minister of Trade and Industry in Order to Further Protect
Consumers,' was likewise issued, which E.O., we respectfully
submit, made the GTEB's power to adjudicate on the question of
the AIFC's entitlement to the subject EQs more than just being
merely "necessarily implied."
52. Thus, Section 5 of Article III of the above-numbered E.O. reads:
Sec. 5. Formal investigation. (a) Whenever the
Minister has verified that violation/s of "Trade and
Industry Laws" has/have been committed, he
may motu proprio charge said violator/s, and
thereafter proceed with a formal investigation,
independent of the corresponding criminal or civil
action for the said violation/s. The imposition of
administrative
penalties
in
the
formal
investigation is without prejudice to the imposition
of penalties in the criminal action and/or
judgment in the civil action, and vice
versa.Provided, however, that in deciding the
case the Minister or the judge, as the case may
be, shall consider the decision of the other and
impose further penalties, or consider the
penalties imposed by the other as already
sufficient, as his sense of justice dictates.
(b) The Minister may proceed to hear and
determine the violation in the absence of any
party who has been served with notice to appear
in the hearing.
(c) The Minister shall use every and all
reasonable means to ascertain the facts of the
case speedily and objectively without regard to
technicalities of law or procedure and strict rules
of evidence prevailing in courts of law and equity.
The Minister shall decide the case within thirty
the
formal
(d) The minister shall have the same power to

punish direct and indirect contempts granted to
superior courts under Rule 71 of the Rules of
Court and the power to issue subpoena duces
tecum.
(e) When the "trade and industry law" violated
provides for its own administrative procedure and
penalties, including a procedure where a Board
Council, Authority, or Committee takes part as a
body, the Minister shall have the option of
selecting that procedure and penalties or the
procedure and penalties provided in this
Executive Order. If he opts for the latter, the
approval of such Board, Council, Authority, or
Committee of the Minister's decision shall not be
necessary.
53. The above-quoted provisions are very significant in light of the
definition of the "Ministry" as the Ministry of Trade and Industry
"and/or any of its bureaus, offices, or attached agencies, or any
other office, unit or committee by whatever name which is placed
under or attached to the Ministry of Trade and Industry (Section 1,
Article I, E.O. 913; Emphasis supplied)." The GTEB is one such
bureau, office or agency.
54. In this connection, AIFC's statement to the effect that GTEB
Case No. 92-50 is an action by one party against another for the
enforcement or protection of a right, is not entirely accurate. It will
be remembered that said GTEB case was initiated principally for
the purpose of securing the cancellation of EQs being illegally held
onto by AIFC, a proceeding which is undoubtedly within the ambit
of the Board's powers; that Glorious Sun stood to benefit from such
cancellation was merely incidental to said proceeding. 51
After examining the arguments raised by all parties concerned, we find the arguments
of the GTEB and Glorious Sun to be impressed with merit, and accordingly hold that
the power and jurisdiction to adjudicate on the question of AIFC's entitlement to the
export allocations subject of the above-entitled petitions (be they export quotas or

export authorizations), which includes the discretion to grant and disapprove said
export allocations, belongs solely to the GTEB, and not to the regular courts.
Semantics notwithstanding, it cannot be denied that GTEB Case No. 92-50 was
instituted by Glorious Sun for the purpose of securing the cancellation of EQs then
alleged by it as being illegally held by AIFC. This being the case, it likewise cannot be
denied that, as Glorious Sun correctly observes, such a proceeding is clearly within
the ambit of the GTEB's powers, more specifically, the power granted to it by Section
3 subparagraph (h) of Executive Order No. 537 (as amended by E.O. No. 952) to
"cancel or suspend quota allocations, export authorizations and licenses for the
operations of bonded garment manufacturing warehouses or disqualify the firm and/or
its principal stockholders and officers from engaging in garment exports and from
doing business with the Board," in case of violations of its rules and regulations.
In light of the above, AIFC's reliance on our ruling in Globe Wireless Ltd. v. PSC, 52 is
clearly misplaced. On the basis of the provisions of law cited by both the GTEB and
Glorious Sun, that the power to adjudicate on the question of an entity's entitlement to
export allocations was expressly granted to the GTEB, or at the very least, was
necessarily impliedfrom the power to cancel or suspend quota allocations, is beyond
cavil.
In addition, we must take judicial notice of the fact that AIFC, in cases involving the
same controversy as that in the above-entitled petitions, has recognized the exclusive
jurisdiction of the GTEB to award or cancel export allocations to deserving entities.
AIFC categorically declared in its "Motion to Dismiss," Civil Case No. 93-138 53 that
"Executive Order No. 537, as amended by Executive Order Nos. 823 and 952, vests
upon defendant GTEB exclusive jurisdiction to grant export quota allocations," and
that "(u)nder the doctrine of primary jurisdiction, only defendant GTEB has the
authority to award/cancel export quotas." In fact, it is noteworthy that in said motion to
dismiss, AIFC relied upon the very principles cited by both the GTEB and Glorious
Sun in the above-entitled petitions in support of their argument that it is the GTEB
which has jurisdiction over the export allocations subject of said petitions, to wit:
Courts of justice should not generally interfere with purely
administrative and discretionary functions; that courts have no
supervisory power over the proceedings and actions of the
administrative departments of the government involving the
exercise of judgment and findings of fact, because by reason of
their special knowledge and expertise over matters falling under
their jurisdiction, the latter are in a better position to pass judgment
on such matters and their findings of facts in that regard are
generally accorded respect, if not finality, by the courts. (Ateneo de

Manila v. CA, 145 SCRA 105) 54
AIFC reiterated this stance in its "Motion to Dismiss" in Civil Case No. 64010
wise:
55
in this
As stated above, this Court cannot grant the reliefs sought in the
Complaint without first deciding that AIFC is not entitled to EQs,
and that, in effect, the EQs now in AIFC's name should be
cancelled. This power, however, has been granted not to the courts
but to the GTEB, which is vested with jurisdiction
[i]n case of violations of its rules and regulations,
[to] cancel or suspend quota allocations, export
authorizations and licenses for the operations of
bonded garment manufacturing warehouses
and/or to disqualify the firm and/or its principal
stockholders and officers from engaging in
garment exports and from doing business with
the Board (Section 3[h], Exec. Order No. 537
[1979], as amended by Exec. Order No. 823
[1982] and Exec. Order No. 952 [1984]).
And even assuming for argument that it is indeed vested with
original jurisdiction to cancel EQs, under the doctrine of primary
jurisdiction, this Court cannot at this time take cognizance of the
Complaint (Supra, at pp. 14-15).
Having already invoked the jurisdiction of the GTEB in earlier actions involving the
same controversy as that before us, AIFC cannot now be heard to question that same
jurisdiction simply because it was unable to obtain the reliefs prayed for by it from the
GTEB. We have warned against such a practice on more than one occasion in the
past. Most recently, in St. Luke's Medical Center, Inc. v. Torres, 56 we reiterated such
warning:
It is a settled rule that a party cannot invoke the jurisdiction of a
court to secure affirmative relief against his opponent and after
failing to obtain such relief, repudiate or question that same
jurisdiction. A party cannot invoke jurisdiction at one time and reject
it at another in the same controversy to suit its interests and
convenience. The Court frowns upon and does not tolerate the
undesirable practice of some litigants who submit voluntarily a

cause and then accepting the judgment when favorable to them
and attacking it for lack of jurisdiction when adverse (Tajonera v.
Lamaroza, 110 SCRA 447, citing Tijam v. Sibonghanoy, 23 SCRA
35) 57
III
More importantly, it is apparent that not only was AIFC afforded the opportunity to
present evidence, it actuallytook advantage of this opportunity by presenting
documentary evidence, as asserted by Glorious Sun, an assertion which AIFC most
notably failed to refute. As we have declared time and again, what is repugnant to due
process is the denial of the opportunity to be heard. 63 That AIFC was afforded this
opportunity is beyond question.
As to the allegations of AIFC that it was deprived of due process, we find no merit to
this contention. With respect to the June 21, 1994 Resolution of the GTEB which
AIFC assails in its petition in G.R. No. 115889, it is AIFC's contention that the GTEB
issued said resolution 58 without giving AIFC the opportunity to be heard and without
receiving its evidence in any form.
From what has been discussed the following conclusions are made:
We disagree.
(2) It is the GTEB, and not the regular courts, nor the Court of Appeals, has the
jurisdiction to adjudicate on the question of AIFC's entitlement to the export
allocations subject to these petitions; and
Insofar as the supposed failure of the GTEB to issue a show cause order to AIFC is
concerned, we hold that the GTEB committed no grave abuse of discretion in
instituting an action against AIFC on the basis of the allegations in Glorious Sun's
petition in GTEB Case No. 92-50. It is apparent from the rule cited by AIFC 59 that the
same was aimed primarily at ensuring that if any action is to be filed against a
respondent, the same must have sufficient basis in fact. Consequently, for so long as
this goal is achieved, albeit through some other means, no undue prejudice can be
caused by the non-issuance of a show-cause order. In fact, as correctly pointed out
by Glorious Sun, the GTEB, as a bureau, office or agency attached to the Ministry of
Trade and Industry, may even motu proprio charge violators of "Trade and Industry
Laws," and thereafter proceed with a formal investigation. 60
Anent AIFC's claim that it was not afforded the opportunity to present evidence in
GTEB Case No. 92-50, we find such claim unworthy of belief. The GTEB, as an
administrative agency, has in its favor the presumption that it has regularly performed
its official duties, including those which are quasi-judicial in nature. In the absence of
clear facts to rebut the same, said presumption of regularity must be upheld. This is
also but in keeping with the doctrine of primary jurisdiction.
We are inclined to give credence instead to Glorious Sun's assertions relative to
AIFC's presentation of evidence in GTEB Case No. 92-50, there being ample basis in
the records therefor. Thus, after examining the "Motion to Dismiss" filed by AIFC in
GTEB Case No. 92-50, 61 we find nothing therein to indicate that AIFC reserved its
right to present evidence in said GTEB case, contrary to AIFC's claims. On the other
hand, as correctly pointed out by Glorious Sun, if any reservation was made by AIFC
in its "Sur Rejoinder (Re: Motion to Dismiss)," attached to AIFC's petition as Annex
"E," this was limited to the reservation "to raise the question of jurisdiction." 62
(1) AIFC no longer has the legal personality to prosecute the above-entitled petitions
and may therefore no longer claim entitlement to the export allocations subject of
these petitions;
(3) AIFC's right to due process was in no wise violated by the GTEB, the former not
having taken advantage of the opportunity afforded to it to present evidence in its
behalf.
WHEREFORE, AIFC's petition in G.R. No. 115889 is hereby DENIED for lack of
merit, as well as for being moot and academic, AIFC having lost the legal personality
to prosecute the same. GTEB's petition is GRANTED, and the assailed January 21,
1994 Decision and March 22, 1994 Resolution of the Court of Appeals in CA-G.R. SP
No. 31596 is hereby ANNULLED AND SET ASIDE (except insofar as it denied AIFC
and AIFC International Fashion Corporation's "Motion for Issuance of Writ
of Mandamus"). Said CA-G.R. SP No. 31596 is likewise ordered annulled and set
aside.
SO ORDERED.

xxx xxx xxx
G.R. No. 96938 October 15, 1991
GOVERNMENT
SERVICE
INSURANCE
SYSTEM
(GSIS), petitioner,
vs.
CIVIL SERVICE COMMISSION, HEIRS OF ELIZAR NAMUCO, and HEIRS OF
EUSEBIO MANUEL, respondents.
Benigno M. Puno for private respondents.
Still unconvinced, the GSIS appealed to the Supreme Court (G.R. Nos. 80321-22).
Once more, it was rebuffed. On July 4, 1988 this Court's Second Division
promulgated a Resolution which:
a) denied its petition for failing to show any grave abuse of
discretion on the part of the Civl Service Commission, the
dismissals of the employees having in truth been made without
formal charge and hearin, and
Fetalino, Llamas-Villanueva and Noro for CSC.
b) declared that reinstatement of said five employees was proper,

"without prejudice to the right of the GSIS to pursue proper
disciplinary action against them;"
NARVASA, J.:p
c) MODIFIED, however, the challenged CSC Resolution of October

21, 1987 "by elminating the payment of back salaries to private
respondents (employees) until the outcome of the disciplinary
proceedings is known, considering the gravity of the offenses
imputed to them ..., 2
In May, 1981, the Government Service Insurance System (GSIS) dismissed six (6)
employees as being "notoriously undersirable," they having allegedly been found to
be connected with irregularities in the canvass of supplies and materials. The
dismissal was based on Article IX, Presidential Decree No. 807 (Civil Service
Law) 1 in relation to LOI 14-A and/or LOI No. 72. The employees' Motion for
Reconsideration was subsequently denied.
Five of these six dismissed employees appealed to the Merit Systems Board. The
Board found the dismissals to be illegal because effected without formal charges
having been filed or an opportunity given to the employees to answer, and ordered
the remand of the cases to the GSIS for appropriate disciplinary proceedings.
The GSIS appealed tothe Civil Service Commission. By Resolution dated October 21,
1987, the Commission ruled that the dismissal of all five was indeed illegal and
disposed as follows:
WHEREFORE, it being obvious that respondents' separation from
the service is illegal, the GSIS is directed to reinstate them with
payment of back salaries and benefits due them not later than ten
(10) days from receipt of a copy hereof, without prejudice to the
right of the GSIS to pursue proper disciplinary action against them.
It is also directed that the services of their replacement be
terminated effective upon reinstatement of herein respondents.
d) ordered reinstateement only of three employees, namely:

Domingo Canero, Renato Navarro and Belen Guerrero, "it
appearing tht respondents Elizar Namuco and Eusebio Manuel
have since passed away." 3
On January 8, 1990, the aforesaid Resolution of July 4, 1988 having become final,
the heirs of Namuco and Manuel filed a motion for execution of the Civil Service
Commission Resolution of October 21, 1987, supra. The GSIS opposed the motion. It
argued that the CSC Resolution of October 21, 1987 directing reinstatement of the
employees and payment to them of back salaries and benefits had been
superseded by the Second Division's Resolution of July 4, 1988 precisely
eliminating the payment of back salaries.
The Civil Service Commission granted the motion for execution in an Order dated
June 20, 1990. It accordingly directed the GSIS "to pay the compulsory heirs of
deceased Elizar Namuco and Eusebio Manuel for the period from the date of their
illegal separation up to the date of their demise." The GSIS filed a motion for
reconsideration. It was denied by Order of the CSC dated November 22, 1990.

Once again the GSIS has come to this Court, this time praying that certiorari issue to
nullify the Orders of June 20, 1990 and November 22, 1990. Here it contends that the
Civil Service Commission has no pwer to execute its judgments and final orders or
resolutions, and even conceding the contrary, the writ of execution issued on June 20,
1990 is void because it varies this Court's Resolution of July 4, 1988.
decide cases is inutile unless accompanied by the authority to see taht what has been
decided is carried out. Hence, the grant to a tribunal or agency of adjudicatory power,
or the authority to hear and adjudge cases, should normally and logically be deemed
to include the grant of authority to enforce or execute the judgments it thus renders,
unless the law otherwise provides.
The Civil Service Commission, like the Commission on Elections and the Commission
on Audit, is a consitutional commission invested by the Constitution and relevant laws
not only with authority to administer the civil service, 4but also with quasi-judicial
powers. 5 It has the authority to hear and decide administrative disciplinary cases
instituted directly with it or brought to it on appeal. 6 The Commission shall decide by
a majority vote of all its Members any case or matter brought before it within sixty
days from the date of its submission for decision it within sixty days from the date of
its submission for on certiorari by any aggrieved party within thirty days from receipt
of a copy thereof. 7 It has the power, too, sitting en banc, to promulgate its own rules
concerning pleadings and practice before it or before any of its offices, which rules
should not however diminish, increase, or modify substantive rights. 8
In any event, the Commission's exercise of that power of execution has been
sanctioned by this Court in several cases.
On October 9, 1989, the Civil Service Commission promulgated Resolution No. 89779 adopting, approving and putting into effect simplified rules of procedure on
administrative disciplinary and protest cases, pursuant tothe authority granted by the
constitutional and statutory provisions above cited, as well as Republic Act No.
6713. 9Those rules provide, among other things, 10 that decision in "administrative
disciplinary cases" shall be immediately executory unless a motion for
reconsideration is seasonably filed. If the decision of the Commission is brought to
the Supreme Court on certiorari, the same shall still be executory unless a restraining
order or preliminary injunction is issued by the High Court." 11 This is similar to a
provision in the former Civil Service Rules authorizing the Commissioner, "if public
interest so warrants, ... (to) order his decision executed pending appeal to the Civil
Service Board of Appeals." 12 The provisions are analogous and entirely consistent
with the duty or responsibility reposed in the Chairman by PD 807, subject to policies
and resolutions adopted by the Commission, "to enforce decision on administrative
discipline involving officials of the Commission," 13 as well as with Section 37 of the
same decree declaring that an appeal to the Commission 14 "shall not stop the
decision from being executory, and in case the penalty is suspension or removal, the
respondent shall be considered as having been under preventive suspension during
the pendency of the appeal in the event he wins an appeal."
In light of all the foregoing consitutional and statutory provisions, it would appear
absurd to deny to the Civil Service Commission the power or authority or order
execution of its decisions, resolutions or orders which, it should be stressed, it has
been exercising through the years. It would seem quite obvious that the authority to
In Cucharo v. Subido, 15 for instance, this Court sustained the challenged directive of
the Civil Service Commissioner, that his decision "be executed immediately 'but not
beyond ten days from receipt thereof ...". The Court said:
As a major premise, it has been the repeated pronouncement of
this Supreme Tribunal that the Civil Service Commissioner has the
discretion toorder the immediate execution in the public interst of
his decision separating petitioner-appellant from the service, always
sbuject however to the rule that, in the event the Civil Service
Board of Appeals or the proper court determines that his dismissal
is illegal, he should be paid the salary corresponding to the period
of his separation from the service unitl his reinstatement.
Petitioner GSIS concedes that the heirs of Namuco and Manuel "are entitled tothe
retirement/death and other benefits due them as government employees" since, at
the time of their death, they "can be considered not to have been separated from the
separated from the service." 16
It contend, however, that since Namuco and Manuel had not been
"completely exonerated of the administrative charge filed against them as the filing
of the proper disciplinary action was yet to have been taken had death not claimed
them" no back salaries may be paid to them, although they "may charge the period
of (their) suspension against (their) leave credits, if any, and may commute such
leave
credits
to
money
value;" 17 this, on the authority of this Court's decision in Clemente v. Commission on
Audit. 18 It is in line with these considerations, it argues, that the final and executory
Resolution of this Court's Second Division of July 4, 1988 should be
construed; 19 and since the Commission's Order of July 20, 1990 maikes a contrary
disposition, the latter order obviously cannot prevail and must be deemed void and
ineffectual.
This Court's Resolution of July 4, 1988, as already stated, modified the Civil Service
Commission's Resolution of October 21, 1987 inter alia granting back salaries

tothe five dismissed employees, including Namuco and Manuel and pertinently
reads as follows:
We modify the said Order, however, by eliminating the payment of
back salaries to private respondents until the outcome of the
disciplinary proceedings is known, considering the gravity of the
offense imputed to them in connection with the irregularities in the
canvass of supplies and materials at the GSIS.
The reinstatement order shall apply only to respondents Domingo
Canero, Renato Navarro and Belen Guerrero, it appearing that
respondents Elizar Namuco and Eusebio Manuel have since
passed away. ....
On the other hand, as also already stated, the Commission's Order of June 20, 1990
directed the GSIS "to pay the compulsory heirs of deceased Elizar Namuco and
Eusebio Manuel for the period from the date of their illegal separation up to the date
of their demise."
The Commission asserted that in promulgating its disparate ruling, it was acting "in
the interest of justice and for other humanitarian reasons," since the question of
whether or not Namuco and Manuel should receive back salaries was "dependent on
the result of the disciplinary proceedings against their co-respondents in the
administrative case before the GSIS," and since at the tiem of their death, "no formal
charge ... (had) as yet been made, nor any finding of their personal culpability ...
and ... they are no longer in a position to refute the charge."
The Court agrees that the challenged orders of the Civil Service Commission should
be upheld, and not merely upon compassionate grounds, but simply because there is
no fair and feasible alternative in the circumstances. To be sure, if the deceased
employees were still alive, it would at least be arguable, positing the primacy of this
Court's final dispositions, that the issue of payment of their back salaries should
properly await the outcome of the disciplinary proceedings referred to in the Second
Division's Resolution of July 4, 1988.
Death, however, has already sealed that outcome, foreclosing the initiation of
disciplinary administrative proceedings, or the continuation of any then pending,
against the deceased employees. Whatever may be said of the binding force of the
Resolution of July 4, 1988 so far as, to all intents and pursposes, it makes
exoneration in the adminstrative proceedings a condition precedent to payment of
back salaries, it cannot exact an impossible performance or decree a useless
exercise. Even in the case of crimes, the death of the offender exteinguishes criminal
liability, not only as to the personal, but also as to the pecuniary, penalties if it occurs
before final judgment. 20 In this context, the subsequent disciplinary proceedings,
even if not assailable on grounds of due process, would be an inutile, empty
procedure in so far as the deceased employees are concerned; they could not
possibly be bound by any substatiation in said proceedings of the original charges:
irrigularities in the canvass of supplies and materials. The questioned order of the
Civil Service Commission merely recognized the impossibility of complying with the
Resolution of July 4, 1988 and the legal futility of attempting a postmortem investigation of the character contemplated.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
SO ORDERED.

FERNANDO, J.:
The right of a holder of a backpay certificate to use the same in the payment of his
taxes has been recognized by law.1 Necessarily, this Court, in Tirona v.
Cudiamat,2 yielding obedience to such statutory prescription, saw nothing
objectionable in a taxpayer taking advantage of such a provision. That much is clear;
it is settled beyond doubt. What is involved in this appeal from a lower court decision
of November 24, 1965, dismissing a complaint by plaintiff-appellant Republic of the
Philippines, seeking the invalidation of the payment by defendant-appellee Philippine
Rabbit Bus Lines, Inc. for the registration fees 3 of its motor vehicles in the sum of
P78,636.17, in the form of such negotiable backpay certificates of indebtedness, is
the applicability of such a provision to such a situation. The lower court held that it
did. The Republic of the Philippines appealed. While originally the matter was
elevated to the Court of Appeals, it was certified to us, the decisive issue being one of
law. The statute having restricted the privilege to the satisfaction of a tax, a liability for
fees under the police power being thus excluded from its benefits, we cannot uphold
the decision appealed from. We reverse.
The complaint of plaintiff-appellant Republic of the Philippines was filed on January
17, 1963 alleging that defendant-appellee, as the registered owner of two hundred
thirty eight (238) motor vehicles, paid to the Motor Vehicles Office in Baguio the
amount of P78,636.17, corresponding to the second installment of registration fees
for 1959, not in cash but in the form of negotiable certificate of indebtedness, the
defendant being merely an assignee and not the backpay holder itself. The complaint
sought the payment of such amount with surcharges plus the legal rate of interest
from the filing thereof and a declaration of the nullity of the use of such negotiable
certificate of indebtedness to satisfy its obligation. The answer by defendant-appellee,
filed on February 18, 1963, alleged that what it did was in accordance with law, both
the Treasurer of the Philippines and the General Auditing Office having signified their
conformity to such a mode of payment. It sought the dismissal of the complaint.
G.R. No. L-26862 March 30, 1970
REPUBLIC
OF
THE
PHILIPPINES, plaintiff-appellant,
vs.
PHILIPPINE RABBIT BUS LINES, INC., defendant-appellee.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Pacifico
P. de Castro and Solicitor Enrique M. Reyes for plaintiff-appellant.
Angel A. Sison for defendant-appellee.
After noting the respective theories of both parties in its pleadings, the lower court, in
its decision, stated that the issue before it "is whether or not the acceptance of the
negotiable certificates of indebtedness tendered by defendant bus firms to and
accepted by the Motor Vehicles Office of Baguio City and the corresponding issuance
of official receipts therefor acknowledging such payment by said office is valid and
binding on plaintiff Republic."4
In the decision now on appeal, the lower court, after referring to a documentary
evidence introduced by plaintiff-appellant continued: "From the evidence adduced by
defendant bus firm, it appears that as early as August 28, 1958, the National
Treasurer upon whom devolves the function of administering the Back Pay Law

(Republic Act 304 as amended by Republic Act Nos. 800 and 897), in his letter to the
Chief of the Motor Vehicles Office who in turn quoted and circularized same in his
Circular No. 5 dated September 1, 1958, to draw the attention thereto of all Motor
Vehicle Supervisors, Registrars and employees ..., had approved the acceptance of
negotiable certificates of indebtedness in payment of registration fees of motor
vehicles with the view that such certificates 'should be accorded with the same
confidence by other governmental instrumentalities as other evidences of public debt,
such as bonds and treasury certificates'. Significantly, the Auditor General concurred
in the said view of the National Treasurer."5
The argument of plaintiff-appellant that only the holders of the backpay certificates
themselves could apply the same to the payment of motor vehicle registration fees
did not find favor with the lower court. Thus, "[Plaintiff] Republic urges that defendant
bus firm being merely an assignee of the negotiable certificates of indebtedness in
question, it could not use the same in payment of taxes. Such contention, this Court
believes, runs counter to the recitals appearing on the said certificates which states
that 'the Republic of the Philippines hereby acknowledges to (name) or assigns ...',
legally allowing the assignment of backpay rights."6
It therefore, as above noted, rendered judgment in favor of defendant-appellee
"upholding the validity and efficacy" of such payment made and dismissing the
complaint. Hence this appeal which, on the decisive legal issue already set forth at
the outset, we find meritorious.
1. If a registration fee were a tax, then what was done by defendant-appellee was
strictly in accordance with law and its nullity, as sought by plaintiff-appellant Republic
of the Philippines, cannot be decreed. But is it? The answer to that question is
decisive of this controversy. A tax refers to a financial obligation imposed by a state
on persons, whether natural or juridical, within its jurisdiction, for property owned,
income earned, business or profession engaged in, or any such activity analogous in
character for raising the necessary revenues to take care of the responsibilities of
government.7 An often-quoted definition is that of Cooley: "Taxes are the enforced
proportional contributions from persons and property levied by the state by virtue of
its sovereignty for the support of government and for all public needs."8
As distinguished from other pecuniary burdens, the differentiating factor is that the
purpose to be subserved is the raising of revenue. A tax then is neither a penalty that
must be satisfied or a liability arising from contract. 9 Much less can it be confused or
identified with a license or a fee as a manifestation of an exercise of the police power.
It has been settled law in this jurisdiction as far back as Cu Unjieng v. Potstone,
decided in 1962, 10 that this broad and all-encompassing governmental competence
to restrict rights of liberty and property carries with it the undeniable power to collect a
regulatory fee. Unlike a tax, it has not for its object the raising of revenue but looks
rather to the enactment of specific measures that govern the relations not only as
between individuals but also as between private parties and the political society. To
quote from Cooley anew: "Legislation for these purposes it would seem proper to look
upon as being made in the exercise of that authority ... spoken of as the police
power." 11
The registration fee which defendant-appellee had to pay was imposed by Section 8
of the Revised Motor Vehicle Law. 12 Its heading speaks of "registration fees." The
term is repeated four times in the body thereof. Equally so, mention is made of the
"fee for registration." 13 A subsection starts with a categorical statement "No fees
shall be charged." 14 The conclusion is difficult to resist therefore that the Motor
Vehicle Act requires the payment not of a tax but of a registration fee under the police
power. Hence the inapplicability of the section relied upon by defendant-appellee
under the Back Pay Law. It is not held liable for a tax but for a registration fee. It
therefore cannot make use of a backpay certificate to meet such an obligation.
Any vestige of any doubt as to the correctness of the above conclusion should be
dissipated by Republic Act No. 5448. 15 A special science fund was thereby created
and its title expressly sets forth that a tax on privately-owned passenger automobiles,
motorcycles and scooters was imposed. The rates thereof were provided for in its
Section 3 which clearly specifies that "additional tax" was to be paid as distinguished
from the registration fee under the Motor Vehicle Act. There cannot be any clearer
expression therefore of the legislative will, even on the assumption that the earlier
legislation could be stretching the point be susceptible of the interpretation that a tax
rather than a fee was levied. What is thus most apparent is that where the legislative
body relies on its authority to tax it expressly so states, and where it is enacting a
regulatory measure, it is equally explicit.
It may further be stated that a statute is meaningful not only by what it includes but
also by what it omits. What is left out is not devoid of significance. As observed by
Frankfurter: "An omission at the time of enactment, whether careless or calculated,
cannot be judicially supplied however much later wisdom may recommend the
inclusion. 16In the light of this consideration, the reversal of the appealed judgment is
unavoidable.
2. In the brief for plaintiff-appellant Republic of the Philippines, filed by the then
Solicitor General, now Justice Antonio P. Barredo, the principal error imputed to the
trial court is its failure to hold that the Back Pay Law prohibits an assignee, as is
defendant-appellee, from using certificates of indebtedness to pay their taxes. In view
of the conclusion reached by us that the liability of defendant-appellee under the

Motor Vehicle Act does not arise under the taxing power of the state, there is no need
to pass upon this particular question.
3. The Republic of the Philippines, in its brief, likewise assigned as error the failure of
the lower court to hold that estoppel does not lie against the government for mistakes
committed by its agents. As could be discerned from an excerpt of the decision earlier
referred to, the lower court was impressed by the fact that the national treasurer to
whom it correctly referred as being vested with the function of administering the
backpay law did in a communication to the Motor Vehicles Office approve the
acceptance of negotiable certificate of indebtedness in payment of registration fees, a
view with which the Auditor General was in concurrence. The appealed decision
likewise noted: "By the testimonies of Pedro Flores, the then Registrar of the Motor
Vehicles Office of Baguio City and Casiano Catbagan, the Cashier of the Bureau of
Public Highways in the same city, defendant bus firm has undisputedly shown that,
after the said certificates of indebtedness were properly indorsed in favor of the Motor
Vehicles Office of Baguio City and accepted by the Bureau of Public Highways on
May 29, 1959, it was duly and properly issued official receipts ... acknowledging full
payment of its registration fees for the second installment of 1959 of its 238 vehicles,
and that the Bureau of Public Highways, thru its collecting and disbursing officer, was
validly and regularly authorized to receive such payment." 17
Thus did the lower court, as pointed out by the then Solicitor General, conclude that
the government was bound by the mistaken interpretation arrived at by the national
treasurer and the auditor general. It would consider estoppel as applicable. That is
not the law. Estoppel does not lie. Such a principle dates back to Aguinaldo de
Romero v. Director of Lands, 18 a 1919 decision. Insofar as the taxing power is
concerned, Pineda v. Court of First Instance, a 1929 decision, speaks categorically:
"The Government is never estopped by mistake or error on the part of its agents. It
follows that, in so far as this record shows, the petitioners have not made it appear
that the additional tax claimed by the Collector is not in fact due and collectible. The
assessment of the tax by the Collector creates, it must be remembered, a charge that
is at least prima facie valid." 19 That principle has since been subsequently
followed. 20 While the question here is one of the collection of a regulatory fee under
the police power, reliance on the above course of decisions is not inappropriate.
There is nothing to stand in the way, therefore, of the collection of the registration fees
from defendant-appellee.
WHEREFORE, the decision of November 24, 1965 is reversed and defendantappellee ordered to pay the sum of P78,636.17. With costs against defendantappellee.
G.R. No. L-46930 June 10, 1988

DALE
SANDERS,
AND
A.S.
MOREAU,
JR, petitioners,
vs.
HON. REGINO T. VERIDIANO II, as Presiding Judge, Branch I, Court of First
Instance of Zambales, Olongapo City, ANTHONY M. ROSSI and RALPH L.
WYERS, respondents.
CRUZ, J.:
The basic issue to be resolved in this case is whether or not the petitioners were
performing their official duties when they did the acts for which they have been sued
for damages by the private respondents. Once this question is decided, the other
answers will fall into place and this petition need not detain us any longer than it
already has.
Petitioner Sanders was, at the time the incident in question occurred, the special
services director of the U.S. Naval Station (NAVSTA) in Olongapo City. 1 Petitioner
Moreau was the commanding officer of the Subic Naval Base, which includes the said
station. 2 Private respondent Rossi is an American citizen with permanent residence
in the Philippines, 3 as so was private respondent Wyer, who died two years
ago. 4 They were both employed as gameroom attendants in the special services
department of the NAVSTA, the former having been hired in 1971 and the latter in
1969. 5
On October 3, 1975, the private respondents were advised that their employment had
been converted from permanent full-time to permanent part-time, effective October
18, 1975. 6 Their reaction was to protest this conversion and to institute grievance
proceedings conformably to the pertinent rules and regulations of the U.S.
Department of Defense. The result was a recommendation from the hearing officer
who conducted the proceedings for the reinstatement of the private respondents to

permanent full-time status plus backwages. The report on the hearing contained the
observation that "Special Services management practices an autocratic form of
supervision." 7
In a letter addressed to petitioner Moreau on May 17, 1976 (Annex "A" of the
complaint), Sanders disagreed with the hearing officer's report and asked for the
rejection of the abovestated recommendation. The letter contained the statements
that: a ) "Mr. Rossi tends to alienate most co-workers and supervisors;" b) "Messrs.
Rossi and Wyers have proven, according to their immediate supervisors, to be
difficult employees to supervise;" and c) "even though the grievants were under oath
not to discuss the case with anyone, (they) placed the records in public places where
others not involved in the case could hear."
On November 7, 1975, before the start of the grievance hearings, a-letter (Annex "B"
of the complaint) purportedly corning from petitioner Moreau as the commanding
general of the U.S. Naval Station in Subic Bay was sent to the Chief of Naval
Personnel explaining the change of the private respondent's employment status and
requesting concurrence therewith. The letter did not carry his signature but was
signed by W.B. Moore, Jr. "by direction," presumably of Moreau.
On the basis of these antecedent facts, the private respondent filed in the Court of
First Instance of Olongapo City a for damages against the herein petitioners on
November 8, 1976. 8 The plaintiffs claimed that the letters contained libelous
imputations that had exposed them to ridicule and caused them mental anguish and
that the prejudgment of the grievance proceedings was an invasion of their personal
and proprietary rights.
The private respondents made it clear that the petitioners were being sued in their
private or personal capacity. However, in a motion to dismiss filed under a special
appearance, the petitioners argued that the acts complained of were performed by
them in the discharge of their official duties and that, consequently, the court had no
jurisdiction over them under the doctrine of state immunity.
After extensive written arguments between the parties, the motion was denied in an
order dated March 8, 1977, 9on the main ground that the petitioners had not
presented any evidence that their acts were official in nature and not personal torts,
moreover, the allegation in the complaint was that the defendants had acted
maliciously and in bad faith. The same order issued a writ of preliminary attachment,
conditioned upon the filing of a P10,000.00 bond by the plaintiffs, against the
properties of petitioner Moreau, who allegedly was then about to leave the
Philippines. Subsequently, to make matters worse for the defendants, petitioner
Moreau was declared in a default by the trial court in its order dated August 9, 1977.
The motion to lift the default order on the ground that Moreau's failure to appear at
the pre-trial conference was the result of some misunderstanding, and the motion for
reconsideration of the denial of the motion to dismiss, which was filed by the
petitioner's new lawyers, were denied by the respondent court on September 7, 1977.
This petition for certiorari, prohibition and preliminary injunction was thereafter filed
before this Court, on the contention that the above-narrated acts of the respondent
court are tainted with grave abuse of discretion amounting to lack of jurisdiction.
We return now to the basic question of whether the petitioners were acting officially or
only in their private capacities when they did the acts for which the private
respondents have sued them for damages.
It is stressed at the outset that the mere allegation that a government functionary is
being sued in his personal capacity will not automatically remove him from the
protection of the law of public officers and, if appropriate, the doctrine of state
immunity. By the same token, the mere invocation of official character will not suffice
to insulate him from suability and liability for an act imputed to him as a personal tort
committed without or in excess of his authority. These well-settled principles are
applicable not only to the officers of the local state but also where the person sued in
its courts pertains to the government of a foreign state, as in the present case.
The respondent judge, apparently finding that the complained acts
were prima facie personal and tortious, decided to proceed to trial to determine inter
alia their precise character on the strength of the evidence to be submitted by the
parties. The petitioners have objected, arguing that no such evidence was needed to
substantiate their claim of jurisdictional immunity. Pending resolution of this question,
we issued a temporary restraining order on September 26, 1977, that has since then
suspended the proceedings in this case in the courta quo.
In past cases, this Court has held that where the character of the act complained of
can be determined from the pleadings exchanged between the parties before the trial,
it is not necessary for the court to require them to belabor the point at a trial still to be
conducted. Such a proceeding would be superfluous, not to say unfair to the
defendant who is subjected to unnecessary and avoidable inconvenience.
Thus, in Baer v. Tizon, 10 we held that a motion to dismiss a complaint against the
commanding general of the Olongapo Naval Base should not have been denied
because it had been sufficiently shown that the act for which he was being sued was
done in his official capacity on behalf of the American government. The United States
had not given its consent to be sued. It was the reverse situation in Syquia v. Almeda
Lopez," where we sustained the order of the lower court granting a where we motion

to dismiss a complaint against certain officers of the U.S. armed forces also shown to
be acting officially in the name of the American government. The United States had
also not waived its immunity from suit. Only three years ago, in United States of
America v. Ruiz, 12 we set aside the denial by the lower court of a motion to dismiss a
complaint for damages filed against the United States and several of its officials, it
appearing that the act complained of was governmental rather than proprietary, and
certainly not personal. In these and several other cases 13 the Court found it
redundant to prolong the other case proceedings after it had become clear that the
suit could not prosper because the acts complained of were covered by the doctrine
of state immunity.
It is abundantly clear in the present case that the acts for which the petitioners are
being called to account were performed by them in the discharge of their official
duties. Sanders, as director of the special services department of NAVSTA,
undoubtedly had supervision over its personnel, including the private respondents,
and had a hand in their employment, work assignments, discipline, dismissal and
other related matters. It is not disputed that the letter he had written was in fact a
reply to a request from his superior, the other petitioner, for more information
regarding the case of the private respondents. 14 Moreover, even in the absence of
such request, he still was within his rights in reacting to the hearing officer's criticism
in effect a direct attack against him-that Special Services was practicing "an
autocratic form of supervision."
As for Moreau,what he is claimed to have done was write the Chief of Naval
Personnel for concurrence with the conversion of the private respondents' type of
employment even before the grievance proceedings had even commenced.
Disregarding for the nonce the question of its timeliness, this act is clearly official in
nature, performed by Moreau as the immediate superior of Sanders and directly
answerable to Naval Personnel in matters involving the special services department
of NAVSTA In fact, the letter dealt with the financial and budgetary problems of the
department and contained recommendations for their solution, including the redesignation of the private respondents. There was nothing personal or private about
it.
Given the official character of the above-described letters, we have to conclude that
the petitioners were, legally speaking, being sued as officers of the United States
government. As they have acted on behalf of that government, and within the scope
of their authority, it is that government, and not the petitioners personally, that is
responsible for their acts. Assuming that the trial can proceed and it is proved that the
claimants have a right to the payment of damages, such award will have to be
satisfied not by the petitioners in their personal capacities but by the United States
government as their principal. This will require that government to perform an
affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount
to cover the damages awarded, thus making the action a suit against that government
without its consent.
There should be no question by now that such complaint cannot prosper unless the
government sought to be held ultimately liable has given its consent to' be sued. So
we have ruled not only in Baer but in many other decisions where we upheld the
doctrine of state immunity as applicable not only to our own government but also to
foreign states sought to be subjected to the jurisdiction of our courts. 15
The practical justification for the doctrine, as Holmes put it, is that "there can be no
legal right against the authority which makes the law on which the right depends. 16 In
the case of foreign states, the rule is derived from the principle of the sovereign
equality of states which wisely admonishes that par in parem non habet imperium and
that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to
this precept is formally expressed in Article II, Section 2, of our Constitution, where we
reiterate from our previous charters that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land.
All this is not to say that in no case may a public officer be sued as such without the
previous consent of the state. To be sure, there are a number of well-recognized
exceptions. It is clear that a public officer may be sued as such to compel him to do
an act required by law, as where, say, a register of deeds refuses to record a deed of
sale; 18or to restrain a Cabinet member, for example, from enforcing a law claimed to
be unconstitutional; 19 or to compel the national treasurer to pay damages from an
already appropriated assurance fund; 20 or the commissioner of internal revenue to
refund tax over-payments from a fund already available for the purpose; 21 or, in
general, to secure a judgment that the officer impleaded may satisfy by himself
without the government itself having to do a positive act to assist him. We have also
held that where the government itself has violated its own laws, the aggrieved party
may directly implead the government even without first filing his claim with the
Commission on Audit as normally required, as the doctrine of state immunity "cannot
be used as an instrument for perpetrating an injustice." 22
This case must also be distinguished from such decisions as Festejo v.
Fernando, 23 where the Court held that a bureau director could be sued for damages
on a personal tort committed by him when he acted without or in excess of authority
in forcibly taking private property without paying just compensation therefor although
he did convert it into a public irrigation canal. It was not necessary to secure the
previous consent of the state, nor could it be validly impleaded as a party defendant,
as it was not responsible for the defendant's unauthorized act.

The case at bar, to repeat, comes under the rule and not under any of the recognized
exceptions. The government of the United States has not given its consent to be sued
for the official acts of the petitioners, who cannot satisfy any judgment that may be
rendered against them. As it is the American government itself that will have to
perform the affirmative act of appropriating the amount that may be adjudged for the
private respondents, the complaint must be dismissed for lack of jurisdiction.
The Court finds that, even under the law of public officers, the acts of the petitioners
are protected by the presumption of good faith, which has not been overturned by the
private respondents. Even mistakes concededly committed by such public officers are
not actionable as long as it is not shown that they were motivated by malice or gross
negligence amounting to bad faith. 24 This, to, is well settled . 25 Furthermore, applying
now our own penal laws, the letters come under the concept of privileged
communications and are not punishable, 26 let alone the fact that the resented
remarks are not defamatory by our standards. It seems the private respondents have
overstated their case.
assuming that our own laws are applicable, the United States government has not
decided to give its consent to be sued in our courts, which therefore has not acquired
the competence to act on the said claim,.
WHEREFORE, the petition is GRANTED. The challenged orders dated March
8,1977, August 9,1977, and September 7, 1977, are SET ASIDE. The respondent
court is directed to DISMISS Civil Case No. 2077-O. Our Temporary restraining order
of September 26,1977, is made PERMANENT. No costs.
SO ORDERED.
A final consideration is that since the questioned acts were done in the Olongapo
Naval Base by the petitioners in the performance of their official duties and the private
respondents are themselves American citizens, it would seem only proper for the
courts of this country to refrain from taking cognizance of this matter and to treat it as
coming under the internal administration of the said base.
The petitioners' counsel have submitted a memorandum replete with citations of
American cases, as if they were arguing before a court of the United States. The
Court is bemused by such attitude. While these decisions do have persuasive effect
upon us, they can at best be invoked only to support our own jurisprudence, which we
have developed and enriched on the basis of our own persuasions as a people,
particularly since we became independent in 1946.
We appreciate the assistance foreign decisions offer us, and not only from the United
States but also from Spain and other countries from which we have derived some if
not most of our own laws. But we should not place undue and fawning reliance upon
them and regard them as indispensable mental crutches without which we cannot
come to our own decisions through the employment of our own endowments We live
in a different ambience and must decide our own problems in the light of our own
interests and needs, and of our qualities and even idiosyncrasies as a people, and
always with our own concept of law and justice.
G.R. No. 88211 October 27, 1989
The private respondents must, if they are still sominded, pursue their claim against
the petitioners in accordance with the laws of the United States, of which they are all
citizens and under whose jurisdiction the alleged offenses were committed. Even
FERDINAND E. MARCOS, IMELDA R. MARCOS, FERDINAND R. MARCOS. JR.,

IRENE M. ARANETA, IMEE M. MANOTOC, TOMAS MANOTOC, GREGORIO
ARANETA, PACIFICO E. MARCOS, NICANOR YIGUEZ and PHILIPPINE

CONSTITUTION ASSOCIATION (PHILCONSA), represented by its President,
CONRADO
F.
ESTRELLA, petitioners,
vs.
HONORABLE RAUL MANGLAPUS, CATALINO MACARAIG, SEDFREY
ORDOEZ, MIRIAM DEFENSOR SANTIAGO, FIDEL RAMOS, RENATO DE VILLA,
in their capacity as Secretary of Foreign Affairs, Executive Secretary, Secretary
of Justice, Immigration Commissioner, Secretary of National Defense and Chief
of Staff, respectively, respondents.
RESOLUTION
EN BANC:
In its decision dated September 15,1989, the Court, by a vote of eight (8) to seven
(7), dismissed the petition, after finding that the President did not act arbitrarily or with
grave abuse of discretion in determining that the return of former President Marcos
and his family at the present time and under present circumstances pose a threat to
national interest and welfare and in prohibiting their return to the Philippines. On
September 28, 1989, former President Marcos died in Honolulu, Hawaii. In a
statement, President Aquino said:
In the interest of the safety of those who will take the death of Mr.
Marcos in widely and passionately conflicting ways, and for the
tranquility of the state and order of society, the remains of
Ferdinand E. Marcos will not be allowed to be brought to our
country until such time as the government, be it under this
administration or the succeeding one, shall otherwise decide.
[Motion for Reconsideration, p. 1; Rollo, p, 443.]
On October 2, 1989, a Motion for Reconsideration was filed by petitioners, raising the
following major arguments:
1. to bar former President Marcos and his family from returning to the Philippines is to
deny them not only the inherent right of citizens to return to their country of birth but
also the protection of the Constitution and all of the rights guaranteed to Filipinos
under the Constitution;
2. the President has no power to bar a Filipino from his own country; if she has, she
had exercised it arbitrarily; and
3. there is no basis for barring the return of the family of former President Marcos.
Thus, petitioners prayed that the Court reconsider its decision, order respondents to
issue the necessary travel documents to enable Mrs. Imelda R. Marcos, Ferdinand R.
Marcos, Jr., Irene M. Araneta, Imee M. Manotoc, Tommy Manotoc and Gregorio
Araneta to return to the Philippines, and enjoin respondents from implementing
President Aquino's decision to bar the return of the remains of Mr. Marcos, and the
other petitioners, to the Philippines.
Commenting on the motion for reconsideration, the Solicitor General argued that the
motion for reconsideration is moot and academic as to the deceased Mr. Marcos.
Moreover, he asserts that "the 'formal' rights being invoked by the Marcoses under
the label 'right to return', including the label 'return of Marcos' remains, is in reality or
substance a 'right' to destabilize the country, a 'right' to hide the Marcoses' incessant
shadowy orchestrated efforts at destabilization." [Comment, p. 29.] Thus, he prays
that the Motion for Reconsideration be denied for lack of merit.
We deny the motion for reconsideration.
1. It must be emphasized that as in all motions for reconsideration, the burden is upon
the movants, petitioner herein, to show that there are compelling reasons to
reconsider the decision of the Court.
2. After a thorough consideration of the matters raised in the motion for
reconsideration, the Court is of the view that no compelling reasons have been
established by petitioners to warrant a reconsideration of the Court's decision.
The death of Mr. Marcos, although it may be viewed as a supervening event, has not
changed the factual scenario under which the Court's decision was rendered. The
threats to the government, to which the return of the Marcoses has been viewed to
provide a catalytic effect, have not been shown to have ceased. On the contrary,
instead of erasing fears as to the destabilization that will be caused by the return of
the Marcoses, Mrs. Marcos reinforced the basis for the decision to bar their return
when she called President Aquino "illegal," claiming that it is Mr. Marcos, not Mrs.
Aquino, who is the "legal" President of the Philippines, and declared that the matter
"should be brought to all the courts of the world." [Comment, p. 1; Philippine Star,
October 4, 1989.]
3. Contrary to petitioners' view, it cannot be denied that the President, upon whom
executive power is vested, has unstated residual powers which are implied from the
grant of executive power and which are necessary for her to comply with her duties
under the Constitution. The powers of the President are not limited to what are
expressly enumerated in the article on the Executive Department and in scattered

provisions of the Constitution. This is so, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the powers of the
President as a reaction to the abuses under the regime of Mr. Marcos, for the result
was a limitation of specific power of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the general grant of executive
power.
That the President has powers other than those expressly stated in the Constitution is
nothing new. This is recognized under the U.S. Constitution from which we have
patterned the distribution of governmental powers among three (3) separate
branches.
Article II, [section] 1, provides that "The Executive Power shall be
vested in a President of the United States of America." In Alexander
Hamilton's widely accepted view, this statement cannot be read as
mere shorthand for the specific executive authorizations that follow
it in [sections] 2 and 3. Hamilton stressed the difference between
the sweeping language of article II, section 1, and the conditional
language of article I, [section] 1: "All legislative Powers herein
granted shall be vested in a Congress of the United States . . ."
Hamilton submitted that "[t]he [article III enumeration [in sections 2
and 31 ought therefore to be considered, as intended merely to
specify the principal articles implied in the definition of execution
power; leaving the rest to flow from the general grant of that power,
interpreted in confomity with other parts of the Constitution...
In Myers v. United States, the Supreme Court accepted
Hamilton's proposition, concluding that the federal executive, unlike
the Congress, could exercise power from sources not enumerated,
so long as not forbidden by the constitutional text: the executive
power was given in general terms, strengthened by specific terms
where emphasis was regarded as appropriate, and was limited by
direct expressions where limitation was needed. . ." The language
of Chief Justice Taft in Myers makes clear that the constitutional
concept of inherent power is not a synonym for power without limit;
rather, the concept suggests only that not all powers granted in the
Constitution are themselves exhausted by internal enumeration, so
that, within a sphere properly regarded as one of "executive' power,
authority is implied unless there or elsewhere expressly limited.
[TRIBE, AMERICAN CONSTITUTIONAL LAW 158-159 (1978).]
And neither can we subscribe to the view that a recognition of the President's implied
or residual powers is tantamount to setting the stage for another dictatorship. Despite
petitioners' strained analogy, the residual powers of the President under the
Constitution should not be confused with the power of the President under the 1973
Constitution to legislate pursuant to Amendment No. 6 which provides:
Whenever in the judgment of the President (Prime Minister), there
exists a grave emergency or a threat or imminence thereof, or
whenever the interim Batasang Pambansa or the regular National
Assembly fails or is unable to act adequately on any matter for any
reason that in his judgment requires immediate action, he may, in
order to meet the exigency, issue the necessary decrees, orders, or
letters of instruction, which shall form part of the law of the land,
There is no similarity between the residual powers of the President under the 1987
Constitution and the power of the President under the 1973 Constitution pursuant to
Amendment No. 6. First of all, Amendment No. 6 refers to an express grant of power.
It is not implied. Then, Amendment No. 6 refers to a grant to the President of
thespecific power of legislation.
4. Among the duties of the President under the Constitution, in compliance with his (or
her) oath of office, is to protect and promote the interest and welfare of the people.
Her decision to bar the return of the Marcoses and subsequently, the remains of Mr.
Marcos at the present time and under present circumstances is in compliance with
this bounden duty. In the absence of a clear showing that she had acted with
arbitrariness or with grave abuse of discretion in arriving at this decision, the Court
will not enjoin the implementation of this decision.

but the latter certified t case to us on the ground that the only questions raised a
purely of law.
The lot in question, which is a fishpond, forms part Lot 57-A of Block 8 of the
Tambobong estate. This lot was formerly Lot 607 of the Capellania de Concepcion,
former owner of the Tambobong estate. Originally, Mamerta Antonio de Ignacio was
the holder of the leasehold right Lot 607 who later sold it to Alberto Santos on
November 2, 1919. Alberto Santos took possession thereof after the sale paying the
corresponding rentals to the Capellania. When Alberto Santos died on December 9,
January 28, 1961
1941, he left heirs his spouse Leoncia A. Vda. de Santos and all the relatives who
G.R.
No.
ROSARIO
S.
JUAT,
ET
L-17080
appear as plaintiffs herein. They took possession and administration of the lot in
AL., plaintiffs-appellants,
question. When the Tambobong estate was acquired by the government, plaintiffs
vs.
continued paying the rentals of the lot to the government until 1947.
THE LAND TENURE ADMINISTRATION, ET AL., defendants-appellees.

In 1954, the Bureau of Lands which was then the administration of the Tambobong
Paredes,
San
Diego
and
Paredes
for
plaintiffs
appellants.
estate notified plaintiffs to enter into a contract of sale of the lot with said Bureau and
Adriano D. Lomuntad and L.P. Barbosa for defendant-appellee Land Tenure
to pay the purchase price within three months. Honorato Santos, representing the
Administration.
plaintiffs, inquired from said Bureau about the purchase price of the same and the
Noli Ma. Cortes for defendant-appellee Province Rizal.
back rentals due and asked for an indefinite extension of time within which to enter
into the required contract of sale. In response to this representation the Director of
BAUTISTA ANGELO, J.:
Plaintiffs brought an action before the Court of First Instance of Rizal to annul the
deed of sale made by the Secretary of Agriculture and Natural Resources in favor of
the province of Rizal covering Lot 57-A of Block 8 of the Tambobong estate situated in
Malabon, Rizal. After trial the court dismissed the complaint without costs, having
found said sale legal and valid. The case was taken appeal to the Court of Appeals
Lands under a letter dated February 20, 1954, granted plaintiffs an extension of time
within which to pay the rents due as well as to enter into the contract of sale. On
March 8, 1954, counsel for plaintiffs sent a letter to the Secretary of Agriculture and
Natural Resources asking for reconsideration of the computation of the back rentals
and of the purchase price stating therein his reasons. This letter was received on the
same date, and on March 11, 1954, the Secretary of Agriculture and Natural

Resources advised plaintiffs' counsel that his letter was referred to the Director of
Section 1. of Commonwealth Act 539 provides:
Lands for appropriate action and report and that as soon as the desired report is
received, further action will be taken on the matter of which plaintiffs' counsel will be
duly notified. Since then neither plaintiffs nor their counsel has received any
communication from either the Director of Lands or the Secretary of Agriculture and
Natural Resources regarding the lot in question.
SECTION 1. The President of the Philippines is authorized to acquire private lands or

any interest therein, through purchase or expropriation, and to subdivide the same
into home lots or small farms for resale at reasonable prices and such conditions as
he may fix to their bona fide tenants occupants or to private individuals who will work
the lands themselves and who are qualified to acquire and own lands in the
In the meantime, the province of Rizal has shown interest in acquiring an area of
Philippines.
29,100 sq. m. of Lot 57, Block 8, which is the lot in question, and to this effect its
provincial board approved Resolution No. 479, series of 1955, requesting the
Secretary of Agriculture and Natural Resources to sell it to the province for purposes
of a fishery school site. The land was finally sold to the province by the Secretary of
Agriculture and Natural Resources under a deed of sale executed on March 14, 1955
for the sum of P23,260.00. After the sale, the province began dumping stones and
gravel on the lot with the apparent intention of levelling it thereby giving notice to the
plaintiffs that the land had already been sold. Hence, plaintiff began the present
action seeking to annul the sale and enjoin defendants from filling up the land and to
pay damages. A writ of preliminary injunction was issued the court pending the
litigation.
We have no quarrel with the view that once a private land is acquired by the
government thru purchase or expropriation by virtue of the authority granted by the
law as above-quoted, it becomes its duty to subdivide the same into small lots "for
resale at reasonable prices and such conditions as he (President of the Philippines)
ma fix to their bona fide tenants or occupants or to private individuals who will work
the lands themselves." It may also be stated that the avowed policy behind the
adoption of such measure is, as aptly observed by the Court of Appeals, "to provide
the landless elements of our population with lots upon which to build their homes and
small farms which they can cultivate and from which they can derive their livelihood
without being beholden to any man" (Pascual v. Lucas, 51 O. G. No. 5, p. 2429), such
measure having been adopted in line with the policy of social justice enshrined in our
Appellants' main theme is that under Section 1 of Co Commonwealth Act 539 they
Constitution to remedy and cure the social unrest caused by the concentration of
are entitled to purchase the lot in question from the government at such reasonable
landed estates in the hands of a few by giving to the landless elements a piece of
price and under such condition the latter may fix, they being its bona fide tenants
land they can call their own.
since their predecessor-in-interest died in 1941, and since the government sold the
same to the province of Rizal in utter disregard of their rights of preference the sale is
null and void, it having been made in violation of the letter and spirit of the law.
But, while such is the avowed policy of the law, it should not however be overlooked
that Congress has likewise decreed that the President may sell to the provinces or
municipalities portions of the lands thus acquired of sufficient size and convenient

location "for public squares or plazas, parks, streets, markets, cemeteries, schools,
Constitution, for it cannot be denied that the authority given to him under Section 10
municipal or town hall, and other public buildings", without stating any qualification for
of the same Act is likewise for the same purpose, which is to promote public policy or
the exercise of the authority. Thus, Section 10 of the same Commonwealth Act
the education of our youth. It should be here emphasized that the main purpose of
539provides:
giving the land to the province of Rizal is to utilize the same as a site for t proposed
vocational school dedicated primarily to courses in fishery and other related subjects,
SEC. 10. The President may sell to the provinces and municipalities portions of lands
required under this Act of sufficient size and convenient location for public squares or
plazas, parks, streets, markets, cemeteries, schools, municipal or town hall, and other
and this is in line with the mandate of the Constitution to our government to establish
and maintain a complete and adequate system of public instruction, including
vocational efficiency (Article XIV Section 5).
public buildings.
Assuming arguendo that under Section 1 of Commonwealth Act 539 it is mandatory
Since said section does not exclude the lots that may be sold under Section 1 from
sale under Section 10 in the sense that lots acquired under the former cannot be
disposed of for purposes contemplated in the latter, it follows as a logical conclusion
that the choice or discretion to sell lands under either section is with the President
whose choice, once exercised, becomes final and binding upon the government. This
is what was done in the instant case. The Secretary of Agriculture and Natural
Resources deemed it proper under the circumstances to sell the land to the province
of Rizal for a school site. And it can be said that the act of the Secretary in making the
sale has the same effect as if done by the President himself by virtue of the legal
truism that the acts of a department secretary are presumed to be the acts of the
for the President to subdivide the lands acquired thereunder into small lots for resale
to the persons therein mentioned to the exclusion of all others, it should be noted
however that said Section I requires that the recipient of the privilege be a bona
fidetenant or occupant in the sense that he should be up-to-date in the payment of his
rentals to the landowner. Here, however, this condition is not present, for plaintiffs are
not bona fide tenants of the land in controversy. The record shows that plaintiffs only
paid the rentals for the lot up to the month of December, 1947 but ceased to pay the
same since that year to the time of this litigation. In fact, they failed to present
evidence showing that they complied with the requisite condition that would entitle
them to purchase the lot within the purview of the law.
Chief Executive. (Donnelly v. Agregado, G.R. No. L-4510, May 31, 1954; Villena v.
Secretary of Interior, 67 Phil. 451.)
WHEREFORE, we hereby affirm the decision of the trial court, without

pronouncement as to costs.
Neither can it be contended that by allowing the President to sell portions of the lands
acquired under Section 1 of Commonwealth Act a39 for purposes other than what is
therein provided, or to those who are not the persons therein intended, would be in
violation of the avowed policy to give land to the landless as enshrined in our
ACCORDINGLY, the Court resolved to DENY the Motion for Reconsideration for lack
of merit."

concentrates. Not content with this step, he also wrote to Dr. Andres Castillo, Acting
Governor of the Central Bank, urging, the same matter. Then Secretary Hernandez
wrote another letter to Dr. Castillo stating, "Senator Sabido is taking this to you
personally. Unless we have legal objection, I would like to authorize the withdrawal of
the concentrates upon payment of all charges in pesos. Please expedite action."
Almost at the same time, the Import-Export Committee of the Central Bank, thru Mr.
Gregorio Licaros, submitted to the Monetary Board a memorandum on the joint
petition of the company and Sabido Law Office for authority to withdraw the
concentrates from the customs house stating therein that it sees no objection to the
proposal. The Monetary Board, however, failed to take up the matter in its meeting of
October 12, 1956 for the reason that the transaction did not involve any dollar
allocation or foreign exchange, and of this decision Mr. Licaros was informed.
G.R. No. L-17169
November 30, 1963
ISIDRO
C.
vs.
HON. NATALIO P. CASTILLO, ET AL., respondents.
Juan
T.
David
Office of the Solicitor General for respondents.
ANG-ANGCO, petitioner,
for
petitioner.
BAUTISTA ANGELO, J.:

On October 8, 1956, the Pepsi-Cola Far East Trade Development Co., Inc. wrote a
letter to the Secretary of Commerce and Industry requesting for special permit to
withdraw certain commodities from the customs house which were imported without
any dollar allocation or remittance of foreign exchange. Said commodities consisted
of 1,188 units of pepsi-cola concentrates which were not covered by any Central
Bank release certificate. On the same date, the company addressed an identical
request to the Secretary of Finance who was also the Chairman of the Monetary
Board of the Central Bank. Senator Pedro Sabido, in behalf of the company, likewise
wrote said official urging that authority be given to withdraw the abovementioned
Having failed to secure the necessary authority from the Central Bank, on October 13,
1956, the counsel of the Pepsi-Cola Far East Trade Development Co., Inc.,
approached Collector of Customs Isidro Ang-Angco in an attempt to secure from him
the immediate release of the concentrates, but this official seeing perhaps that the
importation did not carry any release certificate from the Central Bank advised the
counsel to try to secure the necessary release certificate from the No-Dollar Import
Office that had jurisdiction over the case. In the morning of the same day, Mr. Aquiles
J. Lopez, of said Office, wrote a letter addressed to the Collector of Customs stating,
among other things, that his office had no objection to the release of the 1,188 units
of concentrates but that it could not take action on the request as "the same is not
within the jurisdiction of the No-Dollar Import Office within the contemplation of R.A.
No. 1410." The counsel already referred to above showed the letter to Collector of
Customs Ang-Angco who upon perusing it still hesitated to grant the release. Instead
he suggested that the letter be amended in order to remove the ambiguity appearing
therein, but Mr. Lopez refused to amend the letter stating that the same was neither a
permit nor a release. Secretary of Finance Hernandez having been contacted by
telephone, Collector of Customs Ang-Angco read to him the letter after which the
Secretary verbally expressed his approval of the release on the basis of said
certificate. Collector Ang-Angco, while still in doubt as to the propriety of the action
suggested, finally authorized the release of the concentrates upon payment of the
corresponding duties, customs charges, fees and taxes.
When Commissioner of Customs Manuel P. Manahan learned of the release of the
concentrates in question he immediately ordered their seizure but only a negligible
portion thereof remained in the warehouse. Whereupon, he filed an administrative
complaint against Collector of Customs Ang-Angco charging him with having
committed a grave neglect of duty and observed a conduct prejudicial to the best
interest of the customs service. On the strength of this complaint President Ramon

Magsaysay constituted an investigating committee to investigate Ang-Angco
composed of former Solicitor General Ambrosio Padilla, as Chairman, and Atty. Arturo
A. Alafriz and Lt. Col. Angel A. Salcedo, as members. Together with Collector AngAngco, Mr. Aquiles J. Lopez, was also investigated by the same Committee, who was
also charged in a separate complaint with serious misconduct in office or conduct
prejudicial to the best interest of the State. As a result, Collector Ang-Angco was
suspended from office in the latter part of December, 1956.
After the investigation, the committee submitted to President Magsaysay its report
recommending that a suspension of 15 days, without pay, be imposed upon AngAngco chargeable against the period of his suspension. On April 1, 1957, Collector
Ang-Angco was reinstated to his office by Secretary Hernandez, but the decision on
the administrative case against him remained pending until the death of President
Magsaysay. After around three years from the termination of the investigation during
which period Ang-Angco had been discharging the duties of his office, Executive
Secretary Natalio P. Castillo, by authority of the President, rendered a decision on the
case on February 12, 1960 finding Ang-Angco "guilty of conduct prejudicial to the best
interest of the service", and considering him resigned effective from the date of notice,
with prejudice to reinstatement in the Bureau of Customs.
Upon learning said decision from the newspapers, Collector Ang-Angco wrote a letter
to President Carlos P. Garcia calling attention to the fact that the action taken by
Secretary Castillo in removing him from office had the effect of depriving him of his
statutory right to have his case originally decided by the Commissioner of Civil
Service, as well as of his right of appeal to the Civil Service Board of Appeals, whose
decision under Republic Act No. 2260 is final, besides the fact that such decision is in
violation of the guaranty vouchsafed by the Constitution to officers or employees in
the civil service against removal or suspension except for cause in the manner
provided by law.
In a letter dated February 16, 1960, Secretary Castillo, also by authority of the
President, denied the request for reconsideration. Not satisfied with this resolution,
Collector Ang-Angco sent a memorandum to President Garcia reiterating once more
the same grounds on which he predicated his request for reconsideration. Again
Secretary Castillo, also by authority of the President, in letter dated July 1, 1960,
denied the appeal. In this instance, Secretary Castillo asserted that the President
virtue of his power of control over all executive departments, bureaus and offices, can
take direct action and dispose of the administrative case in question inasmuch as the
provisions of law that would seem to vest final authority in subordinate officers of the
executive branch of the government over administrative matters falling under their
jurisdiction cannot divest the President of his power of control nor diminish the same.
Hence, after exhausting all the administrative remedies available to him to secure his
reinstatement to the office from which he was removed without any valid cause or in
violation of his right to due process of law, Collector Ang-Angco filed before this Court
the present petition for certiorari, prohibition and mandamus with a petition for the
issuance of a preliminary mandatory injunction. The Court gave due course to the
petition, but denied the request for injunction.
The main theme of petitioner is that respondent Executive Secretary Natalio P.
Castillo in acting on his case by authority of the President in the sense of considering
him as resigned from notice thereof, violated the guaranty vouchsafed by the
Constitution to officers and employees in the classified service in that he acted in
violation of Section 16 (i) of the Civil Service Act of 1959 which vests in the
Commissioner of Civil Service the original and exclusive jurisdiction to decide
administrative cases against officers and employees in the classified service,
deprived him of his right of appeal under Section 18 (b) of the same Act to the Civil
Service Board of Appeals whose decision on the matter is final, and removed him
from the service without due process in violation of Section 32 of the same Act which
expressly provides that the removal or suspension of any officer or employee from the
civil service shall be accomplished only after due process, and of Section 4, Article XII
of our Constitution which provides that "No officer or employee in the civil service
shall be removed except for cause as provided for by law." Since petitioner is an
officer who belongs to the classified civil service and is not a presidential appointee,
but one appointed by the Secretary of Finance under the Revised Administrative
Code, he cannot be removed from the service by the President in utter disregard of
the provisions of the Civil Service Act of 1959.
Respondents, on their part, do not agree with this theory entertained by petitioner.
They admit that if the theory is to be considered in the light of the provisions of the
Civil Service Act of 1959, the same may be correct, for indeed the Civil Service Law
as it now stands provides that all officers and employees who belong to the classified
service come under the exclusive jurisdiction of the Commissioner of Civil Service
and as such all administrative cases against them shall be indorsed to said official
whose decision may be appealed to the Civil Service Board of Appeals from whose
decision no further appeal can be taken. They also admit that petitioner belongs to
the classified civil service. But it is their theory that the pertinent provisions of the Civil
Service Law applicable to employees in the classified service do not apply to the
particular case of petitioner since to hold otherwise would be to deprive the President
of his power of control over the officers and employees of the executive branch of the
government. In other words, respondents contend that, whether the officers or
employees concerned are presidential appointees or belong to the classified service,
if they are all officers and employees in the executive department, they all come
under the control of the President and, therefore, his power of removal may be
exercised over them directly without distinction. Indeed, respondents contend that, if,

as held in the case ofNegado v. Castro, 55 O.G., 10534, the President may modify or
set aside a decision of the Civil Service Board of Appeals at the instance of the office
concerned, or the respondent employee, or may even do so motu propio, there would
be in the final analysis no logical difference between removing petitioner by direct
action of the President and separating him from the service by ultimate action by the
President should an appeal be taken from the decision of the Civil Service Board of
Appeals to him, or if in his discretion he may motu proprio consider it necessary to
review the Board's decision. It is contended that this ruling still holds true in spite of
the new provision wrought into the law by Republic Act 2260 which eliminated the
power of review given to the President because the power of control given by the
Constitution to the President over officers and employees in the executive department
can only be limited by the Constitution and not by Congress, for to permit Congress to
do so would be to diminish the authority conferred on the President by the
Constitution which is tantamount to amending the Constitution itself (Hebron v.
Reyes, L- 9124, July 28, 1958). Indeed this is the argument invoked by respondent
Castillo in taking direct action against petitioner instead of following the procedure
outlined in the Civil Service Act of 1959 as may be seen from the following portion of
his decision.
In connection with the second ground advanced in support of your petition, it
is contended that in deciding the case directly, instead of transmitting it to
the Commissioner of Civil Service for original decision, his Office deprived
the respondent of his right to appeal to the Civil Service Board of Appeals.
This contention overlooks the principle that the President may modify or set
aside a decision of the Civil Service Board of Appeals at the instance of
either the office concerned or the respondent employee, or may even do so
motu proprio (Negado vs. Castro, 55 O.G, No. 51, p. 10534, Dec. 21, 1959).
There would therefore be no difference in effect between direct action by the
President and ultimate action by him should an appeal be taken from the
decision of the Commissioner of Civil Service or the Civil Service Board of
Appeals. The result is that the President's direct action would be the final
decision that would be reached in case an appeal takes its due course.
Thus, we see that the main issue involved herein is whether the President has the
power to take direct action on the case of petitioner even if he belongs to the
classified service in spite of the provisions now in force in the Civil Service Act of
1959. Petitioner sustains the negative contending that the contrary view would
deprive him of his office without due process of law while respondents sustain the
affirmative invoking the power of control given to the President by the Constitution
over all officers and employees, belonging to the executive department.
To begin with, we may state that under Section 16 (i) of the Civil Service Act of 1959 it
is the Commissioner of Civil Service who has original and exclusive jurisdiction to
decide administrative cases of all officers and employees in the classified service for
in said section the following is provided: "Except as otherwise provided by law, (the
Commissioner shall) have final authority to pass upon the removal, separation and
suspension of all permanent officers and employees in the competitive or classified
service and upon all matters relating to the employees." The only limitation to this
power is that the decision of the Commissioner may be appealed to the Civil Service
Board of Appeals, in which case said Board shall decide the appeal within a period of
90 days after the same has been submitted for decision, whose decision in such case
shall be final (Section 18, Republic Act 2260). It should be noted that the law as it now
stands does not provide for any appeal to the President, nor is he given the power to
review the decision motu proprio, unlike the provision of the previous law,
Commonwealth Act No. 598, which was expressly repealed by the Civil Service Act of
1959 (Rep. Act 2260), which provides that the decision of the Civil Service Board of
Appeals may be reversed or modified motu proprio by the President. It is, therefore,
clear that under the present provision of the Civil Service Act of 1959, the case of
petitioner comes under the exclusive jurisdiction of the Commissioner of Civil Service,
and having been deprived of the procedure laid down therein in connection with the
investigation and disposition of his case, it may be said that he has been deprived of
due process as guaranteed by said law.
It must, however, be noted that the removal, separation and suspension of the officers
and employees of the classified service are subject to the saving clause "Except as
otherwise provided by law" (Section 16 [i], Republic Act No. 2260). The question then
may be asked: Is the President empowered by any other law to remove officers and
employees in the classified civil service?
The only law that we can recall on the point is Section 64 (b) of the Revised
Administrative Code, the pertinent portion of which we quote:
(b) To remove officials from office conformably to law and to declare vacant
the offices held by such removed officials. For disloyalty to the (United
States) Republic of the Philippines, the (Governor-General) President of the
Philippines may at any time remove a person from any position of trust or
authority under the Government of the (Philippine Islands) Philippines.
The phrase "conformably to law" is significant. It shows that the President does not
have blanket authority move any officer or employee of the government but his power
must still be subject to the law that passed by the legislative body particularly with
regard the procedure, cause and finality of the removal of persons who may be the
subject of disciplinary action. Here, as above stated we have such law which governs

action to be taken against officers and employees in classified civil service. This law is
binding upon President.
cannot be said that the removal of an inferior officer comes within the meaning of
control over a specific policy of government.
Another provision that may be mentioned is Section (D) of the Revised Administrative
Code, which provides:
But the strongest argument against the theory of respondents is that it would entirely
nullify and set at naught the beneficient purpose of the whole civil service system
implanted in this jurisdiction, which is to give stability to the tenure of office of those
who belong to the classified service, in derogation of the provisions of our
Constitution which provides that "No officer or employee in the civil service shall be
removed or suspended except for cause as provided by law" (Section 4, Article XII,
Constitution).Here, we have two provisions of our Constitution which are apparently in
conflict, the power of control by the President embodied in Section 10 (1), Article VII,
and the protection extended to those who are in the civil service of our government
embodied in Section 4, Article XII. It is our duty to reconcile and harmonize these
conflicting provisions in a manner that may give to both full force and effect and the
only logical, practical and rational way is to interpret them in the manner we do it in
this decision. As this Court has aptly said in the case of Lacson v. Romero:
Power to appoint and remove. The Department Head, the

recommendation of the chief of the Bureau or office concerned, shall appoint
all subordinate officers and employees appointment is not expressly vested
by law in the (Governor-General) President of the Philippines, and may
remove or punish them, except as especially provided otherwise, in
accordance the Civil Service Law.
The phrase "in accordance with the Civil Service is also significant. So we may say
that even granting for administrative purposes, the President of the Philippines is
considered as the Department Head of the Civil Service Commission, his power to
remove is still subject to the Civil Service Act of 1959, and we already know with
regard to officers and employees who belong to classified service the finality of the
action is given to the Commissioner of Civil Service or the Civil Board of Appeals.
Let us now take up the power of control given to President by the Constitution over all
officers and employees in the executive department which is now in by respondents
as justification to override the specific visions of the Civil Service Act. This power of
control couched in general terms for it does not set in specific manner its extent and
scope. Yes, this Court in the case of Hebron v. Reyes, supra, had already occasion to
interpret the extent of such power to mean "the power of an officer to alter or modify
or nullify or set aside what a subordinate officer had done in the performance of his
duties and to substitute the judgment of the former for that of the latter," 1 to distinguish
it from the power of general supervision over municipal government, but the decision
does not go to the extent of including the power to remove an officer or employee in
the executive department. Apparently, the power merely applies to the exercise of
control over the acts of the subordinate and not over the actor or agent himself of the
act. It only means that the President may set aside the judgment or action taken by a
subordinate in the performance of his duties.
That meaning is also the meaning given to the word "control" as used in
administrative law. Thus, the Department Head pursuant to Section 79(C) is given
direct control of all bureaus and offices under his department by virtue of which he
may "repeal or modify decisions of the chiefs of said bureaus or offices", and under
Section 74 of the same Code, the President's control over the executive department
only refers to matters of general policy. The term "policy" means a settled or definite
course or method adopted and followed by a government, body, or individual, 2 and it
... To hold that civil service officials hold their office at the will of the
appointing power subject to removal or forced transfer at any time, would
demoralize and undermine and eventually destroy the whole Civil Service
System and structure. The country would then go back to the days of the old
Jacksonian Spoils System under which a victorious Chief Executive, after
the elections could if so minded, sweep out of office, civil service employees
differing in Political color or affiliation from him, and sweep in his Political
followers and adherents, especially those who have given him help, political
or otherwise. (Lacson v. Romero, 84 Phil. 740, 754)
There is some point in the argument that the Power of control of the President may
extend to the Power to investigate, suspend or remove officers and employees who
belong to the executive department if they are presidential appointees or do not
belong to the classified service for such can be justified under the principle that the
power to remove is inherent in the power to appoint (Lacson V. Romero, supra), but
not with regard to those officers or employees who belong to the classified service for
as to them that inherent power cannot be exercised. This is in line with the provision
of our Constitution which says that "the Congress may by law vest the appointment of
the inferior officers, in the President alone, in the courts, or in heads of department"
(Article VII, Section 10 [3], Constitution). With regard to these officers whose
appointments are vested on heads of departments, Congress has provided by law for
a procedure for their removal precisely in view of this constitutional authority. One
such law is the Civil Service Act of 1959.

We have no doubt that when Congress, by law, vests the appointment of
inferior officers in the heads of departments it may limit and restrict power of
removal as it seem best for the public interest. The constitutional authority in
Congress to thus vest the appointment implies authority to limit, restrict, and
regulate the removal by such laws as Congress may enact in relation to the
officers so appointed. The head of a department has no constitutional
prerogative of appointment to officers independently of legislation of
Congress, and by such legislation he must be governed, not only in making
appointments but in all that is incident thereto. (U.S. v. Perkins, 116 U.S.
483)
In resume, we may conclude that the action taken by respondent Executive
Secretary, even with the authority of the President, in taking direct action on the
administrative case of petitioner, without submitting the same to the Commissioner of
Civil Service, is contrary to law and should be set aside.
WHEREFORE, it is hereby ordered that petitioner be immediately reinstated to his
office as Collector of Customs for the Port of Manila, without prejudice of submitting
his case to the Commissioner of Civil Service to be dealt with in accordance with law.
No costs.
G.R. No. 127249 February 27, 1998

CAMARINES NOTE ELECTRIC COOPERATIVE, INC. (CANORECO); RUBEN, N.
BARRAMEDA; ELVIS L. ESPIRITU; MERARDO G. ENERO, JR.; MERCELITO B.
ABAS;
and
REYNALDO
V.
ABUNDO, petitioners,
vs.
HON. RUBEN D. TORRES, in his capacity as Executive Secretary; REX
TANTIONGCO; HONESTO DE JESUS; ANDRES IBASCO; TEODULO M. MEA;
and VICENTE LUKBAN, respondents.
DAVIDE, JR., J.:

May the Office of the President validly constitute an ad hoc committee to
take over and manage the affairs of an electric cooperative?

This is the key issue in this original action for certiorari and prohibition under
Rule 65 of the Rules of Court wherein the petitioners seek to (a) annul and
set aside Memorandum Order No. 409 of the Office of the President dated 3
December 1996 constituting an Ad Hoc Committee to take over and manage
the affairs of the Camarines Norte Electric Cooperative, Inc., (hereafter
CANORECO) "until such time as a general membership meeting can be
called to decide the serious issues affecting the said cooperative and
normalcy in operations is restored"; and (b) prohibit the respondents from
performing acts or continuing proceedings pursuant to the Memorandum
Order.
(6) To authorize the NEA Administrator to designate, subject to the

confirmation of the Board Administrators, an Acting General
Manager and/or Project Supervisor for a Cooperative where
vacancies in the said positions occur and/or when the interest of
the Cooperative and the program so requires, and to prescribe the
functions of said Acting General Manager and/or Project
Supervisor, which powers shall not be nullified, altered or
diminished by any policy or resolution of the Board of Directors of
the Cooperative concerned.
xxx xxx xxx
The factual backdrop of this case is not complicated.

Petitioner CANORECO is an electric cooperative organized under the
provisions of P.D. No. 269, otherwise known as the National Electrification
Administration Decree, as amended by P.D. No. 1645.
On 10 March 1990, then President Corazon C. Aquino signed into law R.A.
No. 6938 and R.A. No. 6939. The former is the Cooperative Code of the
Philippines, while the latter created the Cooperative Development Authority
(CDA) and vested solely upon the CDA the power to register cooperatives.
Article 122 of the Cooperative Code expressly provides that electric
cooperatives shall be covered by the Code. Article 128 of the said Code and
Section 17 of R.A. No. 6939 similarly provide that cooperatives created
under P.D. No. 269, as amended by P.D. No. 1645, shall have three years
within which to qualify and register with the CDA and that after they shall
have so qualified and registered, the provisions of Sections 3 and 5 of P.D.
No. 1645 shall no longer be applicable to them. These Sections 3 and 5 read
as follows:
Sec. 3. Section 5(a), Chapter II of Presidential Decree No. 269 is
hereby amended by adding sub-paragraph (6) to read as follows:
Sec. 5. Section 10, Chapter II of Presidential Decree No. 269 is

hereby amended to read as follows:
Sec. 10. Enforcement Powers and Remedies. In the exercise of
its power of supervision and control over electric cooperatives and
other borrower, supervised or controlled entities, the NEA is
empowered to issue orders, rules and regulations and motu
proprio or upon petition of third parties, to conduct investigations,
referenda and other similar actions in all matters affecting said
electric cooperatives and other borrower, or supervised or
controlled entities.
xxx xxx xxx
Finally, the repealing clause (Article 127) of the Cooperative Code provides:
Provided, however, That nothing in this Code shall be interpreted to
mean the amendment or repeal of any provision of Presidential
Decree No. 269: Provided, further, That the electric cooperatives
which qualify as such under this Code shall fall under the coverage
thereof.
CANORECO registered with the CDA pursuant to R.A. No. 6938 and R.A.
No. 6939. On 8 March 1993, the CDA issued a Certificate of Provisional
Registration (T-003-93) to CANORECO effective for two years. 1 On 1 March
1995, the CDA extended this provisional registration until 4 May
1997. 2 However, on 10 July 1996, CANORECO filed with the CDA its
approved amendments to its Articles of Cooperation converting itself from a
non-stock to a stock cooperative pursuant to the provisions of R.A. No. 6938
and the Omnibus Implementing Rules and Regulations on Electric

Cooperatives. On the same date the CDA issued a Certificate of
Registrations 3 of the amendments to CANORECO Articles of Cooperation
certifying that CANORECO is "registered as a full-[f]ledged cooperative
under and by virtue of R.A. 6938."
Previously, on 11 March 1995, the Board of Directors of
CANORECO 4 approved Resolution No. 22 appointing petitioner Reynaldo V.
Abundo as permanent General Manager. The Board was composed of
Ruben N. Barrameda President
Elvis L. Espiritu Vice president
Merardo G. Enero, Jr. Secretary
Marcelito B. Abas Treasurer
Vice President Antonio Obias

Secretary Felicito Ilan
Treasurer Luis Pascua
Thereupon, these newly elected officers approved the following resolutions:
1) Resolution No. 27, c.s. confirming the election of the new set
of officers of the Board of Directors of CANORECO
2) Resolution No. 28, c.s. recalling Resolution No. 22, c.s.
appointing Mr. Reynaldo V. Abundo as permanent General
Manager in view of the fact that such appointment was in violation
of the provisions of R.A. 6713; declaring the position of General
Manager as vacant; and designating Mr. Oscar Acobera as Officerin-Charge
Antonio R. Obias Director

Luis A. Pascua Director
Norberto Z. Ochoa Director
Leonida Z. Manalo OIC GM/Ex-Officio
On 28 May 1995, Antonio Obias, Norberto Ochoa, Luis Pascua, and Felicito
Ilan held a special meeting of the Board of Directors of CANORECO. The
minutes of the meeting 5 showed that President Ruben Barrameda, VicePresident Elvis Espiritu, and Treasurer Marcelito Abas were absent; that
Obias acted as temporary chairman; that the latter informed those present
that it was the responsibility of the Board after the annual meeting to meet
and elect the new set of officers, but that despite the fact that he had called
the attention of President Barrameda and Directors Abas and Espiritu for the
holding thereof, the three chose not to appear; and that those present in the
special meeting declared all positions in the board vacant and thereafter
proceeded to hold elections by secret balloting with all the directors present
considered candidates for the positions. The following won and were
declared as the newly elected officers of the CANORECO:
President Norberto Ochoa
3) Resolution No. 29, c.s. authorizing the Board President, or in

his absence, the Vice-President, countersigned by the Treasurer, or
in his absence, the Secretary, to be the only officers who can
transfer funds from savings to current accounts; and authorizing the
Officer-in-Charge, Mr. Acobera, to issue checks without
countersignature in an amount not to exceed P3,000.00 and in
excess thereof, to be countersigned by the President and/or the
Treasurer
4) Resolution No. 30, c.s. hiring the services of Atty. Juanito
Subia as retainer-lawyer for CANORECO. 6
The petitioners challenged the above resolutions and the election of officers
by filing with the CDA a Petition for Declaration of Nullity of Board
Resolutions and Election of Officers with Prayer for Issuance of
Injunction/Temporary Restraining Order, which the CDA docketed CDA-CO
Case No. 95-010.
In its Resolution of 15 February 1996, 7 the CDA resolved the petition in favor
of the petitioners and decreed as follows:
WHEREFORE, premises considered, the Board Meeting of May 28,
1995, participated by the respondents, and all the Resolutions

issued on such occasion, are hereby declared NULL AND VOIDAB
INITIO.
Likewise, the election of respondents Norberto Ochoa, Antonio
Obias, Felicito Ilan, and Luis Pascua, as President, Vice-President,
Secretary, and Treasurer, respectively, of CANORECO is hereby
declared NULL AND VOID AB INITIO.
Hence, respondents Norberto Ochoa, Antonio Obias, Felicito Ilan,
and Luis Pascua are hereby ordered to refrain from representing
themselves as President, Vice-President, Secretary, and Treasurer,
respectively, of CANORECO. The same respondents are further
ordered to refrain from acting as authorized signatories to the bank
accounts of CANORECO.
Further respondent Felicito Ilan is hereby ordered to refrain from
exercising the duties and functions of a member of the Board of
CANORECO until the election protest is resolved with finality by the
proper forum. In the meantime, the incumbency of petitioner
Merardo Enero, Jr. as Director of the CANORECO Board is hereby
recognized.
On 26 September 1996, pursuant to the writ of execution and order to

vacate issued by the CDA, the petitioners were able to reassume control of
the CANORECO and to perform their respective functions. 9
On 3 December 1996, the President of the Philippines issued Memorandum
Order No. 409 10 constituting an Ad HocCommittee to temporarily take over
and manage the affairs of CANORECO. It reads as follows:
To efficiently and effectively address the worsening problem of the
Camarines Norte Electric Cooperative, Inc. (CANORECO) and in
order not to prejudice and endanger the interest of the people who
rely on the said cooperative for their supply of electricity, an AD
HOC Committee is hereby constituted to take over and manage the
affairs of CANORECO until such time as a general membership
meeting can be called to decide the serious issues affecting the
said cooperative and normalcy in operations is restored. Further, if
and when warranted, the present Board of Directors may be called
upon by the Committee for advisory services without prejudice to
the receipt of their per diems as may be authorized by existing rules
and regulations.
The AD HOC Committee shall be composed of the following:
A status quo is hereby ordered as regards the position of General

Manager, being held by Mr. Reynaldo Abundo, considering that the
recall of his appointment was done under a void Resolution, and
that the designation of Mr. Oscar Acodera as Officer-in-Charge,
under the same void Resolution, has no force and effect.
Finally, respondents Antonio Obias, Norberto Ochoa, Luisito
Pascua, and petitioners Ruben Barrameda, Elvis Espiritu, Marcelito
Abas and Merardo Enero, Jr. are hereby ordered to work together,
as Board of Directors, for the common good of CANORECO and its
consumer-members, and to maintain an atmosphere of sincere
cooperation among the officers and members of CANORECO.
On 28 June 1996, in defiance of the abovementioned Resolution of the CDA
and with the active participation of some officials of the National
Electrification Administration (NEA), the group of Norberto Ochoa, Antonio
Obias, Felicito Ilan, and Luis Pascua forcibly took possession of the offices
of CANORECO and assumed the duties as officers thereof. 8
REX TANTIONGCO Chairman

Presidential Assistant on Energy Affairs
HONESTO DE JESUS Member
Cooperative Development Authority Nominee
ANDRES IBASCO Member
Cooperative Development Authority Nominee
TEODULO M. MEA Member
National Electrification Administration Nominee
VICENTE LUKBAN Member

National Electrification Administration Nominee
The said Committee shall have the following functions:
1. Designate the following upon the recommendation of the
Chairman:
1.1 an Acting General Manager who shall handle
the day-to-day operations of the Cooperative. In
the meantime, the General Manager shall be
deemed to be on leave without prejudice to the
payment of his salaries legally due him; and
1.2 a Comptroller who shall handle the financial
affairs of the Cooperative.
2. Ensure that:
xxx xxx xxx
The AD HOC Committee shall submit a written report to the
President, through the Office of the Executive Secretary, every two
(2) weeks from the effectivity of this Order.
A General Membership Meeting shall be called by the AD
HOC Committee to determine whether or not there is a need to
change the composition of the membership of the Cooperative's
Board of Directors. If the need exists, the AD HOC Committee shall
call for elections. Once composition of the Board of Directors is
finally settled, it shall decide on the appointment of a General
Manager in accordance with prescribed laws, rules and regulations.
Upon the appointment of a General Manager, the Committee shall
become functus officio.
This Memorandum Order shall take effect immediately.
On 11 December 1996, the petitioners filed this petition wherein they claim
that
I. THE PRESIDENT HAS NO POWER TO TAKE OVER AND

MANAGE OR TO ORDER THE TAKE-OVER OR MANAGEMENT
OF CANORECO.
II. [THE] TAKE-OVER OF CANORECO BY THE AD
HOC COMMITTEE IS UNLAWFUL DESPITE DESIGNATION OF
CANORECO
CONSUMERS
AS
MEMBERS
OF AD
HOC COMMITTEE.
III. [THE] RELEGATION OF PETITIONERS AS MERE ADVISERS
TO THE AD HOC COMMITTEE AMOUNTS TO REMOVAL FROM
OFFICE WHICH THE PRESIDENT HAS NO POWER TO DO.
MOREOVER,
PETITIONERS'
REMOVAL
VIOLATES
PETITIONERS' RIGHT TO DUE PROCESS OF LAW.
IV. THE PRESIDENT IS LIKEWISE WITHOUT POWER TO
DESIGNATE OR ORDER THE DESIGNATION OF AN ACTING
GENERAL MANAGER FOR CANORECO AND TO CONSIDER
THE INCUMBENT REYNALDO V. ABUNDO TO BE ON LEAVE.
The petitioners assert that there is no provision in the Constitution or in a
statute expressly, or even impliedly, authorizing the President or his
representatives to lake over or order the take-over of electric cooperatives.
Although conceding that while the State, through its police power, has the
right to interfere with private business or commerce, they maintain that the
exercise thereof is generally limited to the regulation of the business or
commerce and that the power to regulate does not include the power to take
over, control, manage, or direct the operation of the business. Accordingly,
the creation of the Ad HocCommittee for the purpose of take-over was illegal
and void.
The petitioners further claim that Memorandum Order No. 409 removed
them from their positions as members of the Board of Directors of
CANORECO. The President does not have the authority to appoint, much
less to remove, members of the board of directors of a private enterprise
including electric cooperatives. He cannot rely on his power of supervision
over the NEA to justify the designation of an acting general manager for
CANORECO under P.D. No. 269 as amended by P.D. No. 1645, for
CANORECO had already registered with the CDA pursuant to R.A. 6938
and R.A. No. 6939; hence, the latter laws now govern the internal affairs of
CANORECO

On 3 January 1997, the petitioners filed an Urgent Motion for Issuance of a
Temporary Restraining Order.
On 9 January 1997, the petitioners filed a Manifestation and Motion
informing the Court that on 8 January 1997 respondent Rex Tantiongco
notified the petitioners that the Ad Hoc Committee was taking over the affairs
and management of CANORECO effective as of that date. 11 They reiterated
their plea for the issuance of a temporary restraining order because the Ad
Hoc Committee has taken control of CANORECO and usurped the functions
of the individual petitioners.
In the Resolution dated 13 January 1997, we required respondents to
comment on the petition.
Despite four extensions granted it, the Office of the Solicitor General (OSG)
failed to file its Comment. Hence, in the resolution of 16 July 1997 we
deemed the OSG to have waived the filing of its Comment and declared this
case submitted for decision. The OSG's motion to admit its Comment, as
well as the attached Comment, belatedly filed on 24 July 1997 was merely
noted without action in the resolution of 13 August 1997. We also
subsequently denied for lack of merit its motion for reconsideration.
cooperative and may, by resolution, exercise all such powers of the

cooperative as are not reserved for the general assembly under this
Code and the by-laws.
As to the officers of cooperatives, Article 43 of the Code provides:
Art. 43. Officers of the Cooperative. The board of directors shall
elect from among themselves only the chairman and vice-chairman,
and elect or appoint other officers of the cooperative from outside of
the board in accordance with their by-laws. All officers shall serve
during good behavior and shall not be removed except for cause
and after due hearing. Loss of confidence shall not be a valid
ground for removal unless evidenced by acts or omissions causing
loss of confidence in the honesty and integrity of such officer. No
two (2) or more persons with relationship up to the third degree of
consanguinity or affinity shall serve as elective or appointive officers
in the same board. 12
Under Article 34 of the Code, the general assembly of cooperatives has the
exclusive power, which cannot be delegated, to elect or appoint the
members of the board of directors and to remove them for cause. Article 51
thereof provides for removal of directors and officers as follows:
We find the instant petition impressed with merit.

Having registered itself with the CDA pursuant to Section 128 of R.A. No.
6938 and Section 17 of R.A. No. 6939, CANORECO was brought under the
coverage of said laws. Article 38 of R.A. No. 6938 vests upon the board of
directors the conduct and management of the affairs of cooperatives, and
Article 39 provides for the powers of the board of directors. These sections
read:
Art. 38. Composition of the Board of Directors. The conduct and
management of the affairs of a cooperative shall be vested in a
board of directors which shall be composed of not less than five (5)
nor more than fifteen (15) members elected by the general
assembly for a term fixed in the by-laws but not exceeding a term of
two (2) years and shall hold office until their successors are duly
elected and qualified, or until duly removed. However, no director
shall serve of more than three (3) consecutive terms.
Art. 39. Powers of the Board of Directors. The board of directors
shall direct and supervise the business, manage the property of the
Art. 51. Removal. An elective officer, director, or committee

member may be removed by a vote of two-thirds (2/3) of the voting
members present and constituting a quorum, in a regular or special
general assembly meeting called for the purpose. The person
involved shall be given an opportunity to be heard at said assembly.
Memorandum Order No. 409 clearly removed from the Board of Directors of
CANORECO the power to manage the affairs of CANORECO and
transferred such power to the Ad Hoc Committee, albeit temporarily.
Considering that (1) the take-over will be "until such time that a general
membership meeting can be called to decide the serious issues affecting the
said cooperative and normalcy in operations is restored, and (2) the date
such meeting shall be called and the determination of whether there is a
need to change the composition of the membership of CANORECO's Board
of Directors are exclusively left to theAd Hoc Committee, it necessarily
follows that the incumbent directors were, for all intents and purposes,
suspended at the least, and removed, at the most, from their office. The said
Memorandum did no less to the lawfully appointed General Manager by
directing that upon the settlement of the issue concerning the composition of

the board of directors the Committee shall decide on the appointment of a
general manager. In the meantime, it authorized the Committee to designate
upon the recommendation of the Chairman an Acting Manager, with the
lawfully appointed Manager considered on leave, but who is, however,
entitled to the payment of his salaries.
Nothing in law supported the take-over of the management of the affairs of
CANORECO, and the "suspension," if not "removal," of the Board of
Directors and the officers thereof.
It must be pointed out that the controversy which resulted in the issuance of
the Memorandum Order stemmed from a struggle between two groups vying
for control of the management of CANORECO. One faction was led by the
group of Norberto Ochoa, while the other was petitioners' group whose
members were, at that time, the incumbent directors and officers. It was the
action of Ochoa and his cohorts in holding a special meeting on 28 May
1995 and then declaring vacant the positions of cooperative officers and
thereafter electing themselves to the positions of president, vice-president,
treasurer, and secretary of CANORECO which compelled the petitioners to
file a petition with the CDA. The CDA thereafter came out with a decision
favorable to the petitioners.
Obviously there was a clear case of intra-cooperative dispute. Article 121 of
the Cooperative Code is explicit on how the dispute should be resolved;
thus:
Art. 121. Settlement of Disputes. Disputes among members,
officers, directors, and committee members, and intra-cooperative
disputes shall, as far as practicable, be settled amicably in
accordance with the conciliation or mediation mechanisms
embodied in the by-laws of the cooperative, and in applicable laws.
Should such a conciliation/mediation proceeding fail, the matter
shall be settled in a court of competent jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939, which provides:
Sec. 8. Mediation and Conciliation. Upon request of either or
both or both parties, the [CDA] shall mediate and conciliate
disputes with the cooperative or between cooperatives: Provided,
That if no mediation or conciliation succeeds within three (3)
months from request thereof, a certificate of non-resolution shall be
issued by the commission prior to the filing of appropriate action

before the proper courts.
Even granting for the sake of argument that the party aggrieved by a
decision of the CDA could pursue an administrative appeal to the Office of
the President on the theory that the CDA is an agency under its direct
supervision and control, still the Office of the President could not in this
case, motu proprio or upon request of a party, supplant or overturn the
decision of the CDA. The record does not disclose that the group of Norberto
Ochoa appealed from the decision of the CDA in CDA-CO Case No. 95-010
to the Office of the President as the head of the Executive Department
exercising supervision and control over said agency. In fact the CDA had
already issued a Cease and Desist Order dated 14 August 1996 ordering
Antonio Obias, Norberto Ochoa, Luis Pascua, Felicito Ilan and their followers
"to cease and desist from acting as the Board of Directors and Officers of
Camarines Norte Electric Cooperative (CANORECO) and to refrain from
implementing their Resolution calling for the District V Election on August 17
and 24, 1996." 13 Consequently, the said decision of the CDA had long
become final and executory when Memorandum Order No. 409 was issued
on 3 December 1996. That Memorandum cannot then be considered as one
reversing the decision of the CDA which had attained finality.
Under Section 15, Chapter III of Book VII of the Administrative Code of 1987
(Executive Order No. 292), decisions of administrative agencies become
final and executory fifteen days after receipt of a copy thereof by the party
adversely affected unless within that period an administrative appeal or
judicial review, if proper, has been perfected. One motion for reconsideration
is allowed. A final resolution or decision of an administrative agency also
binds the Office of the President even if such agency is under the
administrative supervision and control of the latter.
We have stated before, and reiterate it now, that administrative decisions
must end sometime, as fully as public policy demands that finality be written
on judicial controversies. Public interest requires that proceedings already
terminated should not be altered at every step, for the rule of non quieta
movereprescribes that what had already been terminated should not be
disturbed. A disregard of this principle does not commend itself to sound
public policy. 14
Neither can police power be invoked to clothe with validity the assailed
Memorandum Order No. 409. Police power is the power inherent in a
government to enact laws, within constitutional limits, to promote the order,

safety, health, morals, and general welfare of society. 15 It is lodged primarily
in the legislature. By virtue of a valid delegation of legislative power, it may
also be exercised by the President and administrative boards, as well as the
lawmaking
bodies
on
all
municipal
levels,
including
the barangay. 16 Delegation of legislative powers to the President is
permitted in Sections 23(2) and 28(2) of Article VI of the Constitution. 17 The
pertinent laws on cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and
P.D. No. 269 as amended by P.D. No. 1645 do not provide for the President
or any other administrative body to take over the internal management of a
cooperative. Article 98 of R.A. 6938 instead provides:
Art. 98. Regulation of Public Service Cooperatives. (1) The
internal affairs of public service cooperatives such as the rights and
privileges of members, the rules and procedures for meetings of the
general assembly, board of directors and committees; for the
election and qualification of officers, directors, and committee
members; allocation and distribution of surpluses, and all other
matters relating to their internal affairs shall be governed by this
Code.
xxx xxx xxx
We do not then hesitate to rule that Memorandum Order No. 409 has no
constitutional and statutory basis. It violates the basic underlying principle
enshrined in Article 4(2) of R.A. No. 6938 that cooperatives are democratic
organizations and that their affairs shall be administered by persons elected
or appointed in a manner agreed upon by the members. Likewise, it runs
counter to the policy set forth in Section 1 of R.A. No. 6939 that the State
shall, except as provided in said Act, maintain a policy of non-interference in
the management and operation of cooperatives.
WHEREFORE, the instant petition is GRANTED and Memorandum Order
No. 409 of the President is hereby declared INVALID.
SO ORDERED.
G.R. No. 90336 August 12, 1991

RUPERTO
vs.
SECRETARY
LUIS
T.
VERCELES, respondents.
TAULE,
SANTOS
petitioner,
and
GOVERNOR
LEANDRO
Balgos & Perez and Bugaring, Tugonon & Associates Law Offices for petitioner.
Juan G. Atencia for private respondent.
GANCAYCO, J.:p
The extent of authority of the Secretary of Local Government over the katipunan ng
mga barangay or the barangay councils is brought to the fore in this case.
On June 18,1989, the Federation of Associations of Barangay Councils (FABC) of
Catanduanes, composed of eleven (11) members, in their capacities as Presidents of
the Association of Barangay Councils in their respective municipalities, convened in
Virac, Catanduanes with six members in attendance for the purpose of holding the
election of its officers.
Present were petitioner Ruperto Taule of San Miguel, Allan Aquino of Viga, Vicente
Avila of Virac, Fidel Jacob of Panganiban, Leo Sales of Caramoran and Manuel
Torres of Baras. The Board of Election Supervisors/Consultants was composed of
Provincial Government Operation Officer (PGOO) Alberto P. Molina, Jr. as Chairman
with Provincial Treasurer Luis A. Manlapaz, Jr. and Provincial Election Supervisor
Arnold Soquerata as members.
When the group decided to hold the election despite the absence of five (5) of its
members, the Provincial Treasurer and the Provincial Election Supervisor walked out.
The election nevertheless proceeded with PGOO Alberto P. Molina, Jr. as presiding
officer. Chosen as members of the Board of Directors were Taule, Aquino, Avila,
Jacob and Sales.

Thereafter, the following were elected officers of the FABC:
President Ruperto Taule
Vice-President Allan Aquino
Secretary Vicente Avila
Treasurer Fidel Jacob
Auditor Leo Sales 1
On June 19, 1989, respondent Leandro I. Verceles, Governor of Catanduanes, sent a
letter to respondent Luis T. Santos, the Secretary of Local Government,* protesting
the election of the officers of the FABC and seeking its nullification in view of several
flagrant irregularities in the manner it was conducted. 2
In compliance with the order of respondent Secretary, petitioner Ruperto Taule as
President of the FABC, filed his comment on the letter-protest of respondent
Governor denying the alleged irregularities and denouncing said respondent
Governor for meddling or intervening in the election of FABC officers which is a purely
non-partisan affair and at the same time requesting for his appointment as a member
of the Sangguniang Panlalawigan of the province being the duly elected President of
the FABC in Catanduanes. 3
On August 4, 1989, respondent Secretary issued a resolution nullifying the election of
the officers of the FABC in Catanduanes held on June 18, 1989 and ordering a new
one to be conducted as early as possible to be presided by the Regional Director of
Region V of the Department of Local Government. 4
Petitioner filed a motion for reconsideration of the resolution of August 4, 1989 but it
was denied by respondent Secretary in his resolution of September 5, 1989. 5
In the petition for certiorari before Us, petitioner seeks the reversal of the resolutions
of respondent Secretary dated August 4, 1989 and September 5, 1989 for being null
and void.
Petitioner raises the following issues:
1) Whether or not the respondent Secretary has jurisdiction to

entertain an election protest involving the election of the officers of
the Federation of Association of Barangay Councils;
2) Whether or not the respondent Governor has the legal
personality to file an election protest;
3) Assuming that the respondent Secretary has jurisdiction over the
election protest, whether or not he committed grave abuse of
discretion amounting to lack of jurisdiction in nullifying the election;
The Katipunan ng mga Barangay is the organization of all sangguniang barangays in
the following levels: in municipalities to be known as katipunang bayan; in
cities, katipunang panlungsod; in provinces, katipunang panlalawigan; in
regions, katipunang pampook; and on the national level, katipunan ng mga
barangay. 6
The Local Government Code provides for the manner in which the katipunan ng mga
barangay at all levels shall be organized:
Sec. 110. Organization. (1) The katipunan at all levels shall be
organized in the following manner:
(a) The katipunan in each level shall elect a board of directors and
a set of officers. The president of each level shall represent the
katipunan concerned in the next higher level of organization.
(b) The katipunan ng mga barangay shall be composed of the
katipunang pampook, which shall in turn be composed of the
presidents of the katipunang panlalawigan and the katipunang
panlungsod. The presidents of the katipunang bayan in each
province shall constitute the katipunang panlalawigan. The
katipunang panlungsod and the katipunang bayan shall be
composed of the punong barangays of cities and municipalities,
respectively.
xxx xxx xxx
The respondent Secretary, acting in accordance with the provision of the Local
Government Code empowering him to "promulgate in detail the implementing
circulars and the rules and regulations to carry out the various administrative actions

required for the initial implementation of this Code in such a manner as will ensure the
least disruption of on-going programs and projects 7 issued Department of Local
Government Circular No. 89-09 on April 7, 1989, 8 to provide the guidelines for the
conduct of the elections of officers of the Katipunan ng mga Barangay at the
municipal, city, provincial, regional and national levels.
It is now the contention of petitioner that neither the constitution nor the law grants
jurisdiction upon the respondent Secretary over election contests involving the
election of officers of the FABC, the katipunan ng mga barangay at the provincial
level. It is petitioner's theory that under Article IX, C, Section 2 of the 1987
Constitution, it is the Commission on Elections which has jurisdiction over all contests
involving elective barangay officials.
On the other hand, it is the opinion of the respondent Secretary that any violation of
the guidelines as set forth in said circular would be a ground for filing a protest and
would vest upon the Department jurisdiction to resolve any protest that may be filed in
relation thereto.
Under Article IX, C, Section 2(2) of the 1987 Constitution, the Commission on
Elections shall exercise "exclusive original jurisdiction over all contests relating to the
elections, returns, and qualifications of all elective regional, provincial, and city
officials, and appellate jurisdiction over all contests involving elective municipal
officials decided by trial courts of general jurisdiction, or involving elective barangay
officials decided by trial courts of limited jurisdiction." The 1987 Constitution expanded
the jurisdiction of the COMELEC by granting it appellate jurisdiction over all contests
involving elective municipal officials decided by trial courts of general jurisdiction or
elective barangay officials decided by trial courts of limited jurisdiction. 9
The jurisdiction of the COMELEC over contests involving elective barangay officials is
limited to appellate jurisdiction from decisions of the trial courts. Under the law, 10 the
sworn petition contesting the election of a barangay officer shall be filed with the
proper Municipal or Metropolitan Trial Court by any candidate who has duly filed a
certificate of candidacy and has been voted for the same office within 10 days after
the proclamation of the results. A voter may also contest the election of any barangay
officer on the ground of ineligibility or of disloyalty to the Republic of the Philippines by
filing a sworn petition for quo warranto with the Metropolitan or Municipal Trial Court
within 10 days after the proclamation of the results of the election. 11 Only appeals
from decisions of inferior courts on election matters as aforestated may be decided by
the COMELEC.
The Court agrees with the Solicitor General that the jurisdiction of the COMELEC is
over popular elections, the elected officials of which are determined through the will of
the electorate. An election is the embodiment of the popular will, the expression of the
sovereign power of the people. 12 It involves the choice or selection of candidates to
public office by popular vote. 13 Specifically, the term "election," in the context of the
Constitution, may refer to the conduct of the polls, including the listing of voters, the
holding of the electoral campaign, and the casting and counting of the votes 14 which
do not characterize the election of officers in the Katipunan ng mga barangay.
"Election contests" would refer to adversary proceedings by which matters involving
the title or claim of title to an elective office, made before or after proclamation of the
winner, is settled whether or not the contestant is claiming the office in dispute 15 and
in the case of elections of barangay officials, it is restricted to proceedings after the
proclamation of the winners as no pre-proclamation controversies are allowed. 16
The jurisdiction of the COMELEC does not cover protests over the organizational setup of the katipunan ng mga barangay composed of popularly elected punong
barangays as prescribed by law whose officers are voted upon by their respective
members. The COMELEC exercises only appellate jurisdiction over election contests
involving elective barangay officials decided by the Metropolitan or Municipal Trial
Courts which likewise have limited jurisdiction. The authority of the COMELEC over
the katipunan ng mga barangay is limited by law to supervision of the election of the
representative of the katipunan concerned to the sanggunian in a particular level
conducted by their own respective organization. 17
However, the Secretary of Local Government is not vested with jurisdiction to
entertain any protest involving the election of officers of the FABC.
There is no question that he is vested with the power to promulgate rules and
regulations as set forth in Section 222 of the Local Government Code.
Likewise, under Book IV, Title XII, Chapter 1, See. 3(2) of the Administrative Code of
1987, ** the respondent Secretary has the power to "establish and prescribe rules,
regulations and other issuances and implementing laws on the general supervision of
local government units and on the promotion of local autonomy and monitor
compliance thereof by said units."
Also, the respondent Secretary's rule making power is provided in See. 7, Chapter II,
Book IV of the Administrative Code, to wit:
(3) Promulgate rules and regulations necessary to carry out
department objectives, policies, functions, plans, programs and
projects;

Thus, DLG Circular No. 89-09 was issued by respondent Secretary in pursuance of
his rule-making power conferred by law and which now has the force and effect of
law. 18
Now the question that arises is whether or not a violation of said circular vests
jurisdiction upon the respondent Secretary, as claimed by him, to hear a protest filed
in relation thereto and consequently declare an election null and void.
It is a well-settled principle of administrative law that unless expressly empowered,
administrative agencies are bereft of quasi- judicial powers. 19 The jurisdiction of
administrative authorities is dependent entirely upon the provisions of the statutes
reposing power in them; they cannot confer it upon themselves. 20 Such jurisdiction is
essential to give validity to their determinations. 21
There is neither a statutory nor constitutional provision expressly or even by
necessary implication conferring upon the Secretary of Local Government the power
to assume jurisdiction over an election protect involving officers of the katipunan ng
mga barangay. An understanding of the extent of authority of the Secretary over local
governments is therefore necessary if We are to resolve the issue at hand.
Presidential power over local governments is limited by the Constitution to the
exercise of general supervision 22"to ensure that local affairs are administered
according to law." 23 The general supervision is exercised by the President through
the Secretary of Local Government. 24
In administrative law, supervision means overseeing or the power or authority of an
officer to see that the subordinate officers perform their duties. If the latter fails or
neglects to fulfill them the former may take such action or step as prescribed by law to
make them perform their duties. Control, on the other hand, means the power of an
officer to alter or modify or nullify or set aside what a subordinate officer had done in
the performance of his duties and to substitute the judgment of the former for that of
the latter. The fundamental law permits the Chief Executive to wield no more authority
than that of checking whether said local government or the officers thereof perform
their duties as provided by statutory enactments. Hence, the President cannot
interfere with local governments so long as the same or its officers act within the
scope of their authority. 25 Supervisory power, when contrasted with control, is the
power of mere oversight over an inferior body; it does not include any restraining
authority over such body. 26
Construing the constitutional limitation on the power of general supervision of the
President over local governments, We hold that respondent Secretary has no
authority to pass upon the validity or regularity of the election of the officers of the
katipunan. To allow respondent Secretary to do so will give him more power than the
law or the Constitution grants. It will in effect give him control over local government
officials for it will permit him to interfere in a purely democratic and non-partisan
activity aimed at strengthening the barangay as the basic component of local
governments so that the ultimate goal of fullest autonomy may be achieved. In fact,
his order that the new elections to be conducted be presided by the Regional Director
is a clear and direct interference by the Department with the political affairs of the
barangays which is not permitted by the limitation of presidential power to general
supervision over local governments. 27
Indeed, it is the policy of the state to ensure the autonomy of local
governments. 28 This state policy is echoed in the Local Government Code wherein it
is declared that "the State shall guarantee and promote the autonomy of local
government units to ensure their fullest development as self-reliant communities and
make them more effective partners in the pursuit of national development and social
progress." 29 To deny the Secretary of Local Government the power to review the
regularity of the elections of officers of the katipunan would be to enhance the
avowed state policy of promoting the autonomy of local governments.
Moreover, although the Department is given the power to prescribe rules, regulations
and other issuances, the Administrative Code limits its authority to merely "monitoring
compliance" by local government units of such issuances. 30 To monitor means "to
watch, observe or check. 31 This is compatible with the power of supervision of the
Secretary over local governments which as earlier discussed is limited to checking
whether the local government unit concerned or the officers thereof perform their
duties as provided by statutory enactments. Even the Local Government Code which
grants the Secretary power to issue implementing circulars, rules and regulations is
silent as to how these issuances should be enforced. Since the respondent Secretary
exercises only supervision and not control over local governments, it is truly doubtful
if he could enforce compliance with the DLG Circular. 32 Any doubt therefore as to the
power of the Secretary to interfere with local affairs should be resolved in favor of the
greater autonomy of the local government.
Thus, the Court holds that in assuming jurisdiction over the election protest filed by
respondent Governor and declaring the election of the officers of the FABC on June
18, 1989 as null and void, the respondent Secretary acted in excess of his
jurisdiction. The respondent Secretary not having the jurisdiction to hear an election
protest involving officers of the FABC, the recourse of the parties is to the ordinary
courts. The Regional Trial Courts have the exclusive original jurisdiction to hear the
protest. 33

The provision in DLG Circular No. 89-15 amending DLG Circular No. 89-09 which
states that "whenever the guidelines are not substantially complied with, the election
shall be declared null and void by the Department of Local Government and an
election shall conduct and being invoked by the Solicitor General cannot be applied.
DLG Circular No. 89-15 was issued on July 3, 1989 after the June 18, 1989 elections
of the FABC officers and it is the rule in statutory construction that laws, including
circulars and regulations 34 cannot be applied retrospectively.35 Moreover, such
provision is null and void for having been issued in excess of the respondent
Secretary's jurisdiction, inasmuch as an administrative authority cannot confer
jurisdiction upon itself.
As regards the second issue raised by petitioner, the Court finds that respondent
Governor has the personality to file the protest. Under Section 205 of the Local
Government Code, the membership of the sangguniang panlalawigan consists of the
governor, the vice-governor, elective members of the said sanggunian and the
presidents of the katipunang panlalawigan and the kabataang barangay provincial
federation. The governor acts as the presiding officer of the sangguniang
panlalawigan. 36
As presiding officer of the sagguniang panlalawigan, the respondent governor has an
interest in the election of the officers of the FABC since its elected president becomes
a member of the assembly. If the president of the FABC assumes his presidency
under questionable circumstances and is allowed to sit in the sangguniang
panlalawigan the official actions of the sanggunian may be vulnerable to attacks as to
their validity or legality. Hence, respondent governor is a proper party to question the
regularity of the elections of the officers of the FABC.
As to the third issue raised by petitioner, the Court has already ruled that the
respondent Secretary has no jurisdiction to hear the protest and nullify the elections.
Nevertheless, the Court holds that the issue of the validity of the elections should now
be resolved in order to prevent any unnecessary delay that may result from the
commencement of an appropriate action by the parties.
The elections were declared null and void primarily for failure to comply with Section
2.4 of DLG Circular No. 89-09 which provides that "the incumbent FABC President or
the Vice-President shall preside over the reorganizational meeting, there being a
quorum." The rule specifically provides that it is the incumbent FABC President or
Vice-President who shall preside over the meeting. The word "shall" should be taken
in its ordinary signification, i.e., it must be imperative or mandatory and not merely
permissive, 37 as the rule is explicit and requires no other interpretation. If it had been
intended that any other official should preside, the rules would have provided so, as it
did in the elections at the town and city levels 38 as well as the regional level.. 39
It is admitted that neither the incumbent FABC President nor the Vice-President
presided over the meeting and elections but Alberto P. Molina, Jr., the Chairman of
the Board of Election Supervisors/Consultants. Thus, there was a clear violation of
the aforesaid mandatory provision. On this ground, the elections should be nullified.
Under Sec. 2.3.2.7 of the same circular it is provided that a Board of Election
Supervisors/Consultants shall be constituted to oversee and/or witness the
canvassing of votes and proclamation of winners. The rules confine the role of the
Board of Election Supervisors/Consultants to merely overseeing and witnessing the
conduct of elections. This is consistent with the provision in the Local Government
Code limiting the authority of the COMELEC to the supervision of the election. 40
In case at bar, PGOO Molina, the Chairman of the Board, presided over the elections.
There was direct participation by the Chairman of the Board in the elections contrary
to what is dictated by the rules. Worse, there was no Board of Election Supervisors to
oversee the elections in view of the walk out staged by its two other members, the
Provincial COMELEC Supervisor and the Provincial Treasurer. The objective of
keeping the election free and honest was therefore compromised.
The Court therefore finds that the election of officers of the FABC held on June 18,
1989 is null and void for failure to comply with the provisions of DLG Circular No. 8909.
Meanwhile, pending resolution of this petition, petitioner filed a supplemental petition
alleging that public respondent Local Government Secretary, in his memorandum
dated June 7, 1990, designated Augusto Antonio as temporary representative of the
Federation to the sangguniang panlalawigan of Catanduanes. 41 By virtue of this
memorandum, respondent governor swore into said office Augusto Antonio on June
14, 1990. 42
The Solicitor General filed his comment on the supplemental petition
the resolution of the Court dated September 13,1990.
43
as required by

In his comment, the Solicitor General dismissed the supervening event alleged by
petitioner as something immaterial to the petition. He argues that Antonio's
appointment was merely temporary "until such time that the provincial FABC
president in that province has been elected, appointed and qualified." 44 He stresses
that Antonio's appointment was only a remedial measure designed to cope with the
problems brought about by the absence of a representative of the FABC to the
"sanggunian ang panlalawigan."
Sec. 205 (2) of the Local Government Code (B.P. Blg. 337) provides(2) The sangguniang panlalawigan shall be composed of the
governor, the vice-governor, elective members of the said
sanggunian and the presidents of the katipunang panlalawigan and
the kabataang barangay provincial federation who shall be
appointed by the President of the Philippines. (Emphasis supplied.)
Batas Pambansa Blg. 51, under Sec. 2 likewise states:
xxx xxx xxx
The sangguniang panlalawigan of each province shall be
composed of the governor as chairman and presiding officer, the
vice-governor as presiding officer pro tempore, the elective
sangguniang panlalawigan members, and the appointive members
consisting of the president of the provincial association of barangay
councils, and the president of the provincial federation of the
kabataang barangay. (Emphasis supplied.)
In Ignacio vs. Banate Jr. 45 the Court, interpreting similarly worded provisions of Batas
Pambansa Blg. 337 and Batas Pambansa Blg. 51 on the composition of
the sangguniang panlungsod, 46 declared as null and void the appointment of private
respondent Leoncio Banate Jr. as member of the Sangguniang Panlungsod of the
City of Roxas representing thekatipunang panlungsod ng mga barangay for he lacked
the elegibility and qualification required by law, not being a barangay captain and for
not having been elected president of the association of barangay councils. The Court
held that an unqualified person cannot be appointed a member of the sanggunian,
even in an acting capacity. In Reyes vs. Ferrer, 47 the appointment of Nemesio L.
Rasgo Jr. as representative of the youth sector to the sangguniang panlungsod of
Davao City was declared invalid since he was never the president of the kabataang
barangay city federation as required by Sec. 173, Batas Pambansa Blg. 337.
In the present controversy involving the sangguniang panlalawigan, the law is

likewise explicit. To be appointed by the President of the Philippines to sit in
the sangguniang panlalawigan is the president of the katipunang panlalawigan. The
appointee must meet the qualifications set by law. 48 The appointing power is bound
by law to comply with the requirements as to the basic qualifications of the appointee
to the sangguniang panlalawigan. The President of the Philippines or his alter ego,
the Secretary of Local Government, has no authority to appoint anyone who does not
meet the minimum qualification to be the president of the federation of barangay
councils.
Augusto Antonio is not the president of the federation. He is a member of the
federation but he was not even present during the elections despite notice. The
argument that Antonio was appointed as a remedial measure in the exigency of the
service cannot be sustained. Since Antonio does not meet the basic qualification of
being president of the federation, his appointment to the sangguniang panlalawigan is
not justified notwithstanding that such appointment is merely in a temporary capacity.
If the intention of the respondent Secretary was to protect the interest of the
federation in the sanggunian, he should have appointed the incumbent FABC
President in a hold-over capacity. For even under the guidelines, the term of office of
officers of the katipunan at all levels shall be from the date of their election until their
successors shall have been duly elected and qualified, without prejudice to the terms
of their appointments as members of the sanggunian to which they may be
correspondingly appointed. 49 Since the election is still under protest such that no
successor of the incumbent has as yet qualified, the respondent Secretary has no
choice but to have the incumbent FABC President sit as member of the sanggunian.
He could even have appointed petitioner since he was elected the president of the
federation but not Antonio. The appointment of Antonio, allegedly the protege of
respondent Governor, gives credence to petitioner's charge of political interference by
respondent Governor in the organization. This should not be allowed. The barangays
should be insulated from any partisan activity or political intervention if only to give
true meaning to local autonomy.
WHEREFORE, the petition is GRANTED in that the resolution of respondent
Secretary dated August 4, 1989 is hereby SET ASIDE for having been issued in
excess of jurisdiction.
The election of the officials of the ABC Federation held on June 18, 1989 is hereby
annulled. A new election of officers of the federation is hereby ordered to be
conducted immediately in accordance with the governing rules and regulations.

The Supplemental petition is hereby GRANTED. The appointment of Augusto Antonio
as representative to theSangguniang Panlalawigan in a temporary capacity is
declared null and void.
No costs.
SO ORDERED.

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ADMIN LAW | Nov 14, 2015 1

G.R. No. 114711 February 13, 1997

initial export quota (EQ) allocation by virtue of the resolution of the

G.R. No. 115889 February 13, 1997

HERMOSISIMA, JR., J.:

Before AIFC's incorporation, Glorious Sun, a corporation organized

ADMIN LAW | Nov 14, 2015 2

3. The bonded manufacturing warehouse license

ADMIN LAW | Nov 14, 2015 3

order and from otherwise delaying the release of AIFC's EQ

ADMIN LAW | Nov 14, 2015 4

Incidentally, the difference between the REA-Flex quota and the

ADMIN LAW | Nov 14, 2015 5

ADMIN LAW | Nov 14, 2015 6

WHEREFORE, the instant petition is GRANTED and the Orders of

Shortly thereafter, motions to intervene as well as motions for reconsideration of the

ADMIN LAW | Nov 14, 2015 7

Intervention filed by Glorious Sun, Yeung Chun Kam, Yeung Chun

ADMIN LAW | Nov 14, 2015 8

February 14, 1984, which evidence/records must

ADMIN LAW | Nov 14, 2015 9

What right then could Glorious

ADMIN LAW | Nov 14, 2015 10

corporation which profited from

ADMIN LAW | Nov 14, 2015 11

17. On August 3, 1993, the Hearing Officer submitted his Report

ADMIN LAW | Nov 14, 2015 12

RESOLVED, that the findings and recommendation of the

1. That the export quotas and export

Accordingly, on September 7, 1994, Glorious Sun filed a

ADMIN LAW | Nov 14, 2015 13

On April 3, 1995, we issued a resolution, the pertinent portions whereof reads:

(e) NOTE the manifestation dated August 12, 1994 by Atty.

Considering the allegations contained, the issues raised and the

xxx xxx xxx

ADMIN LAW | Nov 14, 2015 14

new corporation" and that it was not the intention of this

A "Motion for Leave to Intervene and Submit Manifestation" 33 in the above-entitled

I. The respondent Court of Appeals erred gravely in failing to rule

II. The respondent Court of Appeals erred gravely in failing to rule

The articles of incorporation of American Inter-Fashion Corporation

III. The respondent Court of Appeals erred gravely in failing to hold

ADMIN LAW | Nov 14, 2015 15

On November 23, 1992, petitioner filed a petition for review (under

ADMIN LAW | Nov 14, 2015 16

ADMIN LAW | Nov 14, 2015 17

Too basic in administrative law to need citation of jurisprudence is

ADMIN LAW | Nov 14, 2015 18

working days from the time

51. However, in addition to the above, E.O. No. 913, entitled

(d) The minister shall have the same power to

ADMIN LAW | Nov 14, 2015 19

generally accorded respect, if not finality, by the courts. (Ateneo de

ADMIN LAW | Nov 14, 2015 20

ADMIN LAW | Nov 14, 2015 21

Fetalino, Llamas-Villanueva and Noro for CSC.

b) declared that reinstatement of said five employees was proper,

c) MODIFIED, however, the challenged CSC Resolution of October

d) ordered reinstateement only of three employees, namely:

ADMIN LAW | Nov 14, 2015 22

ADMIN LAW | Nov 14, 2015 23

ADMIN LAW | Nov 14, 2015 24

ADMIN LAW | Nov 14, 2015 25

ADMIN LAW | Nov 14, 2015 26