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ADMINISTRATIVE LAW CASE DIGESTS 1

Atty. Vic Alabastro


F4

1.) CEBU UNITED ENTERPRISES vs.


JOSE GALLOFIN, Collector of Customs, Cebu
Port,
(G.R. No. L-12859; Nov. 18, 1959)
FACTS:
The
Cebu
United
Enterprises
imported
newspapers from the United States. It was
covered by five bills of lading covering two
shipments dated December 17, 1953, or one day
before the expiration of the import license.
However, this license expired on Dec. 16, or one
day before the date of the importation of the
items.
Jose Gallofin, the Collector of Customs, refused to
deliver to the Cebu United Enterprises the
shipments, premised on his contention that while
the five bills of lading covering the two shipments
were all dated December 17, 1953 or one day
before the expiration of the import license since it
arrived on January the following year it was made
without a valid import license.
ISSUE:
W/N duly executed acts of a governmental
agency can have valid effects even beyond the
life span of said agency.
HELD: YES.
The authority of the appellee to import was
contained in the Import Control Commission
License No. 17225, the same had a six-month
period of validity counted from the said date June
18, 1953. This license states, among other
conditions, that Commodities covered by this
license must be shipped from the country of
origin before the expiry date of the license, and
are subject to Sec. 13 of Republic Act. No. 650.
Although RA 650 creating the Import Control
Commission (ICC) expired on July 31, it is to be
conceded that its duly executed acts can have
valid effects even beyond the life span of said
government agency. The ICC who issued the
license was abolished yet, the LICENSE was
extended, the latter has still its valid effects.

2.) ISABELO T. CRISOSTOMO vs.


CA and the PEOPLE OF THE PHILIPPINES
(G.R. No. 106296; July 5, 1996)
FACTS:
Crisostomo was appointed the President of the
Philippine College of Commerce (PCC) by the
President of the Philippines.
During his
incumbency, two administrative charges were
filed against him for illegal use of government
vehicles,
misappropriation
of
construction
materials, oppression and harassment, grave
misconduct, nepotism and dishonesty before the
Office of the President. Likewise, he was also
charged with violation of Anti-Grant and Corrupt
Practices Act with the Tanodbayan. As such, he
was preventively suspended and Dr. Mateo was
designated as the officer-in-charge in his place.

On April 1, 1978, P.D. No. 1341 was issued by


then President Ferdinand E. Marcos, CONVERTING
THE PHILIPPINE COLLEGE OF COMMERCE INTO A
POLYTECHNIC
UNIVERSITY,
DEFINING
ITS
OBJECTIVES, ORGANIZATIONAL STRUCTURE AND
FUNCTIONS, AND EXPANDING ITS CURRICULAR
OFFERINGS.
Mateo continued as the head of the new
University. Crisostomo was later acquitted and his
administrative charges were dismissed.
On February 12, 1992, petitioner filed a motion
for execution of the judgment, particularly the
part ordering his reinstatement to the position of
president of the PUP and the payment of his
salaries and other benefits during the period of
suspension.
This led the People of the Philippines to file a
petition for certiorari and prohibition (CA G.R. No.
27931), assailing the orders and the writs of
execution issued by the trial court. It also asked
for a temporary restraining order against
petitioner.
On June 25, 1992, CA issued a TRO, enjoining
petitioner to cease and desist from acting as
president of the PUP pursuant to the
reinstatement orders of the trial court.
On July 15, 1992, the CA rendered a decision,
which set aside the orders and writ of
reinstatement issued by the trial court. The
payment of salaries and benefits to petitioner
accruing after the conversion of the PCC to the
PUP was disallowed. Recovery of salaries and
benefits was limited to those accruing from the
time of petitioner's suspension until the
conversion of the PCC to the PUP. The case was
remanded to the trial court for a determination of
the amounts due and payable to petitioner.
Hence this petition. Petitioner argues that P.D. No.
1341, which converted the PCC into the PUP, did
not abolish the PCC. He contends that if the law
had intended the PCC to lose its existence, it
would have specified that the PCC was being
"abolished" rather than "converted" and that if
the PUP was intended to be a new institution, the
law would have said it was being "created."
Petitioner claims that the PUP is merely a
continuation of the existence of the PCC, and,
hence, he could be reinstated to his former
position as president.
ISSUE:
WON petitioner Crisostomo may be reinstated.
HELD: NO
In part the contention is well taken, but, as will
presently be explained, reinstatement is no
longer possible because of the promulgation of
P.D. No. 1437 by the President of the aPhilippines
on June 10, 1978.
P.D. No. 1341 did not abolish, but only changed,
the former Philippine College of Commerce into
what is now the Polytechnic University of the
Philippines, in the same way that earlier in 1952,
R.A. No. 778 had converted what was then the

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

Philippine School of Commerce into the Philippine


College of Commerce. What took place was a
change in academic status of the educational
institution, not in its corporate life. Hence the
change in its name, the expansion of its curricular
offerings, and the changes in its structure and
organization.
As petitioner correctly points out, when the
purpose is to abolish a department or an office or
an organization and to replace it with another
one, the lawmaking authority says so.
The appellate court ruled, however, that the PUP
and the PCC are not "one and the same
institution" but "two different entities" and that
since
petitioner
Crisostomo's
term
was
coterminous with the legal existence of the PCC,
petitioner's term expired upon the abolition of the
PCC.
But these are hardly indicia of an intent to abolish
an existing institution and to create a new one.
New course offerings can be added to the
curriculum of a school without affecting its legal
existence. Nor will changes in its existing
structure and organization bring about its
abolition and the creation of a new one. Only an
express declaration to that effect by the
lawmaking authority will.
Nevertheless, the reinstatement of petitioner to
the position of president of the PUP could not be
ordered by the trial court because on June 10,
1978, P.D. No. 1437 had been promulgated fixing
the term of office of presidents of state
universities and colleges at six (6) years,
renewable for another term of six (6) years, and
authorizing the President of the Philippines to
terminate the terms of incumbents who were not
reappointed.
In this case, Dr. Pablo T. Mateo Jr., who had been
acting president of the university since April 3,
1979, was appointed president of PUP for a term
of six (6) years on March 28, 1980, with the result
that petitioner's term was cut short. In
accordance with of the law, therefore, petitioner
became entitled only to retirement benefits or the
payment of separation pay.

3.) CESAR G. VIOLA, Chairman, Brgy. 167,


Zone 15, District II, Manila vs.
HON. RAFAEL M. ALUNAN III, Secretary
DILG, ALEX L. DAVID, President/Secretary
General, National Liga ng mga Barangay,
LEONARDO L. ANGAT, President, City of
Manila, Liga ng mga Barangay
(G.R. No. 115844; August 15, 1997)
FACTS:
Viola, as a barangay chairman, filed a petition for
prohibition challenging the validity of the Art III,
Sec.1-2 of the Revised Implementing Rules and
Guidelines for the General Elections of the Liga
ng mga Barangay Officers insofar as they provide
for the election of first, second, and third vice

presidents and for auditors for the National Liga


ng mga Barangay and its chapters.
He contended that the questioned positions are in
excess of those provided in the LGC Sec.493
which mentions as elective positions only those of
the president, vice president, and five members
of the board of directors in each chapter at the
municipal, city, provincial, metropolitan political
subdivision, and national levels and thus the
implementing rules expand the numbers in the
LGC
in violation
of
the
principle
that
implementing rules and regulations cannot add or
detract from the provisions of the law they are
designed to implement.
ISSUE:
Whether or not Sec 1-2 of the Implementing Rules
are valid.
HELD: Yes.
The creation of additional positions is authorized
by Sec. 493 of the LGC which in fact requires
and not merely authorizes the board of directors
to create such other positions as it may deem
necessary for the management of the chapter.
To begin with, the creation of these positions was
actually made in the Constitution and By-laws of
the Liga ng mga barangay which was adopted by
the First Barangay National Assembly.
There is no undue delegation of power by
Congress in this case. SC decisions have upheld
the validity of reorganization statutes authorizing
the President of the Philippines to create, abolish,
or merge offices in the executive management.
While the board of directors of a local chapter can
create additional positions to provide for the
needs of the chapter, the board of directors of the
National Liga must be deemed to have the power
to create additional positions not only for its
management but also for that of all the chapters
at the municipal, city, provincial and metropolitan
political
subdivision
levels. Otherwise
the
National Liga would be no different from the local
chapters. The fact is that Sec. 493 grants the
power to create positions not only to the boards
of the local chapters but to the board of the Liga
at the national level as well.
NOTE:
LGC, Sec. 493. Organization The liga at the
municipal, city, provincial, metropolitan political
subdivision, and national levels directly elect a
president, a vice-president, and five (5) members
of the board of directors. The board shall appoint
its secretary and treasurer and create such other
positions as it may deem necessary for the
management of the chapter. A secretary-general
shall be elected from among the members of the
national liga and shall be charged with the overall
operation of the liga on the national level. The
board shall coordinate the activities of the
chapters of the liga.

4.) AQUILINO T. LARIN vs.


THE EXECUTIVE SECRETARY, SECRETARY OF

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

FINANCE, COMMISSIONER OF THE BUREAU


OF
INTERNAL
REVENUE
AND
THE
COMMITTEE CREATED TO INVESTIGATE THE
ADMINISTRATIVE
COMPLAINT
AGAINST
AQUILINO
T.
LARIN,
COMPOSED
OF
FRUMENCIO
A.
LAGUSTAN,
JOSE
B.
ALEJANDRINO AND JAIME M. MAZA
(G.R. No. 112745; October 16, 1997)
FACTS:
Larin, a Revenue Specific Tax Officer under the
Assistant Commissioner of the BIR, is convicted of
crimes of violation of sec. 268 (4) NIRC and sec. 3
(e) RA 3019 (grave misconduct). Acting by
authority of the president, Sr. Deputy Executive
Secretary Quisumbing issued a memorandum
order, creating an Executive Committee to
investigate Larins administrative charge. While
the investigation was going on, the President
issued E.O. 132, streamlining the BIR and
abolishing the office of the Specific Tax Service.
Afterwards, Larin was found guilty and was
subsequently dismissed. However, in the
appealed case, SC set aside the conviction of
Larin
ISSUES:
W/N Larin was unlawfully removed from office.
(1) Does the President have the power to
dismiss him? Reorganize the BIR?
(2) Was reorganization valid, considering that
there was no law enacted by Congress
authorizing reorganization by the Executive
HELD: YES
SC held that removal as a result of reorganization
was done in bad faith.
Does the President have the power to dismiss
him?
Larin is a presidential appointee. As such, he
comes under the direct disciplining authority of
the President for the power to remove is
inherent in the power to appoint. However, Larin
is a career service officer, therefore, he enjoys
security of tenure. Under the Civil Service Decree,
career service officers and employees who enjoy
security of tenure may be removed only for any
of the causes enumerated in said law. In other
words, the fact that the petitioner is a
presidential appointee does not give the
appointing authority the license to remove him at
will or at his pleasure for it is an admitted fact
that he is likewise a career service officer who
under the law is the recipient of tenurial
protection, thus, may only be removed for a
cause and in accordance with procedural due
process.
Was the removal for a legal cause under a valid
proceeding?
SC held that the removal complied with the
requirements for procedural due process but that
the dismissal was not for a valid cause. The basis
used in Larins removal is the criminal conviction
against him, but this conviction was later set
aside by the Supreme Court upon appeal. Where
the very basis of the administrative case against

petitioner is his conviction in the criminal action


which was later on set aside by this court upon a
categorical and clear findings that the acts for
which he was administratively held liable are not
unlawful and irregular, the acquittal of the
petitioner in the criminal case necessarily entails
the dismissal of the administrative action against
him, because in sch a case, there is no basis nor
justifiable reason to maintain the administrative
suit.
Does the President have the power to reorganize
the BIR?
Yes, under sec. 48 and 62 of RA 7645, sec. 20, Bk.
III of EO 292 (Residual Powers), and PD 1772
which amended PD 1416. But while the
Presidents power to reorganize can not be
denied, this does not mean however that the
reorganization itself is properly made in
accordance with law. Well-settled is the rule that
reorganization is regarded as valid provided it is
pursued in good faith.
When is there reorganization made in good faith?
The general rule is that a reorganization is carried
out in good faith if it is for the purpose of
economy or to make bureaucracy more efficient.
In that event no dismissal or separation actually
occurs because the position itself ceases to exist.
And in that case the security of tenure would not
be a Chinese Wall. Be that as it may, if the
abolition which is nothing else but a separation or
removal, is done for political reasons or purposely
to defeat security of tenure, or otherwise not in
good faith, no valid abolition takes place and
whatever abolition is done is void ab initio.
What are the marks of bad faith in removal as a
result of reorganization?
Sec. 2, RA 6656 enumerates the circumstances
evidencing bad faith in the removal of employees
as a result of reorganization:
(1) Where there is a significant increase in the
number of positions in the new staffing pattern of
the department or agency concerned;
(2) Where an office is abolished and another
performing substantially the same functions is
created;
(3) Where incumbents are replaced by those less
qualified in terms of status of appointment,
performance and merit;
(4) Where there is a reclassification of offices in
the department or agency concerned and the
reclassified offices perform substantially the
same functions as the original offices;
(5) Where the removal violates the order of
separation provided in sec. 3 hereof.

5.) CESAR Z. DARIO vs.


HON. SALVADOR M. MISON, HON. VICENTE
JAYME and HON. CATALINO MACARAIG, JR.,
in
their
respective
capacities
as

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

Commissioner of Customs, Secretary


Finance, and Executive Secretary
(G.R. No. 81954; August 8, 1989)

of

FACTS:
Cory Aquino promulgated Proclamation No. 3,
"DECLARING A NATIONAL POLICY TO IMPLEMENT
THE REFORMS MANDATED BY THE PEOPLE..., the
mandate of the people to Completely reorganize
the government.
In January 1987, she promulgated EO 127,
"REORGANIZING THE MINISTRY OF FINANCE".
Among other offices, Executive Order No. 127
provided for the reorganization of the Bureau of
Customs and prescribed a new staffing pattern
therefor. In February 1987, a brand new
constitution was adopted.
On January 1988, incumbent Commissioner of
Customs Salvador Mison issued a Memorandum,
in
the
nature
of
"Guidelines
on
the
Implementation of Reorganization Executive
Orders," prescribing the procedure in personnel
placement. It also provided that by February
1988, all employees covered by EO 127 and the
grace period extended to the Bureau of Customs
by the President on reorganization shall be: a)
informed of their re-appointment, or b) offered
another position in the same department or
agency, or c) informed of their termination.
A total of 394 officials and employees of the
Bureau of Customs were given individual notices
of separation. They filed appeals with the CSC.
CSC promulgated its ruling for reinstatement of
the 279 employees. Mison, filed a motion for
reconsideration, which was denied. Commissioner
Mison instituted certiorari proceedings.
ISSUE:
WON Section 16 of Article XVIII of the 1987
Constitution is a grant of a license upon the
Government to remove career public officials it
could have validly done under an "automatic"vacancy-authority and to remove them without
rhyme or reason.
HELD: NO
The provision benefits career civil service
employees separated from the service. And the
separation contemplated must be due to or the
result of (1) the reorganization pursuant to
Proclamation No. 3 dated March 25, 1986, (2) the
reorganization from February 2, 1987, and (3) the
resignations of career officers tendered in line
with the existing policy and which resignations
have been accepted. The phrase "not for cause"
is clearly and primarily exclusionary, to exclude
those career civil service employees separated
"for cause." In other words, in order to be entitled
to the benefits granted under Section 16 of
Article XVIII of the Constitution of 1987, two
requisites, one negative and the other positive,
must concur, to wit:
1. The separation must not be for cause, and
2. The separation must be due to any of the
three situations mentioned above.

By its terms, the authority to remove public


officials under the Provisional Constitution ended
on February 25, 1987, advanced by jurisprudence
to February 2, 1987. It can only mean, then, that
whatever reorganization is taking place is upon
the authority of the present Charter, and
necessarily, upon the mantle of its provisions and
safeguards. Hence, it cannot be legitimately
stated that we are merely continuing what the
revolutionary Constitution of the Revolutionary
Government had started. We are through with
reorganization under the Freedom Constitution the first stage. We are on the second stage - that
inferred from the provisions of Section 16 of
Article XVIII of the permanent basic document.
What must be understood, however, is that
notwithstanding her immense revolutionary
powers, the President was, nevertheless,
magnanimous in her rule. This is apparent from
Executive Order No. 17, which established
safeguards against the strong arm and ruthless
propensity that accompanies reorganizations
-notwithstanding the fact that removals arising
therefrom were "not for cause," and in spite of
the fact that such removals would have been
valid and unquestionable.
Noteworthy is the injunction embodied in the
Executive Order that dismissals should be made
on the basis of findings of inefficiency, graft, and
unfitness to render public service. Assuming,
then, that this reorganization allows removals
"not for cause" in a manner that would have been
permissible in a revolutionary setting as
Commissioner Mison so purports, it would seem
that the
Commissioner would have been powerless, in any
event, to order dismissals at the Customs Bureau
left and right. Lastly, reorganizations must be
carried out in good faith. In this case, Mison failed
to prove that the reorganization was indeed made
in good faith because he hired more people to
replace those that he fired and no legitimate
structural changes have been made.
To sum up, the President could have validly
removed officials before the effectivity of the
1987 Constitution even without cause because it
was a revolutionary government. However, from
the effectivity of the 1987 Constitution, the State
did not lose its right to reorganize resulting to
removals but such reorganization must be made
in good faith.

6.) TONDO MEDICAL CENTER EMPLOYEES vs.


CA
(G.R. No. 167324; July 17, 2007)
FACTS:
President Estrada issued EO 102, which provided
for the changes in the roles, functions, and
organizational processes of the DOH. EO 102 was
enacted pursuant to Section 17 of the Local
Government Code which provided for the
devolution to the LGUs of the basic services and
facilities, as well as specific health-related
functions and responsibilities.

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

its income.
ISSUE:
Whether or not the HSRA and EO NO. 102 violates
the constitution?
HELD: NO
Reorganization of DOH under EO 102 is not a
usurpation of legislative power. EO 292 also
known as the Administrative Code of 1987, gives
continuing authority to the President to
reorganize the administrative structure of the
Office of the President.
The validity of Executive Order No. 102 would,
nevertheless, remain unaffected. Settled is the
rule that courts are not at liberty to declare
statutes invalid, although they may be abused or
disabused, and may afford an opportunity for
abuse in the manner of application. The validity
of a statute or ordinance is to be determined from
its general purpose and its efficiency to
accomplish the end desired, not from its effects in
a particular case. Section 17, Article VII of the
1987 Constitution, clearly states: [T]he president
shall have control of all executive departments,
bureaus and offices. Section 31, Book III,
Chapter 10 of Executive Order No. 292, also
known as the Administrative Code of 1987. It is
an exercise of the Presidents constitutional
power of control over the executive department,
supported by the provisions of the Administrative
Code, recognized by other statutes, and
consistently affirmed by this Court.

7.) ATTY. SYLVIA BANDA, et.al. vs. EDUARDO


R. ERMITA, in his capacity as Executive
Secretary, The Director General of the
Philippine Information Agency and The
National Treasurer
(G.R. No. 166620; April 20, 2010)
FACTS:
The NPO was formed on July 25, 1987, during the
term of former President Corazon C. Aquino
(President Aquino), by virtue of Executive Order
No. 285 which provided, among others, the
creation of the NPO from the merger of the
Government Printing Office and the relevant
printing units of the Philippine Information
Agency (PIA).
On October 25, 2004, President Arroyo issued the
herein assailed Executive Order No. 378,
amending Section 6 of Executive Order No. 285
by, inter alia, removing the exclusive jurisdiction
of the NPO over the printing services
requirements of government agencies and
instrumentalities.
Pursuant to Executive Order No. 378, government
agencies and instrumentalities are allowed to
source their printing services from the private
sector through competitive bidding, subject to the
condition that the services offered by the private
supplier be of superior quality and lower in cost
compared to what was offered by the NPO.
Executive Order No. 378 also limited NPOs
appropriation in the General Appropriations Act to

Perceiving Executive Order No. 378 as a threat to


their security of tenure as employees of the NPO,
petitioners now challenge its constitutionality,
contending that: (1) it is beyond the executive
powers of President Arroyo to amend or repeal
Executive Order No. 285 issued by former
President Aquino when the latter still exercised
legislative powers; and (2) Executive Order No.
378 violates petitioners security of tenure,
because it paves the way for the gradual abolition
of the NPO.
ISSUE:
Whether the E.O no. 378 is Constitutional.
HELD: YES
In the present case, involving neither an abolition
nor transfer of offices, the assailed action is a
mere reorganization under the general provisions
of the law consisting mainly of streamlining the
NTA in the interest of simplicity, economy and
efficiency. It is an act well within the authority of
the President motivated and carried out,
according to the findings of the appellate court, in
good faith, a factual assessment that this Court
could only but accept.
This Court has already ruled in a number of cases
that the President may, by executive or
administrative order, direct the reorganization of
government entities under the Executive
Department. This is also sanctioned under the
Constitution, as well as other statutes.
Section 17, Article VII of the 1987 Constitution,
clearly states: "[T]he president shall have control
of all executive departments, bureaus and
offices." Section 31, Book III, Chapter 10 of
Executive Order No. 292, also known as the
Administrative Code of 1987 reads:
SEC. 31. Continuing Authority of the
President to Reorganize his Office - The
President, subject to the policy in the
Executive Office and in order to achieve
simplicity, economy and efficiency, shall
have continuing authority to reorganize
the administrative structure of the Office
of the President.
The Administrative Code provides that the Office
of the President consists of the Office of the
President Proper and the agencies under it. The
agencies under the Office of the President are
identified in Section 23, Chapter 8, Title II of the
Administrative Code:
Sec. 23. The Agencies under the Office of
the President. The agencies under the
Office of the President refer to those
offices placed under the chairmanship of
the
President,
those
under
the
supervision and control of the President,
those
under
the
administrative
supervision of the Office of the President,
those attached to it for policy and
program coordination, and those that are

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

not placed by law or order creating them


under any specific department.

the prohibition against


retroactive effect.

passing

laws

with

The power of the President to reorganize the


executive department is likewise recognized in
general appropriations laws.

ISSUE:
WON respondent Secretary of Justice commit
grave abuse of discretion in issuing DO No. 182.

Clearly, Executive Order No. 102 is well within the


constitutional power of the President to issue. The
President
did
not
usurp
any
legislative
prerogative in issuing Executive Order No. 102. It
is an exercise of the Presidents constitutional
power of control over the executive department,
supported by the provisions of the Administrative
Code, recognized by other statutes, and
consistently affirmed by this Court.

HELD: NO
DO No. 182 enjoyed a strong presumption of its
validity. In ABAKADA Guro Party List v. Purisima,
the Court has extended the presumption of
validity to legislative issuances as well as to rules
and
regulations
issued
by
administrative
agencies, saying:
Administrative regulations enacted by
administrative agencies to implement
and interpret the law which they are
entrusted to enforce have the force of
law and are entitled to respect. Such
rules and regulations partake of the
nature of a statute and are just as
binding as if they have been written in
the statute itself. As such, they have the
force and effect of law and enjoy the
presumption of constitutionality and
legality until they are set aside with
finality in an appropriate case by a
competent court.
DO No. 182 was issued pursuant to Department
Order No. 84 that the Secretary of Justice had
promulgated to govern the performance of the
mandate of the DOJ to "administer the criminal
justice system in accordance with the accepted
processes thereof"as expressed in Republic Act
No. 10071 (Prosecution Service Act of 2010) and
Section 3, Chapter I, Title III and Section 1,
Chapter I, Title III of Book IV of Executive Order
292 (Administrative Code of 1987).
To overcome this strong presumption of validity of
the questioned issuances, it became incumbent
upon petitioners to prove their unconstitutionality
and invalidity, either by showing that the
Administrative Code of 1987 did not authorize the
Secretary of Justice to issue DO No. 182, or by
demonstrating that DO No. 182 exceeded the
bounds of the Administrative Code of 1987 and
other pertinent laws. They did not do so. They
must further show that the performance of the
DOJs functions under the Administrative Code of
1987 and other pertinent laws did not call for the
impositions laid down by the assailed issuances.
That was not true here, for DO No 182 did not
deprive petitioners in any degree of their right to
seek redress for the alleged wrong done against
them by the Legacy Group. Instead, the issuances
were designed to assist petitioners and others
like them expedite the prosecution, if warranted
under the law, of all those responsible for the
wrong through the creation of the special panel of
state prosecutors and prosecution attorneys in
order
to
conduct
a
nationwide
and
comprehensive preliminary investigation and
prosecution of the cases. Thereby, the Secretary
of Justice did not act arbitrarily or oppressively
against petitioners.

In establishing an executive department, bureau


or office, the legislature necessarily ordains an
executive agencys position in the scheme of
administrative structure. Such determination is
primary, but subject to the Presidents continuing
authority to reorganize the administrative
structure. As far as bureaus, agencies or offices in
the executive department are concerned, the
power of control may justify the President to
deactivate the functions of a particular office. Or
a law may expressly grant the President the
broad authority to carry out reorganization
measures. The Administrative Code of 1987 is
one such law.

8.) SPOUSES AUGUSTO DACUDAO & OFELIA


DACUDAO vs. RAUL GONZALES, Secretary of
Justice
(G.R. No. 188056; JANUARY 08, 2013)
FACTS:
The petitioners filed a case of syndicated estafa
against Celso Delos Angeles and his associates
after the petitioners were defrauded in a business
venture.
Thereafter, the DOJ Secretary issued Department
Order 182 which directs all prosecutors in the
country to forward all cases already filed against
Celso Delos Angeles, Jr. and his associates to the
secretariat of DOJ in Manila for appropriate
action.
Because of such DOJ orders, the complaint of
petitioners was forwarded to the secretariat of
the Special Panel of the DOJ in Manila. Aggrieved,
Spouses Dacudao filed this petition for certiorari,
prohibition and mandamus assailing to the
respondent Secretary of justice grave abuse of
discretion in issuing the department Order and
the Memorandum, which according to the
violated their right to due process, right to equal
protection of the law and right to speedy
disposition of the cases.
The petitioners opined that orders were
unconstitutional or exempting from coverage
cases already filed and pending at the
Prosecutors Office of Cagayan De Oro City. They
maintained that DO 182 was issued in violation of

9.) SPOUSES BERNYL BALANGAUAN &


KATHERENE BALANGAUAN vs. CA and THE

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Atty. Vic Alabastro
F4

HONGKONG
AND
SHANGHAI
BANKING
CORPORATION, LTD.
(G. R. No. 174350; August 13, 2008)
FACTS:
This is a Petition for Certiorari assailing the 28
April 2006 Decision and 29 June 2006 Resolution
of the Court of Appeals in CA-G.R. CEB-SP No.
00068, which annulled and set aside the 6 April
2004 and 30 August 2004 Resolutions of the
Department of Justice (DOJ) in I.S. No. 02-9230-I,
entitled The Hongkong and Shanghai Banking
Corporation v. Katherine Balangauan, et al.
The twin resolutions of the DOJ affirmed, in
essence, the Resolution of the Office of the City
Prosecutor, Cebu City, which dismissed for lack
of probable cause the criminal complaint for
Estafa and/or Qualified Estafa, filed against
petitioner-Spouses Bernyl Balangauan (Bernyl)
and Katherene Balangauan (Katherene) by
respondent Hong Kong and Shanghai Banking
Corporation, Ltd. (HSBC).
Petitioners Bernyl and Katherene filed the present
petition on the argument that the Court of
Appeals committed grave abuse of discretion in
reversing and setting aside the resolutions of the
DOJ when: (1) [i]t reversed the resolution of the
Secretary of Justice, Manila dated August 30,
2004 and correspondingly, gave due course to
the Petition for Certiorari filed by HSBC on April
28, 2006 despite want of probable cause to
warrant the filing of an information against the
herein petitioners; (2) [i]t appreciated the
dubious evidence adduced by HSBC albeit the
absence of legal standing or personality of the
latter; (3) [i]t denied the motions for
reconsideration on June 29, 2006 notwithstanding
the glaring evidence proving the innocence of the
petitioners; (4) [i]t rebuffed the evidence of the
herein petitioners in spite of the fact that,
examining such evidence alone would establish
that the money in question was already
withdrawn by Mr. Roger Dwayne York; and (5) [i]t
failed to dismiss outright the petition by HSBC
considering that the required affidavit of service
was not made part or attached in the said
petition pursuant to Section 13, Rule 13 in
relation to Section 3, Rule 46, and Section 2, Rule
56 of the Rules of Court.
ISSUE:
WON CA acted with grave abuse of discretion in
reversing and setting aside the resolutions of the
DOJ.
HELD: NO
In reversing and setting aside the resolutions of
the DOJ, petitioners Bernyl and Katherene
contend that the Court of Appeals acted with
grave abuse of discretion amounting to lack or
excess of jurisdiction.
The Court of Appeals, when it resolved to grant
the petition in CA-G.R. CEB. SP No. 00068, did so
on two grounds, i.e., 1) that the public
respondent (DOJ) gravely abused his discretion in
finding that there was no reversible error on the
part of the Cebu City Prosecutor dismissing the

case against the private respondent without


stating the facts and the law upon which this
conclusion was made; and 2) that the public
respondent (DOJ) made reference to the facts and
circumstances of the case leading to his finding
that no probable cause exists, x x x (the) very
facts and circumstances (which) show that there
exists a probable cause to believe that indeed the
private respondents committed the crimes x x x
charged against them.
The Court of Appeals found fault in the DOJs
failure to identify and discuss the issues raised by
the respondent HSBC in its Petition for Review
filed therewith. And, in support thereof,
respondent HSBC maintains that it is incorrect to
argue that it was not necessary for the Secretary
of Justice to have his resolution recite the facts
and the law on which it was based, because
courts and quasi-judicial bodies should faithfully
comply with Section 14, Article VIII of the
Constitution requiring that decisions rendered by
them should state clearly and distinctly the facts
of the case and the law on which the decision is
based.
Petitioners Bernyl and Katherene, joined by the
Office of the Solicitor General, on the other hand,
defends the DOJ and assert that the questioned
resolution was complete in that it stated the legal
basis for denying respondent HSBCs petition for
review that (after) an examination (of) the
petition and its attachment [it] found no
reversible error that would justify a reversal of the
assailed resolution which is in accord with the law
and evidence on the matter.
It must be
investigation
and that the
exercising a
reviews the
regarding the

remembered that a preliminary


is not a quasi-judicial proceeding,
DOJ is not a quasi-judicial agency
quasi-judicial function when it
findings of a public prosecutor
presence of probable cause.

Though some cases describe the public


prosecutors power to conduct a preliminary
investigation as quasi-judicial in nature, this is
true only to the extent that, like quasi-judicial
bodies, the prosecutor is an officer of the
executive department exercising powers akin to
those of a court, and the similarity ends at this
point. A quasi-judicial body is an organ of
government other than a court and other than a
legislature which affects the rights of private
parties through either adjudication or rulemaking. A quasi-judicial agency performs
adjudicatory functions such that its awards,
determine the rights of parties, and their
decisions have the same effect as judgments of a
court. Such is not the case when a public
prosecutor conducts a preliminary investigation
to determine probable cause to file an
Information against a person charged with a
criminal offense, or when the Secretary of Justice
is reviewing the formers order or resolutions. In
this case, since the DOJ is not a quasi-judicial
body, Section 14, Article VIII of the Constitution
finds no application. Be that as it may, the DOJ
rectified the shortness of its first resolution by

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Atty. Vic Alabastro
F4

issuing a lengthier one when it resolved


respondent HSBCs motion for reconsideration.

10.) EDUARDO B. OLAGUER AND CONRADO


S. REYES in their official capacity as Fiscal
Agents of The Presidential Commission On
Good Government, vs. THE REGIONAL TRIAL
COURT
(G.R. No. 81385; February 21, 1989)
FACTS:
On December 17, 1987, private respondents filed
a complaint for injunction and damages, with a
prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order, in
the Regional Trial Court (RTC) of Manila against
petitioners and Winston Marbella, Gaston Ortigas,
Robeto Federis, Manuel C. Villa-Real, Emanuel
Soriano, Jack Arroyo and Benjamin Tulio.
The complaint alleges, among others, that private
respondents are the only stockholders with the
right to vote of the Philippine Journalists, Inc. (PJI)
Publisher of several daily periodicals such as
Manila Journal, People's Journal, etc. Sometime in
1977, PJI obtained from the Development Bank of
the
Philippines
(DBP)
certain
financing
accommodations
and
as security
thereof
executed a first mortgage in favor of DBP on its
acts enumerated in a list attached to the
mortgage.
The PJI stockholders assigned to DBP the voting
rights over 67% of the total subscribed and
outstanding voting shares of stock of the
company held by them. Due to some financial
difficulty on its part, PJI requested for a
restructuring of its loan obligation with certain
conditions. Due to the default on the part of the
PJI the DBP cancelled the proxies in favor of the
assigning stockholders on September 30, 1986
and designated as its proxies petitioner Eduardo
Olaguer, Jose Mari Velez and Manuel de Leon.
The complaint also alleges that although Olaguer
was elected chairman of the board and chief
executive officer of PJI he failed to comply with
his commitment and that this gave private
respondents a reason to cancel the assignment.
Olaguer also committed certain illegal acts which
gave rise to the filing of several complaints
against him. However, before these cases could
be resolved, Olaguer's appointment as member
of the board of directors of DBP was terminated
by President Corazon C. Aquino effective
September 9, 1987. He was informed about his
termination through two letters dated August 27
and October 12, 1987.
Private respondents also alleged that despite
such notice, petitioner and his associates
continued to sit in the board and that Olaguer
took over the complete management of the
corporation and even caused the appointment of
other members of the board and/or corporate
officers even if such appointees do not own PJI
shares of stock in their own right. It is likewise
alleged that the petitioner and his associates

should be enjoined from committing further acts


of usurpation and that they should be held liable
for all unlawful disbursements they have made. It
is further alleged that some of the private
respondents had been unlawfully dismissed
and/or retired one after another thereby depriving
them of all benefits they are entitled to and
subjecting them to great mental anguish,
sleepless nights, deep humiliation and great
anxiety for which they must be paid damages in
an amount left to the sound discretion of the
court.
Hence, private respondents filed a complaint for
injunction and damages, with a prayer for the
issuance of a writ of preliminary injunction and/or
temporary restraining order against petitioners.
On January 4, 1988, a motion to dismiss was filed
by the petitioners on the ground that the court
has no jurisdiction over the persons of
petitioners; that they were not served summons
and that the subject matter of the action involves
controversies arising out of intra-corporate
relations between and among stockholders which
are covered by the provisions of Section 5 of
Presidential Decree No. 902-A so that the matter
is within the original and exclusive jurisdiction of
the Securities and Exchange Commission (SEC);
that the venue for a petition seeking injunctive
relief should be the Sandiganbayan where
aforesaid PCGG Case No. 0035 against Benjamin
Romualdez, Rosario Olivares, et al. is pending,
pursuant to Executive Order No. 14 defining the
jurisdiction over cases involving the alleged illgotten wealth of Former President Marcos, et al.
ISSUE:
WON the trial court has jurisdiction over the
subject matter of the action.
HELD: NO
The petition is impressed with merit. There is no
dispute that the PJI is now under sequestration by
the PCGG and that Civil Case No. 0035 was filed
in the Sandiganbayan wherein the PJI is listed as
among the corporations involved in the
unexplained wealth case against former President
Marcos, Romualdez and many others. The records
likewise show that petitioner Olaguer, among
others, is a fiscal agent of the PCGG and that as
Chairman of the Board of Directors of the PJI he
was acting for and in behalf of the PCGG. Under
Section 2 of Executive Order No. 14, the
Sandiganbayan has exclusive and original
jurisdiction over all cases regarding "the funds,
moneys, assets and properties illegally acquired
by Former President Ferdinand E. Marcos, Mrs.
Imelda Romualdez Marcos, their close relatives,
subordinates, business associates, dummies,
agents, or nominees," 3 civil or criminal, including
incidents arising from such cases. The Decision of
the Sandiganbayan is subject to review on
certiorari exclusively by the Supreme Court. 4
In the exercise of its functions, the PCGG is a coequal body with the regional trial courts and coequal bodies have no power to control the other. 5
The regional trial courts and the Court of Appeals
have no jurisdiction over the PCGG in the exercise
of its powers under the applicable Executive

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Atty. Vic Alabastro
F4

Orders and Section 26, Article XVIII of the 1987


Constitution and, therefore, may not interfere
with and restrain or set aside the orders and
actions of the PCGG. 6 By the same token, the
regional trial courts have no jurisdiction over the
acts of fiscal agents of the PCGG acting for and in
behalf of said commission.
Petitioners, as fiscal agents of the PCGG, cannot
be sued in such capacity before the ordinary
courts. The tribunal for such purpose is the
Sandiganbayan.
It necessarily follows that the issues raised by the
private respondents before the respondent judge
to the effect that petitioners are usurpers and
have no right to sit in the board of directors or act
as corporate officers of the PJI are issues which
should be addressed to the Sandiganbayan.

11.) CEFERINO PADUA vs. HON. SANTIAGO


RANADA,
PHILIPPINE
NATIONAL
CONSTRUCTION CORP., TOLL REGULATORY
BOARD, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, and REPUBLIC OF THE
PHILIPPINES
(G.R. No. 141949. October 14, 2002)
FACTS:
The Toll Regulatory Board (TRB) issued a
resolution authorizing provisional toll rate
adjustments at the Metro Manila Skyway. It was
thereafter published in newspapers of general
circulation for three (3) consecutive weeks.
However, there was no hearing conducted for the
matter. Deliberations were not even attended by
Board Members except TRB Executive Director
Jaime Dumlao, Jr. Petitioners assail the validity of
the resolution.
ISSUE:
WON the TRB Executive Director Jaime Dumlao, Jr.
alone can authorized the provisional increase.
HELD:
It is not true that it was TRB Executive Director
Dumlao, Jr. alone who issued Resolution No. 200189. The Resolution itself contains the signature
of the four TRB Directors. Petitioner Padua would
argue that while these Directors signed the
Resolution, none of them personally attended the
hearing. This argument is misplaced.
Under our jurisprudence, an administrative
agency may employ other persons, such as a
hearing officer, examiner or investigator, to
receive evidence, conduct hearing and make
reports, on the basis of which the agency shall
render its decision. Such a procedure is a
practical necessity. Corollarily, in a catena of
cases, the Supreme Court laid down the cardinal
requirements of due process in administrative
proceedings, one of which is that the tribunal or
body or any of its judges must act on its or his
own independent consideration of the law and
facts of the controversy, and not simply accept
the views of a subordinate. Thus, it is logical to
say that this mandate was rendered precisely to
ensure that in cases where the hearing or
reception of evidence is assigned to a

subordinate, the body or agency shall not merely


rely on his recommendation but instead shall
personally weigh and assess the evidence which
the said subordinate has gathered.
The TRB may grant and issue ex-parte to any
petitioner, without need of notice, publication or
hearing, provisional authority to collect the
increase in rates.
An administrative agency may be empowered to
approve provisionally, when demanded by urgent
public need, rates of public utilities without a
hearing. Provisional rates are by their nature
temporary and subject to adjustment in
conformity with the definitive rates approved
after final hearing.
The remedy of the petitioner is file a petition for
review of the adjusted toll rates. Under PD 1112,
the decision of TRB is appealable to the Office of
the President within 10 days from date of
promulgation of such order granting this
provisional toll rates.

12.) AIDA EUGENIO vs. CIVIL SERVICE


COMMISSION, HON. TEOFISTO T. GUINGONA,
JR. & HON. SALVADOR ENRIQUEZ, JR.
(G.R. No. 115863; March 31, 1995)
FACTS:
In 1993, Aida Eugenio passed the Career
Executive Service Eligibility (CES). She was then
recommended to be appointed as a Civil Service
Officer Rank IV. But her appointment to said rank
was impeded when in the same year, the Civil
Service Commission (CSC) abolished the Career
Executive Service Board (CESB). CESB is the
office tasked with promulgating rules, standards,
and procedures on the selection, classification
and compensation of the members of the Career
Executive Service.
Eugenio then assailed the resolution which
abolished CESB. She averred that the CSC does
not have the power to abolish CESB because the
same was created by law (P.D. 1). CSC on the
other hand argued that it has the power to do so
pursuant to the Administrative Code of 1987
which granted the CSC the right to reorganize the
CSC.
ISSUE:
W/N CSC usurped legislative function of Congress
by abolishing the CESB.
HELD: NO
CESB was created by PD 1. It cannot be disputed,
therefore, that as CESB was created by law, it can
only be abolished by the legislature. While CSC
has the power to reorganize under Sec. 17, Chap.
3, Subtitle A, Title I, Bk. V. of the Administrative
Code of 1987, this must be read with sec. 16,
which enumerates the offices under the control of
the CSC. CESB is not one of such offices.
CESB was intended to be an autonomous entity,
albeit administratively attached to CSC. This
essential autonomous character of the CESB is
not negated by its attachment to respondent

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Atty. Vic Alabastro
F4

Commission. By said attachment, CESB was not


made to fall within the control of respondent
Commission. Under the Administrative Code of
1987, the purpose of attaching one functionally
inter-related government agency to another is to
attain policy and program coordination.

13.) HIJO PLANTATION INC., DAVAO FRUITS


CORPORATION, TWIN RIVERS PLANTATION,
INC. and MARSMAN & CO., INC., for
themselves and in behalf of other persons
and
entities
similarly
situated, petitioners, vs.
CENTRAL
BANK
OF
THE
PHILIPPINES, respondent.
FACTS:
Hijo Plantation, Inc., Davao Fruits Corporation,
Twin Rivers Plantation, Inc. and Marsman
Plantation(Petitioners) are engaged in the
production and exportation of bananas.
Owing to the difficulty of determining the
exchange rate of the peso to the dollar because
of the floating rate and the promulgation of
Central Bank Circular No. 289 which imposes an
80% retention scheme on all dollar earners,
Congress passed Republic Act No. 6125 entitled
"an act imposing STABILIZATION TAX ON
CONSIGNMENTS ABROAD TO ACCELERATE THE
ECONOMIC DEVELOPMENT OF THE PHILIPPINES
AND FOR OTHER PURPOSES," approved and made
effective on May 1, 1970), to eliminate the
necessity for said circular and to stabilize the
peso. Among others, it provides as follows:
Sec. 1(b)
Any export product the aggregate annual
F.O.B. value of which shall exceed five million
United States dollars in any one calendar year
during the effectivity of this Act shall likewise
be subject to the rates of tax in force during
the fiscal years following its reaching the said
aggregate value.
During the first nine (9) months of calendar year
1971, the total banana export amounted to an
annual aggregate F.O.B. value of P8,949,000.00
thus exceeding the aggregate F.O.B. value of five
million United States Dollar, bringing it within the
ambit of Republic Act No. 6125. Consequently,
the banana industry was in a dilemma as to when
the stabilization tax was to become due and
collectible from it and under what schedule of
Section 1 (b) of Republic Act 6125 should said tax
be collected. The Central Bank called attention to
Monetary Board Resolution No. 1995 dated
December 3, 1971 which clarified that:
ISSUE:
Whether or not respondent acted with grave
abuse of discretion amounting to lack of
jurisdiction when it issued Monetary Board
Resolution No. 1995, series of 1971 which in
effect reaffirmed Central Bank Circular No. 309,
enacted pursuant to Monetary Board Resolution
No. 1179.
RULING:

Yes. The crux of the controversy, however, is the


manner of implementation of Republic Act No.
6125.
It therefore becomes convenient for the
legislative department of the government, by law,
in a most general way, to provide for the conduct,
control, and management of the work of the
particular department of the government; to
authorize certain persons, in charge of the
management and control of such department.
Such regulations have uniformly been held to
have the force of law, whenever they are found to
be in consonance and in harmony with the
general purposes and objects of the law. Such
regulations once established and found to be in
conformity with the general purposes of the law,
are just as binding upon all the parties, as if the
regulation had been written in the original law
itself. Upon the other hand, should the regulation
conflict with the law, the validity of the regulation
cannot be sustained. Respondent in gross
violation of the law, instead issued Resolution No.
1995 which impose a 6% stabilization tax for the
calendar year January 1, 1972 to June 30, 1972,
which obviously is in excess of its jurisdiction. It
was further argued that in directing its agent
bank to collect the stabilization tax in accordance
with Monetary Board Resolution No. 1995, it
acted whimsically and capriciously.
It will be observed that while Monetary Board
Resolution No. 1995 cannot be said to be the
product of grave abuse of discretion but rather
the result of respondent's overzealous desire to
carry into effect the provisions of RA 6125, it is
evident that the Board acted beyond its authority
under the law and the Constitution. Moreover,
there is no dispute that in case of discrepancy
between the basic law and a rule or regulation
issued to implement said law, the basic law
prevails because said rule or regulation cannot go
beyond the terms and provisions of the basic law.

14.) RADIO COMMUNICATIONS OF THE


PHILIPPINES, INC., petitioner, vs.
FRANCISCO
SANTIAGO
and
ENRIQUE
MEDINA, as Commissioner, Public Service
Commission, respondents.
G.R. No. L-29247 August 21, 1974
RADIO
COMMUNICATIONS
OF
THE
PHILIPPINES, INC., petitioner, vs.
CONSTANCIO JAUGAN and ENRIQUE MEDINA,
Commissioner, Public Service Commission,
respondents.
FACTS:
It is admitted by petitioner Radio Communication
of the Philippines, Inc. (RCPI) that a telegram was
filed with respondent-company and the amount of
P1.50 was paid for the transmission of said
telegram. The telegram, however, was never
transmitted until now. The Petitioner not only did
not give any valid explanation, but did not
present any evidence to explain why the said
telegram was not forwarded to the addressee.
This is, therefore, a clear case where the

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Atty. Vic Alabastro
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petitioner, taking advantage of the rates fixed by


this Commission collected the sum of P1.50 and
promised to render a service to the complainant.
Upon the complaints of respondents Santiago,
Juagan,
and Medina, the Public service
commission imposed a fine as penalty against
RCPI.
ISSUE:
Whether the Public Service Commission had the
jurisdiction to act on complaints by dissatisfied
customers of RCPI and penalize with fine.
RULING:
No. There can be no justification then for the
Public Service Commission imposing the fines.
The law cannot be any clearer. The only power it
possessed over radio companies, as noted was
the fix rates. It could not take to task a radio
company for any negligence or misfeasance. It
was bereft of such competence. It was not vested
with such authority. What it did then in these two
petitions lacked the impress of validity.
Except for constitutional officials who can trace
their competence to act to the fundamental law
itself, a public official must locate in the statute
relied upon a grant of power before he can
exercise it. It need not be express. It may be
implied from the wording of the law. Absent such
a requisite, however, no warrant exists for the
assumption of authority. The act performed, if
properly challenged, cannot meet the test of
validity. It must be set aside. So it must be in
these two petitions. That is to defer to a principle
reiterated by this Court time and time again.

15.) TAYUG RURAL BANK, plaintiff-appellee,


vs.
CENTRAL BANK OF THE PHILIPPINES,
defendant-appellant.
FACTS:
Plaintiff-Appellee, Tayug Rural Bank, Inc., is a
banking corporation in Pangasinan. Plaintiff
obtained thirteen (13) loans from DefendantAppellant, Central Bank of the Philippines, by way
of rediscounting. The outstanding balance was P
444,809.45 as of July 15, 1969. Appellant, issued
Memorandum Circular No. DLC-8, informing all
rural banks that an additional penalty interest
rate of ten per cent (10%) per annum would be
assessed on all past due loans beginning January
4, 1965.
Appellee Rural Bank sued Appellant in the Court
of First Instance of Manila, Branch III, to recover
the 10% penalty imposed by Appellant amounting
to P16,874.97 and to restrain Appellant from
continuing the imposition of the penalty.
Appellant justified the imposition of the penalty
by way of affirmative and special defenses,
stating that it was legally imposed under the
provisions of Section 147 and 148 of the Rules
and
Regulations
Governing
Rural
Banks
promulgated by the Monetary Board on
September 5, 1958, under authority of Section 3
of Republic Act No. 720, as amended.

ISSUE:
Whether the Monetary Board had authority to
authorize Appellant Central Bank to impose a
penalty rate of 10% per annum on past due loans
of rural banks which had failed to pay their
accounts on time.
RULING:
No. The supervising authority of the Monetary
Board of the Central Bank over Rural Banks, is
spelled-out under Section 10 of R.A. 720, as
follows:
SEC. 10. The power to supervise the operation
of any Rural Bank by the Monetary Board of the
Central Bank as herein indicated, shall consist
in placing limits to the maximum credit allowed
any individual borrower; in prescribing the
interest rate; in determining the loan period
and loan procedure; in indicating the manner in
which technical assistance shall be extended to
Rural Banks; in imposing a uniform accounting
system and manner of keeping the accounts
and records of the Rural Banks; in undertaking
regular credit examination of the Rural Banks:
in instituting periodic surveys of loan and
lending procedures, audits, test check of cash
and other transactions of the Rural Banks; in
conducting training courses for personnel of
Rural Banks; and, in general in supervising the
business operation of the Rural Banks.
Nowhere in any of the above-quoted pertinent
provisions of R.A. 720 nor in any other provision
of R.A. 720 for that matter, is the monetary Board
authorized to mete out on rural banks an
additional penalty rate on their past due accounts
with Appellant. As correctly stated by the trial
court, while the Monetary Board possesses broad
supervisory powers, nonetheless, the retroactive
imposition of administrative penalties cannot be
taken as a measure supervisory in character.
There are, however, limitations to the rulemaking power of administrative agencies. A rule
shaped out by jurisprudence is that when
Congress
authorizes
promulgation
of
administrative rules and regulations to implement
given legislation, all that is required is that the
regulation be not in contradiction with it, but
conform to the standards that the law prescribes.
A rule is binding on the courts so long as the
procedure fixed for its promulgation is followed
and its scope is within the statute granted by the
legislature, even if the courts are not in
agreement with the policy stated therein or its
innate wisdom. On the other hand, administrative
interpretation of the law is at best merely
advisory, for it is the courts that finally determine
what the law means. Hence an administrative
agency cannot impose a penalty not so provided
in the law authorizing the promulgation of the
rules and regulations, much less one that is
applied retroactively.

16.) GLOBE WIRELESS LTD., petitioner, vs.


PUBLIC SERVICE COMMISSION and ANTONIO
B. ARNAIZ, respondents.

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F4

FACTS:
A message addressed to Maria Diaz, Madrid,
Spain, filed by private respondent Antonio B.
Arnaiz with the telegraph office of the Bureau of
Telecommunications was transmitted to the
Bureau of Telecommunications in Manila. It was
forwarded to petitioner Globe Wireless Ltd. for
transmission to Madrid. Petitioner sent the
message to the American Cable and Radio
Corporation in New York, which, in turn,
transmitted the same to the Empresa Nacional de
Telecommunicaciones in Madrid. The latter,
however, mislaid said message, resulting in its
non-delivery to the addressee.
After being informed of said fact, private
respondent Arnaiz, sent to then Public Service
Commissioner Enrique Medina an unverified
letter-complaint relating the incident. Petitioner
questioned PSC's jurisdiction over the subject
matter of the letter-complaint, even as it denied
liability for the non-delivery of the message to the
addressee. PSC issued an order finding petitioner
"responsible
for
the
inadequate
and
unsatisfactory service complained of, in violation
of the Public Service Act" and ordering it "to pay a
fine of TWO HUNDRED [P200.00] PESOS under
Sec. 21 of Com. Act 146, as amended."
ISSUE:
Whether respondent PSC had the jurisdiction to
act on complaints and impose fine upon failure of
petitioner to deliver the letter.
RULING:
No. Section 5 of Republic Act No. 4630, the
legislative franchise under which petitioner was
operating, limited respondent Commission's
jurisdiction over petitioner only to the rate which
petitioner may charge the Public. Thus,
Sec. 5. The Public Service Commission is
hereby given jurisdiction over the grantee only
with respect to the rates which the grantee
may charge the public subject to international
commitments made or adhered to by the
Republic of the Philippines.
The act complained of consisted in petitioner
having allegedly failed to deliver the telegraphic
message of private respondent to the addressee
in Madrid, Spain. Obviously, such imputed
negligence had nothing whatsoever to do with
the subject matter of the very limited jurisdiction
of the Commission over petitioner
Too basic in administrative law to need citation of
jurisprudence is the rule that the jurisdiction and
powers
of
administrative
agencies,
like
respondent Commission, are limited to those
expressly granted or necessarily implied from
those granted in the legislation creating such
body; and any order without or beyond such
jurisdiction is void and ineffective. The order
under consideration belonged to this category.

17.) DANTE M. POLLOSO, petitioner, vs.


HON.
CELSO
D.
GANGAN,
Chairman,

COMMISSION ON AUDIT, HON. RAUL C.


FLORES, COMMISSIONER, COMMISSION ON
AUDIT, HON. EMMANUEL M. DALMAN,
COMMISSIONER,
COMMISSION
ON
AUDIT.respondents.
FACTS:
The
National
Power
Corporation
(NPC),
represented by its President Dr. Francisco L. Viray
entered into a service contract with Atty.
Benemerito A. Satorre.
Unit Auditor Alexander A. Tan, NPC-VRC, Cebu City
issued Notice of Disallowance for the payment of
the services rendered by Atty. Satorre in the total
amount of P283,763.39. The following reasons
were cited for said disallowance:
1) The contract for services did not have the
written conformity and acquiescence of the
Solicitor General or the Corporate Counsel
and concurrence of the Commission on Audit
as required under COA Circular No. 86-255
dated April 2, 1986.
2) The contract was not supported with
Certificate of Availability of Funds as required
under Sec. 86 of P.D. 1445.
3) The contract was not submitted to the Civil
Service Commission for final review and was
not forwarded to the Compensation and
Position Confirmation and Classification
Bureau, DBM for appropriate action as
required in CSC MC # 5 Series of 1985.
Petitioner argues that the phrase handling
legal cases should be construed to mean
conduct of cases or handling of court cases
litigation and not to other legal matters such
right of way matters.

of
as
or
as

ISSUE:
Whether COA Circular No. 86-255 applies to the
nature of hiring Atty. Sattore who handled only
right of way matters and did not handle court
cases.
RULING:
Yes. What can be gleaned from a reading of the
above circular is that government agencies and
instrumentalities are restricted in their hiring of
private lawyers to render legal services or handle
their cases. No public funds will be disbursed for
the payment to private lawyers unless prior to
the hiring of said lawyer, there is a written
conformity and acquiescence from the Solicitor
General or the Government Corporate Counsel.
On the claim that COA Circular 86-255 is not
applicable in this case because the inhibition
provided for in said Circular relates to the
handling of legal cases of a government agency
and that the contractor was not hired in that
capacity but to handle legal matters involving
right-of-way, it is maintained that the contracted
service falls within the scope of the inhibition
which clearly includes "the hiring or employing
private lawyers or law practitioners to render
legal services for them and/or to handle their
legal cases.

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

Moreover, it is important to mention that the


intention of said Circular is to curb the observed
and persistent violation of existing laws and
regulations, including CSC MC # 5 series of 1985
pertaining to the employment of private lawyers
on a contractual basis in government agencies
which involves the disbursement of public funds
by subjecting the same to the conformity and
concurrence requirements of said Circular. Being
so, the manner of agreed payment or
consideration, whether termed as a fixed retainer
basis or a fixed contract price patterned after
existing salary scale of existing and comparable
positions in NPC-VRC is immaterial as both still
involve the outlay of public funds and also the
contractual employment/hiring of a private
lawyer.

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.

19.) MAKATI STOCK EXCHANGE, INC.,


petitioner, vs. SECURITIES AND EXCHANGE
COMMISSION
and
MANILA
STOCK
EXCHANGE, respondents.

ISSUE:
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.

FACTS:
This is an issue on resolution of the Securities and
Exchange Commission which would deny the
Makati Stock Exchange, Inc., permission to
operate a stock exchange unless it agreed not to
list for trading on its board, securities already
listed in the Manila Stock Exchange.
Petitioner contended that the permission
provided by law amounted to prohibition, and
that the commission has no power to impose it.
ISSUE:
Whether the SEC has the authority to promulgate
the rule in question.
RULING:
No. It is fundamental that an administrative
officer has only such powers as are expressly
granted to him by the statute, and those
necessarily implied in the exercise thereof.
The commission cites no provision of law
expressly supporting its rule against double
listing. It suggests that the power is necessary for
the execution of the functions vested in it. It
argues that said rule was approved by the
department head before the War and it is not in
conflict with the provisions of securities and
exchange act. The approval of the department,
by itself, adds no weight on judicial litigation. The
commission possesses no power to impose the
condition of the rule which result in discrimination
and violation of constitutional rights.

20.) RUPERTO TAULE, petitioner, vs.


SECRETARY LUIS T. SANTOS and GOVERNOR
LEANDRO VERCELES, respondents.
FACTS:
The Federation of Associations of Barangay
Councils (FABC) convened in Virac, Catanduanes
with six members in attendance for the purpose
of holding the election of its officers. When the
group decided to hold the election despite the

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.
Respondent Secretary issued a resolution
nullifying the election of the officers of the FABC
in Catanduanes 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.

RULING:
No. The Secretary of Local Government is not
vested with jurisdiction to entertain any protest
involving the election of officers of the FABC.
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 rulemaking power conferred by law and which now
has the force and effect of law.
However, it is a well-settled principle of
administrative
law
that
unless
expressly
empowered, administrative agencies are bereft of
quasi- judicial powers. The jurisdiction of
administrative authorities is dependent entirely
upon the provisions of the statutes reposing
power in them; they cannot confer it upon
themselves. Such jurisdiction is essential to give
validity to their determinations.
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.

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21.) RADIO COMMUNICATIONS OF THE


PHILIPPINES, INC. (RCPI), petitioner, vs.
NATIONAL
TELECOMMUNICATIONS
COMMISSION
(NTC)
and
JUAN
A.
ALEGRE, respondents.
FACTS:
Private respondent Juan A. Alegre's wife, Dr.
Jimena Alegre, sent two (2) RUSH telegrams
through petitioner RCPI's facilities to his sister
and brother-in-law in Valencia, Bohol and another
sister-in-law in Espiritu, Ilocos Norte. Both
telegrams did not reach their destinations on the
expected dates. Private respondent filed a lettercomplaint against the RCPI with the National
Telecommunications Commission (NTC) for poor
service, with a request for the imposition of the
appropriate punitive sanction against the
company.
Commission finds respondent administratively
liable for deficient and inadequate service
defined under Section 19(a) of C.A. 146 and
hereby imposes the penalty of FINE.
ISSUE:
Whether the NTC had the jurisdiction and impose
fine against petitioner for failure to deliver the
letters to the addressee.
RULING:
No. NTC has no jurisdiction to impose a
fine. Globe
Wireless
Ltd. vs. Public
Service
Commission (G. R. No. L-27250, 21 January 1987,
147 SCRA 269) says so categorically.
Verily, Section 13 of Commonwealth Act No.
146, as amended, otherwise known as the
Public Service Act, vested in the Public Service
Commission
jurisdiction,
supervision
and
control over all public services and their
franchises, equipment and other properties.
No substantial change has been brought about by
Executive Order No. 546 invoked by the Solicitor
General's Office to bolster NTC's jurisdiction. The
Executive Order is not an explicit grant of power
to impose administrative fines on public service
utilities, including telegraphic agencies, which
have failed to render adequate service to
consumers. Neither has it expanded the coverage
of the supervisory and regulatory power of the
agency. There appears to be no alternative but to
reiterate the settled doctrine in administrative
law that:
Too basic in administrative law to need citation
of jurisprudence is the rule that jurisdiction and
powers of administrative agencies, like
respondent Commission, are limited to those
expressly granted or necessarily implied from
those granted in the legislation creating such
body; and any order without or beyond such
jurisdiction is void and ineffective.

22.) SOLID HOMES, INC., petitioner, vs.


TERESITA
PAYAWAL
and
COURT
APPEALS, respondents.

OF

FACTS:
The complaint was filed by Teresita Payawal
against Solid Homes, Inc. The plaintiff alleged
that the defendant contracted to sell to her a
subdivision lot in Marikina on June 9, 1975, for the
agreed price of P 28,080.00, and that by
September 10, 1981, she had already paid the
defendant the total amount of P 38,949.87 in
monthly installments and interests. Solid Homes
subsequently executed a deed of sale over the
land but failed to deliver the corresponding
certificate of title despite her repeated demands
because, as it appeared later, the defendant had
mortgaged the property in bad faith to a
financing company.
Solid Homes moved to dismiss the complaint on
the ground that the court had no jurisdiction, this
being vested in the National Housing Authority
under PD No. 957.
ISSUE:
Whether the NHA had the jurisdiction over cases
involving claims, refund and any other claims
filed by the subdivision lot or condominium unit
buyer.
RULING:
Yes. The applicable law is PD No. 957, as
amended by PD No. 1344, entitled "Empowering
the National Housing Authority to Issue Writs of
Execution in the Enforcement of Its Decisions
Under Presidential Decree No. 957." Section 1 of
the latter decree provides as follows:
SECTION 1. In the exercise of its function to
regulate the real estate trade and business and
in addition to its powers provided for in
Presidential Decree No. 957, the National
Housing
Authority
shall
have exclusive
jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other
claims filed by subdivision lot or condominium
unit buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of
contractuala statutory obligations filed by
buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or
salesman.
The language of this section, especially the
italicized portions, leaves no room for doubt that
"exclusive jurisdiction" over the case between the
petitioner and the private respondent is vested
not in the Regional Trial Court but in the National
Housing Authority.

23.)
ANTIPOLO
REALTY
CORPORATION,
petitioner, vs. THE NATIONAL HOUSING
AUTHORITY, HON. G.V. TOBIAS, in his
capacity as General Manager of the National
Housing Authority, THE HON. JACOBO C.

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

CLAVE, in his capacity as Presidential


Executive
Assistant
and
VIRGILIO
A.
YUSON, respondents.
FACTS:
By virtue of a Contract to Sell, Jose Hernando
acquired prospective and beneficial ownership
over Lot of the Ponderosa Heights Subdivision
from the petitioner Antipolo Realty Corporation.
Hernando transferred his rights over subject lot to
private respondent Virgilio Yuson. The transfer
was embodied in a Deed of Assignment and
Substitution of Obligor executed with the consent
of Antipolo Realty, in which Mr. Yuson assumed
the performance of the vendee's obligations
under the original contract, including payment of
his predecessor's installments in arrears.
However, for failure of Antipolo Realty to develop
the subdivision project in accordance with its
undertaking under Clause 17 of the Contract to
Sell, Mr. Yuson paid only the arrearages pertaining
to the period up to, and including, the month of
August 1972 and stopped all monthly installment
payments falling due thereafter Clause 17 reads:
Failure by the SELLER shall permit the BUYER to
suspend his monthly installments without any
penalties or interest charges until such time
that such improvements shall have been
completed
Antipolo Realty rescinded the Contract to Sell,
and claiming the forfeiture of all installment
payments previously made by Mr. Yuson.
Aggrieved by the rescission of the Contract to
Sell, Mr. Yuson brought his dispute with Antipolo
Realty before public respondent NHA.
Antipolo Realty contende that the jurisdiction to
hear and decide Mr. Yuson's complaint was
lodged in the regular courts, not in the NHA, since
that complaint involved the interpretation and
application of the Contract to Sell.
ISSUE:
Whether the regular court has jurisdiction over
the present controversy.
RULING:
No. It is by now commonplace learning that many
administrative agencies exercise and perform
adjudicatory powers and functions, though to a
limited extent only. Limited delegation of judicial
or quasi-judicial authority to administrative
agencies
is
well
recognized
in
our
jurisdiction, basically because the need for special
competence and experience has been recognized
as essential in the resolution of questions of
complex or specialized character and because of
a companion recognition that the dockets of our
regular courts have remained crowded and
clogged. Presidential Decree No. 1344 clarified
and spelled out the quasi-judicial dimensions of
the grant of regulatory authority to the NHA in
the following quite specific terms:
SECTION 1. In the exercise of its functions to
regulate the real estate trade and business and
in addition to its powers provided for in
Presidential Decree No. 957, the National

Housing
Authority
shall
have
exclusive
jurisdiction to hear and decide cases of the
following nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims
filed by sub- division lot or condominium unit
buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of
contractual and statutory obligations filed by
buyers of subdivision lots or condominium units
against the owner, developer, dealer, broker or
salesman.
The substantive provisions being applied and
enforced by the NHA in the instant case are found
in Section 23 of Presidential Decree No. 957
which reads:
Sec. 23. Non-Forfeiture of Payments. No
installment payment made by a buyer in a
subdivision or condominium project for the lot
or unit he contracted to buy shall be forfeited in
favor of the owner or developer when the
buyer, after due notice to the owner or
developer, desists from further payment due to
the failure of the owner or developer to develop
the subdivision or condominium project
according to the approved plans and within the
time limit for complying with the same. Such
buyer may, at his option, be reimbursed the
total amount paid including amortization and
interests but excluding delinquency interests,
with interest thereon at the legal rate.
Having failed to comply with its contractual
obligation
to
complete
certain
specified
improvements in the subdivision within the
specified period of two years from the date of the
execution of the Contract to Sell, petitioner was
not entitled to exercise its options under Clause 7
of the Contract. Hence, petitioner could neither
rescind the Contract to Sell nor treat the
installment payments made by the private
respondent as forfeited in its favor.

24.)
LAGUNA
LAKE
DEVELOPMENT
AUTHORITY, petitioner, vs.
COURT
OF
APPEALS, HON. MANUEL JN. SERAPIO,
Presiding Judge RTC, Branch 127, Caloocan
City, HON. MACARIO A. ASISTIO, JR., City
Mayor of Caloocan and/or THE CITY
GOVERNMENT OF CALOOCAN,respondents.
FACTS:
The instant case stemmed from the filing of the
letter-complaint of Task Force Camarin Dumpsite
with the Laguna Lake Development Authority
seeking to stop the operation of the 8.6-hectare
open garbage dumpsite in Tala Estate, Barangay
Camarin, Caloocan City due to its harmful effects
on the health of the residents and the possibility
of pollution of the water content of the
surrounding area. Laguna Lake Development
Authority (LLDA) issue a cease and desist order
enjoining the dumping of garbage in Barangay
Camarin, Tala Estate, Caloocan City.

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F4

ISSUE:
Whether the LLDA have the power and authority
to issue a "cease and desist" order under
Republic Act No. 4850 and its amendatory laws.
RULING:
Yes. The cease and desist order issued by the
LLDA requiring the City Government of Caloocan
to stop dumping its garbage in the Camarin open
dumpsite found by the LLDA to have been done in
violation of Republic Act No. 4850, as amended,
and other relevant environment laws, cannot be
stamped as an unauthorized exercise by the LLDA
of injunctive powers. By its express terms,
Republic Act No. 4850, as amended by P.D. No.
813 and Executive Order No. 927, series of 1983,
authorizes the LLDA to "make, alter or modify
order requiring the discontinuance or pollution."
Section 4, par. (d) explicitly authorizes the LLDA
to make whatever order may be necessary in the
exercise of its jurisdiction.
Assuming arguendo that the authority to issue a
"cease and desist order" were not expressly
conferred by law, there is jurisprudence enough
to the effect that the rule granting such authority
need not necessarily be express. While it is a
fundamental rule that an administrative agency
has only such powers as are expressly granted to
it by law, it is likewise a settled rule that an
administrative agency has also such powers as
are necessarily implied in the exercise of its
express powers. 26 In the exercise, therefore, of its
express powers under its charter as a regulatory
and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of
the LLDA to issue a "cease and desist order" is,
perforce, implied. Otherwise, it may well be
reduced to a "toothless" paper agency.
The issuance, therefore, of the cease and desist
order by the LLDA, as a practical matter of
procedure under the circumstances of the case, is
a proper exercise of its power and authority under
its charter and its amendatory laws. Had the
cease and desist order issued by the LLDA been
complied with by the City Government of
Caloocan as it did in the first instance, no further
legal steps would have been necessary.

25.) DRA. BRIGIDA S. BUENASEDA, Lt. Col.


ISABELO BANEZ, JR., ENGR. CONRADO REY
MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N.
LOPEZ, petitioners, vs.
SECRETARY JUAN FLAVIER, Ombudsman
CONRADO M. VASQUEZ, and NCMH NURSES
ASSOCIATION, represented by RAOULITO
GAYUTIN, respondents.
FACTS:
Principally, the petition seeks to nullify the Order
of the Ombudsman directing the preventive
suspension of petitioners.
The questioned order was issued in connection
with the administrative complaint filed with the
Ombudsman
(OBM-ADM-0-91-0151)
by
the
private respondents against the petitioners for

violation of the Anti-Graft and Corrupt Practices


Act.
The Solicitor General, commenting on the Petition
stated that (a) "The authority of the Ombudsman
is only to recommend suspension and he has no
direct power to suspend;" and (b) "Assuming the
Ombudsman has the power to directly suspend a
government official or employee, there are
conditions required by law for the exercise of
such powers; and said conditions have not been
met in the instant case".
Petitioners adopted the position of the Solicitor
General that the Ombudsman can only suspend
government officials or employees connected
with his office.
ISSUE:
Whether the Ombudsman has the power to
suspend government officials and employees
working in offices other than the Office of the
Ombudsman, pending the investigation of the
administrative complaints filed against said
officials and employees.
RULING:
Yes. In upholding the power of the Ombudsman to
preventively suspend petitioners, respondents
invoke Section 24 of R.A. No. 6770, which
provides:
Sec. 24. Preventive Suspension. The
Ombudsman or his Deputy may preventively
suspend any officer or employee under his
authority pending an investigation, if in his
judgment the evidence of guilt is strong, and (a)
the charge against such officer or employee
involves dishonesty, oppression or grave
misconduct or neglect in the performance of
duty; (b) the charge would warrant removal
from the service; or (c) the respondent's
continued stay in office may prejudice the case
filed against him.
The preventive suspension shall continue until
the case is terminated by the Office of
Ombudsman but not more than six months,
without pay, except when the delay in the
disposition of the case by the Office of the
Ombudsman is due to the fault, negligence or
petition of the respondent, in which case the
period of such delay shall not be counted in
computing the period of suspension herein
provided.
When the constitution vested on the Ombudsman
the power "to recommend the suspension" of a
public official or employees (Sec. 13 [3]), it
referred to "suspension," as a punitive measure.
All the words associated with the word
"suspension" in said provision referred to
penalties in administrative cases. Section 24 of
R.A. No. 6770, which grants the Ombudsman the
power to preventively suspend public officials and
employees facing administrative charges before
him, is a procedural, not a penal statute. The
preventive
suspension
is
imposed
after
compliance with the requisites therein set forth,

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

as an aid in the
administrative charges.

investigation

of

the

Under the Constitution, the Ombudsman is


expressly authorized to recommend to the
appropriate official the discipline or prosecution
of erring public officials or employees. In order to
make an intelligent determination whether to
recommend such actions, the Ombudsman has to
conduct an investigation. In turn, in order for him
to conduct such investigation in an expeditious
and efficient manner, he may need to suspend
the respondent.
The purpose of R.A. No. 6770 is to give the
Ombudsman such powers as he may need to
perform efficiently the task committed to him by
the Constitution. Such being the case, said
statute, particularly its provisions dealing with
procedure, should be given such interpretation
that will effectuate the purposes and objectives of
the Constitution. Any interpretation that will
hamper the work of the Ombudsman should be
avoided.
The Administrative Code of 1987 also empowered
the proper disciplining authority to "preventively
suspend any subordinate officer or employee
under his authority pending an investigation

26.) ALFREDO L. AZARCON, petitioner, vs.


SANDIGANBAYAN,
PEOPLE
OF
THE
PHILIPPINES
and
JOSE
C.
BATAUSA,
respondents.
FACTS:
Petitioner Alfredo Azarcon owned and operated
an earth-moving business, hauling dirt and ore.
His services were contracted by the Paper
Industries Corporation of the Philippines (PICOP)
at its concession in Mangagoy, Surigao del Sur.
Occasionally, he engaged the services of subcontractors like Jaime Ancla whose trucks were
left at the formers premises.
On May 25, 1983, a Warrant of Distraint of
Personal Property was issued by the Main Office
of the BIR addressed to the Regional Director
(Jose Batausa) or his authorized representative of
Revenue Region 10, Butuan City commanding the
latter to distraint the goods, chattels or effects
and other personal property of Jaime Ancla, a
sub-contractor of Azarcon and, a delinquent
taxpayer.
The Warrant of Garnishment was issued to
Azarcon ordering him to transfer, surrender,
transmit and/or remit to BIR the property in his
possession owned by taxpayer Ancla.
Petitioner Azarcon, in signing the Receipt for
Goods, Articles, and Things Seized Under
Authority of the National Internal Revenue,
assumed the undertakings specified in the receipt
and left in his possession pending investigation is
1 blue Isuzu dump truck.

Subsequently, Azarcon wrote a letter to the BIRs


Regional Director for Revenue Region 10 stating
that Mr. Jaime Ancla intends to cease his
operations with him, and that this is evidenced by
the fact that sometime in August, 1985 he
surreptitiously withdrew his equipment from his
custody. He therefore expressed his desire to
relinquish whatever responsibilities he has over
the property, and that this cancellation shall take
effect immediately.
Incidentally, Azarcon reported the taking of the
truck to the security manager of PICOP, Mr. Delfin
Panelo, and requested him to prevent this truck
from being taken out of the PICOP concession. By
the time the order to bar the trucks exit was
given, however, it was too late.
Regional Director Batausa responded in a letter,
stating that Azarcon voluntarily assumed the
liabilities of safekeeping and preserving the unit
in behalf of the BIR and his failure to observe said
provisions does not relieve Azarcon from
responsibility.
Thereafter, the Sandiganbayan found that On 11
June 1986, Calo, a Revenue Document Processor,
sent a progress report to the Chief of the
Collection Branch of the surreptitious taking of
the dump truck and that Ancla was renting out
the truck to a certain contractor by the name of
Oscar Cueva at PICOP.
She also suggested that if the report were true, a
warrant of garnishment be reissued against
Cueva for whatever amount of rental is due from
Ancla until such time as the latters tax liabilities
shall be deemed satisfied. However, instead of
doing so, Director Batausa filed a letter-complaint
against Azarcon and Ancla.
Provincial Fiscal Montenegro forwarded the
records of the complaint to the Office of the
Tanodbayan. He was deputized Tanodbayan
prosecutor and granted authority to conduct
preliminary investigation.
Along with his co-accused Jaime Ancla, Azarcon
was charged before the Sandiganbayan with the
crime of malversation of public funds or property
under Article 217 in relation to Article 222 of the
RPC. (Allegedly, as the dumptruck became public
property and the value thereof as public fund, he
unlawfully
and
feloniously
misappropriate,
misapply and convert to his personal use and
benefit the aforementioned motor vehicle, and
allowing accused Jaime C. Ancla to retrieve the
dump truck to the damage and prejudice of the
government in the amount of P80,831.59 in a
form of unsatisfied tax liability)
Azarcon filed a motion for reinvestigation before
the Sandiganbayan alleging that:
1. the petitioner never appeared in the
preliminary investigation; and
2. the petitioner was not a public officer, hence
a doubt exists as to why he was being
charged with malversation under Article 217
of the
3.
Revised Penal Code.

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Atty. Vic Alabastro
F4

The Sandiganbayan rendered a Decision against


Azarcon and found him guilty beyond reasonable
doubt as principal of Malversation of Public Funds
defined and penalized under Article 217 in
relation to Article 222 of the Revised Penal Code.
ISSUES:
1. Whether or not the Sandiganbayan had
jurisdiction over the subject matter of the
controversy; and
2. Whether or not Azarcon can be considered a
public officer by reason of his designation by
the Bureau of Internal Revenue as a
depositary of distrained property.
HELD:
1. No, the Sandiganbayan does not have
jurisdiction over the controversy.
Section 4 of P.D. No. 1606 provided that:
SEC. 4. Jurisdiction. -- The Sandiganbayan shall
exercise:
(a) Exclusive original jurisdiction in all cases
involving:
(1) Violations of Republic Act No. 3019, as
amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and
Chapter II, Section 2, Title VII of the Revised Penal
Code;
(2) Other offenses or felonies committed by
public officers and employees in relation to their
office, including those employed in governmentowned or controlled corporations, whether simple
or complexed with other crimes, where the
penalty prescribed by law is higher than prision
correccional or imprisonment for six (6) years, or
a fine of P6,000.00: PROVIDED, HOWEVER, that
offenses or felonies mentioned in this paragraph
where the penalty prescribed by law does not
exceed prision correccional or imprisonment for
six (6) years or a fine of P6,000.00 shall be tried
by the proper Regional Trial Court, Metropolitan
Trial Court, Municipal Trial Court and Municipal
Circuit Trial Court.
In case private individuals are charged as coprincipals, accomplices or accessories with the
public officers or employees, including those
employed in government-owned or controlled
corporations, they shall be tried jointly with said
public officers and employees.
The foregoing provisions unequivocally specify
the only instances when the Sandiganbayan will
have jurisdiction over a private individual, i.e.
when the complaint charges the private
individual either as a co-principal, accomplice or
accessory of a public officer or employee who has
been charged with a crime within its jurisdiction.
The Information does not charge petitioner
Azarcon of being a co-principal, accomplice or
accessory to a public officer committing an
offense under the Sandiganbayans jurisdiction.
Thus, unless petitioner be proven a public officer,

the Sandiganbayan will have no jurisdiction over


the crime charged.
Article 203 of the RPC determines who are public
officers:
Who are public officers. -- For the purpose of
applying the provisions of this and the preceding
titles of the book, any person who, by direct
provision of the law, popular election, popular
election or appointment by competent authority,
shall take part in the performance of public
functions in the Government of the Philippine
Islands, or shall perform in said Government or in
any of its branches public duties as an employee,
agent, or subordinate official, of any rank or
classes, shall be deemed to be a public officer.
Thus, to be a public officer, one must be -(1) Taking part in the performance of public
functions in the government, or performing in
said Government or any of its branches public
duties as an employee, agent, or subordinate
official, of any rank or class; and
(2) That his authority to take part in the
performance of public functions or to perform
public duties must be -a. by direct provision of the law, or
b. by popular election, or
c. by appointment by competent authority.[28]
Granting arguendo that the petitioner, in signing
the receipt for the truck constructively distrained
by the BIR, commenced to take part in an activity
constituting public functions, he obviously may
not be deemed authorized by popular election.
2. No, petitioners designation by the BIR as
a custodian of distrained property does not
qualify as appointment by direct provision
of law, or by competent authority.
The Solicitor General contends that the BIR, in
effecting constructive distraint over the truck
allegedly owned by Jaime Ancla, and in requiring
the petitioner Alfredo Azarcon who was in
possession thereof to sign a pro forma receipt for
it, effectively designated petitioner a depositary
and, hence, a public officer. This is based on the
theory that the power to designate a private
person who has actual possession of a distrained
property as a depository of distrained property is
necessarily implied in the BIRs power to place the
property of a delinquent tax payer (sic) in
distraint as provided for under Sections 206, 207
and 208 (formerly Sections 303, 304 and 305) of
the National Internal Revenue Code, (NIRC) x x x.
It is axiomatic in our constitutional framework,
which mandates a limited government, that its
branches and administrative agencies exercise
only that power delegated to them as defined
either in the Constitution or in legislation or in
both.
Thus, although the appointing power is the
exclusive prerogative of the President, the
quantum
of
powers
possessed
by
an

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Atty. Vic Alabastro
F4

administrative agency forming part of the


executive branch will still be limited to that
conferred expressly or by necessary or fair
implication in its enabling act. Hence, an
administrative officer has only such powers as are
expressly granted to him and those necessarily
implied in the exercise thereof.
Implied powers are those which are necessarily
included in, and are therefore of lesser degree
than the power granted. It cannot extend to other
matters not embraced therein, nor are not
incidental thereto. For to so extend the statutory
grant of power would be an encroachment on
powers expressly lodged in Congress by our
Constitution.
It is true that Sec. 206 of the NIRC, as pointed out
by the prosecution, authorizes the BIR to effect a
constructive distraint by requiring any person to
preserve a distrained property.
However, we find no provision in the NIRC
constituting such person a public officer by
reason of such requirement. The BIRs power
authorizing a private individual to act as a
depositary cannot be stretched to include the
power to appoint him as a public officer.
The prosecution argues that Article 222 of the
Revised Penal Code defines the individuals
covered by the term officers under Article 217 of
the same Code. And accordingly, since Azarcon
became a depository of the truck seized by the
BIR he also became a public officer who can be
prosecuted under Article 217.
The Court is not persuaded. Article 222 of the
RPC reads:
Officers included in the preceding provisions. -The provisions of this chapter shall apply to
private individuals who, in any capacity whatever,
have charge of any insular, provincial or
municipal funds, revenues, or property and to any
administrator or depository of funds or property
attached, seized or deposited by public authority,
even if such property belongs to a private
individual.
The language of the foregoing provision is clear. A
private individual who has in his charge any of
the public funds or property enumerated therein
and commits any of the acts defined in any of the
provisions of Chapter Four, Title Seven of the
RPC, should likewise be penalized with the same
penalty meted to erring public officers. Nowhere
in this provision is it expressed or implied that a
private individual falling under said Article 222 is
to be deemed a public officer.
The Court thus finds petitioner Alfredo Azarcon
and his co-accused Jaime Ancla to be both private
individuals erroneously charged before and
convicted by Respondent Sandiganbayan which
had no jurisdiction over them.
It is evident that the petitioner did not cease to
be a private individual when he agreed to act as
depositary of the garnished dump truck.

Therefore, when the information charged him and


Jaime Ancla before the Sandiganbayan for
malversation of public funds or property, the
prosecution was in fact charging two private
individuals without any public officer being
similarly
charged
as
a
co-conspirator.
Consequently, the Sandiganbayan had no
jurisdiction over the controversy and therefore all
the proceedings taken below as well as the
Decision
rendered
by
Respondent
Sandiganbayan, are null and void for lack of
jurisdiction.

27.) BENJAMIN MASANGCAY, petitioner, vs.


THE
COMMISSION
ON
ELECTIONS,
respondent.
FACTS: Masangcay was then the provincial
treasurer of Aklan designated by the Commission
to take charge of the receipt and custody of the
official ballots, election forms and supplies, as
well as of their distribution, among the different
municipalities of the province.
Masangcay, with several others, was charged
before the Commission on Elections with
contempt for having opened three boxes
containing official and sample ballots for the
municipalities of the province of Aklan, in
violation of the instructions of said Commission
embodied in its resolution.
Commission rendered its decision finding
Masangcay and his co-respondent Molo guilty as
charged.
It is contended that, even if petitioner can be held
guilty of the act of contempt charged, the
decision is null and void for lack of valid power on
the part of the Commission to impose such
disciplinary penalty under the principle of
separation of powers.
ISSUE: Whether or not the Commission on
Elections lacks power to impose the disciplinary
penalty meted out to Masangcay.
HELD: Yes. There is merit in the contention that
the Commission on Elections lacks power to
impose the disciplinary penalty meted out to
petitioner in the decision subject of review.
We had occasion to stress in the case of Guevara
v. The Commission on Elections that under the
law and the constitution, the Commission on
Elections has only the duty to enforce and
administer all laws to the conduct of elections,
but also the power to try, hear and decide any
controversy that may be submitted to it in
connection with the elections.
In this sense, said, the Commission, although it
cannot be classified a court of justice within the
meaning of the Constitution (Section 30, Article
VIII), for it is merely an administrative body, may
however exercise quasi-judicial functions insofar
as controversies that by express provision law
come under its jurisdiction. The difficulty lies in

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Atty. Vic Alabastro
F4

drawing the demarcation line between the duty


which inherently is administrative in character
and a function which calls for the exercise of the
quasi-judicial function of the Commission.

When FREEMAN failed to pay its obligations,


EQUITABLE instituted collection suit against
FREEMAN and Saw Chiao Lian. EQUITABLE also
prayed for preliminary attachment.

In the same case, we also expressed the view


that when the Commission exercises a ministerial
function it cannot exercise the power to punish
contempt because such power is inherently
judicial in nature, as can be clearly gleaned from
the following doctrine we laid down therein:
. . . As this Court has aptly said: 'The power to
punish for contempt is inherent in all courts; its
existence is essential to the preservation of order
in judicial proceedings, and to the enforcement of
judgments, orders and mandates courts, and,
consequently, in the administration of justice
(Slade Perkins v. Director of Prisons, 58 Phil., 271;
U.S. v. Lee Hoc, 36 Phil., 867; In Re Sotto, 46 O.G.,
2570; In Re Kelly, Phil., 944). The exercise of this
power has always been regarded as a necessary
incident and attribute of courts (Slade Perkins v.
Director of Prisons, Ibid.).

The collection case was terminated when the


parties entered into a compromise agreement.
However, FREEMAN and Saw Chiao Lian failed to
comply with the judgment.

In the instant case, the resolutions which the


Commission tried to enforce and for whose
violation the charge for contempt was filed
against petitioner Masangcay merely call for the
exercise of an administrative or ministerial
function for they merely concern the procedure to
be followed in the distribution of ballots and other
election paraphernalia among the different
municipalities.
In fact, Masangcay, who as provincial treasurer of
Aklan was the one designated to take charge of
the receipt, custody and distribution of election
supplies in that province, was charged with
having opened three boxes containing official
ballots
for
distribution
among
several
municipalities in violation of the instructions of
the Commission.
And because of such violation he was dealt as for
contempt of the Commission and was sentenced
accordingly. In this sense, the Commission has
exceeded its jurisdiction in punishing him for
contempt, and so its decision is null and void.

28.)
FREEMAN,
INC.,
FREEMAN
MANAGEMENT & DEVELOPMENT CORP.,
CHIAO LIAN, LECHU S. LIM, PERLITA S.
DYOGI, OLIVIA S. SANTOS, CARMEN S. SAW
and RUBEN CHUA, petitioners, vs.
THE
SECURITIES
AND
EXCHANGE
COMMISSION, SAW MUI, RUBEN SAW,
DIONISIO SAW, LINA S. CHUA, LUCILA S.
RUSTE and EVELYN SAW, respondents.
FACTS: Freeman, Inc. (FREEMAN), was granted a
loan
by
Equitable
Banking
Corporation
(EQUITABLE) as evidenced by 2 promissory notes:
P1,700,000.00 payable December 1987, and
P6,000,000.00 payable April 1988. Saw Chiao
Lian, President of Freeman, Inc., signed as comaker in both promissory notes.

A writ of execution was issued, and 2 parcels of


land belonging to FREEMAN were levied upon and
sold at public auction. The highest bidder was
one of the petitioners, Freeman Management and
Development
Corporation
(FREEMAN
MANAGEMENT), which thereafter registered its
certificates of sale with the Register of Deeds.
Before FREEMAN MANAGEMENT could consolidate
its title over the properties purchased at the
auction sale, private respondents filed a petition
with the Securities and Exchange Commission
(SEC) seeking the dissolution of FREEMAN,
accounting and reconveyance of the properties.
Private respondent filed a similar complaint
against petitioners with the RTC. The complaint
sought to annul the compromise agreement
between EQUITABLE on one hand and defendants
FREEMAN and Saw Chiao Lian on the other, as
well as the promissory notes executed by Saw
Chiao Lian, the auction sale, and the sheriff's
certificate of sale of the lots.
SEC Hearing Officer Juanito B. Almosa, Jr., issued
a writ of preliminary injunction to prevent the
consolidation of ownership of petitioner FREEMAN
MANAGEMENT over the properties it acquired in
the auction sale, the redemption period having
expired.
Petitioners filed the present petition alleging that
the SEC committed grave abuse of discretion and
acted in excess of jurisdiction in sustaining the
order of its Hearing Officer granting the writ of
injunction enjoining consolidation of ownership in
FREEMAN MANAGEMENT and that the SEC has
jurisdiction to take cognizance of and determine
the rights of petitioners and private respondents
as against each other.
Petitioners also argue that the SEC, being a
coordinate body with the Regional Trial Court,
could not interfere in the proceedings held
therein, and neither could it review the issues
passed upon by the said court.
Private respondents contend the jurisdiction of
the SEC has been resolved by this Court in Saw v.
Court of Appeals when it held that "even with the
denial of petitioners' motion to intervene, nothing
is really lost to them. The denial did not
necessarily prejudice them as their rights are
being litigated in the case (SEC Case No. 3577)
now before the Securities and Exchange
Commission and may be fully asserted and
protected in that separate proceeding.
In its comment, the Office of the Solicitor General
agrees with petitioners' contention that the SEC,

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Atty. Vic Alabastro
F4

as a co-equal body with the Regional Trial Court,


cannot modify, reverse or pass upon the decision
of said court.
ISSUE: Whether or not the SEC, being a
coordinate body with the Regional Trial Court,
may interfere in the proceedings held therein and
review the issues passed upon by the said court.
RULING: No. Our ruling in Saw v. Court of
Appeals should be understood in the light of 2
basic legal principles.
First, that administrative agencies like the SEC
are tribunals of limited jurisdiction and as such
can exercise only those powers which are
specifically granted to them by their enabling
statutes.
Section 5 of P.D. No. 902-A, as amended, provides
the cases over which the SEC has original and
exclusive jurisdiction to hear and decide. These
include controversies arising out of intracorporate or partnership relations between and
among stockholders, members or associates;
between any or all of them and the corporation,
partnership or association of which they are
stockholders,
members
or
associates,
respectively; and, between such corporation,
partnership or association and the state insofar
as it concerns their individual franchise or right to
exist as such entity. Section 6 of the same decree
empowers the SEC to issue preliminary or
permanent injunction, whether prohibitory or
mandatory, in all cases in which it has
jurisdiction.
The action for dissolution of FREEMAN filed by its
minority stockholders is well within the
jurisdiction of the SEC to resolve in accordance
with P.D. No. 902-A. However, the inclusion in the
SEC case of FREEMAN MANAGEMENT of which
private respondents are not stockholders for the
purpose of compelling it to reconvey to FREEMAN
the properties originally owned by the latter but
were levied upon and sold to FREEMAN
MANAGEMENT in a public auction is a matter
outside of the limited jurisdiction of the SEC.
The petition for reconveyance of properties
against FREEMAN MANAGEMENT is not an intracorporate controversy since private respondents
have no shares or interests whatsoever in
FREEMAN MANAGEMENT, a corporation separate
and distinct from FREEMAN, which is undergoing
dissolution proceedings in the SEC.
The second basic principle is the doctrine of noninterference which should be regarded as highly
important in judicial stability and in the
administration of justice whereby the judgment of
a court of competent jurisdiction may not be
opened, modified or vacated by any court or
tribunal of concurrent jurisdiction.
The SEC is at the very least co-equal with the
Regional Trial Court. As such, one would have no
power to control the other. Moreover, in the
instant case, judgment was rendered by the trial
court in Civil Case No. 88-44404 approving the

compromise agreement between EQUITABLE on


one hand, and FREEMAN and Saw Chiao Lian on
the other. A writ of execution was issued against
the defendants to enforce the judgment and 2
properties of FREEMAN were levied upon and sold
to FREEMAN MANAGEMENT as highest bidder in
the public auction.
Finally, the judgment was fully satisfied and a
certificate of sale was issued to FREEMAN
MANAGEMENT. It is axiomatic that after a
judgment has been fully satisfied, the case is
deemed terminated once and for all. It cannot be
modified or altered.
Hence, the properties sold to FREEMAN
MANAGEMENT are now considered excluded from
the corporate assets of FREEMAN and can no
longer be the subject of the proceedings in the
SEC for the dissolution of the latter. Therefore
SEC exceeded its jurisdiction when it issued a writ
of injunction enjoining FREEMAN MANAGEMENT
from consolidating its ownership over the 2
parcels of land it acquired as highest bidder in
the execution sale.

29.) THE CITY OF BAGUIO, MAURICIO


DOMOGAN,
and
ORLANDO
GENOVE,
Petitioners, vs.
FRANCISCO
NIO,
JOSEFINA
NIO,
EMMANUEL NIO, and EURLIE OCAMPO,
Respondents.
FACTS: The Bureau of Lands awarded on May 13,
1966 to Narcisa A. Placino a parcel of land
identified as Lot No. 10 (the lot) located at Saint
Anthony Road, Dominican-Mirador Barangay,
Baguio City.
Francisco Nio, who has been occupying the lot,
contested the award by filing a Petition Protest
before the Bureau of Lands. The Director of Lands
dismissed the Petition Protest, and Nio appealed
the dismissal all the way to the Supreme Court
but he did not succeed.
The decision of the Director of Lands having
become final and executory, the then-Executive
Director of the Department of Environment and
Natural Resources-Cordillera Autonomous Region
(DENR-CAR), on petition of Narcisa, issued an
Order of Execution directing the Community
Environment and Natural Resources Office
(CENRO) Officer to enforce the decision "by
ordering Petitioner Nio and those acting in his
behalf to refrain from continuously occupying the
area and remove whatever improvements they
may have introduced thereto."
Attempts to enforce the Order of Execution failed,
prompting Narcisa to file a complaint for
ejectment before the Baguio City Municipal Trial
Court in Cities (MTCC).
Narcisas counsel, Atty. Edilberto Claravall, later
petitioned the DENR-CAR for the issuance of a

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Atty. Vic Alabastro
F4

Special Order authorizing the City Sheriff of


Baguio, the City Police Station, and the
Demolition Team of the City Government to
demolish or remove the improvements on the lot
introduced by Nio. The DENR-CAR denied the
petition, citing lack of jurisdiction over the City
Sheriff of Baguio, the City Police Station, and the
Demolition Team of the City Government.
But on July 16, 1997, the Demolition Team of
Baguio City headed by Engineer Orlando Genove
and the Baguio City Police, on orders of then
Baguio City Police Officer-In-Charge (OIC) Donato
Bacquian, started demolishing the houses of Nio
and his herein co-respondents.
Nio and his wife Josefina Nio thereupon filed a
Petition for Certiorari and Prohibition with Prayer
for Temporary Restraining Order before the
Regional Trial Court (RTC) of Baguio City. The RTC
denied the petition. However the Court of Appeals
granted the petition on appeal.
Mayor Mauricio Domogan through the Demolition
Team and City Engineers Office are ordered to
cease and desist from enforcing the amended
order of execution issued by Oscar N. Hamada,
Regional Executive Director of the Department of
Environmental and Natural Resources, concerning
the demolition or removal of the structures made
by petitioners until private respondent applied for
a special order abovementioned with the proper
court.
ISSUE: Whether or not the enforcement of the
Amended Order of Execution needs a hearing and
court order which Sec. 10(d) of Rule 39 of the
Rules of Court requires despite the fact that an
the administrative agency which is clothed with
quasi-judicial functions issued the Amended
Order of Execution.
HELD: Yes. In general, the quantum of judicial or
quasi-judicial powers which an administrative
agency may exercise is defined in the enabling
act of such agency. In other words, the extent to
which an administrative entity may exercise such
powers depends largely, if not wholly, on the
provisions of the statute creating or empowering
such agency.
There is, however, no explicit provision granting
the Bureau of Lands (now the Land Management
Bureau) or the DENR (which exercises control
over the Land Management Bureau) the authority
to issue an order of demolition which the
Amended Order of Execution, in substance, is.
While the jurisdiction of the Bureau of Lands is
confined to the determination of the respective
rights of rival claimants to public lands or to
cases which involve the disposition of public
lands, the power to determine who has the
actual, physical possession or occupation or the
better right of possession over public lands
remains with the courts.

30.) RUFINO O. ESLAO, in his capacity as


President of Pangasinan State University,
petitioner, vs.
COMMISSION ON AUDIT, respondent.
FACTS: On 9 December 1988, PSU entered into a
Memorandum of Agreement (MOA) with the
Department
of
Environment
and
Natural
Resources (DENR) for the evaluation of 11
government
reforestation
operations
in
Pangasinan.
A notice to proceed with the review and
evaluation of the 11 reforestation operations was
issued by the DENR to PSU. The latter complied
with this notice and did proceed.
PSU Vice President for Research and Extension
and Assistant Project Director Victorino P. Espero
requested the Office of the President of PSU, to
have the University's Board of Regents (BOR)
confirm the appointments or designations of
involved PSU personnel including the rates of
honoraria and per diems corresponding to their
specific roles and functions.
The BOR approved the MOA and PSU issued a
voucher for payment of honoraria to PSU
personnel engaged in the project. Later, however,
the approved honoraria rates were found to be
higher than the rates provided for in the
guidelines of National Compensation Circular
(NCC) No. 53. Accordingly, adjustments were
made by deducting amounts from subsequent
disbursements of honoraria.
Bonifacio Icu, COA resident auditor at PSU,
alleged that there were excess payments of
honoraria. This was based on the premise that
Compensation Policy Guidelines (CPG) No. 80-4
issued by the DBM which provided for lower rates
than NCC No. 53 was the schedule for honoraria
and per diems applicable to work done under the
MOA between the PSU and the DENR.
A letter was sent by PSU to the Chairman of the
COA requesting reconsideration of the action of
its
resident
auditor.
COA
denied
the
reconsideration and ruled that CPG. No. 80-4 is
the applicable guideline in respect of the
honoraria as CPG No. 80-4 does not distinguish
between projects locally funded and projects
funded or assisted with monies of foreign-origin.
Subsequently, honoraria for the period from
January 1989 to January 1990 were disbursed in
accordance with NCC No. 53. A Certificate of
Settlement and Balances was then issued by the
COA
resident
auditor
of
PSU
showing
disallowance of alleged excess payment of
honoraria which petitioner was being required to
return.
The resolution of the dispute lies in the
determination of the circular or set of provisions
applicable in respect of the honoraria to be paid
to PSU personnel who took part in the evaluation
project, i.e., NCC No. 53 or CPG No. 80-4.

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Atty. Vic Alabastro
F4

ISSUE: Whether or not the special project applies


to NCC 53 (foreign assisted), for CPG No. 80-4
applies only to "locally-funded projects.
HELD: NCC 53 should apply.
Sec. 2.1 of CPG No. 80-4 defines "special project"
as an inter-agency or inter-committee activity or
an undertaking by a composite group of
officials/employees from various agencies which
[activity or undertaking] is not among the regular
and primary functions of the agencies involved.
Examination of the definition in CPG No. 80-4 of a
"special project" reveals that definition has two
(2) components: firstly, there should be an interagency or inter-committee activity or undertaking
by a group of officials or employees who are
drawn from various agencies; and secondly, the
activity or undertaking involved is not part of the
"regular or primary" functions of the participating
agencies.
Examination of the MOA and its annexes reveals
that two (2) groups were actually created. The
first group consisted of the coordinating
committee, the membership of which was drawn
from officials of the DENR and of the PSU; and the
second, the evaluation project team itself which
was, in contrast, composed exclusively of PSU
personnel.
We believe that the first component of the CPU
No. 80-4's definition of "special project" is
applicable in respect of the group which is
charged with the actual carrying out of the
project itself, rather than to the body or group
which coordinates the task of the operating or
implementing group.
To construe the administrative definition of
"special project" otherwise would create a
situation, which we deem to be impractical and
possibly even absurd, under which any
undertaking entered into between the senior
officials of government agencies would have to
be considered an "inter-agency or intercommittee activity," even though the actual
undertaking or operation would be carried out not
by the coordinating body but rather by an
separate group which might not (as in the
present case) be drawn from the agencies
represented in the coordinating group.
As already noted, in the case at hand, the project
team actually tasked with carrying out the
evaluation of the DENR reforestation activity is
composed exclusively of personnel from PSU; the
project team's responsibility and undertaking are
quite distinct from the responsibilities of the
coordinating [DENR and PSU] committee. Thus,
the project team is not a "composite group" as
required by the definition of CPG No. 80-4 of
"special projects." It follows that the evaluation
projects here involved do not fall within the ambit
of a "special project" as defined and regulated by
CPG No. 80-4.
We do not consider it necessary to rule on
whether the project at hand involved an

undertaking "which is not among the regular and


primary functions of the agencies involved" since
the reforestation activity evaluation group is not,
as pointed out above, a "special project" within
the meaning of CPG No. 80-4. In any case, this
particular issue was not raised by any of the
parties here involved.
Examination of the provisions of NCC No. 53
makes it crystal clear that the circular is
applicable to foreign-assisted projects only. The
explicit text of NCC No. 53 states that it was
issued to prescribe/authorize the classification
and compensation rates of positions in foreignassisted projects (FAPs) including honoraria rates
for personnel detailed to FAPs and guidelines in
the
implementation
thereof
pursuant
to
Memorandum No. 173 dated 16 May 1988 and
which apply to all positions in foreign-assisted
projects only.
Clearly, NCC No. 53 amended the earlier CPG No.
80-4 by carving out from the subject matter
originally covered by CPG No. 80-4 all "foreignassisted [special] projects." CPG No. 80-4 was,
accordingly, modified so far as "foreign-assisted
[special] projects (FAPs)" are concerned. It is this
fact or consequence of NCC No. 53 that
respondent COA apparently failed to grasp.
Thus, CPG No. 80-4 does not control, nor even
relate to, the DENR evaluation project for at least
two (2) reasons: firstly, the evaluation project was
not a "special project" within the meaning of CPG
No. 80-4; secondly, that same evaluation project
was a Foreign-Assisted Project to which NCC No.
53 is specifically applicable.
Even in its Comment respondent COA submits
that the issue as to whether or not the project
was special already became moot in the face of
the opinion/ruling of the DBM that since it (the
project) is "foreign-assisted" NCC 53 should
apply, for CPG No. 80-4 applies only to "locallyfunded projects.
Under the Administration Code of 1987, the
Compensation and Position Classification Bureau
of the DBM "shall classify positions and determine
appropriate salaries for specific position classes
and review appropriate salaries for specific
position classes and review the compensation
benefits programs of agencies and shall design
job evaluation programs."
In Warren Manufacturing Workers Union (WMWU)
v. Bureau of Labor Relations, the Court held that
"administrative regulations and policies enacted
by administrative bodies to interpret the law have
the force of law and are entitled to great respect."
It is difficult for the Court to understand why,
despite these certifications, respondent COA took
such a rigid and uncompromising posture that
CPG No. 80-4 was the applicable criterion for
honoraria to be given members of the
reforestation evaluation project team of the PSU.
Respondent COA's contention that the DBM
clarification is unconstitutional as that ruling does
not fulfill the requisites of a valid classification is,

ADMINISTRATIVE LAW CASE DIGESTS 1


Atty. Vic Alabastro
F4

in the Court's perception, imaginative but


nonetheless an after-thought and a futile attempt
to justify its action. As correctly pointed out by
petitioner, the constitutional arguments raised by
respondent COA here were never even
mentioned, much less discussed, in COA
Decisions Nos. 1547 (1990) and 2571 (1992) or in
any of the proceedings conducted before it.
COA is not authorized to substitute its own
judgment for any applicable law or administrative
regulation with the wisdom or propriety of which
it does not agree at least not before such law or
regulation is set aside by the authorized agency
of government as unconstitutional or illegal and
void.
Mindful of the detailed provisions of the MOA and
Project Proposal governing project duration and
project financing as regulated by NCC No. 53, the
Court is not persuaded that petitioner can so
casually assume implicit consent on the part of
the DENR to an extension of the evaluation
project's duration.
From the clear and detailed provisions of the MOA
and Project Proposal in relation to NCC No. 53,
consent to any extension of the evaluation
project, in this instance, must be more concrete
than the alleged silence or lack of protest on the
part of the DENR. Although tacit acceptance is
recognized in our jurisdiction, 24 as a rule, silence
is not equivalent to consent since its ambiguity
lends itself to error. And although under the Civil
Code there are instances when silence amounts
to consent, 25 these circumstances are wanting
in the case at bar. Furthermore, as correctly
pointed out by the respondent COA, the date
when the DENR accepted the final project report
is by no means conclusive as to the terminal date
of the evaluation project.
Examination of the MOA reveals that the
submission of reports merely served to trigger
the phased releases of funds. There being no
explicit agreement between PSU and the DENR to
extend the duration of the evaluation project, the
MOA's "Budget Estimate" which, among others,
provides in detail the duration of service for each
member of the evaluation project as amended by
the rates provided by NCC No. 53 must be the
basis of the honoraria due to the evaluation
team.
The other arguments of respondent COA appear
to us to be insubstantial and as, essentially,
afterthoughts. The COA apparently does not
agree with the policy basis of NCC No. 53 in
relation to CPG No. 80-4 since COA argues that
loan proceeds regardless of source eventually
become public funds for which the government is
accountable. The result would be that any
provisions under any [foreign] loan agreement
should be considered locally-funded. We do not
consider that the COA is, under its constitutional
mandate, authorized to substitute its own
judgment for any applicable law or administrative
regulation with the wisdom or propriety of which,
however, it does not agree, at least not before
such law or regulation is set aside by the

authorized agency of government i.e., the


courts as unconstitutional or illegal and void.
The COA, like all other government agencies,
must respect the presumption of legality and
constitutionality
to
which
statutes
and
administrative regulations are entitled 26 until
such statute or regulation is repealed or
amended, or until set aside in an appropriate
case by a competent court (and ultimately this
Court).