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G.R. No.

L-16704 requested NFA to increase the of the monthly


VICTORIAS MILLING COMPANY, INC vs. contractrate
SOCIAL SECURITY COMMISSION
1. NFA only granted the request only with respect to
Facts: On October 15,1958, the Social Security theincrease in daily wageRespondent filed a case for
Commission issued Circular No. 22 requiring all recovery of sum of money against NFAwith the RTC.
Employers in computing premiums to include in the
Employee's remuneration all bonuses and overtime NFA CONTENTION: Respondent cannot demand an
pay, as well as the cash value of other media of
adjustment onthe said salary benefits because it is
remuneration. Upon receipt of a copy thereof,
bound by their contractexpressly limiting NFAs
petitioner Victorias Milling Company, Inc., through
counsel, wrote the Social Security Commission in effect obligation to pay only the increment inthe daily wage.
protesting against the circular as contradictory to a
previous Circular No. 7 dated October 7, 1957 Pre-trial Issue: WON respondent is entitled to
expressly excluding overtime pay and bonus in the recover from NFAwage related benefits of the security
computation of the employers' and employees' guards.
respective monthly premium contributions. Counsel
further questioned the validity of the circular for lack of RTC Ruling: NFA is liable to pay the security guards
authority on the part of the Social Security Commission wage relatedbenefits pursuant to RA 6727, because
to promulgate it without the approval of the President
the basis of thecomputation of said benefits, like
and for lack of publication in the Official Gazette.
overtime pay, holiday pay, SSSand Pag-ibig premium,
Overruling the objections, the Social Security
Commission ruled that Circular No. 22 is not a rule or is the increased minimum wage. It alsofound NFA liable
regulation that needed the approval of the President for the consequential adjustments inadministrative
and publication in the Official Gazette to be effective, costs and margin.NFA appealed to the Court of Appeals
but a mere administrative interpretation of the statute, but was dismissed
a mere statement of general policy or opinion as to
how the law should be construed. Petitioner comes to ISSUE: WON the liability of principals in
Court on appeal. servicecontracts under Section 6 of RA 6727 and the
wage orders issuedby the RTWPB is limited only to the
Issue: Whether or not Circular No. 22 is a rule or increment in the minimumwage.
regulation as contemplated in Section 4(a) of Republic
Act 1161 empowering the Social Security Commission.
HELD: Payment of the increases in the wage rate of
workers is ordinarilyshouldered by the employer.
Held:
Section 6 of RA 6727, however,expressly lodged said
There can be no doubt that there is a distinction
obligation to the principals or indirectemployers in
between an administrative rule or regulation and an
administrative interpretation of a law whose construction projects and establishments
enforcement is entrusted to an administrative body. providingsecurity, janitorial and similar services.The
When an administrative agency promulgates rules and court found merit in NFAs contention that its
regulations, it "makes" a new law with the force and additional liability under the aforcited provision is only
effect of a valid law, while when it renders an opinion limited to the payment of the increment in the
or gives a statement of policy, it merely interprets a
statutory minimum wage rate i.e. the rate for a regular
pre-existing law. Rules and regulations when
promulgated in pursuance of the procedure or eight (8) hour work day.
authority conferred upon the administrative agency by
law, partake of the nature of a statute, and compliance Expresio unius est exclusio alterius. Where a statute,
therewith may be enforced by a penal sanction by its terms,is expressly limited to certain matters, it
provided therein. The details and the manner of may not, byinterpretation or construction, be extended
carrying out the law are often times left to the to others. Since theincrease in wage referred to in
administrative agency entrusted with its enforcement. Section 6 pertains to the statutory
In this sense, it has been said that rules and
regulations are the product of a delegated power to 1 Consisting of: (1)daily minimum wage of the security
create new or additional legal provisions that have the
guards; (2) overtime pay; (3) holiday pay(4)13th
effect of law. Therefore, Circular No. 22 purports
merely to advise employers-members of the System of month pay; (5) holiday and rest day pay; (6)Social
what, in the light of the amendment of the law, they Security System [SSS]; (7) Pag-ibig premiums as well
should include in determining the monthly as administrative costs and margin. Minimum wage
compensation of their employees upon which the social as defined herein, principals in service contracts cannot
security contributions should be based, and that such be made to pay the corresponding wage increase in
circular did not require presidential approval and the overtime pay, night shift differential, holiday and
publication in the Official Gazette for its effectivity. The
rest day pay, premium pay and other benefits granted
Resolution appealed from is hereby affirmed, with
costs against appellant. So ordered. to workers. While basis of said remuneration and
benefits is the statutory minimum wage, the law
National Food Authority (NFA) v. MasadaSecurity cannot be unduly expanded as to include those not
Agency, Inc.453 SCRA 70 (March 8, 2005) stated in the subject provision. Moreover, the law
secures the welfare of the workers by imposing a
Facts: Masada entered into a 1 year contract to solidary liability on principals and the service
provide security services to NFA-REGION 1. Upon the contractors. Under the second sentence of Section 6 of
expiration of the said contract, the parties extended RA 6727, in the event that the principal or client fails
the effectivity thereof on a monthly basis under same to pay the prescribed wage rates, the service
terms and condition. The Regional Tripartite Wages and contractor shall be held solidarily liable with the
Productivity Board (RTWPB)issued wage orders former. The parties therefore acknowledged the
mandating increases in the daily wage rate. Masada application to their contract of the wage orders issued
by the RTWPB pursuant to RA6727. There being no HELD: Petitioners contention is bereft of merit,
assumption by NFA of a greater liability than that because of its reliance on a literal reading of cited rules
mandated by Section 6 of the Act, its obligation is without correlating them to current laws as well as
presidential decrees on the matter.
limited to the payment of the increased statutory
Administrative Order No. 18, series of 1987, issued by
minimum wage rates which, as admitted by public respondent reads: Section 1. Unless otherwise
respondent, had already been satisfied by NFA. governed by special laws, an appeal to the Office of
the President shall be taken within thirty (30) days
Under Article 1231 of the Civil Code, one of the modes from receipt by the aggrieved party of the
of extinguishing an obligation is by payment. Having decision/resolution/order complained of or appealed
discharged its obligation to respondent, NFA no longer from.
have a duty that will give rise to a correlative legal
right of respondent. The latters complaint for ADMINISTRATIVE LAW; OFFICE OF THE PRESIDENT;
HOUSING AND LAND USE REGULATORY BOARD
collection of remuneration and benefits other than the
(HLURB); 30-DAY PERIOD OF APPEAL UNDER HLURB
increased minimum wage rate, should therefore be RULES OF PROCEDURE SHORTENED TO 15 DAYS BY
dismissed for lack of cause of action. ADMINISTRATIVE ORDER NO. 18. As pointed out by
public respondent, the aforecited administrative order
WHEREFORE, the petition is GRANTED. The February allows aggrieved party to file its appeal with the Office
12, 2004decision and the April 30, 2004 resolution of of the President within thirty (30) days from receipt of
the Court of Appealswhich dismissed petitioner the decision complained of. Nonetheless, such thirty-
National Food Authoritys appeal andmotion for day period is subject to the qualification that there are
no other statutory periods of appeal applicable. If
reconsideration, respectively, in CA-G.R. CV No.
there are special laws governing particular cases which
76677,are REVERSED and SET ASIDE. The complaint provide for a shorter or longer reglementary period,
filed by respondentMASADA Security Agency, Inc., the same shall prevail over the thirty-day period
docketed as Civil Case No. Q-01-43988, before the provided for in the administrative order. This is in line
Regional Trial Court of Quezon, City, Branch 83,is with the rule in statutory construction that an
ordered DISMISSED. administrative rule or regulation, in order to be valid,
must not contradict but conform to the provisions of
Art.1231. Obligations are extinguished: the enabling law. We note that indeed there are special
laws that mandate a shorter period of fifteen (15) days
1. By payment or performance; within which to appeal a case to public respondent.
2. By loss of the thing due;
3. By the condonation or remission of the debt; We note that indeed there are special laws that
4. By confusion or merger of the rights of the creditor mandate a shorter period of fifteen (15) days within
and debtor; which to appeal a case to public respondent. First,
5. By compensation Section 15 of Presidential Decree No. 957 provides that
6. By novation Other causes of extinguishment of the decisions of the National Housing Authority (NHA)
obligations, such as annulment, rescission, fulfillment shall become final and executory after the lapse of
of a resolutory condition, and prescription, are fifteen (15) days from the date of receipt of the
governed elsewhere in this Code. decision. Second, Section 2 of Presidential Decree No.
1344 states that decisions of the National Housing
SGMC REALTY CORPORATION vs. OFFICE OF THE Authority shall become final and executory after the
PRESIDENT lapse of fifteen (15) days from the date of its receipt.
The latter decree provides that the decisions of NHA
FACTS: Petitioner appealed from a decision of the are appealable only to the Office of the President.
Housing and Land Use Regulatory Board (HLURB) Further, we note that the regulatory functions of NHA
dismissing its action against private respondents for relating to housing and land development has been
breach of contract, violation of property rights and transferred to Human Settlements Regulatory
damages. It received a copy of the decision on October Commission, now known as HLURB. Thus, said
23, 1995 and appealed on November 20, 1995 or 28 presidential issuances providing for a reglementary
days from receipt of the appealed decision to the Office period of appeal of fifteen days apply in this case.
of the President. The same was dismissed for having Accordingly, the period of appeal of thirty (30) days set
been filed out of time. Its motion for reconsideration forth in Section 27 of HLURB 1994 Rules of Procedure
having been denied, hence, this petition claiming that no longer holds true for being in conflict with the
the Office of the President committed grave abuse of provisions of aforesaid presidential decrees. For it is
discretion in dismissing its appeal. Petitioner alleged axiomatic that administrative rules derive their validity
that its appeal was filed within the 30-day period from the statute that they are intended to implement.
provided for by Section 27 of the 1994 Rules of Any rule which is not consistent with statute itself is
Procedure of HLURB. null and void.
Section 27 of the 1994 HLURB Rules of Procedure
provides as follows: Section 27.Appeal to the Office of Commissioner of Internal Revenue vs Azucena
the President. Any party may, upon notice to the Reyes
Board and the other party, appeal the decision of the
Board of Commissioners or its division to the Office of In 1993, Maria Tancino died leaving behind an estate
the President within thirty (30) days from receipt worth P32 million. In 1997, a tax audit was conducted
thereof pursuant to and in accordance with on the estate. Meanwhile, the National Internal
Administrative Order No. 18, of the Office of the Revenue Code (NIRC) of 1997 was passed. Eventually
President dated February 12, 1987. Decision of the in 1998, the estate was issued a final assessment
President shall be final subject only to review by the notice (FAN) demanding the estate to pay P14.9
Supreme Court on certiorari or on questions of law. million in taxes inclusive of surcharge and interest; the
estates liability was based on Section 229 of the [old]
ISSUE: WON the reglementary period within which to Tax Code. Azucena Reyes, one of the heirs, protested
appeal the decision of HLURB to public respondent the FAN. The Commissioner of Internal Revenue (CIR)
(OP) is fifteen days. nevertheless issued a warrant of distraint and/or levy.
Reyes again protested the warrant but in March 1999,
she offered a compromise and was willing to pay P1
million in taxes. Her offer was denied. She continued to According to PR, she saw the accused stealing
work on another compromise but was eventually galvanized iron sheets, lumber, and rolled plain iron
denied. The case reached the Court of Tax Appeals sheets from her backyard. The incident was
where Reyes was also denied. In the Court of Appeals, purportedly witnessed by Patanguis two daughters
Reyes received a favorable judgment. who saw two men cart away the items upon the orders
of a woman who was standing nearby. A BSDO on duty
ISSUE: Whether or not the formal assessment notice told Patangui that it was Dadalo who ordered the
is valid. seizure of the subject construction materials. The same
information was relayed to her by a certain Elsie
HELD: No. The NIRC of 1997 was already in effect Castillejos. The following day, Patangui found out that
when the FAN was issued. Under Section 228 of the some of the galvanized iron sheets taken from her
NIRC, taxpayers shall be informed in writing of the law backyard were utilized in building the new barangay
and the facts on which the assessment is made: outpost. She recognized said items because she is
otherwise, the assessment shall be void. In the case at familiar with the campaign stickers still posted on the
bar, the FAN merely stated the amount of liability to be galvanized iron sheets.
shouldered by the estate and the law upon which such
liability is based. However, the estate was not informed Jessica, 9 year old daughter of Patangui, stated that
in writing of the facts on which the assessment of while she was playing in their yard, two men seized
estate taxes had been made. The estate was merely their construction materials upon the orders of a
informed of the findings of the CIR. Section 228 of the woman. The following day, she pointed to a BSDO
NIRC being remedial in nature can be applied wearing a black jacket as one of those who took the
retroactively even though the tax investigation was construction materials. Upon inquiry, said man was
conducted prior to the laws passage. Consequently, identified as Edgar Saraga. Jessica later learned from
the invalid FAN cannot be a basis of a compromise, any their neighbors and from her mother that the woman
proceeding emanating from the invalid FAN is void who was standing near their house and giving orders
including the issuance of the warrant of distraint to the BSDOs, was petitioner Rosario Dadulo.
and/or levy.
Petitioner denied the charge against her and declared
The appellate court held that while administrative that on day of incident, a certain Elsie Castillejos
agencies, like the BIR, were not bound by procedural applied for a permit to construct a house extension but
requirements, they were still required by law and was denied because the structure was intended to be
equity to observe substantive due process. The reason built on the land owned by the National Waterworks
behind this requirement, said the CA, was to ensure and Sewerage Authority (NAWASA). Nevertheless, the
that taxpayers would be duly apprised of -- and could construction proceeded. Petitioner inspected the site
effectively protest -- the basis of tax assessments and found out that the structure is owned by Patangui
against them.[7] Since the assessment and the and not by Elsie Castillejos.
demand were void, the proceedings emanating from
them were likewise void, and any order emanating OMBUDSMAN: Guilty of Conduct Prejudicial to the Best
from them could never attain finality. Interest of the Service, for which the penalty of
Suspension for Six (6) Months Without Pay. CA
A tax regulation is promulgated by the finance affirmed. HtP.
secretary to implement the provisions of the Tax Code.
[15] While it is desirable for the government authority ISSUE: W/N there is substantial evidence to show that
or administrative agency to have one immediately petitioner ordered the seizure of Patanguis
issued after a law is passed, the absence of the construction materials.
regulation does not automatically mean that the law
itself would become inoperative. HELD: Yes. Petition denied. CA affirmed.

Petitioner violated the cardinal rule in administrative Substantial evidence rule


law that the taxpayer be accorded due process. Not Administrative proceedings are governed by the
only was the law here disregarded, but no valid notice "substantial evidence rule." Otherwise stated, a finding
was sent, either. A void assessment bears no valid of guilt in an administrative case would have to be
fruit. sustained for as long as it is supported by substantial
evidence that the respondent has committed acts
The law imposes a substantive, not merely a formal, stated in the complaint. Substantial evidence is more
requirement. To proceed heedlessly with tax collection than a mere scintilla of evidence. It means such
without first establishing a valid assessment is relevant evidence as a reasonable mind might accept
evidently violative of the cardinal principle in as adequate to support a conclusion, even if other
administrative investigations: that taxpayers should be minds equally reasonable might conceivably opine
able to present their case and adduce supporting otherwise.
evidence.[19] In the instant case, respondent has not
been informed of the basis of the estate tax liability. As applied
Without complying with the unequivocal mandate of A review of the records of the case shows that the
first informing the taxpayer of the governments claim, factual findings of the Ombudsman upon which its
there can be no deprivation of property, because no decision on petitioners administrative liability was
effective protest can be made.[20] The haphazard shot based are supported by the evidence on record.
at slapping an assessment, supposedly based on Petitioner and BSDO Edgar Saraga were identified as
estate taxations general provisions that are expected the persons who took the construction materials.
to be known by the taxpayer, is utter chicanery. Respondents claim was corroborated by the testimony
of her daughter who saw the actual taking of the
Dadulo v. CA construction materials. Moreover, respondent testified
that the materials taken from her premises were used
Petitioner Rosario Dadulo, Brgy. Chairman of Payatas in the construction of the new barangay outpost.
QC and Barangay Security Dev Officers Edgar Saraga,
Rogelio Dumadigo and Efren Pagabao were On the other hand, the defense proffered by petitioner
administratively charged by private respondent Gloria failed to rebut the charges against her. She cannot rely
Patangui before the Ombudsman. on the sweeping general denial of the charges in the
face of a positive and categorical assertion made by
respondent and her witness. Petitioner was afforded Excepting constitutional offices which provide for
the opportunity to disprove the charges against her but special immunity as regards salary and tenure, no one
still failed to offer any plausible explanation as to why can be said to have any vested right in an office.
the construction materials were in their possession,
some of which were even used in the barangay Well-settled is the rule that procedural laws are
outpost. Instead, she accused private respondent of construed to be applicable to actions pending and
illegally constructing a structure. However, even if the undetermined at the time of their passage, and are
construction materials were to be used in constructing deemed retroactive in that sense and to that extent.
an illegal structure, their summary seizure would still As a general rule, the retroactive application of
make the public officers ordering or affecting the procedural laws cannot be considered violative of any
seizure administratively liable. personal rights because no vested right may attach to
MR (Sept 2007 Reso; READ THIS BECAUSE THIS IS nor arise therefrom.
WHAT IS RELEVANT IN CLASS)
Finally, the appeal of the decision of the Ombudsman
ISSUE W/N there was a premature application of her to the Court of Appeals is through a Petition for Review
suspension order (when her Court pets. were still under Rule 43 of the Rules of Court, Section 12 of
pending) which categorically provides that the appeal shall not
stay the award, judgment, final order or resolution
HELD No. Petition denied with finality sought to be reviewed unless the Court of Appeals
shall direct otherwise upon such terms as it may deem
Petitioner argues that her appeal has the effect of just.
staying the execution of the decision of the
Ombudsman hence, the immediate implementation of Republic vs Express Telco
the suspension order before it has become final and
executory, was premature. She cited the cases of Lapid FACTS: On December 29, 1992, the International
v. Court of Appeals and Laxina v. Court of Appeals Communications Corporation (now Bayantel) filed an
where this Court ruled against the immediate application with the NTC for a CPCN to install, operate
implementation of the Ombudsmans dismissal orders and maintain a digital Cellular MobileTelephone
in view of Section 27 of Republic Act No. 6770. System/Service (CMTS) with prayer for a Provisional
Authority (PA). However, ExpressTelecommunication
As correctly observed by the Solicitor General, at the Co., Inc. (Extelcom) filed in NTC an Opposition praying
time the Lapid and Laxina cases were decided, Section for the dismissal of Bayantels application. On May 3,
7, Rule III of the Rules of Procedure of the Office of the 2000, the NTC issued an Order granting in favor of
Ombudsman was silent as to the execution of its Bayantel, applying Rule 15, Section 3 of its 1978 Rules
decisions pending appeal. This was later amended by of Practice and Procedure. Extelcom filed with the CA a
Administrative Order No. 17 and Administrative Order petition seeking the annulment of the Order of the
No. 14-A as implemented by Memorandum Circular No. RTC, which was eventually granted by the CA.
1 s. 2006. Hence, as amended, Section 7 of Rule III Aggrieved, Bayantel brought the case to the SC.
now reads:
Section 7. Finality and execution of decision. Where Extelcom contends that the NTC should have applied
the respondent is absolved of the charge, and in case the Revised Rules which were filed with the Office of
of conviction where the penalty imposed is public the NAR on February 3, 1993.. The NTC, on the other
censure or reprimand, suspension of not more than hand, issued a certification to the effect that inasmuch
one month, or a fine equivalent to one month salary, as the 1993 Revised Rules have not been published in
the decision shall be final, executory and unappealable. a newspaper of general circulation, the NTC has been
In all other cases, the decision may be appealed to the applying the 1978 Rules. Thus, the present petition.
Court of Appeals on a verified petition for review under
the requirements and conditions set forth in Rule 43 of ISSUE: Which among the NTC Rules of Practice and
the Rules of Court, within fifteen (15) days from Procedure should govern in the approval of Bayantels
receipt of the written Notice of the Decision or Order application?
denying the Motion for Reconsideration.1wphi1
An appeal shall not stop the decision from being HELD: The 1978 NTC Rules. The absence of
executory. In case the penalty is suspension or publication, coupled with the certification by the
removal and the respondent wins such appeal, he shall Commissioner of the NTC stating that the NTC was still
be considered as having been under preventive governed by the 1978 Rules, clearly indicate that the
suspension and shall be paid the salary and such other 1993 Revised Rules have not taken effect at the time
emoluments that he did not receive by reason of the of the grant of the provisional authority to Bayantel.
suspension or removal.
There is nothing in the Administrative Code of 1987
A decision of the Office of the Ombudsman in which implies that the filing of the rules with the UP
administrative cases shall be executed as a matter of Law Center is the operative act that gives the rules
course. The Office of the Ombudsman shall ensure that force and effect. Still, publication in the Official
the decision shall be strictly enforced and properly Gazette or a newspaper of general circulation is a
implemented. The refusal or failure by any officer condition sine qua non before statutes, rules or
without just cause to comply with an order of the regulations can take effect. The Rules of Practice and
Office of the Ombudsman to remove, suspend, Procedure of the NTC, which implements Section 29 of
demote, fine, or censure shall be a ground for the Public Service Act (Commonwealth Act 146, as
disciplinary action against said officer. amended), fall squarely within the scope of these laws.
Administrative rules and regulations must be published
The Rules of Procedure of the Office of the if their purpose is to enforce or implement existing law
Ombudsman are clearly procedural and no vested right pursuant to a valid delegation.
of the petitioner is violated as he is considered
preventively suspended while his case is on appeal. The only exceptions are interpretative regulations,
Moreover, in the event he wins on appeal, he shall be those merely internal in nature, or those so-called
paid the salary and such other emoluments that he did letters of instructions issued by administrative
not receive by reason of the suspension or removal. superiors concerning the rules and guidelines to be
Besides, there is no such thing as a vested interest in followed by their subordinates in the performance of
an office, or even an absolute right to hold office. their duties.
contends that Presidential Decree 851 speaks only of
SAN MIGUEL CORPORATION (CAGAYAN COCA- basic salary as basis for the determination of the 13th-
COLA PLANT), petitioner, month pay; submits that payments for sick, vacation,
vs. or maternity leaves, night differential pay, as well as
Hon. AMADO G. INCIONG, Deputy Minister of premium paid for work performed on rest days, special
Labor and CAGAYAN COCA-COLA FREE WORKERS and regular holidays do not form part of the basic
UNION, respondents. salary; and concludes that the inclusion of those
payments in the computation of the 13th-month pay is
clearly not sanctioned by Presidential Decree 851.
DE CASTRO, J.:
The Court finds petitioner's contention meritorious.
Petition for certiorari and prohibition, with preliminary
injunction to review the Order 1 dated December 19, The provision in dispute is Section 1 of Presidential
1978 rendered by the Deputy Minister of Labor in STF Decree 851 and provides:
ROX Case No. 009-77 docketed as "Cagayan Coca-Cola
Free Workers Union vs. Cagayan Coca-Cola Plant, San All employers are hereby required to pay all their
Miguel Corporation, " which denied herein petitioner's employees receiving a basic salary of not more than
motion for reconsideration and ordered the immediate Pl,000 a month, regardless of the nature of the
execution of a prior Order 2 dated June 7, 1978. employment, a 13th-month pay not later than
December 24 of every year.
On January 3, 1977, Cagayan Coca-Cola Free Workers
Union, private respondent herein, filed a complaint Section 2 of the Rules and Regulations for the
against San Miguel Corporation (Cagayan Coca-Cola implementation of Presidential Decree 851 provides:
Plant), petitioner herein, alleging failure or refusal of
the latter to include in the computation of 13th- month a) Thirteenth-month pay shall mean one twelfth
pay such items as sick, vacation or maternity leaves, (1/12) of the basic salary of an employee within a
premium for work done on rest days and special calendar year
holidays, including pay for regular holidays and night
differentials. b) Basic salary shall include all remunerations on
earnings paid by an employer to an employee for
An Order 3 dated February 15, 1977 was issued by services rendered but may not include cost-of-living
Regional Office No. X where the complaint was filed allowances granted pursuant to Presidential Decree No.
requiring herein petitioner San Miguel Corporation 525 or Letter of Instructions No. 174, profit sharing
(Cagayan Coca-Cola Plant) "to pay the difference of payments and all allowances and monetary benefits
whatever earnings and the amount actually received as which are not considered or integrated as part of the
13th month pay excluding overtime premium and regular or basic salary of the employee at the time of
emergency cost of living allowance. " the promulgation of the Decree on December 16,
1975.
Herein petitioner appealed from that Order to the
Minister of Labor in whose behalf the Deputy Minister Under Presidential Decree 851 and its implementing
of Labor Amado G. Inciong issued an Order 4 dated rules, the basic salary of an employee is used as the
June 7, 1978 affirming the Order of Regional Office No. basis in the determination of his 13th-month pay. Any
X and dismissing the appeal for lack of merit. compensations or remunerations which are deemed
Petitioner's motion for reconsideration having been not part of the basic pay is excluded as basis in the
denied, it filed the instant petition. computation of the mandatory bonus.

On February 14, 1979, this Court issued a Temporary Under the Rules and Regulations Implementing
Restraining Order 5 enjoining respondents from Presidential Decree 851, the following compensations
enforcing the Order dated December 19, 1978. are deemed not part of the basic salary:

The crux of the present controversy is whether or not a) Cost-of-living allowances granted pursuant to
in the computation of the 13th-month pay under Presidential Decree 525 and Letter of Instructions No.
Presidential Decree 851, payments for sick, vacation or 174;
maternity leaves, premium for work done on rest days
and special holidays, including pay for regular holidays b) Profit sharing payments;
and night differentials should be considered.
c) All allowances and monetary benefits which are
Public respondent's consistent stand on the matter not considered or integrated as part of the regular
since the effectivity of Presidential Decree 851 is that basic salary of tile employee at the time of the
"payments for sick leave, vacation leave, and promulgation of the Decree on December 16, 1975.
maternity benefits, as well as salaries paid to
employees for work performed on rest days, special Under a later set of Supplementary Rules and
and regular holidays are included in the computation of Regulations Implementing Presidential Decree 851
the 13th-month pay. 6 On its part, private respondent issued by the then Labor Secretary Blas Ople, overtime
cited innumerable past rulings, opinions and decisions pay, earnings and other remunerations are excluded as
rendered by then Acting Labor Secretary Amado G. part of the basic salary and in the computation of the
Inciong to the effect that, "in computing the 13th-month pay.
mandatory bonus, the basis is the total gross basic
salary paid by the employer during the calendar year. The exclusion of cost-of-living allowances under
Such gross basic salary includes: (1) regular salary or Presidential Decree 525 and Letter of Instructions No.
wage; (2) payments for sick, vacation and maternity 174, and profit sharing payments indicate the intention
leaves; (3) premium for work performed on rest days to strip basic salary of other payments which are
or holidays: (4) holiday pay for worked or unworked properly considered as "fringe" benefits. Likewise, the
regular holiday; and (5) emergency allowance if given catch-all exclusionary phrase "all allowances and
in the form of a wage adjustment." 7 monetary benefits which are not considered or
integrated as part of the basic salary" shows also the
Petitioner, on the other hand, assails as erroneous the intention to strip basic salary of any and all additions
aforesaid order, ruling and opinions, vigorously
which may be in the form of allowances or "fringe" ASTURIAS SUGAR CENTRAL, INC.
benefits. vs.
COMMISSIONER OF CUSTOMS and COURT OF TAX
Moreover, the Supplementary Rules and Regulations APPEALS (1969) penned by CASTRO
Implementing Presidential Decree 851 is even more
emphatic in declaring that earnings and other The petitioner Asturias Sugar Central, Inc. is engaged
remunerations which are not part of the basic salary in the production and milling of centrifugal sugar for
shall not be included in the computation of the 13th- exert, the sugar so produced being placed in
month pay. containers known as jute bags. In 1957 it made two
importations of jute bags. In the first shipment, the
While doubt may have been created by the prior Rules petitioner filed Re-exportation and Special Import Tax
and Regulations Implementing Presidential Decree 851 Bond no. 1 in the amounts of P25,088 and P2,464.50
which defines basic salary to include all remunerations and in the second shipment, the petitioner filed Re-
or earnings paid by an employer to an employee, this exportation and Special Import Tax Bond no. 6 in the
cloud is dissipated in the later and more controlling amounts of P42,112 and P7,984.44, On February 6,
Supplementary Rules and Regulations which 1958 the petitioner, thru its agent Theo. H. Davies &
categorically, exclude from the definition of basic Co., Far East, Ltd., requested the Commissioner of
salary earnings and other remunerations paid by Customs for a week's extension of Re-exportation and
employer to an employee. A cursory perusal of the two Special Import Tax Bond no. 6 which was to expire the
sets of Rules indicates that what has hitherto been the following day, this request was denied by the
subject of a broad inclusion is now a subject of broad Commissioner. Due to the petitioner's failure to show
exclusion. The Supplementary rules and Regulations proof of the exportation of the balance of 86,353 jute
cure the seeming tendency of the former rules to bags within one year from their importation, the
include all remunerations and earnings within the Collector of Customs of Iloilo, on March 17, 1958,
definition of basic salary. required it to pay the amount of P28,629.42
representing the customs duties and special import tax
The all-embracing phrase "earnings and other due thereon, which amount the petitioner paid under
renumeration" which are deemed not part of the basic protest. The petitioner demanded the refund of the
salary includes within its meaning payments for sick, amount it had paid, on the ground that its request for
vacation, or maternity leaves. Maternity premium for extension of the period of one year was filed on time,
works performed on rest days and special holidays and that its failure to export the jute bags within the
pays for regular holidays and night differentials. As required one-year period was due to delay in the
such they are deemed not part of the basic salary and arrival of the vessel on which they were to be loaded
shall not be considered in the computation of the 13th- and to the picketing of the Central railroad line.
month they, were not so excluded, it is hard to find Alternatively, the petitioner asked for refund of the
any "earnings and other remunerations" expressly same amount in the form of a drawback under section
excluded in the computation of the 13th-month pay. 106(b) in relation to section 105(x) of the Tariff and
Then the exclusionary provision would prove to be Idle Customs Code. The Collector of Customs denied the
and with no purpose. claim for refund. Court of Tax Appeals affirmed the
decision. The petitioner argues that not having availed
This conclusion finds strong support under the Labor itself of the full exemption granted by sec. 105(x) of
Code of the Philippines. To cite a few provisions: the Tariff and Customs Code due to its failure to export
the jute bags within one year, by authority of section
Art. 87. overtime work. Work may be performed 106 (b) of the Tariff and Customs Code, it is entitled to
beyond eight hours a day provided what the employee a 99% drawback of the duties it had paid, averring
is paid for the overtime work, additional compensation further that sec. 106(b) does not presuppose
equivalent to his regular wage plus at least twenty-five immediate payment of duties and taxes at the time of
(25%) percent thereof. importation.

It is clear that overtime pay is an additional WON petitioner is entitled to a drawback of the duties
compensation other than and added to the regular it had paid, by virtue of sections 106 (b) of the Tariff
wage or basic salary, for reason of which such is and Customs Code and sec. 105(x) of the Tariff and
categorically excluded from the definition of basic Customs Code.
salary under the Supplementary Rules and Regulations
Implementing Presidential Decree 851.
No. The provisions invoked by the petitioner (to sustain
In Article 93 of the same Code, paragraph his claim for refund) offer two options to an importer.
The first, under sec. 105 (x), gives him the privilege of
c) work performed on any special holiday shall be importing, free from import duties, the containers
paid an additional compensation of at least thirty mentioned therein as long as he exports them within
percent (30%) of the regular wage of the employee. one year from the date of acceptance of the import
entry, which period as shown above, is not extendible.
It is likewise clear that prernium for special holiday The second, presented by sec. 106 (b), contemplates a
which is at least 30% of the regular wage is an case where import duties are first paid, subject to
additional compensation other than and added to the refund to the extent of 99% of the amount paid,
regular wage or basic salary. For similar reason it shall provided the articles mentioned therein are exported
not be considered in the computation of the 13th- within three years from importation. The basic purpose
month pay. of the two provisions is the same, which is, to enable a
local manufacturer to compete in foreign markets, by
WHEREFORE, the Orders of the Deputy Labor Minister relieving him of the disadvantages resulting from
dated June 7, 1978 and December 19, 1978 are having to pay duties on imported merchandise,
hereby set aside and a new one entered as above thereby building up export trade and encouraging
indicated. The Temporary Restraining Order issued by manufacture in the country. But there is a difference,
this Court on February 14, 1979 is hereby made and it is this: under section 105(x) full exemption is
permanent. No pronouncement as to costs. granted to an importer who justifies the grant of
exemption by exporting within one-year. The petitioner,
SO ORDERED. having opted to take advantage of the provisions of
section 105(x), may not, after having failed to comply
with the conditions imposed thereby, avoid the YES. Petition was granted. The CIAC is ordered to
consequences of such failure by being allowed a proceed with the execution of its Decision.
drawback under section 106(b) of the same Act
without having complied with the conditions of the RATIO:
latter section. For it is not to be supposed that the
legislature had intended to defeat compliance with the Rule 1, Section 6 of the Rules of Court provides that
terms of section 105(x) thru a refuge under the the Rules shall be liberally construed in order to
provisions of section 106(b). A construction should be promote their objective of securing a just, speedy and
avoided which affords an opportunity to defeat inexpensive disposition of every action and proceeding.
compliance with the terms of a statute. We have at times relaxed procedural rules in the
interest of substantial justice.
Rather courts should proceed on the theory that parts
of a statute may be harmonized and reconciled with But from the outset, it bears stressing that the subject
each other. A construction of a statute which creates of petitioner and respondents petitions is the
an inconsistency should be avoided when a reasonable execution of a final judgment was affirmed by no less
interpretation can be adopted which will not do than this Court. This being so, the appellate court
violence to the plain words of the act and will carry out should have been doubly careful about entertaining an
the intention of Congress. obviously dilatory petition intended merely to delay the
satisfaction of the judgment. Any lower court or
Cario vs CHR tribunal that trifles with the execution of a final and
executory judgment of the Supreme Court flirts with
On September 17, 1990, some 800 public school insulting the highest court of the land. While we do not
teachers in Manila did not attend work and decided to diminish the availability of judicial remedies to the
stage rallies in order to air grievances. As a result execution of final judgments of this Court, as may be
thereof, eight teachers were suspended from work for sanctioned under the Rules of Court, such actions
90 days. The issue was then investigated, and on could only prosper if they have basis in fact and in law.
December 17, 1990, DECS Secretary Isidro Cario Any court or tribunal that entertains such baseless
ordered the dismissal from the service of one teacher actions designed to thwart the execution of final
and the suspension of three others. The case was judgments acts with grave abuse of discretion
appealed to the Commission on Human Rights. In the tantamount to lack of jurisdiction. It is the positive
meantime, the Solicitor General filed an action for duty of every court of the land to give full recognition
certiorari regarding the case and prohibiting the CHR and effect to final and executory decisions, much less
from continuing the case. Nevertheless, CHR continued those rendered by the Supreme Court.
trial and issued a subpoena to Secretary Cario.
The abuse of discretion amounting to lack or excess of
ISSUE: Whether or not CHR has the power to try and jurisdiction in this case was made manifest by the fact
decide and determine certain specific cases such as the that the appellate court not only took cognizance of
alleged human rights violation involving civil and the case and issued the assailed restraining order. It
political rights. eventually decided the case in petitioners (respondent
herein) favor as well notwithstanding the dearth of any
HELD: No. The CHR is not competent to try such case. basis for doing so.
It has no judicial power. It can only investigate all
forms of human rights violation involving civil and NATIONAL POWER CORPORATION, PETITIONER
political rights but it cannot and should not try and V. HON. ROSE MARIE ALONZO-LEGASTO AS
decide on the merits and matters involved therein. The PRESIDING JUDGE, RTC QC BR 99 ET AL
CHR is hence then barred from proceeding with the GR no.148318 November 22, 2004
trial.
SV: NPC and FUCC Entered into a project for
Megaworld vs DSM excavation. FUCC needed to do blasting works to
continue with the project. NPC agreed that it will issue
FACTS: [P]etitioner and respondent entered into an extra work order for the blasting works and
agreements for the construction of a condominium subsequently pay FUCC but this did not happen. The
project owned by respondent called The Salcedo two entered into a compromise agreement and agreed
Park, with petitioner as contractor. In the course of that NPC will pay the undisputed unpaid claims and
the projects construction, differences with respect to that they will submit the agreement to an arbitration
billings arose between the parties. Petitioner thus filed board to settle the amount to be paid. After the
a complaint for compulsory arbitration before the CIAC arbitration issued its ruling, NPC questioned the award
claiming payment for approximately P97 Million as the which included the blasting works (no extra work order
outstanding balance due from respondent pursuant to issued for it) allegedly due to promissory estoppel.
the agreements. The CIAC rendered a decision partially SC: no basis for applying promissory estoppel. The
granting both petitioners and respondents claims in payment was conditional on the issuance of the extra
favor of petitioner. This award was affirmed by the work order. The acts of the officials of NPC exceeded
Court of Appeals. Thereafter, the Supreme Court their authority and should not bind NPC unless the
promulgated its Decision affirming the judgment of the latter ratifies these acts. Unfortunately, NPC did when
Court of Appeals and lifting the TRO that was then still it signed the compromise agreement. Hence, FUCC
in effect.It became final and executory. Petitioner was entitled for payment for the blasting works.
centers on attempts, regrettably entertained by 1. NPC and First United Constructors Corporation
respondent Court of Appeals, to thwart the execution (FUCC) entered into a construction of power facilities,
of a final and executory decision of the Supreme Court. one in Cawayan area and the other in Bacon,
Sorsogon. The price for grading excavation was P76.00
ISSUE: per cubic meter.
2. After commencement of the excavation, FUCC
Whether or not the Court of Appeals gravely abused its requested that it be allowed to blast to the design
discretion when it issued a Resolution enjoining the grade of 495 meters above sea level as its dozers and
enforcement of Alias Writ of Execution. rippers could no longer excavate. It also requested
that it be paid P1346 per cubic meter
HELD:
3. NPC, after creating a task force to review the of the project and, therefore, shall be within the
blasting works, offered to pay P458.07 per cubic general scope of the contract as bid[ded] and awarded.
meter, which FUCC accepted in a letter. All change orders and extra work orders shall be
4. FUCC eventually abandoned the project. NPC subject to the approval of the Minister of Public Works,
decided to take over the project to stave-off huge Transportation and Communications, the Minister of
pecuniary and non-monetary losses. FUCC, in order to Public Highways, or the Minister of Energy, as the case
prevent this filed an action for specific performance may be.
and damages with preliminary injunction and TRO The SC also considered the facts which were
against NPC. used as bases for promissory estoppel and held that
5. RTC qc issued a TRO and later a writ of although it appeared that NPC made promises that an
preliminary injunction. extra work order will be issued in connection with the
a. NPC filed a petition for certiorari before the CA. blasting projects, none came to existence.
CA granted petition and set aside the lower courts o Promissory estoppel may arise from the
order making of a promise, even though without
6. FUCC filed before the SC a petition for review consideration, if it was intended that the promise
assailing the decision of the CA but pending the should be relied upon and in fact it was relied upon,
resolution of the SC, NPC and FUCC entered into a and if a refusal to enforce it would be virtually to
compromise agreement. sanction the perpetration of fraud or would result in
a. In the compromise agreement, NPC shall pay other injustice. Promissory estoppel presupposes the
the undisputed unpaid billings of FUCC in connection existence of a promise on the part of one against
with the project; that NPC shall have the right to whom estoppel is claimed. The promise must be plain
preceed with the works by re-bidding it; upon final and unambiguous and sufficiently specific so that the
resolution of the arbitration, the parties shall mutually court can understand the obligation assumed and
terminate the contract among others enforce the promise according to its terms.
b. That the claims will be settled through 2 stages o There was no basis for promissory estoppel
i. One is the signing of the compromise since both parties knew that the payment for the
agreement which they whill submit for approval by this blasting works was dependent on the issuance of an
court extra work order. The promise of NPC to pay was
ii. It shall submit by arbitration to settle the price conditional (upon the issuance of the work order) and
of the blasting, damages and all other unresolved FUCC knew of this fact.
claims by the parties. The 3-man commission was o Mendoza v. CA: a cause of action for
headed by Mr. Carmelo Sison promissory estoppel does not lie where an alleged oral
7. The compromise agreement was approved by promise was conditional, so that reliance upon it was
the court and the case was then referred to arbitration not reasonable. It does not operate to create liability
where it was held that an award of P118,681,328.28 where it does not otherwise exist.
as just compensation plus 10% thereof for attorneys NPCs argument that it is not bound by the acts
fees and expenses of litigation was due. (NPC already of its officials is correct. It is a corporate entity
paid 36,550,000 so they only owe FUCC performing proprietary functions and not a mere
P82,131,328.28) agency of the government.
8. FUCC filed a motion for execution while NPC The officials exceeded the scope of their
filed a motion to vacate award by the arbitration authority when they authorized FUCC to commence
board. Judge Alonzo-LEgasto approved the motion for blasting without an extra work order. Their acts cannot
execution. bind NPC unless it has ratified such acts or it is
9. NPC went to the CA alleging GAD. estopped from disclaiming them
a. CA: no GAD. The arbitration board acted NPC RATIFIED THOSE ACTS! The compromise
pursuant to its powers under the compromise agreement is a confirmatory act signifying NPCs
agreement. That NPC failed to prove by evidence that ratification of all the prior acts of its officers (the
Mr. Sison was biased. That although the blasting was president who signed it was acting pursuant to a board
not part of the unit price for the project and that there resolution)
was no perfected contract for it, FUCC relied on the SC in the end upheld the award of the
representation of NPCs officials that the extra work arbitration except for the rate of interest which was
order should be submitted to its board of directors for decreased from 12% to 6%.
approval and that the blasting works would be paid. CA
ruled that Lupangco vs Court of Appeals
FUCC is entitled to just compensation on grounds of G.R. No. 77372 April 29, 1988
equity and promissory estoppel
10. NPC went up to the SC with basically the same Facts: PRC issued Resolution No. 105 as parts of its
arguments before the CA. one of these arguments is "Additional Instructions to Examiness," to all those
that the claim for blasting works was not approved by applying for admission to take the licensure
authorized officials, that the approval of extra work by examinations in accountancy.
authorized officials is required for an extra work order
is issued. Petitioners, all reviewees preparing to take the
licensure examinations in accountancy, filed with the
ISSUE: Is FUCC entitled to the payment for the extra RTC a complaint for injunction with a prayer with the
work done on the project? issuance of a writ of a preliminary injunction against
respondent PRC to restrain the latter from enforcing
there was a discussion on arbitration and the above-mentioned resolution and to declare the
vacating an award. In the end SC held that NPCs only same unconstitutional.
ground was the alleged bias of Mr. Sison, which it
failed to prove by evidence at the lower court. Hence Issue: Can the Professional Regulation Commission
they cannot depart from the ruling upholding the lawfully prohibit the examiness from attending review
award classes, receiving handout materials, tips, or the like 3
days before the date of the examination?
the court looked at Sec. 9 of PD 1594
(Prescribing Policies, Guidelines, Rules and Regulations Ruling: We realize that the questioned resolution was
for Government Infrastructure Contracts,) which adopted for a commendable purpose which is "to
provides that a change order or extra work order may preserve the integrity and purity of the licensure
be issued only for works necessary for the completion examinations." However, its good aim cannot be a
cloak to conceal its constitutional infirmities. On its the issuance of rules and regulations. To be valid, such
face, it can be readily seen that it is unreasonable in rules and regulations must be reasonable and fairly
that an examinee cannot even attend any review class, adapted to the end in view. If shown to bear no
briefing, conference or the like, or receive any hand- reasonable relation to the purposes for which they are
out, review material, or any tip from any school, authorized to be issued, then they must be held to be
college or university, or any review center or the like or invalid.
any reviewer, lecturer, instructor, official or employee
of any of the aforementioned or similar institutions. Resolution No. 105 is not only unreasonable and
arbitrary, it also infringes on the examinees' right to
The unreasonableness is more obvious in that one who liberty guaranteed by the Constitution. Respondent
is caught committing the prohibited acts even without PRC has no authority to dictate on the reviewees as to
any ill motives will be barred from taking future how they should prepare themselves for the licensure
examinations conducted by the respondent PRC. examinations. They cannot be restrained from taking
Furthermore, it is inconceivable how the Commission all the lawful steps needed to assure the fulfillment of
can manage to have a watchful eye on each and every their ambition to become public accountants. They
examinee during the three days before the have every right to make use of their faculties in
examination period. attaining success in their endeavors.

It is an aixiom in administrative law that administrative


authorities should not act arbitrarily and capriciously in