Republic of the Philippines Hence, this petition for certiorari and prohibition seeking to set aside the
SUPREME COURT decision of the Voluntary Arbitrator and to prohibit her from enforcing the
Manila
EN BANC
Page |
1 arguments presented by such parties who have bound themselves to
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and
ATTY. ESTER S. GARCIA in her capacity as VOLUNTARY
ARBITRATOR, respondents.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB)
and the Association of Luzon Development Bank Employees (ALDBE)
arose an arbitration case to resolve the following issue:
Whether or not the company has violated the Collective
Bargaining Agreement provision and the Memorandum of
Agreement dated April 1994, on promotion.
At a conference, the parties agreed on the submission of their respective
Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her
capacity as Voluntary Arbitrator, received ALDBE's Position Paper on
January 18, 1995. LDB, on the other hand, failed to submit its Position
Paper despite a letter from the Voluntary Arbitrator reminding them to do
so. As of May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator
rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has
not adhered to the Collective Bargaining Agreement
provision nor the Memorandum of Agreement on
promotion.
same.
In labor law context, arbitration is the reference of a labor dispute to an
impartial third person for determination on the basis of evidence and
accept the decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is
based, as either compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are
compelled by the government to forego their right to strike and are
compelled to accept the resolution of their dispute through arbitration by a
third party.1 The essence of arbitration remains since a resolution of a
dispute is arrived at by resort to a disinterested third party whose decision
is final and binding on the parties, but in compulsory arbitration, such a
third party is normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the
parties is made, pursuant to a voluntary arbitration clause in their
collective agreement, to an impartial third person for a final and binding
resolution.2 Ideally, arbitration awards are supposed to be complied with
by both parties without delay, such that once an award has been
rendered by an arbitrator, nothing is left to be done by both parties but to
comply with the same. After all, they are presumed to have freely chosen
arbitration as the mode of settlement for that particular dispute. Pursuant
thereto, they have chosen a mutually acceptable arbitrator who shall hear
and decide their case. Above all, they have mutually agreed to de bound
by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining
Agreement (CBA) are required to include therein provisions for a
machinery for the resolution of grievances arising from the interpretation
or implementation of the CBA or company personnel policies.3 For this
purpose, parties to a CBA shall name and designate therein a voluntary
arbitrator or a panel of arbitrators, or include a procedure for their
selection, preferably from those accredited by the National Conciliation
and Mediation Board (NCMB). Article 261 of the Labor Code accordingly
provides for exclusive original jurisdiction of such voluntary arbitrator or
panel of arbitrators over (1) the interpretation or implementation of the
 CBA and (2) the interpretation or enforcement of company personnel
policies. Article 262 authorizes them, but only upon agreement of the
parties, to exercise jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code
Page | has jurisdiction over the following enumerated cases:
2 executory after ten (10) calendar days from receipt of the copy of the
. . . (a) Except as otherwise provided under this Code the
Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar
days after the submission of the case by the parties for
decision without extension, even in the absence of
stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of pay,
hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of strikes
and lockouts;
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary
arbitrator or a panel of such arbitrators is quite limited compared to the
original jurisdiction of the labor arbiter and the appellate jurisdiction of the
National Labor Relations Commission (NLRC) for that matter.4 The state
of our present law relating to voluntary arbitration provides that "(t)he
award or decision of the Voluntary Arbitrator . . . shall be final and
award or decision by the parties,"5 while the "(d)ecision, awards, or orders
of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders."6 Hence, while there is an
express mode of appeal from the decision of a labor arbiter, Republic Act
No. 6715 is silent with respect to an appeal from the decision of a
voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator
is, more often than not, elevated to the Supreme Court itself on a petition
for certiorari,7 in effect equating the voluntary arbitrator with the NLRC or
the Court of Appeals. In the view of the Court, this is illogical and imposes
an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled premise
that the judgments of courts and awards of quasi-judicial agencies must
become final at some definite time, this Court ruled that the awards of
voluntary arbitrators determine the rights of parties; hence, their decisions
have the same legal effect as judgments of a court. In Oceanic Bic
Division (FFW), et al. v. Romero, et al.,9 this Court ruled that "a voluntary
arbitrator by the nature of her functions acts in a quasi-judicial capacity."
Under these rulings, it follows that the voluntary arbitrator, whether acting
solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not
appealable to the latter.10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902,
provides that the Court of Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the
 Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service
Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under
Page | Presidential Decree No. 442, as amended, the provisions
3 of this Act, and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of voluntary
arbitrators may not strictly be considered as a quasi-judicial agency,
board or commission, still both he and the panel are comprehended
within the concept of a "quasi-judicial instrumentality." It may even be
stated that it was to meet the very situation presented by the quasi-
judicial functions of the voluntary arbitrators here, as well as the
subsequent arbitrator/arbitral tribunal operating under the Construction
Industry Arbitration Commission,11 that the broader term
"instrumentalities" was purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency.12 Thus, the
terms governmental "agency" or "instrumentality" are synonymous in the
sense that either of them is a means by which a government acts, or by
which a certain government act or function is performed.13 The word
"instrumentality," with respect to a state, contemplates an authority to
which the state delegates governmental power for the performance of a
state function.14 An individual person, like an administrator or executor, is
a judicial instrumentality in the settling of an estate,15 in the same manner
that a sub-agent appointed by a bankruptcy court is an instrumentality of
the court,16and a trustee in bankruptcy of a defunct corporation is an
instrumentality of the state.17
The voluntary arbitrator no less performs a state function pursuant to a
governmental power delegated to him under the provisions therefor in the
Labor Code and he falls, therefore, within the contemplation of the term
"instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his
functions and powers are provided for in the Labor Code does not place
him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that, although the
Employees Compensation Commission is also provided for in the Labor
Code, Circular No. 1-91, which is the forerunner of the present Revised
Administrative Circular No. 1-95, laid down the procedure for the
appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in
amending Sec. 9 of B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of
arbitrators should likewise be appealable to the Court of Appeals, in line
with the procedure outlined in Revised Administrative Circular No. 1-95,
just like those of the quasi-judicial agencies, boards and commissions
enumerated therein.
This would be in furtherance of, and consistent with, the original purpose
of Circular No. 1-91 to provide a uniform procedure for the appellate
review of adjudications of all quasi-judicial entities18 not expressly
excepted from the coverage of Sec. 9 of B.P. 129 by either the
Constitution or another statute. Nor will it run counter to the legislative
intendment that decisions of the NLRC be reviewable directly by the
Supreme Court since, precisely, the cases within the adjudicative
competence of the voluntary arbitrator are excluded from the jurisdiction
of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic
Act No. 876, also known as the Arbitration Law, arbitration is deemed a
special proceeding of which the court specified in the contract or
submission, or if none be specified, the Regional Trial Court for the
province or city in which one of the parties resides or is doing business,
or in which the arbitration is held, shall have jurisdiction. A party to the
controversy may, at any time within one (1) month after an award is
made, apply to the court having jurisdiction for an order confirming the
award and the court must grant such order unless the award is vacated,
modified or corrected.19
In effect, this equates the award or decision of the voluntary arbitrator
with that of the regional trial court. Consequently, in a petition
for certiorari from that award or decision, the Court of Appeals must be
deemed to have concurrent jurisdiction with the Supreme Court. As a
matter of policy, this Court shall henceforth remand to the Court of
Appeals petitions of this nature for proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the Court of
Appeals.
 SO ORDERED.Padilla, Regalado, Davide, Jr., Bellosillo, Puno, Vitug,
Kapunan, Mendoza, Francisco and Hermosisima, Jr., JJ.,
concur.Feliciano, J., concurs in the result.

Narvasa, C.J. and Melo, J. are on leave.

Page |
4
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
Page |
5 (e) to assist the industry in securing adequate and low-
G.R. No. 102976 October 25, 1995
IRON AND STEEL AUTHORITY, petitioner,
vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER
CORPORATION, respondents.
FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential
Decree (P.D.) No. 272 dated 9 August 1973 in order, generally, to
develop and promote the iron and steel industry in the Philippines. The
objectives of the ISA are spelled out in the following terms:
Sec. 2. Objectives — The Authority shall have the
following objectives:
(a) to strengthen the iron and steel industry of the
Philippines and to expand the domestic and export
markets for the products of the industry;
(b) to promote the consolidation, integration and
rationalization of the industry in order to increase industry
capability and viability to service the domestic market and
to compete in international markets;
(c) to rationalize the marketing and distribution of steel
products in order to achieve a balance between demand
and supply of iron and steel products for the country and
to ensure that industry prices and profits are at levels that
provide a fair balance between the interests of investors,
consumers suppliers, and the public at large;
(d) to promote full utilization of the existing capacity of the
industry, to discourage investment in excess capacity,
and in coordination, with appropriate government
agencies to encourage capital investment in priority areas
of the industry;
cost supplies of raw materials and to reduce the
excessive dependence of the country on imports of iron
and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. — The authority shall have
the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron
and steel facilities for subsequent resale and/or lease to
the companies involved if it is shown that such use of the
State's power is necessary to implement the construction
of capacity which is needed for the attainment of the
objectives of the Authority;
xxx xxx xxx
(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years
counting from 9 August 1973.1 When ISA's original term expired on 10
October 1978, its term was extended for another ten (10) years by
Executive Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary
of the National Development Corporation which is itself an entity wholly
owned by the National Government, embarked on an expansion program
embracing, among other things, the construction of an integrated steel
mill in Iligan City. The construction of such a steel mill was considered a
priority and major industrial project of the Government. Pursuant to the
expansion program of the NSC, Proclamation No. 2239 was issued by
the President of the Philippines on 16 November 1982 withdrawing from
 sale or settlement a large tract of public land (totalling about 30.25
hectares in area) located in Iligan City, and reserving that land for the use
and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No.
Page | 2239 were occupied by a non-operational chemical fertilizer plant and
6 related facilities owned by private respondent Maria Cristina Fertilizer
Corporation ("MCFC"), Letter of Instruction (LOI), No. 1277, also dated
16 November 1982, was issued directing the NSC to "negotiate with the
owners of MCFC, for and on behalf of the Government, for the
compensation of MCFC's present occupancy rights on the subject land."
LOI No. 1277 also directed that should NSC and private respondent
MCFC fail to reach an agreement within a period of sixty (60) days from
the date of LOI No. 1277, petitioner ISA was to exercise its power of
eminent domain under P.D. No. 272 and to initiate expropriation
proceedings in respect of occupancy rights of private respondent MCFC
relating to the subject public land as well as the plant itself and related
facilities and to cede the same to the NSC.2
Negotiations between NSC and private respondent MCFC did fail.
Accordingly, on 18 August 1983, petitioner ISA commenced eminent
domain proceedings against private respondent MCFC in the Regional
Trial Court, Branch 1, of Iligan City, praying that it (ISA) be places in
possession of the property involved upon depositing in court the amount
of P1,760,789.69 representing ten percent (10%) of the declared market
values of that property. The Philippine National Bank, as mortgagee of
the plant facilities and improvements involved in the expropriation
proceedings, was also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court
in favor of ISA. ISA in turn placed NSC in possession and control of the
land occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the
statutory existence of petitioner ISA expired on 11 August 1988. MCFC
then filed a motion to dismiss, contending that no valid judgment could be
rendered against ISA which had ceased to be a juridical person.
Petitioner ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's
motion to dismiss and did dismiss the case. The dismissal was anchored
on the provision of the Rules of Court stating that "only natural or juridical
persons or entities authorized by law may be parties in a civil case."3 The
trial court also referred to non-compliance by petitioner ISA with the
requirements of Section 16, Rule 3 of the Rules of Court.4
Petitioner ISA moved for reconsideration of the trial court's Order,
contending that despite the expiration of its term, its juridical existence
continued until the winding up of its affairs could be completed. In the
alternative, petitioner ISA urged that the Republic of the Philippines,
being the real party-in-interest, should be allowed to be substituted for
petitioner ISA. In this connection, ISA referred to a letter from the Office
of the President dated 28 September 1988 which especially directed the
Solicitor General to continue the expropriation case.
The trial court denied the motion for reconsideration, stating, among other
things that:
The property to be expropriated is not for public use or
benefit [__] but for the use and benefit [__] of NSC, a
government controlled private corporation engaged in
private business and for profit, specially now that the
government, according to newspaper reports, is offering
for sale to the public its [shares of stock] in the National
Steel Corporation in line with the pronounced policy of the
present administration to disengage the government from
its private business ventures.5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8
October 1991, the Court of Appeals affirmed the order of dismissal of the
trial court. The Court of Appeals held that petitioner ISA, "a government
regulatory agency exercising sovereign functions," did not have the same
rights as an ordinary corporation and that the ISA, unlike corporations
organized under the Corporation Code, was not entitled to a period for
winding up its affairs after expiration of its legally mandated term, with the
result that upon expiration of its term on 11 August 1987, ISA was
"abolished and [had] no more legal authority to perform governmental
functions." The Court of Appeals went on to say that the action for
expropriation could not prosper because the basis for the proceedings,
the ISA's exercise of its delegated authority to expropriate, had become
ineffective as a result of the delegate's dissolution, and could not be
continued in the name of Republic of the Philippines, represented by the
Solicitor General:
 It is our considered opinion that under the law, the
complaint cannot prosper, and therefore, has to be
dismissed without prejudice to the refiling of a new
complaint for expropriation if the Congress sees it fit."
(Emphases supplied)
Page |
7 At the same time, however, the Court of Appeals held that it was
premature for the trial court to have ruled that the expropriation
suit was not for a public purpose, considering that the parties had
not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA
initiated and prosecuted the action for expropriation in its capacity as
agent of the Republic of the Philippines, the Republic, as principal of ISA,
is entitled to be substituted and to be made a party-plaintiff after the
agent ISA's term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of
Congress to enact a law further extending the term of ISA after 11 August
1988 evinced a "clear legislative intent to terminate the juridical existence
of ISA," and that the authorization issued by the Office of the President to
the Solicitor General for continued prosecution of the expropriation suit
could not prevail over such negative intent. It is also contended that the
exercise of the eminent domain by ISA or the Republic is improper, since
that power would be exercised "not on behalf of the National Government
but for the benefit of NSC."
The principal issue which we must address in this case is whether or not
the Republic of the Philippines is entitled to be substituted for ISA in view
of the expiration of ISA's term. As will be made clear below, this is really
the only issue which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a
civil action:
Sec. 1. Who May Be Parties. — Only natural or juridical
persons or entities authorized by law may be parties in a
civil action.
Under the above quoted provision, it will be seen that those who
can be parties to a civil action may be broadly categorized into
two (2) groups:
(a) those who are recognized as persons under the law
whether natural, i.e., biological persons, on the one hand,
or juridical person such as corporations, on the other
hand; and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA
falls under category (b) above. P.D. No. 272, as already noted, contains
express authorization to ISA to commence expropriation proceedings like
those here involved:
Sec. 4. Powers and Functions. — The Authority shall
have the following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron
and steel facilities for subsequent resale and/or lease to
the companies involved if it is shown that such use of the
State's power is necessary to implement the construction
of capacity which is needed for the attainment of the
objectives of the Authority;
xxx xxx xxx
(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly
authorized it to enter into certain kinds of contracts "for and in
behalf of the Government" in the following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into
contracts for and in behalf of the government, for the bulk
purchase of materials, supplies or services for any sectors
in the industry, and to maintain inventories of such
materials in order to insure a continuous and adequate
supply thereof and thereby reduce operating costs of such
sector;
 xxx xxx xxx
(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes normally
Page |
associated with juridical personality. There is, however, no provision in
8 P.D. No. 272 recognizing ISA as possessing general or comprehensive
juridical personality separate and distinct from that of the Government.
The ISA in fact appears to the Court to be a non-incorporated agency or
instrumentality of the Republic of the Philippines, or more precisely of the
Government of the Republic of the Philippines. It is common knowledge
that other agencies or instrumentalities of the Government of the
Republic are cast in corporate form, that is to say, are incorporated
agencies or instrumentalities, sometimes with and at other times without
capital stock, and accordingly vested with a juridical personality distinct
from the personality of the Republic. Among such incorporated agencies
or instrumentalities are: National Power Corporation;6 Philippine Ports
Authority;7 National Housing Authority;8 Philippine National Oil
Company;9 Philippine National Railways; 10 Public Estates
Authority; 11 Philippine Virginia Tobacco Administration,12 and so forth. It is
worth noting that the term "Authority" has been used to designate both
incorporated and non-incorporated agencies or instrumentalities of the
Government.
We consider that the ISA is properly regarded as an agent or delegate of
the Republic of the Philippines. The Republic itself is a body corporate
and juridical person vested with the full panoply of powers and attributes
which are compendiously described as "legal personality." The relevant
definitions are found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. — Unless the specific
words of the text, or the context as a whole, or a particular
statute, require a different meaning:
(1) Government of the Republic of the Philippines refers
to the corporate governmental entity through which the
functions of government are exercised throughout the
Philippines, including, save as the contrary appears from
the context, the various arms through which political
authority is made effective in the Philippines, whether
pertaining to the autonomous regions, the provincial, city,
municipal or barangay subdivisions or other forms of local
government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various
units of the Government, including a department,
bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct
unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department
framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and
government-owned or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the
powers, duties and functions as well as the assets and liabilities of that
agency revert back to, and are re-assumed by, the Republic of the
Philippines, in the absence of special provisions of law specifying some
other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency
or instrumentality of the Republic of the Philippines. When the expiring
agency is an incorporated one, the consequences of such expiry must be
looked for, in the first instance, in the charter of that agency and, by way
of supplementation, in the provisions of the Corporation Code. Since, in
the instant case, ISA is a non-incorporated agency or instrumentality of
the Republic, its powers, duties, functions, assets and liabilities are
properly regarded as folded back into the Government of the Republic of
the Philippines and hence assumed once again by the Republic, no
special statutory provision having been shown to have mandated
succession thereto by some other entity or agency of the Republic.
 The procedural implications of the relationship between an agent or
delegate of the Republic of the Philippines and the Republic itself are, at
least in part, spelled out in the Rules of Court. The general rule is, of
course, that an action must be prosecuted and defended in the name of
the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at the
Page | commencement of the expropriation proceedings, a real party in interest,
9 having been explicitly authorized by its enabling statute to institute
expropriation proceedings. The Rules of Court at the same time
expressly recognize the role of representative parties:
Sec. 3. Representative Parties. — A trustee of an
expressed trust, a guardian, an executor or administrator,
or a party authorized by statute may sue or be sued
without joining the party for whose benefit the action is
presented or defended; but the court may, at any stage of
the proceedings, order such beneficiary to be made a
party. . . . . (Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its
capacity as an agent or delegate or representative of the Republic of the
Philippines pursuant to its authority under P.D. No. 272. The present
expropriation suit was brought on behalf of and for the benefit of the
Republic as the principal of ISA. Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs
the subject parcels of land for the construction and
installation of iron and steel manufacturing facilities that
are indispensable to the integration of the iron and steel
making industry which is vital to the promotion of public
interest and welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of
the Philippines and not the National Steel Corporation, even
though the latter may be an ultimate user of the properties
involved should the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the
Philippines is entitled to be substituted in the expropriation proceedings
as party-plaintiff in lieu of ISA, the statutory term of ISA having expired.
Put a little differently, the expiration of ISA's statutory term did not by itself
require or justify the dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which
occurred upon the expiration of ISA's statutory term, was not a ground for
dismissal of such proceedings since a party may be dropped or added by
order of the court, on motion of any party or on the court's own initiative at
any stage of the action and on such terms as are just. 13 In the instant
case, the Republic has precisely moved to take over the proceedings as
party-plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate
Court, 14 the Court recognized that the Republic may initiate or participate
in actions involving its agents. There the Republic of the Philippines was
held to be a proper party to sue for recovery of possession of property
although the "real" or registered owner of the property was the Philippine
Ports Authority, a government agency vested with a separate juridical
personality. The Court said:
It can be said that in suing for the recovery of the rentals,
the Republic of the Philippines acted as principal of the
Philippine Ports Authority, directly exercising the
commission it had earlier conferred on the latter as its
agent. . . .15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the
Republic to commence all over again another proceeding, as the
trial court and Court of Appeals had required, was to generate
unwarranted delay and create needless repetition of proceedings:
More importantly, as we see it, dismissing the complaint
on the ground that the Republic of the Philippines is not
the proper party would result in needless delay in the
settlement of this matter and also in derogation of the
policy against multiplicity of suits. Such a decision would
require the Philippine Ports Authority to refile the very
same complaint already proved by the Republic of the
Philippines and bring back as it were to square
one.16 (Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the substitution
of the Republic of the Philippines for the ISA upon the ground that the
action for expropriation could not prosper because the basis for the
proceedings, the ISA's exercise of its delegated authority to expropriate,
had become legally ineffective by reason of the expiration of the statutory
 term of the agent or delegated i.e., ISA. Since, as we have held above,
the powers and functions of ISA have reverted to the Republic of the
Philippines upon the termination of the statutory term of ISA, the question
should be addressed whether fresh legislative authority is necessary
before the Republic of the Philippines may continue the expropriation
Page | proceedings initiated by its own delegate or agent.
10
While the power of eminent domain is, in principle, vested primarily in the
legislative department of the government, we believe and so hold that no
new legislative act is necessary should the Republic decide, upon being
substituted for ISA, in fact to continue to prosecute the expropriation
proceedings. For the legislative authority, a long time ago, enacted a
continuing or standing delegation of authority to the President of the
Philippines to exercise, or cause the exercise of, the power of eminent
domain on behalf of the Government of the Republic of the Philippines.
The 1917 Revised Administrative Code, which was in effect at the time of
the commencement of the present expropriation proceedings before the
Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of
the Philippines. — In addition to his general supervisory
authority, the President of the Philippines shall have such
other specific powers and duties as are expressly
conferred or imposed on him by law, and also, in
particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be:
xxx xxx xxx
(h) To determine when it is necessary or advantageous to
exercise the right of eminent domain in behalf of the
Government of the Philippines; and to direct the Secretary
of Justice, where such act is deemed advisable, to cause
the condemnation proceedings to be begun in the court
having proper jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has
substantially reproduced the foregoing provision in the following
terms:
Sec. 12. Power of eminent domain. — The President
shall determine when it is necessary or advantageous to
exercise the power of eminent domain in behalf of the
National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute
expopriation proceedings in the proper court. (Emphasis
supplied)
In the present case, the President, exercising the power duly
delegated under both the 1917 and 1987 Revised Administrative
Codes in effect made a determination that it was necessary and
advantageous to exercise the power of eminent domain in behalf
of the Government of the Republic and accordingly directed the
Solicitor General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after
becoming once more the depository of primary legislative power, had not
enacted a statute extending the term of ISA, such non-enactment must
be deemed a manifestation of a legislative design to discontinue or abort
the present expropriation suit. We find this argument much too
speculative; it rests too much upon simple silence on the part of
Congress and casually disregards the existence of Section 12 of the
1987 Administrative Code already quoted above.
Other contentions are made by private respondent MCFC, such as, that
the constitutional requirement of "public use" or "public purpose" is not
present in the instant case, and that the indispensable element of just
compensation is also absent. We agree with the Court of Appeals in this
connection that these contentions, which were adopted and set out by the
Regional Trial Court in its order of dismissal, are premature and are
appropriately addressed in the proceedings before the trial court. Those
proceedings have yet to produce a decision on the merits, since trial was
still on going at the time the Regional Trial Court precipitously dismissed
the expropriation proceedings. Moreover, as a pragmatic matter, the
Republic is, by such substitution as party-plaintiff, accorded an
opportunity to determine whether or not, or to what extent, the
proceedings should be continued in view of all the subsequent
developments in the iron and steel sector of the country including, though
not limited to, the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals
dated 8 October 1991 to the extent that it affirmed the trial court's order
dismissing the expropriation proceedings, is hereby REVERSED and
 SET ASIDE and the case is REMANDED to the court a quo which shall
allow the substitution of the Republic of the Philippines for petitioner Iron
and Steel Authority and for further proceedings consistent with this
Decision. No pronouncement as to costs.

Page | SO ORDERED.
11
Romero, Melo, Vitug and Panganiban, JJ., concur.
 Republic of the Philippines
SUPREME COURT
THIRD DIVISION
Page |
G.R. No. 149179. July 15, 2005
12
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,
INC., Petitioners,
vs.
CITY OF BACOLOD, FLORENTINO T. GUANCO, in his capacity as
the City Treasurer of Bacolod City, and ANTONIO G. LACZI, in his
capacity as the City Legal Officer of Bacolod City, Respondents.
DECISION
GARCIA, J.:
In this appeal by way of a petition for review on certiorari under Rule 45
of the Rules of Court, petitioner Philippine Long Distance Telephone
Company (PLDT), seeks the reversal and setting aside of the July 23,
2001 decision1 of the Regional Trial Court at Bacolod City, Branch 42,
dismissing its petition in Civil Case No. 99-10786, an action to declare
petitioner as exempt from the payment of franchise and business taxes
sought to be imposed and collected by the respondent City of Bacolod.
The material facts are not at all disputed:
PLDT is a holder of a legislative franchise under Act No. 3436, as
amended, to render local and international telecommunications services.
On August 24, 1991, the terms and conditions of its franchise were
consolidated under Republic Act No. 7082,2 Section 12 of which
embodies the so-called "in-lieu-of-all-taxes" clause, whereunder PLDT
shall pay a franchise tax equivalent to three percent (3%) of all its gross
receipts, which franchise tax shall be "in lieu of all taxes". More
specifically, the provision pertinently reads:
SEC. 12. xxx In addition thereto, the grantee, its successors or assigns
shall pay a franchise tax equivalent to three percent (3%) of all gross
receipts of the telephone or other telecommunications businesses
transacted under this franchise by the grantee, its successors or assigns,
and the said percentage shall be in lieu of all taxes on this franchise or
earnings thereof. xxx (Italics ours).
Meanwhile, or on January 1, 1992, Republic Act No. 7160, otherwise
known as the Local Government Code, took effect. Section 137 of the
Code, in relation to Section 151 thereof, grants cities and other local
government units the power to impose local franchise tax on businesses
enjoying a franchise, thus:
SEC. 137. Franchise Tax. – Notwithstanding any exemption granted by
any law or other special law, the province may impose a tax on
businesses enjoying a franchise, at a rate not exceeding fifty percent
(50%) of one percent (1%) of the gross annual receipts for the preceding
calendar year based on the incoming receipt, or realized, within its
territorial jurisdiction.
xxx xxx xxx
SEC. 151. Scope of Taxing Powers. – Except as otherwise provided in
this Code, the city, may levy the taxes, fees, and charges which the
province or municipality may impose: Provided, however, That the taxes,
fees, and charges levied and collected by highly urbanized and
independent component cities shall accrue to them and distributed in
accordance with the provisions of this Code.
The rates of taxes that the city may levy may exceed the maximum rates
allowed for the province or municipality by not more than fifty percent
(50%) except the rates of professional and amusement taxes.
By Section 193 of the same Code, all tax exemption privileges then
enjoyed by all persons, whether natural or juridical, save those expressly
mentioned therein, were withdrawn, necessarily including those taxes
from which PLDT is exempted under the "in-lieu-of-all-taxes" clause in its
charter. We quote Section 193:
SEC. 193. Withdrawal of Tax Exemption Privileges. – Unless otherwise
provided in this Code, tax exemptions or incentives granted to, or
presently enjoyed by all persons, whether natural or juridical, including
government-owned or controlled corporations, except local water
districts, cooperatives duly registered under R.A. 6938, non-stock and
non-profit hospitals and educational institutions, are hereby withdrawn
upon the effectivity of this Code.
 Aiming to level the playing field among telecommunication companies,
Congress enacted Republic Act No. 7925, otherwise known as the Public
Telecommunications Policy Act of the Philippines, which took effect on
March 16, 1995. To achieve the legislative intent, Section 23 thereof, also
known as the "most-favored- treatment" clause, provides for an equality
Page | of treatment in the telecommunications industry, thus:
13
SEC. 23. Equality of Treatment in the Telecommunications Industry –
Any advantage, favor, privilege, exemption, or immunity granted under
existing franchises, or may hereafter be granted shall ipso facto become
part of previously granted telecommunications franchises and shall be
accorded immediately and unconditionally to the grantees of such
franchises: Provided, however, That the foregoing shall neither apply to
nor affect provisions of telecommunications franchises concerning
territory covered by the franchise, the life span of the franchise, or the
type of the service authorized by the franchise.
In August 1995, the City of Bacolod, invoking its authority under Section
137, in relation to Section 151 and Section 193, supra, of the Local
Government Code, made an assessment on PLDT for the payment of
franchise tax due the City.
Complying therewith, PLDT began paying the City franchise tax from the
year 1994 until the third quarter of 1998, at which time the total franchise
tax it had paid the City already amounted to ₱2,770,696.37.
On June 2, 1998, the Department of Finance through its Bureau of Local
Government Finance (BLGF), issued a ruling to the effect that as of
March 16, 1995, the effectivity date of the Public Telecommunications
Policy Act of the Philippines (Rep. Act. No. 7925), PLDT, among other
telecommunication companies, became exempt from local franchise tax.
Pertinently, the BLGF ruling reads:
It appears that RA 7082 further amending ACT No. 3436 which granted
to PLDT a franchise to install, operate and maintain a telephone system
throughout the Philippine Islands was approved on August 3, 1991.
Section 12 of said franchise, likewise, contains the ‘in lieu of all taxes’
proviso.
In this connection, Section 23 of RA 7925, quoted hereunder, which was
approved on March 1, 1995 provides for the equality of treatment in the
telecommunications industry:
xxx xxx xxx
On the basis of the aforequoted Section 23 of RA 7925, PLDT as a
telecommunications franchise holder becomes automatically covered by
the tax exemption provisions of RA 7925, which took effect on March 16,
1995.
Accordingly, PLDT shall be exempt from the payment of franchise and
business taxes imposable by LGUs under Sections 137 and 143,
respectively, of the LGC [Local Government Code], upon the effectivity of
RA 7925 on March 16, 1995. However, PLDT shall be liable to pay the
franchise and business taxes on its gross receipts realized from January
1, 1992 up to March 15, 1995, during which period PLDT was not
enjoying the ‘most favored clause’ proviso of RA 7025 [sic].3
Invoking the aforequoted ruling, PLDT then stopped paying local
franchise and business taxes to Bacolod City starting the fourth quarter of
1998.
The controversy came to a head-on when, sometime in 1999, PLDT
applied for the issuance of a Mayor’s Permit but the City of Bacolod
withheld issuance thereof pending PLDT’s payment of its franchise tax
liability in the following amounts: (1) ₱358,258.30 for the fourth quarter of
1998; and (b) ₱1,424,578.10 for the year 1999, all in the aggregate
amount of ₱1,782,836.40, excluding surcharges and interest, about
which PLDT was duly informed by the City Treasurer via a 5th
Indorsement dated March 16, 1999 for PLDT’s "appropriate action".4
In time, PLDT filed a protest5 with the Office of the City Legal Officer,
questioning the assessment and at the same time asking for a refund of
the local franchise taxes it paid in 1997 until the third quarter of 1998.
In a reply-letter dated March 26, 1999,6 City Legal Officer Antonio G.
Laczi denied the protest and ordered PLDT to pay the questioned
assessment.
Hence, on May 14, 1999, in the Regional Trial Court at Bacolod City,
PLDT filed its petition7 in Civil Case No. 99-10786, therein praying for a
judgment declaring it as exempt from the payment of local franchise and
business taxes; ordering the respondent City to henceforth cease and
desist from assessing and collecting said taxes; directing the City to issue
the Mayor’s Permit for the year 1999; and requiring it to refund the
 amount of ₱2,770,606.37, allegedly representing overpaid franchise
taxes for the years 1997 and 1998 with interest until fully paid.
In time, the respondent City filed its Answer/Comment to the
petition,8 basically maintaining that Section 137 of the Local Government
Page | Code remains as the operative law despite the enactment of the Public
14 Telecommunications Policy Act of the Philippines (Rep. Act No. 7925),
and accordingly prayed for the dismissal of the petition.
In the ensuing pre-trial conference, the parties manifested that they would
not present any testimonial evidence, and merely requested for time to
file their respective memoranda, to which the trial court acceded.
Eventually, in the herein assailed decision dated July 23, 2001,9 the trial
court dismissed PLDT’s petition, thus:
WHEREFORE, premises considered, the petition should be, as it is
hereby DISMISSED. No costs.
SO ORDERED.
Therefrom, PLDT came to this Court via the present recourse, imputing
the following errors on the part of the trial court:
5.01.a. THE LOWER COURT ERRED IN SUSTAINING
RESPONDENTS’ POSITION THAT SECTION 137 OF THE LOCAL
GOVERNMENT CODE, WHICH, IN RELATION TO SECTION 151
THEREOF, ALLOWS RESPONDENT CITY TO IMPOSE THE
FRANCHISE TAX, IS APPLICABLE IN THIS CASE.
5.01.b. THE LOWER COURT ERRED IN NOT HOLDING THAT UNDER
PETITIONER’S FRANCHISE (REPUBLIC ACT NO. 7082), AS
AMENDED AND EXPANDED BY SECTION 23 OF REPUBLIC ACT NO.
7925 (PUBLIC TELECOMMUNICATIONS POLICY ACT), TAKING INTO
ACCOUNT THE FRANCHISES OF GLOBE TELECOM, INC., (GLOBE)
(REPUBLIC ACT NO. 7229) AND SMART COMMUNICATIONS, INC.
(SMART) (REPUBLIC ACT NO. 7294), WHICH WERE ENACTED
SUBSEQUENT TO THE LOCAL GOVERNMENT CODE, NO
FRANCHISE TAXES MAY BE IMPOSED ON PETITIONER BY
RESPONDENT CITY.
5.01.c. THE LOWER COURT ERRED IN NOT GIVING WEIGHT TO THE
RULING OF THE DEPARTMENT OF FINANCE, THROUGH ITS
BUREAU OF LOCAL GOVERNMENT FINANCE, THAT PETITIONER IS
EXEMPT FROM THE PAYMENT OF FRANCHISE AND BUSINESS
TAXES IMPOSABLE BY LOCAL GOVERNMENT UNITS UNDER THE
LOCAL GOVERNMENT CODE.
5.01.d. THE LOWER COURT ERRED IN DISMISSING THE PETITION
BELOW.
As we see it, the only question which commends itself for our resolution
is, whether or not Section 23 of Rep. Act No. 7925, also called the "most-
favored-treatment" clause, operates to exempt petitioner PLDT from the
payment of franchise tax imposed by the respondent City of Bacolod.
Contrary to petitioner’s claim, the issue thus posed is not one of "first
impression" insofar as this Court is concerned. For sure, this is not the
first time for petitioner PLDT to invoke the jurisdiction of this Court on the
same question, albeit involving another city.
In PLDT vs. City of Davao,10 this Court has had the occasion to interpret
Section 23 of Rep. Act No. 7925. There, we ruled that Section 23 does
not operate to exempt PLDT from the payment of franchise tax imposed
upon it by the City of Davao:
In sum, it does not appear that, in approving §23 of R.A. No. 7925,
Congress intended it to operate as a blanket tax exemption to all
telecommunications entities. Applying the rule of strict construction of
laws granting tax exemptions and the rule that doubts should be resolved
in favor of municipal corporations in interpreting statutory provisions on
municipal taxing powers, we hold that §23 of R.A. No. 7925 cannot be
considered as having amended petitioner's franchise so as to entitle it to
exemption from the imposition of local franchise taxes. Consequently, we
hold that petitioner is liable to pay local franchise taxes in the amount of
₱3,681,985.72 for the period covering the first to the fourth quarter of
1999 and that it is not entitled to a refund of taxes paid by it for the period
covering the first to the third quarter of 1998.11
Explains this Court in the same case:
 To begin with, tax exemptions are highly disfavored. The reason for this
was explained by this Court in Asiatic Petroleum Co. v. Llanes, in which it
was held:
. . . Exemptions from taxation are highly disfavored, so much so that they
Page | may almost be said to be odious to the law. He who claims an exemption
15 must be able to point to some positive provision of law creating the right. .
. As was said by the Supreme Court of Tennessee in Memphis vs. U. &
P. Bank (91 Tenn., 546, 550), ‘The right of taxation is inherent in the
State. It is a prerogative essential to the perpetuity of the government;
and he who claims an exemption from the common burden must justify
his claim by the clearest grant of organic or statute law.’ Other utterances
equally or more emphatic come readily to hand from the highest
authority. In Ohio Life Ins. and Trust Co. vs. Debolt (16 Howard, 416), it
was said by Chief Justice Taney, that the right of taxation will not be held
to have been surrendered, ‘unless the intention to surrender is
manifested by words too plain to be mistaken.’ In the case of
the Delaware Railroad Tax (18 Wallace, 206, 226), the Supreme Court of
the United States said that the surrender, when claimed, must be shown
by clear, unambiguous language, which will admit of no reasonable
construction consistent with the reservation of the power. If a doubt arises
as to the intent of the legislature, that doubt must be solved in favor of the
State. In Erie Railway Company vs. Commonwealth of Pennsylvania (21
Wallace, 492, 499), Mr. Justice Hunt, speaking of exemptions, observed
that a State cannot strip itself of the most essential power of taxation by
doubtful words. ‘It cannot, by ambiguous language, be deprived of this
highest attribute of sovereignty.’ In Tennessee vs. Whitworth (117 U.S.,
129, 136), it was said: ‘In all cases of this kind the question is as to the
intent of the legislature, the presumption always being against any
surrender of the taxing power.’ In Farrington vs. Tennessee and County
of Shelby (95 U.S., 379, 686), Mr. Justice Swayne said: ‘. . . When
exemption is claimed, it must be shown indubitably to exist. At the outset,
every presumption is against it. A well-founded doubt is fatal to the claim.
It is only when the terms of the concession are too explicit to admit fairly
of any other construction that the proposition can be supported.’
The tax exemption must be expressed in the statute in clear language
that leaves no doubt of the intention of the legislature to grant such
exemption. And, even if it is granted, the exemption must be interpreted
in strictissimi jurisagainst the taxpayer and liberally in favor of the taxing
authority.
xxx xxx xxx
The fact is that the term ‘exemption’ in §23 is too general. A cardinal rule
in statutory construction is that legislative intent must be ascertained from
a consideration of the statute as a whole and not merely of a particular
provision. For, taken in the abstract, a word or phrase might easily
convey a meaning which is different from the one actually intended. A
general provision may actually have a limited application if read together
with other provisions. Hence, a consideration of the law itself in its
entirety and the proceedings of both Houses of Congress is in order.
xxx xxx xxx
R.A. No. 7925 is thus a legislative enactment designed to set the national
policy on telecommunications and provide the structures to implement it
to keep up with the technological advances in the industry and the needs
of the public. The thrust of the law is to promote gradually the
deregulation of the entry, pricing, and operations of all public
telecommunications entities and thus promote a level playing field in the
telecommunications industry. There is nothing in the language of §23 nor
in the proceedings of both the House of Representatives and the Senate
in enacting R.A. No. 7925 which shows that it contemplates the grant of
tax exemptions to all telecommunications entities, including those whose
exemptions had been withdrawn by the LGC.
What this Court said in Asiatic Petroleum Co. v. Llanes applies mutatis
mutandis to this case: ‘When exemption is claimed, it must be shown
indubitably to exist. At the outset, every presumption is against it. A well-
founded doubt is fatal to the claim. It is only when the terms of the
concession are too explicit to admit fairly of any other construction that
the proposition can be supported.’ In this case, the word ‘exemption’ in
§23 of R.A. No. 7925 could contemplate exemption from certain
regulatory or reporting requirements, bearing in mind the policy of the
law. It is noteworthy that, in holding Smart and Globe exempt from local
taxes, the BLGF did not base its opinion on §23 but on the fact that the
franchises granted to them after the effectivity of the LGC exempted them
from the payment of local franchise and business taxes.
As in City of Davao, supra, petitioner presently argues that because
Smart Communications, Inc. (SMART) and Globe Telecom (GLOBE)
under whose respective franchises granted after the effectivity of
the Local Government Code, are exempt from franchise tax, it follows
that petitioner is likewise exempt from the franchise tax sought to be
collected by the City of Bacolod, on the reasoning that the grant of tax
exemption to SMART and GLOBE ipso factoapplies to PLDT, consistent
 with the "most-favored-treatment" clause found in Section 23 of
the Public Telecommunications Policy Act of the Philippines (Rep. Act
No. 7925).
Again, there is nothing novel in petitioner’s contention. In fact, this Court
Page | in City of Davao, even adverted to PLDT’s argument therein, thus:
16
Finally, it [PLDT] argues that because Smart and Globe are exempt from
the franchise tax, it follows that it must likewise be exempt from the tax
being collected by the City of Davao because the grant of tax exemption
to Smart and Globe ipso facto extended the same exemption to it.
In rejecting PLDT’s contention, this Court ruled in City of Davao as
follows:
The acceptance of petitioner’s theory would result in absurd
consequences. To illustrate: In its franchise, Globe is required to pay a
franchise tax of only one and one-half percentum (1/2% [sic] ) of all gross
receipts from its transactions while Smart is required to pay a tax of three
percent (3%) on all gross receipts from business transacted. Petitioner’s
theory would require that, to level the playing field, any "advantage, favor,
privilege, exemption, or immunity" granted to Globe must be extended to
all telecommunications companies, including Smart. If, later, Congress
again grants a franchise to another telecommunications company
imposing, say, one percent (1%) franchise tax, then all other
telecommunications franchises will have to be adjusted to "level the
playing field" so to speak. This could not have been the intent of
Congress in enacting Section 23 of Rep. Act 7925. Petitioner’s theory will
leave the Government with the burden of having to keep track of all
granted telecommunications franchises, lest some companies be treated
unequally. It is different if Congress enacts a law specifically granting
uniform advantages, favor, privilege, exemption or immunity to all
telecommunications entities.
On PLDT’s motion for reconsideration in Davao, the Court added in its en
banc Resolution of March 25, 2003,12 that even as it is a state policy to
promote a level playing field in the communications industry, Section 23
of Rep. Act No. 7925 does not refer to tax exemption but only to
exemption from certain regulations and requirements imposed by the
National Telecommunications Commission:
xxx. The records of Congress are bereft of any discussion or even
mention of tax exemption. To the contrary, what the Chairman of the
Committee on Transportation, Rep. Jerome V. Paras, mentioned in his
sponsorship of H.B. No. 14028, which became R.A. No. 7925, were
‘equal access clauses’ in interconnection agreements, not tax
exemptions. He said:
There is also a need to promote a level playing field in the
telecommunications industry. New entities must be granted protection
against dominant carriers through the encouragement of equitable
access charges and equal access clauses in interconnection
agreements and the strict policing of predatory pricing by dominant
carriers. Equal access should be granted to all operators connecting into
the interexchange network. There should be no discrimination against
any carrier in terms of priorities and/or quality of services.
Nor does the term ‘exemption’ in § 23 of R.A. No. 7925 mean tax
exemption. The term refers to exemption from certain regulations and
requirements imposed by the National Telecommunications Commission
(NTC). For instance, R.A. No. 7925, § 17 provides: ‘The Commission
shall exempt any specific telecommunications service from its rate or
tariff regulations if the service has sufficient competition to ensure fair and
reasonable rates or tariffs.’ Another exemption granted by the law in line
with its policy of deregulation is the exemption from the requirement of
securing permits from the NTC every time a telecommunications
company imports equipment.13
In the same en banc Resolution, the Court even rejected PLDT’s
contention that the "in-lieu-of-all-taxes" clause does not refer to "tax
exemption" but to "tax exclusion" and hence, the strictissimi juris rule
does not apply, explaining that these two terms actually mean the same
thing, such that the rule that tax exemption should be applied
in strictissimi juris against the taxpayer and liberally in favor of the
government applies equally to tax exclusions. Thus:
Indeed, both in their nature and in their effect there is no difference
between tax exemption and tax exclusion. Exemption is an immunity or
privilege; it is freedom from a charge or burden to which others are
subjected. Exclusion, on the other hand, is the removal of otherwise
taxable items from the reach of taxation, e.g., exclusions from gross
income and allowable deductions. Exclusion is thus also an immunity or
privilege which frees a taxpayer from a charge to which others are
subjected. Consequently, the rule that tax exemption should be applied
 in strictissimi juris against the taxpayer and liberally in favor of the Panganiban, (Chairman), no part, former counsel of the party.
government applies equally to tax exclusions. To construe otherwise the
‘in lieu of all taxes’ provision invoked is to be inconsistent with the theory
that R.A. No. 7925, § 23 grants tax exemption because of a similar grant
to Globe and Smart.14
Page |
17 PLDT likewise argued in said case that the RTC at Davao City erred in
not giving weight to the ruling of the BLGF which, according to petitioner,
is an administrative agency with technical expertise and mastery over the
specialized matters assigned to it. But then again, we held in Davao:

To be sure, the BLGF is not an administrative agency whose findings on

questions of fact are given weight and deference in the courts. The
authorities cited by petitioner pertain to the Court of Tax Appeals, a highly
specialized court which performs judicial functions as it was created for
the review of tax cases. In contrast, the BLGF was created merely to
provide consultative services and technical assistance to local
governments and the general public on local taxation, real property
assessment, and other related matters, among others. The question
raised by petitioner is a legal question, to wit, the interpretation of §23 of
R.A. No. 7925. There is, therefore, no basis for claiming expertise for the
BLGF that administrative agencies are said to possess in their respective
fields.15

We note, quite interestingly, that apart from the particular local

government unit involved in the earlier case of PLDT vs. Davao, the
arguments presently advanced by petitioner on the issue herein posed
are but a mere reiteration if not repetition of the very same arguments it
has already raised in Davao. For sure, the errors presently assigned are
substantialy the same as those in Davao, all of which have been
adequately addressed and passed upon by this Court in its decision
therein as well as in its en banc resolution in that case.

WHEREFORE, the instant petition is DENIED and the assailed decision

dated July 23, 2001 of the lower court AFFIRMED.

Costs against petitioner.

SO ORDERED.

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
Page |
18 G.R. No. 84811 August 29, 1989
SOLID HOMES, INC., petitioner,
vs.
TERESITA PAYAWAL and COURT OF APPEALS, respondents.
CRUZ, J.:
We are asked to reverse a decision of the Court of Appeals sustaining
the jurisdiction of the Regional Trial Court of Quezon City over a
complaint filed by a buyer, the herein private respondent, against the
petitioner, for delivery of title to a subdivision lot. The position of the
petitioner, the defendant in that action, is that the decision of the trial
court is null and void ab initio because the case should have been heard
and decided by what is now called the Housing and Land Use Regulatory
Board.
The complaint was filed on August 31, 1982, by Teresita Payawal against
Solid Homes, Inc. before the Regional Trial Court of Quezon City and
docketed as Civil Case No. Q-36119. 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. The plaintiff asked for delivery of the
title to the lot or, alternatively, the return of all the amounts paid by her
plus interest. She also claimed moral and exemplary damages, attorney's
fees and the costs of the suit.
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. The motion was denied. The defendant repleaded the
objection in its answer, citing Section 3 of the said decree providing that
"the National Housing Authority shall have exclusive jurisdiction to
regulate the real estate trade and business in accordance with the
provisions of this Decree." After trial, judgment was rendered in favor of
the plaintiff and the defendant was ordered to deliver to her the title to the
land or, failing this, to refund to her the sum of P 38,949.87 plus interest
from 1975 and until the full amount was paid. She was also awarded P
5,000.00 moral damages, P 5,000.00 exemplary damages, P 10,000.00
attorney's fees, and the costs of the suit.1
Solid Homes appealed but the decision was affirmed by the respondent
court, 2 which also berated the appellant for its obvious efforts to evade a
legitimate obligation, including its dilatory tactics during the trial. The
petitioner was also reproved for its "gall" in collecting the further amount
of P 1,238.47 from the plaintiff purportedly for realty taxes and
registration expenses despite its inability to deliver the title to the land.
In holding that the trial court had jurisdiction, the respondent court
referred to Section 41 of PD No. 957 itself providing that:
SEC. 41. Other remedies.-The rights and remedies
provided in this Decree shall be in addition to any and all
other rights and remedies that may be available under
existing laws.
and declared that "its clear and unambiguous tenor undermine(d) the
(petitioner's) pretension that the court a quowas bereft of jurisdiction."
The decision also dismissed the contrary opinion of the Secretary of
Justice as impinging on the authority of the courts of justice. While we are
disturbed by the findings of fact of the trial court and the respondent court
on the dubious conduct of the petitioner, we nevertheless must sustain it
on the jurisdictional issue.
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 haveexclusive
jurisdiction to hear and decide cases of the following
nature:
A. Unsound real estate business practices;
Page |
19 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. (Emphasis supplied.)
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. 3
The private respondent contends that the applicable law is BP No. 129,
which confers on regional trial courts jurisdiction to hear and decide
cases mentioned in its Section 19, reading in part as follows:
SEC. 19. Jurisdiction in civil cases.-Regional Trial Courts
shall exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is
incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or
possession of, real property, or any interest therein,
except actions for forcible entry into and unlawful detainer
of lands or buildings, original jurisdiction over which is
conferred upon Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;
xxx xxx xxx
(8) In all other cases in which the demand, exclusive of
interest and cost or the value of the property in
controversy, amounts to more than twenty thousand
pesos (P 20,000.00).
It stresses, additionally, that BP No. 129 should control as the later
enactment, having been promulgated in 1981, after PD No. 957 was
issued in 1975 and PD No. 1344 in 1978.
This construction must yield to the familiar canon that in case of conflict
between a general law and a special law, the latter must prevail
regardless of the dates of their enactment. Thus, it has been held that-
The fact that one law is special and the other general
creates a presumption that the special act is to be
considered as remaining an exception of the general act,
one as a general law of the land and the other as the law
of the particular case. 4
xxx xxx xxx
The circumstance that the special law is passed before or
after the general act does not change the principle. Where
the special law is later, it will be regarded as an exception
to, or a qualification of, the prior general act; and where
the general act is later, the special statute will be
construed as remaining an exception to its terms, unless
repealed expressly or by necessary implication. 5
It is obvious that the general law in this case is BP No. 129 and PD No.
1344 the special law.
The argument that the trial court could also assume jurisdiction because
of Section 41 of PD No. 957, earlier quoted, is also unacceptable. We do
not read that provision as vesting concurrent jurisdiction on the Regional
Trial Court and the Board over the complaint mentioned in PD No. 1344 if
only because grants of power are not to be lightly inferred or merely
implied. The only purpose of this section, as we see it, is to reserve. to
the aggrieved party such other remedies as may be provided by existing
law, like a prosecution for the act complained of under the Revised Penal
Code. 6
 On the competence of the Board to award damages, we find that this is
part of the exclusive power conferred upon it by PD No. 1344 to hear and
decide "claims involving refund and any other claims filed by subdivision
lot or condominium unit buyers against the project owner, developer,
dealer, broker or salesman." It was therefore erroneous for the
Page | respondent to brush aside the well-taken opinion of the Secretary of
20 Justice that-
Such claim for damages which the
subdivision/condominium buyer may have against the
owner, developer, dealer or salesman, being a necessary
consequence of an adjudication of liability for non-
performance of contractual or statutory obligation, may be
deemed necessarily included in the phrase "claims
involving refund and any other claims" used in the
aforequoted subparagraph C of Section 1 of PD No. 1344.
The phrase "any other claims" is, we believe, sufficiently
broad to include any and all claims which are incidental to
or a necessary consequence of the claims/cases
specifically included in the grant of jurisdiction to the
National Housing Authority under the subject provisions.
The same may be said with respect to claims for
attorney's fees which are recoverable either by agreement
of the parties or pursuant to Art. 2208 of the Civil Code (1)
when exemplary damages are awarded and (2) where the
defendant acted in gross and evident bad faith in refusing
to satisfy the plaintiff 's plainly valid, just and demandable
claim.
xxx xxx xxx
Besides, a strict construction of the subject provisions of
PD No. 1344 which would deny the HSRC the authority to
adjudicate claims for damages and for damages and for
attorney's fees would result in multiplicity of suits in that
the subdivision condominium buyer who wins a case in
the HSRC and who is thereby deemed entitled to claim
damages and attorney's fees would be forced to litigate in
the regular courts for the purpose, a situation which is
obviously not in the contemplation of the law. (Emphasis
supplied.)7
As a result of the growing complexity of the modern society, it has
become necessary to create more and more administrative bodies to help
in the regulation of its ramified activities. Specialized in the particular
fields assigned to them, they can deal with the problems thereof with
more expertise and dispatch than can be expected from the legislature or
the courts of justice. This is the reason for the increasing vesture of
quasi-legislative and quasi-judicial powers in what is now not
unreasonably called the fourth department of the government.
Statutes conferring powers on their administrative agencies must be
liberally construed to enable them to discharge their assigned duties in
accordance with the legislative purpose. 8 Following this policy in Antipolo
Realty Corporation v. National Housing Authority, 9 the Court sustained
the competence of the respondent administrative body, in the exercise of
the exclusive jurisdiction vested in it by PD No. 957 and PD No. 1344, to
determine the rights of the parties under a contract to sell a subdivision
lot.
It remains to state that, contrary to the contention of the petitioner, the
case of Tropical Homes v. National Housing Authority 10 is not in point.
We upheld in that case the constitutionality of the procedure for appeal
provided for in PD No. 1344, but we did not rule there that the National
Housing Authority and not the Regional Trial Court had exclusive
jurisdiction over the cases enumerated in Section I of the said decree.
That is what we are doing now.
It is settled that any decision rendered without jurisdiction is a total nullity
and may be struck down at any time, even on appeal before this
Court. 11 The only exception is where the party raising the issue is barred
by estoppel, 12 which does not appear in the case before us. On the
contrary, the issue was raised as early as in the motion to dismiss filed in
the trial court by the petitioner, which continued to plead it in its answer
and, later, on appeal to the respondent court. We have no choice,
therefore, notwithstanding the delay this decision will entail, to nullify the
proceedings in the trial court for lack of jurisdiction.
WHEREFORE, the challenged decision of the respondent court is
REVERSED and the decision of the Regional Trial Court of Quezon City
in Civil Case No. Q-36119 is SET ASIDE, without prejudice to the filing of
the appropriate complaint before the Housing and Land Use Regulatory
Board. No costs.
 SO ORDERED.

Narvasa, Gancayco, Griñ;o-Aquino and Medialdea, JJ., concur.

Page |
21
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
Page |
22 G.R. No. 164789 August 27, 2009
CHRISTIAN GENERAL ASSEMBLY, INC., Petitioner,
vs.
SPS. AVELINO C. IGNACIO and PRISCILLA T.
IGNACIO, Respondents.
DECISION
BRION, J.:
We resolve in this Rule 45 petition the legal issue of whether an action to
rescind a contract to sell a subdivision lot that the buyer found to be
under litigation falls under the exclusive jurisdiction of the Housing and
Land Use Regulatory Board (HLURB).
In this petition,1 Christian General Assembly, Inc. (CGA) prays that we set
aside the decision2 issued by the Court of Appeals (CA) in CA–G.R. SP
No. 75717 that dismissed its complaint for rescission filed with the
Regional Trial Court (RTC) of Bulacan for lack of jurisdiction, as well as
the CA resolution3 that denied its motion for reconsideration.
FACTUAL ANTECEDENTS
The present controversy traces its roots to the case filed by CGA against
the Spouses Avelino and Priscilla Ignacio (respondents) for rescission of
their Contract to Sell before the RTC, Branch 14, Malolos, Bulacan. The
facts, drawn from the records and outlined below, are not in dispute.
On April 30, 1998, CGA entered into a Contract to Sell a subdivision
lot4 (subject property) with the respondents – the registered owners and
developers of a housing subdivision known as Villa Priscilla Subdivision
located in Barangay Cutcut, Pulilan, Bulacan. Under the Contract to Sell,
CGA would pay ₱2,373,000.00 for the subject property on installment
basis; they were to pay a down payment of ₱1,186,500, with the balance
payable within three years on equal monthly amortization payments of
₱46,593.85, inclusive of interest at 24% per annum, starting June 1998.
On August 5, 2000, the parties mutually agreed to amend the Contract to
Sell to extend the payment period from three to five years, calculated
from the date of purchase and based on the increased total consideration
of ₱2,706,600, with equal monthly installments of ₱37,615.00, inclusive
of interest at 24% per annum, starting September 2000.
According to CGA, it religiously paid the monthly installments until its
administrative pastor discovered that the title covering the subject
property suffered from fatal flaws and defects. CGA learned that the
subject property was actually part of two consolidated lots (Lots 2-F and
2-G Bsd-04-000829 [OLT]) that the respondents had acquired from
Nicanor Adriano (Adriano) and Ceferino Sison (Sison), respectively.
Adriano and Sison were former tenant-beneficiaries of Purificacion S.
Imperial (Imperial) whose property in Cutcut, Pulilan, Bulacan5 had been
placed under Presidential Decree (PD) No. 27’s Operation Land
Transfer.6 According to CGA, Imperial applied for the retention of five
hectares of her land under Republic Act No. 6657,7 which the Department
of Agrarian Reform (DAR) granted in its October 2, 1997 order (DAR
Order). The DAR Order authorized Imperial to retain the farm lots
previously awarded to the tenant-beneficiaries, including Lot 2-F
previously awarded to Adriano, and Lot 2-G Bsd-04-000829 awarded to
Sison. On appeal, the Office of the President8 and the CA9 upheld the
DAR Order. Through the Court’s Resolution dated January 19, 2005 in
G.R. No. 165650, we affirmed the DAR Order by denying the petition for
review of the appellate decision.
Understandably aggrieved after discovering these circumstances, CGA
filed a complaint against the respondents before the RTC on April 30,
2002.10 CGA claimed that the respondents fraudulently concealed the fact
that the subject property was part of a property under litigation; thus, the
Contract to Sell was a rescissible contract under Article 1381 of the Civil
Code. CGA asked the trial court to rescind the contract; order the
respondents to return the amounts already paid; and award actual, moral
and exemplary damages, attorney’s fees and litigation expenses.
Instead of filing an answer, the respondents filed a motion to dismiss
asserting that the RTC had no jurisdiction over the case.11 Citing PD No.
95712 and PD No. 1344, the respondents claimed that the case falls within
the exclusive jurisdiction of the HLURB since it involved the sale of a
subdivision lot. CGA opposed the motion to dismiss, claiming that the
 action is for rescission of contract, not specific performance, and is not
among the actions within the exclusive jurisdiction of the HLURB, as
specified by PD No. 957 and PD No. 1344.
On October 15, 2002, the RTC issued an order denying the respondents’
Page | motion to dismiss. The RTC held that the action for rescission of contract
23 and damages due to the respondents’ fraudulent misrepresentation that
they are the rightful owners of the subject property, free from all liens and
encumbrances, is outside the HLURB’s jurisdiction. 1avv phi1
The respondents countered by filing a petition for certiorari with the CA.
In its October 20, 2003 decision, the CA found merit in the respondents’
position and set the RTC order aside; the CA ruled that the HLURB had
exclusive jurisdiction over the subject matter of the complaint since it
involved a contract to sell a subdivision lot based on the provisions of PD
No. 957 and PD No. 1344.
Contending that the CA committed reversible error, the CGA now comes
before the Court asking us to overturn the CA decision and resolution.
THE PETITION
In its petition, CGA argues that the CA erred -
(1) in applying Article 1191 of the Civil Code for breach of
reciprocal obligation, while the petitioner’s action is for the
rescission of a rescissible contract under Article 1381 of the same
Code, which is cognizable by the regular court; and
(2) in holding that the HLURB has exclusive jurisdiction over the
petitioner’s action by applying Antipolo Realty Corp v. National
Housing Corporation13 and other cited cases.
In essence, the main issue we are asked to resolve is which of the two –
the regular court or the HLURB – has exclusive jurisdiction over CGA’s
action for rescission and damages.
According to CGA, the exclusive jurisdiction of the HLURB, as set forth in
PD No. 1344 and PD No. 957, is limited to cases involving specific
performance and does not cover actions for rescission.
Taking the opposing view, respondents insist that since CGA’s case
involves the sale of a subdivision lot, it falls under the HLURB’s exclusive
jurisdiction.
THE COURT’S RULING
We find no merit in the petition and consequently affirm the CA decision.
Development of the HLURB’s jurisdiction
The nature of an action and the jurisdiction of a tribunal are determined
by the material allegations of the complaint and the law governing at the
time the action was commenced. The jurisdiction of the tribunal over the
subject matter or nature of an action is conferred only by law, not by the
parties’ consent or by their waiver in favor of a court that would otherwise
have no jurisdiction over the subject matter or the nature of an
action.14 Thus, the determination of whether the CGA’s cause of action
falls under the jurisdiction of the HLURB necessitates a closer
examination of the laws defining the HLURB’s jurisdiction and authority.
PD No. 957, enacted on July 12, 1976, was intended to closely supervise
and regulate the real estate subdivision and condominium businesses in
order to curb the growing number of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium
sellers and operators. As one of its "whereas clauses" states:
WHEREAS, reports of alarming magnitude also show cases of swindling
and fraudulent manipulations perpetrated by unscrupulous subdivision
and condominium sellers and operators, such as failure to deliver titles to
the buyers or titles free from liens and encumbrances, and to pay real
estate taxes, and fraudulent sales of the same subdivision lots to different
innocent purchasers for value;
Section 3 of PD No. 957 granted the National Housing Authority (NHA)
the "exclusive jurisdiction to regulate the real estate trade and business."
Thereafter, PD No. 1344 was issued on April 2, 1978 to expand the
jurisdiction of the NHA to include the following:
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
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
Page |
24 C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or
salesman.
Executive Order No. 648 (EO 648), dated February 7, 1981, transferred
the regulatory and quasi-judicial functions of the NHA to the Human
Settlements Regulatory Commission (HSRC). Section 8 of EO 648
provides:
SECTION 8. Transfer of Functions. -The regulatory functions of the
National Housing Authority pursuant to Presidential Decree Nos. 957,
1216, 1344 and other related laws are hereby transferred to the
Commission [Human Settlements Regulatory Commission]. x x x. Among
these regulatory functions are: 1) Regulation of the real estate trade and
business; x x x 11) Hear and decide cases of unsound real estate
business practices; claims involving refund filed against project owners,
developers, dealers, brokers, or salesmen; and cases of specific
performance.
Pursuant to Executive Order No. 90 dated December 17, 1986, the
HSRC was renamed as the HLURB.
Rationale for HLURB’s extensive quasi-judicial powers
The surge in the real estate business in the country brought with it an
increasing number of cases between subdivision owners/developers and
lot buyers on the issue of the extent of the HLURB’s exclusive
jurisdiction. In the cases that reached us, we have consistently ruled that
the HLURB has exclusive jurisdiction over complaints arising from
contracts between the subdivision developer and the lot buyer or those
aimed at compelling the subdivision developer to comply with its
contractual and statutory obligations to make the subdivision a better
place to live in.15
We explained the HLURB’s exclusive jurisdiction at length in Sps. Osea
v. Ambrosio,16 where we said:
Generally, the extent to which an administrative agency may exercise its
powers depends largely, if not wholly, on the provisions of the statute
creating or empowering such agency. Presidential Decree (P.D.) No.
1344, "Empowering The National Housing Authority To Issue Writ Of
Execution In The Enforcement Of Its Decision Under Presidential Decree
No. 957," clarifies and spells out the quasi-judicial dimensions of the
grant of jurisdiction to the HLURB in the following specific terms:
SEC. 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
subdivision 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 extent to which the HLURB has been vested with quasi-judicial
authority must also be determined by referring to the terms of P.D. No.
957, "The Subdivision And Condominium Buyers' Protective Decree."
Section 3 of this statute provides:
x x x National Housing Authority [now HLURB]. - The National Housing
Authority shall have exclusive jurisdiction to regulate the real estate trade
and business in accordance with the provisions of this Decree.
The need for the scope of the regulatory authority thus lodged in the
HLURB is indicated in the second, third and fourth preambular
paragraphs of PD 957 which provide:
WHEREAS, numerous reports reveal that many real estate subdivision
owners, developers, operators, and/or sellers have reneged on their
 representations and obligations to provide and maintain properly
subdivision roads, drainage, sewerage, water systems, lighting systems,
and other similar basic requirements, thus endangering the health and
safety of home and lot buyers;
Page | WHEREAS, reports of alarming magnitude also show cases of swindling
25 and fraudulent manipulations perpetrated by unscrupulous subdivision
and condominium sellers and operators, such as failure to deliver titles to
the buyers or titles free from liens and encumbrances, and to pay real
estate taxes, and fraudulent sales of the same subdivision lots to different
innocent purchasers for value;
xxxx
WHEREAS, this state of affairs has rendered it imperative that the real
estate subdivision and condominium businesses be closely supervised
and regulated, and that penalties be imposed on fraudulent practices and
manipulations committed in connection therewith.
The provisions of PD 957 were intended to encompass all questions
regarding subdivisions and condominiums. The intention was aimed at
providing for an appropriate government agency, the HLURB, to which all
parties aggrieved in the implementation of provisions and the
enforcement of contractual rights with respect to said category of real
estate may take recourse. The business of developing subdivisions and
corporations being imbued with public interest and welfare, any question
arising from the exercise of that prerogative should be brought to the
HLURB which has the technical know-how on the matter. In the exercise
of its powers, the HLURB must commonly interpret and apply contracts
and determine the rights of private parties under such contracts. This
ancillary power is no longer a uniquely judicial function, exercisable only
by the regular courts.
As observed in C.T. Torres Enterprises, Inc. v. Hibionada:
The argument that only courts of justice can adjudicate claims resoluble
under the provisions of the Civil Code is out of step with the fast-changing
times. There are hundreds of administrative bodies now performing this
function by virtue of a valid authorization from the legislature. This quasi-
judicial function, as it is called, is exercised by them as an incident of the
principal power entrusted to them of regulating certain activities falling
under their particular expertise.
In the Solid Homes case for example the Court affirmed the competence
of the Housing and Land Use Regulatory Board to award damages
although this is an essentially judicial power exercisable ordinarily only by
the courts of justice. This departure from the traditional allocation of
governmental powers is justified by expediency, or the need of the
government to respond swiftly and competently to the pressing problems
of the modern world. [Emphasis supplied.]
Another case – Antipolo Realty Corporation v. NHA17 – explained the
grant of the HLURB’s expansive quasi-judicial powers. We said:
In this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge,
experience and capability to hear and determine promptly disputes on
technical matters or essentially factual matters, subject to judicial review
in case of grave abuse of discretion, has become well nigh indispensable.
Thus, in 1984, the Court noted that ‘between the power lodged in an
administrative body and a court, the unmistakable trend has been to refer
it to the former’.
xxx
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. In the exercise of such
powers, the agency concerned must commonly interpret and apply
contracts and determine the rights of private parties under such
contracts, One thrust of the multiplication of administrative agencies is
that the interpretation of contracts and the determination of private rights
thereunder is no longer a uniquely judicial function, exercisable only by
our regular courts. [Emphasis supplied.]
Subdivision cases under the RTC’s jurisdiction
The expansive grant of jurisdiction to the HLURB does not mean,
however, that all cases involving subdivision lots automatically fall under
its jurisdiction. As we said in Roxas v. Court of Appeals: 18
In our view, the mere relationship between the parties, i.e., that of being
subdivision owner/developer and subdivision lot buyer, does not
 automatically vest jurisdiction in the HLURB. For an action to fall within
the exclusive jurisdiction of the HLURB, the decisive element is the
nature of the action as enumerated in Section 1 of P.D. 1344. On this
matter, we have consistently held that the concerned administrative
agency, the National Housing Authority (NHA) before and now the
Page | HLURB, has jurisdiction over complaints aimed at compelling the
26 subdivision developer to comply with its contractual and statutory
obligations.
xxx
Note particularly pars. (b) and (c) as worded, where the HLURB’s
jurisdiction concerns cases commenced by subdivision lot or
condominium unit buyers. As to par. (a), concerning "unsound real estate
practices," it would appear that the logical complainant would be the
buyers and customers against the sellers (subdivision owners and
developers or condominium builders and realtors ), and not vice versa.
[Emphasis supplied.]
Pursuant to Roxas, we held in Pilar Development Corporation v.
Villar19 and Suntay v. Gocolay20 that the HLURB has no jurisdiction over
cases filed by subdivision or condominium owners or developers against
subdivision lot or condominium unit buyers or owners. The rationale
behind this can be found in the wordings of Sec. 1, PD No. 1344, which
expressly qualifies that the cases cognizable by the HLURB are those
instituted by subdivision or condomium buyers or owners against the
project developer or owner. This is also in keeping with the policy of the
law, which is to curb unscrupulous practices in the real estate trade and
business.21
Thus, in the cases of Fajardo Jr. v. Freedom to Build, Inc.,[22] and
Cadimas v. Carrion,23 we upheld the RTC’s jurisdiction even if the subject
matter was a subdivision lot since it was the subdivision developer who
filed the action against the buyer for violation of the contract to sell.
The only instance that HLURB may take cognizance of a case filed by the
developer is when said case is instituted as a compulsory counterclaim to
a pending case filed against it by the buyer or owner of a subdivision lot
or condominium unit. This was what happened in Francel Realty
Corporation v. Sycip,24 where the HLURB took cognizance of the
developer’s claim against the buyer in order to forestall splitting of causes
of action.
Obviously, where it is not clear from the allegations in the complaint that
the property involved is a subdivision lot, as in Javellana v. Hon.
Presiding Judge, RTC, Branch 30, Manila,25 the case falls under the
jurisdiction of the regular courts and not the HLURB. Similarly,
in Spouses Dela Cruz v. Court of Appeals,26 we held that the RTC had
jurisdiction over a case where the conflict involved a subdivision lot buyer
and a party who owned a number of subdivision lots but was not himself
the subdivision developer.
The Present Case
In the present case, CGA is unquestionably the buyer of a subdivision lot
from the respondents, who sold the property in their capacities as owner
and developer. As CGA stated in its complaint:
2.01. Defendants are the registered owners and developers of a
housing subdivision presently known as Villa Priscilla Subdivision
located at Brgy. Cutcut, Pulilan, Bulacan;
2.02 On or about April 30, 1998, the plaintiff thru its
Administrative Pastor bought from defendants on installment
basis a parcel of land designated at Lot 1, Block 4 of the said Villa
Priscilla Subdivision xxx
xxx
2.04 At the time of the execution of the second Contract to Sell
(Annex "B"), Lot 1, Block 4 of the Villa Priscilla Subdivision was
already covered by Transfer Certificate of Title No. T-127776 of
the Registry of Deeds of Quezon City in the name of Iluminada T.
Soneja, married to Asterio Soneja (defendant Priscilla T. Ignacio’s
sister and brother-in-law) and the defendants as co-owners, but
the latter represented themselves to be the real and absolute
owners thereof, as in fact it was annotated in the title that they
were empowered to sell the same. Copy of TCT No. T-127776 is
hereto attached and made part hereof as Annex "C".
2.05 Plaintiff has been religiously paying the agreed monthly
installments until its Administrative Pastor discovered recently
that while apparently clean on its face, the title covering the
subject lot actually suffers from fatal flaws and defects as it is part
of the property involved in litigation even before the original
 Contract to Sell (Annex "A"), which defendants deliberately and
fraudulently concealed from the plaintiff;
2.06 As shown in the technical description of TCT No. T-127776
(Annex "C"), it covers a portion of consolidated Lots 2-F and 2-G
Page | Bsd-04-000829 (OLT), which were respectively acquired by
27 defendants from Nicanor Adriano and Ceferino Sison, former
tenants-beneficiaries of Purificacion S. Imperial, whose property
at Cutcut, Pulilan, Bulacan originally covered by TCT No. 240878
containing an area of 119,431 square meters was placed under
Operation Land Transfer under P.D. No. 27;
2.07 Said Purificacion S. Imperial applied for retention of five (5)
hectares of her property at Cutcut, Pulilan, Bulacan under Rep,
Act No. 6657 and the same was granted by the Department of
Agrarian Reform (DAR) to cover in whole or in part farm lots
previously awarded to tenants-beneficiaries, including inter alia
Nicanor Adriano’s Lot 2-F and Ceferino Sison’s Lot 2-G Bsd-04-
000829 (OLT).
xxx
2.08 Said order of October 2, 1997 was affirmed and declared
final and executory, and the case was considered closed, as in
fact there was already an Implementing Order dated November
10, 1997.
xxx
3.03 As may thus be seen, the defendants deliberately and
fraudulently concealed from the plaintiff that fact that the parcel of
land sold to the latter under the Contract to Sell (Annexes "A" and
"B") is part of the property already under litigation and in fact part
of the five-hectare retention awarded to the original owner,
Purificacion S. Imperial.
xxx
3.05 Plaintiff is by law entitled to the rescission of the Contracts to
Sell (Annexes "A" and "B") by restitution of what has already been
paid to date for the subject property in the total amount of
P2,515,899.20, thus formal demand therefor was made on the
defendants thru a letter dated April 5, 2002, which they received
but refused to acknowledge receipt. Copy of said letter is hereto
attached and made part hereof as Annex "J". 27[Emphasis
supplied.]
From these allegations, the main thrust of the CGA complaint is clear – to
compel the respondents to refund the payments already made for the
subject property because the respondents were selling a property that
they apparently did not own. In other words, CGA claims that since the
respondents cannot comply with their obligations under the contract, i.e.,
to deliver the property free from all liens and encumbrances, CGA is
entitled to rescind the contract and get a refund of the payments already
made. This cause of action clearly falls under the actions contemplated
by Paragraph (b), Section 1 of PD No. 1344, which reads:
SEC. 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:
xxx
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
We view CGA’s contention – that the CA erred in applying Article 1191 of
the Civil Code as basis for the contract’s rescission – to be a negligible
point. Regardless of whether the rescission of contract is based on Article
1191 or 1381 of the Civil Code, the fact remains that what CGA
principally wants is a refund of all payments it already made to the
respondents. This intent, amply articulated in its complaint, places its
action within the ambit of the HLURB’s exclusive jurisdiction and outside
the reach of the regular courts. Accordingly, CGA has to file its complaint
before the HLURB, the body with the proper jurisdiction.
WHEREFORE, premises considered, we DENY the petition and AFFIRM
the October 20, 2003 Decision of the Court of Appeals in CA G.R. SP No.
75717 dismissing for lack of jurisdiction the CGA complaint filed with the
RTC, Branch 14 of Malolos, Bulacan.
SO ORDERED.
 ARTURO D. BRION
Associate Justice

Page |
28
 SUPREME COURT
Manila
EN BANC
Page |
29
G.R. No. 106498 June 28, 1993
LOLITA DADUBO, petitioner,
vs.
CIVIL SERVICE COMMISSION and the DEVELOPMENT BANK OF
THE PHILIPPINES, respondents.
Francisco P. Duran for petitioner.
CRUZ, J.:
Petitioner Lolita A. Dadubo, Senior Accounts Analyst and Rosario B.
Cidro, Cash Supervisor, of the Development Bank of the Philippines,
Borongan Branch were administratively charged with conduct prejudicial
to the best interest of the service.1 The charges were based on reports on
the unposted withdrawal of P60,000.00 from Savings Account No. 87-692
in the name of Eric Tiu, Edgar Tiu, and/or Pilar Tiu.
The formal investigations revealed that in the morning of August 13,
1987, Erlinda Veloso, authorized representative of the Tius, presented an
undated withdrawal slip for P60,000.00.2 Dadubo, as acting teller,
prepared the corresponding ticket and voucher in the name of the cash
supervisor, Rosario Cidro. Dadubo initialed the withdrawal slip, ticket and
voucher, all dated August 13, 1987, and passed on to Cidro all the
documents on the said transaction. These were then forwarded to the
accountant, Reynaldo Dorado, who signed the voucher ledger card of the
Tius' savings account and forwarded the documents to Apolinario
Babaylon, bookkeeper, who was also acting as posting machine
operator. After posting the amount of P60,000.00 on the ledger card and
passbook, Babaylon initialed the withdrawal slip and returned the
documents to Dorado, who approved the withdrawal and thereafter
disbursed the P60,000.00 to Veloso. The Received payment portion of
the withdrawal slip was signed Veloso but Cidro, who disbursed the
amount, failed to initial the passbook.
After banking hours, another withdrawal slip was presented by Feliciano
Bugtas, Jr., also an employee of the Tius.3This was the second
P60,000.00 withdrawal. Veloso did not know about it. The withdrawal slip
was processed and approved on the same day, August 13, 1987. The
space Posted by was initialed by Babaylon but no posting was actually
made because the passbook was not presented. While the withdrawal
slip was dated August 13, 1987, all other supporting documents were
dated August 14, 1987, this being a withdrawal after banking hours
(ABH).
The following day, August 14, 1987, prior to the payment of the ABH
withdrawal, Veloso presented another undated withdrawal slip for
P60,000.00.4 This was the third P60,000.00 withdrawal. The withdrawal
slip was received by Dorado, who handed it to Dadubo. At that time,
Cidro was encashing the check at PNB to satisfy the ABH withdrawal.
When she returned from the bank, she paid this withdrawal to Veloso,
who thought that what she was collecting was the P60,000.00
corresponding to the withdrawal slip she presented that morning.
When Dadubo informed Cidro about the third withdrawal, till money of
P100,000.00 was made to service it. Prior to the payment of the third
P60,000.00 withdrawal, Veloso came back and presented another
withdrawal slip for P40,000.00.5 The petitioner claimed she disbursed
P100,000.00 to Veloso, covering the third P60,000.00 and the
P40,000.00 withdrawals. On the other hand, Veloso testified that she
received only P40,000.00 from the petitioner. She acknowledged receipt
of the amount by signing the withdrawal slip and indicating opposite her
signature the amount of P40,000.00.
That left the balance of P60,000.00 unaccounted for and directly
imputable to Dadubo.
On the basis of these findings, DBP found Dadubo guilty of dishonesty for
embezzlement of bank funds. She was penalized with dismissal from the
service.6 Cidro was adjudged guilty of gross neglect of duty and fined in
an amount equivalent to one month basic salary, payable through salary
deductions in not more than 12 installments.
Dadubo appealed to the Merit Systems Protection Board (MSPB),7 which
affirmed the decision of the DBP, declaring as follows:
There is nothing in the records to show that the Senior
Manager, Personnel Services and Vice-Chairman, both of
 the DBP, abused their discretion in deciding the case
against the appellant or that their decision was made and
attended with arbitrariness or unfairness. To all intents
and purposes, the ensuing decision was a necessary
consequence of the evidence.
Page |
30 However, DBP was reversed by the Civil Service Commission in its
Resolution No. 91-642, dated May 21, 1991,8which reduced Dadubo's
penalty to suspension for six months on the ground that:
Although Dadubo made alterations on the dates in the
Ledger Card from August 13 to August 14, the fact
remains that the bank was defrauded on account of said
ABH withdrawal (for) which Cidro is held responsible and
accordingly found guilty of Gross Neglect of Duty and
Inefficiency and Incompetence in the Performance of
Official Duty. It was also Dadubo who reported on the
irreconcilable P60,000.00. The most that Dadubo could
be charged with is willful violation of office regulation
when she undertook reconciliation for under the Bank
Manual the tellers are not allowed access to the savings
account ledger cards.
Respondent DBP moved reconsideration. On July 16, 1992, the
Commission acting favorably on the motion, promulgated Resolution No.
92-8789 affirming the earlier findings of the DBP as to Dadubo guilt, thus
— Required to comment, the Solicitor General argued that CSC Resolution
The records reveal that Dadubo admitted in her Answer
that she changed entry of the date August 13 to 14 in the
ledger in the course of her reconciliation which she was
advised not to do.
xxx xxx xxx
This act of admission needs no further elaboration to
prove that Dadubo is guilty of the charge. Such admission
is however treated as a mitigating circumstance which is
offset by the aggravating circumstance of taking
advantage of her official position. There is no reason for
her to change or alter entries in the ledger unless she
intends to benefit therefrom or to conceal some facts.
Further, it should be noted that the report was made only
on September 28, 1987 (the date the report on
reconciliation was submitted to the Regional Office). It
should be emphasized as earlier stated that Dadubo was
not authorized to reconcile the subsidiary ledger cards for
the period ending August 20, 1987. Hence, as
emphatically stated in the MSPB decision, ". . .
respondent Dadubo manipulated the bank records to
conceal the offense which constituted the act of
dishonesty."
The opinion of an acting Internal Audit Officer, whose
report was among the preliminary findings considered in
the investigation of the case, is not conclusive as there
are other available and convincing evidence to prove the
guilt of Dadubo.
Dadubo has brought her case to this Court in this petition for certiorari.
She claims that CSC Resolution No. 92-878 failed to comply with the
constitutional requirement to state clearly and distinctly the facts an the
law on which the decision is based; CSC Resolution No. 92-878 conflicts
with the findings of fact in CSC Resolution No. 91-642; the Commission
manifestly overlooked or disregarded certain relevant facts not disputed
by the parties; and it based its conclusions entirely on speculations,
surmises or conjectures.
No. 92-878 did not need to restate the legal and factual bases of the
original decision in CSC-MSPB No. 497 which already explained the
relevant facts and the applicable law. The petitioner had admitted that
she changed the entry of the dates in the subsidiary ledger card from
August 13 to 14 in the course of her reconciliation work although she was
not authorized to do this. This admission, along with the other evidence
Presented during the investigation in the bank, proved Dadubo's guilt.
Moreover, the affidavit of Albert C. Ballicud was inadmissible in evidence
because he was never subjected to cross-examination.
The petitioner's challenges are mainly factual. The rule is that the findings
of fact of administrative bodies, if based on substantial evidence, are
controlling on the reviewing authority. 10 is settled that it is not for the
appellate court to substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence and the
credibility of the witnesses. 11 Administrative decisions on matters within
 their jurisdiction are entitled to respect and can only be set aside on proof
of grave abuse of discretion, fraud or error of law. 12 None of these vices
has been shown in this case.
The petitioner's invocation of due process is without merit. Her complaint
Page | that she was not sufficiently informed of the charges against her has no
31 basis. While the rules governing Judicial trials should be observed as
much as possible, their strict observance is not indispensable in
administrative cases. 13 As this Court has held, "the standard of due
process that must be met in administrative tribunals allows a certain
latitude as long as the element of fairness is not ignored." 14
The essence of due process is distilled in the immortal cry of
Themistocles to Eurybiades: "Strike, but hear me first!" Less dramatically,
it simply connotes an opportunity to be heard. The petitioner had several
opportunities to be heard and to present evidence that she was not guilty
of embezzlement but only of failure to comply with the tellering
procedure. Not only did she testify at her formal investigation but she also
filed a motion for reconsideration with the DBP, then appealed to the
Merit Systems Protection Board (MSPB), and later elevated the case to
the Civil Service Commission. Having been given all these opportunities
to be heard, which she fully availed of, she cannot now complain that she
was denied due process.
Appreciation of the evidence submitted by the parties was, to repeat, the
prerogative of the administrative body, subject to reversal only upon a
clear showing of arbitrariness. The rejection of the affidavit of Ballicud, for
example, was not improper because there was nothing in that document
showing that the petitioner did not embezzle the P60,000.00.
It is true that the petitioner was formally charged with conduct prejudicial
to the best interest of the bank and not specifically with embezzlement.
Nevertheless, the allegations and the evidence presented sufficiently
proved her guilt of embezzlement of bank funds, which in unquestionably
prejudicial to the best interest of the bank.
The charge against the respondent in an administrative case need not be
drafted with the precision of an information in a criminal prosecution. It is
sufficient that he is apprised of the substance of the charge against him;
what is controlling is the allegation of the acts complained of, not the
designation of the offense. 15
We must also dismiss the petitioner's complaint that CSC Resolution No.
92-878 failed to comply with the constitutional requirement to state clearly
and distinctly the facts and the law on which a decision is based. We
have held that this provision applies only to courts of justice and not to
administrative bodies like the Civil Service Commission. 16 In any event,
there was an earlier statement of the facts and the law involved in the
decision rendered by the MSPB dated February 28, 1990, which affirmed
DBP's decision to dismiss the petitioner. In both decisions, the facts and
the law on which they were based were clearly and distinctly stated.
It is worth adding that inasmuch as Civil Service Resolution No. 92-878
was rendered only to resolve DBP's motion for reconsideration, it was not
really necessary to re-state the factual an, legal bases for the said
decisions. Even resolutions issued by this Court do not need to conform,
to the first paragraph of Article VIII, Section 14, of the Constitution, for
reasoning extensively discussed in Borromeo v. Court of Appeals 17 and
other subsequent cases. 18
We find no justification to nullify or modify the questioned resolution. It
would perhaps have been more thorough if certain other officers of the
bank had been also investigated for their part in the anomalous
transaction. But that matter is not before this Court and cannot be
resolved by us at this time.
WHEREFORE, the petition is DISMISSED for lack of a clear showing of
grave abuse of discretion on the part of the Civil Service Commission in
issuing the questioned resolutions. Costs against the petitioner.
SO ORDERED.
Narvasa, C.J., Feliciano, Bidin, Griño-Aquino, Regalado, Davide, Jr.,
Romero, Nocon, Bellosillo, Melo and Quiazon, JJ., concur.
Padilla, J., is on leave.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
Page |
32 G.R. No. L-30637 July 16, 1987
LIANGA BAY LOGGING, CO., INC., petitioner,
vs.
HON. MANUEL LOPEZ ENAGE, in his capacity as Presiding Judge
of Branch II of the Court of First, Instance of Agusan, and AGO
TIMBER CORPORATION, respondents.
TEEHANKEE, C.J.:
The Court grants the petition for certiorari and prohibition and holds that
respondent judge, absent any showing of grave abuse of discretion, has
no competence nor authority to review anew the decision in
administrative proceedings of respondents public officials (director of
forestry, secretary of agriculture and natural resources and assistant
executive secretaries of the Office of the President) in determining the
correct boundary line of the licensed timber areas of the contending
parties. The Court reaffirms the established principle that findings of fact
by an administrative board or agency or official, following a hearing, are
binding upon the courts and will not be disturbed except where the board,
agency and/or official(s) have gone beyond their statutory authority,
exercised unconstitutional powers or clearly acted arbitrarily and without
regard to their duty or with grave abuse of discretion.
The parties herein are both forest concessionaries whose licensed areas
are adjacent to each other. The concession of petitioner Lianga Bay
Logging Corporation Co., Inc. (hereinafter referred to as petitioner
Lianga) as described in its Timber License Agreement No. 49, is located
in the municipalities of Tago, Cagwait, Marihatag and Lianga, all in the
Province of Surigao, consisting of 110,406 hectares, more or less, while
that of respondent Ago Timber Corporation (hereinafter referred to as
respondent Ago) granted under Ordinary Timber License No. 1323-60
[New] is located at Los Arcos and San Salvador, Province of Agusan,
with an approximate area of 4,000 hectares. It was a part of a forest area
of 9,000 hectares originally licensed to one Narciso Lansang under
Ordinary Timber License No. 584-'52.
Since the concessions of petitioner and respondent are adjacent to each
other, they have a common boundary-the Agusan-Surigao Provincial
boundary-whereby the eastern boundary of respondent Ago's concession
is petitioner Lianga's western boundary. The western boundary of
petitioner Lianga is described as "... Corner 5, a point in the intersection
of the Agusan-Surigao Provincial boundary and Los Arcos-Lianga Road;
thence following Agusan-Surigao Provincial boundary in a general
northerly and northwesterly and northerly directions about 39,500 meters
to Corner 6, a point at the intersection of the Agusan-Surigao Provincial
boundary and Nalagdao Creek ..." The eastern boundary of respondent
Ago's concession is described as "... point 4, along the Agusan-Surigao
boundary; thence following Agusan-Surigao boundary in a general
southeasterly and southerly directions about 12,000 meters to point 5, a
point along Los Arcos-Lianga Road; ..." 1
Because of reports of encroachment by both parties on each other's
concession areas, the Director of Forestry ordered a survey to establish
on the ground the common boundary of their respective concession
areas. Forester Cipriano Melchor undertook the survey and fixed the
common boundary as "Corner 5 of Lianga Bay Logging Company at Km.
10.2 instead of Km. 9.7 on the Lianga-Arcos Road and lines N900E,
21,000 meters; N12 W, 21,150 meters; N40 W, 3,000 meters; N31 W,
2,800 meters; N50 W, 1,700 meters" which respondent Ago protested
claiming that "its eastern boundary should be the provincial boundary line
of Agusan-Surigao as described in Section 1 of Art. 1693 of the Philippine
Commission as indicated in the green pencil in the attached sketch" of
the areas as prepared by the Bureau of Forestry. 2 The Director of
Forestry, after considering the evidence, found:
That the claim of the Ago Timber Corporation portrays a line
(green line) far different in alignment with the line (red) as
indicated in the original License Control Map of this Office;
That the claim of the Ago Timber Corporation (green line does not
conform to the distance of 6,800 meters from point 3 to point 4 of
the original description of the area of Narciso Lansang but would
project said line to a distance of approximately 13,800 meters;
That to follow the claim of the Ago Timber Corporation would
increase the area of Narciso Lansang from 9,000 to 12,360
hectares;
 That to follow the claim of the Ago Timber Corporation would
reduce the area of the Lianga Bay Logging, Co., Inc. to 107,046
hectares instead of the area granted which is 110,406 hectares.
and ruled that "the claim of the Ago Timber Corporation runs counter to
Page | the intentions of this Office is granting the license of Mr. Narciso
33 Lansang; and further, that it also runs counter to the intentions of this
Office in granting the Timber License Agreement to the Lianga Bay
Logging Co., Inc. The intentions of this Office in granting the two licenses
(Lansang and Lianga Bay Logging Co., Inc.) are patently manifest in
that distances and bearings are the controlling factors. If mention was
ever made of the Agusan-Surigao boundary, as the common boundary
line of both licensees, this Office could not have meant the Agusan-
Surigao boundary as described under Section 1 of Act 1693 of the
Philippine Commission for were it so it could have been so easy for this
Office to mention the distance from point 3 to point 4 of Narciso Lansang
as approximately 13,800 meters. This cannot be considered a mistake
considering that the percentage of error which is more or less 103% is
too high an error to be committed by an Office manned by competent
technical men. The Agusan-Surigao boundary as mentioned in the
technical descriptions of both licensees, is, therefore, patently an
imaginary line based on B.F. License Control Map. Such being the case,
it is reiterated that distance and bearings control the description where an
imaginary line exists. 3The decision fixed the common boundary of the
licensed areas of the Ago Timber Corporation and Lianga Bay Logging
Co., Inc. as that indicated in red pencil of the sketch attached to the
decision.
In an appeal interposed by respondent Ago, docketed in the Department
of Agriculture and Natural Resources as DANR Case No. 2268, the then
Acting Secretary of Agriculture and Natural Resources Jose Y. Feliciano,
in a decision dated August 9, 1965 set aside the appealed decision of the
Director of Forestry and ruled that "(T)he common boundary line of the
licensed areas of the Ago Timber Corporation and the Lianga Bay
Logging Co., Inc., should be that indicated by the green line on the same
sketch which had been made an integral part of the appealed decision." 4
Petitioner elevated the case to the Office of the President, where in a
decision dated June 16, 1966, signed by then Assistant Executive
Secretary Jose J. Leido, Jr., the ruling of the then Secretary of Agriculture
and Natural Resources was affirmed. 5 On motion for reconsideration, the
Office of the President issued another decision dated August 9, 1968
signed by then Assistant Executive Secretary Gilberto Duavit reversing
and overturning the decision of the then Acting Secretary of Agriculture
and Natural Resources and affirming in toto and reinstating the decision,
dated March 20, 1961, of the Director of Forestry. 6
Respondent Ago filed a motion for reconsideration of the decision dated
August 9, 1968 of the Office of the President but after written opposition
of petitioner Lianga, the same was denied in an order dated October 2,
1968, signed by then Assistant Executive Secretary Jose J. Leido, Jr. 7
On October 21, 1968, a new action was commenced by Ago Timber
Corporation, as plaintiff, in the Court of First Instance of Agusan, Branch
II, docketed thereat as Civil Case No. 1253, against Lianga Bay Logging
Co., Inc., Assistant Executive Secretaries Jose J. Leido, Jr. and Gilberto
M. Duavit and Director of Forestry, as defendants, for "Determination of
Correct Boundary Line of License Timber Areas and Damages with
Preliminary Injunction" reiterating once more the same question raised
and passed upon in DANR Case No. 2268 and insisting that "a judicial
review of such divergent administrative decisions is necessary in order to
determine the correct boundary fine of the licensed areas in question." 8
As prayed for, respondent judge issued a temporary restraining order on
October 28, 1968, on a bond of P20,000, enjoining the defendants from
carrying out the decision of the Office of the President. The
corresponding writ was issued the next day, or on October 29, 1968. 9
On November 10, 1968, defendant Lianga (herein petitioner) moved for
dismissal of the complaint and for dissolution of the temporary restraining
order on grounds that the complaint states no cause of action and that
the court has no jurisdiction over the person of respondent public officials
and respondent corporation. It also submitted its opposition to plaintiff's
(herein respondent prayer for the issuance of a writ of preliminary
injunction. 10 A supplemental motion was filed on December 6, 1968. 11
On December 19, 1968, the lower court issued an order denying
petitioner Lianga's motion to dismiss and granting the writ of preliminary
injunction prayed for by respondent Ago. 12 Lianga's Motion for
Reconsideration of the Order was denied on May 9, 1969. 13 Hence, this
petition praying of the Court (a) to declare that the Director of Forestry
has the exclusive jurisdiction to determine the common boundary of the
licensed areas of petitioners and respondents and that the decision of the
Office of the President dated August 9, 1968 is final and executory; (b) to
order the dismissal of Civil Case No. 1253 in the Court of First Instance of
Agusan; (c) to declare that respondent Judge acted without jurisdiction or
in excess of jurisdiction and with grave abuse of discretion, amounting to
 lack of jurisdiction, in issuing the temporary restraining order dated
October 28, 1968 and granting the preliminary injunction per its Order
dated December 19, 1968; and (d) to annul the aforementioned orders.
After respondent's comments on the petition and petitioner's reply
Page | thereto, this Court on June 30, 1969 issued a restraining order enjoining
34 in turn the enforcement of the preliminary injunction and related orders
issued by the respondent court in Civil Case No. 1253. 14
The Court finds merit in the petition.
Respondent Judge erred in taking cognizance of the complaint filed by
respondent Ago, asking for the determination anew of the correct
boundary fine of its licensed timber area, for the same issue had already
been determined by the Director of Forestry, the Secretary of Agriculture
and Natural Resources and the Office of the President, administrative
officials under whose jurisdictions the matter properly belongs. Section
1816 of the Revised Administrative Code vests in the Bureau of Forestry,
the jurisdiction and authority over the demarcation, protection,
management, reproduction, reforestation, occupancy, and use of all
public forests and forest reserves and over the granting of licenses for
game and fish, and for the taking of forest products, including stone and
earth therefrom. The Secretary of Agriculture and Natural Resources, as
department head, may repeal or in the decision of the Director of Forestry
when advisable in the public interests, 15 whose decision is in turn
appealable to the Office of the President. 16
In giving due course to the complaint below, the respondent court would
necessarily have to assess and evaluate anew all the evidence presented
in the administrative proceedings, 17 which is beyond its competence and
jurisdiction. For the respondent court to consider and weigh again the
evidence already presented and passed upon by said officials would be
to allow it to substitute its judgment for that of said officials who are in a
better position to consider and weigh the same in the light of the authority
specifically vested in them by law. Such a posture cannot be entertained,
for it is a well-settled doctrine that the courts of justice will generally not
interfere with purely administrative matters which are addressed to the
sound discretion of government agencies and their expertise unless there
is a clear showing that the latter acted arbitrarily or with grave abuse of
discretion or when they have acted in a capricious and whimsical manner
such that their action may amount to an excess or lack of jurisdiction. 18
A doctrine long recognized is that where the law confines in an
administrative office the power to determine particular questions or
matters, upon the facts to be presented, the jurisdiction of such office
shall prevail over the courts. 19
The general rule, under the principles of administrative law in force in this
jurisdiction, is that decisions of administrative officers shall not be
disturbed by the courts, except when the former have acted without or in
excess of their jurisdiction, or with grave abuse of discretion. Findings of
administrative officials and agencies who have acquired expertise
because their jurisdiction is confined to specific matters are generally
accorded not only respect but at times even finality of such findings are
supported by substantial evidence. 20 As recently stressed by the Court,
"in this era of clogged court dockets, the need for specialized
administrative boards or commissions with the special knowledge,
experience and capability to hear and determine promptly disputes on
technical matters or essentially factual matters, subject to judicial review
in case of grave abuse of discretion, has become well nigh
indispensable." 21
The facts and circumstances in the instant case are similar to the earlier
case of Pajo, et al. v. Ago, et al. 22 (where therein respondent Pastor Ago
is the president of herein respondent Ago Timber Corporation). In the
said case, therein respondent Pastor Ago, after an adverse decision of
the Director of Forestry, Secretary of Agriculture and Natural Resources
and Executive Secretary in connection with his application for renewal of
his expired timber licenses, filed with the Court of First instance of
Agusan a petition for certiorari, prohibition and damages with preliminary
injunction alleging that the rejection of his application for renewal by the
Director of Forestry and Secretary of Agriculture and Natural Resources
and its affirmance by the Executive Secretary constituted an abuse of
discretion and was therefore illegal. The Court held that "there can be no
question that petitioner Director of Forestry has jurisdiction over the grant
or renewal of respondent Ago's timber license (Sec. 1816, Rev. Adm.
Code); that petitioner Secretary of Agriculture and Natural Resources as
department head, is empowered by law to affirm, modify or reject said
grant or renewal of respondent Ago's timber license by petitioner Director
of Forestry (Sec. 79[c], Rev. Adm. Code); and that petitioner Executive
Secretary, acting for and in behalf and by authority of the President has,
likewise, jurisdiction to affirm, modify or reverse the orders regarding the
grant or renewal of said timber license by the two aforementioned
officials." The Court went on to say that, "(I)n the case of Espinosa, et al.
v. Makalintal, et al. (79 Phil. 134; 45 Off. Gaz. 712), we held that the
powers granted to the Secretary of Agriculture and Commerce (Natural
 Resources) by law regarding the disposition of public lands such as
granting of licenses, permits, leases, and contracts or approving,
rejecting, reinstating, or cancelling applications or deciding conflicting
applications, are all executive and administrative in nature. It is a well-
recognized principle that purely administrative and discretionary functions
Page | may not be interfered with by the courts. In general, courts have no
35 supervising power over the proceedings and actions of the administrative
departments of the government. This is generally true with respect to acts
involving the exercise of judgment or discretion, and findings of act.
Findings of fact by an administrative board, agency or official, following a
hearing, are binding upon the courts and will not be disturbed except
where the board, agency or official has gone beyond his statutory
authority, exercised unconstitutional powers or clearly acted arbitrarily
and without regard to his duty or with grave abuse of discretion. And we
have repeatedly held that there is grave abuse of discretion justifying the
issuance of the writ of certiorari only when there is capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction.
(Abad Santos v. Province of Tarlac, 67 Phil. 480; Tan vs. People, 88 Phil.
609)"
Respondent Ago contends that the motion filed by petitioner Lianga for
reconsideration of the decision of the Office of the President was denied
in an alleged "decision" dated August 15, 1966, allegedly signed by then
Assistant Executive Secretary Jose J. Leido, Jr. that, "however, for some
mysterious, unknown if not anomalous reasons and/or illegal
considerations, the "decision" allegedly dated August 15, 1966(Annex
"D") was never released" and instead a decision was released on August
9, 1968, signed by then Assistant Executive Secretary Gilberto M. Duavit,
which reversed the findings and conclusions of the Office of the President
in its first decision dated June 16, 1966 and signed by then Assistant
Executive Secretary Leido.
It is elementary that a draft of a decision does not operate as judgment
on a case until the same is duly signed and delivered to the clerk for filing
and promulgation. A decision cannot be considered as binding on the
parties until its promulgation. 23 Respondent should be aware of this rule.
In still another case of Ago v. Court of Appeals, 24 (where herein
respondent Ago was the petitioner) the Court held that, "While it is to be
presumed that the judgment that was dictated in open court will be the
judgment of the court, the court may still modify said order as the same is
being put into writing. And even if the order or judgment has already been
put into writing and signed, while it has not yet been delivered to the clerk
for filing, it is stin subject to amendment or change by the judge. It is only
when the judgment signed by the judge is actually filed with the clerk of
court that it becomes a valid and binding judgment. Prior thereto, it could
still be subject to amendment and change and may not, therefore,
constitute the real judgment of the court."
Respondent alleges "that in view of the hopelessly conflicting decisions of
the administrative bodies and/or offices of the Philippine government, and
the important questions of law and fact involved therein, as well as the
well-grounded fear and suspicion that some anomalous, illicit and
unlawful considerations had intervened in the concealment of the
decision of August 15, 1966 (Annex "D") of Assistant Executive Secretary
Gilberto M. Duavit, a judicial review of such divergent administrative
decisions is necessary in order to determine the correct boundary line of
the licensed areas in question and restore the faith and confidence of the
people in the actuations of our public officials and in our system of
administration of justice."
The mere suspicion of respondent that there were anomalies in the non-
release of the Leido "decision" allegedly denying petitioner's motion for
reconsideration and the substitution thereof by the Duavit decision
granting reconsideration does not justify judicial review. Beliefs,
suspicions and conjectures cannot overcome the presumption of
regularity and legality of official actions. 25 It is presumed that an official of
a department performs his official duties regularly. 26 It should be noted,
furthermore, that as hereinabove stated with regard to the case history in
the Office of the President, Ago's motion for reconsideration of the Duavit
decision dated August 9, 1968 was denied in the Order dated October 2,
1968 and signed by Assistant Executive Secretary Leido himself (who
thereby joined in the reversal of his own first decision dated June 16,
1966 and signed by himself).
The Ordinary Timber License No. 1323-'60[New] which approved the
transfer to respondent Ago of the 4,000 hectares from the forest area
originally licensed to Narciso Lansang, stipulates certain conditions,
terms and limitations, among which were: that the decision of the Director
of Forestry as to the exact location of its licensed areas is final; that the
license is subject to whatever decision that may be rendered on the
boundary conflict between the Lianga Bay Logging Co. and the Ago
Timber Corporation; that the terms and conditions of the license are
subject to change at the discretion of the Director of Forestry and the
license may be made to expire at an earlier date. Under Section 1834 of
the Revised Administrative Code, the Director of Forestry, upon granting
any license, may prescribe and insert therein such terms, conditions, and
limitations, not inconsistent with law, as may be deemed by him to be in
the public interest. The license operates as a contract between the
 government and respondent. Respondent, therefore, is estopped from
questioning the terms and stipulation thereof.
Clearly, the injunctive writ should not have been issued. The provisions of
law explicitly provide that Courts of First Instance shall have the power to
Page | issue writ of injunction, mandamus, certiorari, prohibition, quo warranto
36 and habeas corpus in their respective places, 27 if the petition filed relates
to the acts or omissions of an inferior court, or of a corporation, board,
officer or person, within their jurisdiction. 28
The jurisdiction or authority of the Court of First Instance to control or
restrain acts by means of the writ of injunction is limited only to acts
which are being committed within the territorial boundaries of their
respective provinces or districts 29 except where the sole issue is the
legality of the decision of the administrative officials. 30
In the leading case of Palanan Lumber Plywood Co., Inc. v.
Arranz 31 which involved a petition for certiorari and prohibition filed in the
Court of First Instance of Isabela against the same respondent public
officials as here and where the administrative proceedings taken were
similar to the case at bar, the Court laid down the rule that: "We agree
with the petitioner that the respondent Court acted without jurisdiction in
issuing a preliminary injunction against the petitioners Executive
Secretary, Secretary of Agriculture and Natural Resources and the
Director of Forestry, who have their official residences in Manila and
Quezon City, outside of the territorial jurisdiction of the respondent Court
of First Instance of Isabela. Both the statutory provisions and the settled
jurisdiction of this Court unanimously affirm that the extraordinary writs
issued by the Court of First Instance are limited to and operative only
within their respective provinces and districts."
A different rule applies only when the point in controversy relates solely to
a determination of a question of law whether the decision of the
respondent administrative officials was legally correct or not. 32 We thus
declared in Director of Forestry v. Ruiz. 33 "In Palanan Lumber & Plywood
Co., Inc., supra, we reaffirmed the rule of non-jurisdiction of courts of first
instance to issue injunctive writs in order to control acts outside of their
premises or districts. We went further and said that when the petition filed
with the courts of first instance not only questions the legal correctness of
the decision of administrative officials but also seeks to enjoin the
enforcement of the said decision, the court could not validly issue the writ
of injunction when the officials sought to be restrained from enforcing the
decision are not stationed within its territory.
1avv phi1
"To recapitulate, insofar as injunctive or prohibitory writs are concerned,
the rule still stands that courts of first instance have the power to issue
writs limited to and operative only within their respective provinces or
districts. "
The writ of preliminary injunction issued by respondent court is
furthermore void, since it appears that the forest area described in the
injunctive writ includes areas not licensed to respondent Ago. The forest
area referred to and described therein comprises the whole area
originally licensed to Narciso Lansang under the earlier Ordinary Timber
License No. 58452. Only a portion of this area was in fact transferred to
respondent Ago as described in its Ordinary Timber License No. 1323-
'60[New].
It is abundantly clear that respondent court has no jurisdiction over the
subject matter of Civil Case No. 1253 of the Court of First Instance of
Agusan nor has it jurisdiction to decide on the common boundary of the
licensed areas of petitioner Lianga and respondent Ago, as determined
by respondents public officials against whom no case of grave abuse of
discretion has been made. Absent a cause of action and jurisdiction,
respondent Judge acted with grave abuse of discretion and excess, if not
lack, of jurisdiction in refusing to dismiss the case under review and in
issuing the writ of preliminary injunction enjoining the enforcement of the
final decision dated August 9, 1968 and the order affirming the same
dated October 2, 1968 of the Office of the President.
ACCORDINGLY, the petition for certiorari and prohibition is granted. The
restraining order heretofore issued by the Court against enforcement of
the preliminary injunction and related orders issued by respondent judge
is the case below is made permanent and the respondent judge or
whoever has taken his place is hereby ordered to dismiss Civil Case No.
1253.
SO ORDERED.
Narvasa, Cruz, Paras and Gancayco, JJ., concur.