Administrative Law A2010

Dean Carlota
V. JUDICIAL REVIEW OF representative for collective bargaining. participate in the election.” That was
Circuit Court of Appeals affirmed. added so that the Board’s “own
ADMINISTRATIVE DECISIONS usefulness of settling disputes that might
ISSUE: arise thereafter might not be impaired.
A. FACTORS AFFECTING FINALITY WON the District Court erred in taking cognizance - If Congress had desired to implicate the
of the case federal judiciary and to place on the
OF ADMINISTRATIVE DECISIONS
federal courts the burden of having the
HELD final say on any aspect of the problem, it
SWITCHMEN’S UNION OF NORTH YES. The District Court did not have the power to would have made its desire plain.
AMERICA v NATIONAL MEDIATION review the action of the National Mediation Board - Congress has long delegated to executive
in issuing the certificate. officers or agencies the determination of
BOARD
320 US 297 - Section 24 (8) of the Judicial Code gives complicated questions of fact and of law.
And where no judicial review was
the federal district courts “original
DOUGLAS; Nov 22, 1943 provided by Congress, the Court has often
jurisdiction” of all “suits and proceedings
refused to furnish one even where
arising under any law regulating
FACTS: questions of law might be involved.
commerce.” But that broad grant of
- Switchmen’s Union of North America
brought suit against National Mediation
general jurisdiction may not be invoked in - The function of the Board under Sec 2,
face of special circumstances obtaining in Ninth is more the function of a referee. To
Board, Brotherhood of Railroad Trainmen,
this case. this decision of the referee Congress has
and New York Central Railroad Co and the
Michigan Central Railroad Co. - The Act in Sec 2, Fourth writes into law added a command enforcible by judicial
decree. But the “command” is that “of
- Pursuant to Sec 2, Ninth of the Railway the “right” of the “majority of any craft or
the statute, not of the Board.”
class of employees” to “determine who
Labor Act (The Act), the Board was called
on to investigate a dispute among the
shall be the representative of the craft or - Under the Act, Congress did not give the
class for the purposes of this Act.” That Board discretion to take or withhold
yardmen of the Railroad Co as to their
“right” is protected by Sec 2, Ninth which action, to grant or deny relief. It gave it
representative for collective bargaining.
gives the Mediation Board the power to no enforcement functions. It was to find
- The Brotherhood sought to be the resolve controversies concerning it and as the fact and then cease. Congress
representative for all the yardmen of the an incident thereto to determine what is prescribed the command. The intent
said lines operated by the New York the appropriate craft or class in which the seems plain – the dispute was to reach its
Central system. The Switchmen election should be held. A review by the last terminal point when the
contended that yardmen of certain federal district courts of the Board’s administrative finding was made. This is
designated parts of the system should be determination is not necessary to reinforced by the highly selective manner
permitted to vote for separate preserve or protect that “right”. It is for Congress has provided for judicial review
representatives instead of being Congress to determine how the rights of administrative orders or determinations
compelled to take part in a system-wide which it creates shall be enforced. In such under the Act. There is no general
election. a case, the specification of one remedy provision for such review but has
- The Board designated all yardmen of the normally excludes another. expressly provided for it only in two
carriers as participants in the election.
The election was held and the
- Where Congress has not expressly instances: the National Railroad
Adjustment Board (concerning rates of
authorized judicial review, the type of
Brotherhood was chosen as pay, rules, or working conditions), and the
problem involved and the history of the
representative. machinery for the voluntary arbitration of
statute in question become highly
- Upon the certification of the result to the labor controversies.
relevant in determining whether judicial
- The language of the Act read in the light
carriers, petitioners sought to have the review may be nonetheless supplied.
of its history supports the view that
determination by the Board of the
participants in the election and the
- Sec 2, Ninth of the Act was introduced as Congress gave administrative action
a device to strengthen and make more under Sec 2, Ninth a finality which it
certification of the representative
effective the processes of collective denied administrative action under the
cancelled.
bargaining. It was drafted so as to give to other sections.
- District Court upheld Board’s decision to the Mediation Board the power to Disposition Reversed
the effect that all yardmen in the service “appoint a committee of three neutral
of a carrier should select a single persons who after hearing shall within 10 Reed, dissent
days designate the employees who may

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- The problem presented by this case is one of
statutory interpretation, whether or not Sec 2,
Ninth gives discretion to the Board to split the
crafts of a single carrier into smaller units so that
the members of such units may choose
representatives of employees.
- The petitioners may not have an opportunity to
impeach or contest an award of a board of
arbitration reached after collective bargaining.
There is no opportunity for the petitioners to
intervene. As a consequence, petitioners are left
without an opportunity specifically provided by the
Act to contest the ruling of the Board of Mediation.
The members of the Switchmen’s Union and the
Union itself, in view of the fact that it was the
bargaining representative of its members prior to
this controversy, have an interest recognized by
law in the selection of representatives. This right
adheres to his condition as an employee as a right
of privacy does to a person.
CHEVRON USA v NATURAL
RESOURCES DEFENSE COUNCIL, INC
467 US 837
STEVENS; JUNE 25, 1984
FACTS
- Environmental groups filed a petition to review
Environmental Protection Agency (EPA) regulations
that allow states to treat all of the pollution-
emitting devices within the same industrial
grouping as though they were encased within a
single “bubble.” The regulations were promulgated
to implement Sec.172 (b)(6) of the Clean Air Act
Amendments of 1977, which requires states that
have not achieved the national air quality
standards established by the EPA to establish a
permit program regulating new or modified major
stationary sources of air pollution. Under the
regulations, an existing plant that contains several
pollution-emitting devices may install or modify
one piece of equipment without meeting the
permit conditions if the alteration will not increase
the total emissions from the plant. The US Court of
Appeals for the District of Columbia Circuit set
aside the regulations, holding that the bubble
concept was inappropriate in programs enacted to
improve air quality.
ISSUE
WON the EPA regulations are valid
HELD
YES.
Reasoning The EPA regulations allowing states to
treat all of the pollution-emitting devices within
the same industrial grouping as though they were
encased within a single “bubble” were based on a
reasonable construction of the term “stationary
source” in Sec.172 (b)(6) of the Clean Air Act
Amendments of 1977. Congress did not have a
specific intention on the applicability of the bubble
concept and the EPA’s use of that concept was a
reasonable policy choice for the agency to make.
The EPA’s interpretation represented a reasonable
accommodation of manifestly competing interests
and therefore entitled to deference.
Disposition CA decision REVERSED. EPA
regulations held valid.
FORTICH VS CORONA
289 SCRA 624
MARTINEZ; April 24, 1998
FACTS
- This case involves a 144-hectare land located at
San Vicente, Sumilao, Bukidnon, owned by the
Norberto Quisumbing, Sr. Management and
Development Corporation (NQSRMDC), one of the
petitioners.
- In 1984, the land was leased as a pineapple
plantation to the Philippine Packing Corporation,
now Del Monte Philippines, Inc. (DMPI), a
multinational corporation, for a period of 10 years
under the Crop Producer and Grower's Agreement.
The lease expired in April, 1994.
- In October 1991, during the existence of the
lease, the DAR placed the entire 144-hectare
property under compulsory acquisition and
assessed the land value at P2.38 million.
- NQSRMDC resisted the DAR's action. In February,
1992, it sought and was granted by the DARAB a
writ of prohibition with preliminary injunction
which ordered the DAR Region X Director, the
Provincial Agrarian Reform Officer (PARO) of
Bukidnon, the Municipal Agrarian Reform Office
(MARO) of Sumilao, Bukidnon, and Land Bank to
desist from pursuing any activity or activities
concerning the subject land until further orders.
- Despite the DARAB order, the DAR Regional
Director issued a memorandum directing the Land
Bank to open a trust account for P2.38 million in
the name of NQSRMDC and to conduct summary
proceedings to determine the just compensation of
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the subject property. NQSRMDC objected to these
moves
- The DARAB (a) ordered the DAR Regional Director
and Land Bank "to seriously comply with the terms
of the order" (b) nullified the DAR Regional
Director's memo and the summary proceedings
conducted pursuant thereto; and (c) directed the
Land Bank "to return the claim folder of
NQSRMDC's subject Property to the DAR until
further orders."
- The Land Bank complied with the DARAB order
- In the meantime, the Provincial Development
Council (PDC) of Bukidnon, headed by Governor
Carlos O. Fortich, passed Resolution No. 6
designating certain areas along Bukidnon-Sayre
Highway as part of the Bukidnon Agro-Industrial
Zones where the subject property is situated.
- What happened thereafter was:
Pursuant to Section 20 of the Local Government
Code, the Sangguniang Bayan of Sumilao,
Bukidnon, on March 4, 1993, enacted Ordinance
No. 24 converting or re-classifying 144 hectares of
land in Bgy. San Vicente from agricultural to
industrial/institutional with a view of providing an
opportunity to attract investors who can inject new
economic vitality, provide more jobs and raise the
income of its people.
Parenthetically, under said section, 4th to 5th class
municipalities may authorize the classification of
five percent (5%) of their agricultural land area
and provide for the manner of their utilization or
disposition.
On 12 October 1993, the Bukidnon Provincial Land
Use Committee approved the said Ordinance.
Accordingly, on 11 December 1993, the instant
application for conversion was filed by Mr.
Gaudencio Beduya in behalf of NQSRMDC/BAIDA
(Bukidnon Agro-Industrial Development
Association).
The Bukidnon Provincial Board, on the basis of a
Joint Committee Report, approved the said
Ordinance (now Resolution No. 94-95).
The said industrial area, as conceived by
NQSRMDC is supposed to have the following
components:
1. Development Academy of Mindanao which
covers an area of 24 hectares;
2. Bukidnon Agro-Industrial Park needing about 67
hectares;
3. Forest development to cover 33 hectares; and
4. Support facilities which comprise the
construction of a 360-room hotel, restaurants,
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dormitories and a housing project covering an area
of 20 hectares.
The said NQSRMDC Proposal was adopted by the
DTI, Bukidnon Provincial Office, as one of its
flagship projects.
Notwithstanding the foregoing favorable
recommendation, however, on November 14,
1994, the DAR, thru Secretary Garilao, invoking its
powers to approve conversion of lands under
Section 65 of R.A. No. 6657, issued an Order
denying the instant application for the conversion
of the subject land from agricultural to agro-
industrial and, instead, placed the same under the
compulsory coverage of CARP and directed the
distribution thereof to all qualified beneficiaries on
the following grounds:
1. The area is considered as a prime agricultural
land with irrigation facility;
2. The land has long been covered by a Notice of
Compulsory Acquisition (NCA);
3. The existing policy on withdrawal or lifting on
areas covered by NCA is not applicable;
4. There is no clear and tangible compensation
package arrangements for the beneficiaries;
- Thus, the DAR Secretary ordered the DAR
Regional Director "to proceed with the compulsory
acquisition and distribution of the property."
- Gov. Fortich appealed" the order of denial to the
Office of the President and prayed for the
conversion/reclassification of the subject land as
the same would be more beneficial to the people
of Bukidnon.
- To prevent the enforcement of the DAR
Secretary's order, NQSRMDC filed with the CA a
petition for certiorari, prohibition with preliminary
injunction
- Meanwhile, on July 25, 1995, Dominguez, then
Presidential Assistant for Mindanao sent a memo
to the President favorably endorsing the project.
Also, in a memo to the President, Rafael Alunan III,
then Secretary of the DILG, recommended the
conversion of the subject land to
industrial/institutional use.
- CA issued a Resolution ordering the parties to
observe status quo pending resolution of the
petition.
- In resolving the appeal, the Office of the
President issued a Decision reversing the DAR
Secretary's decision, saying that converting the
land in would open great opportunities for
employment and real development in the area.
That the land is considered a prime agricultural
land with irrigation facility, the decision said that
the same is not irrigated. On the issue that the
land has long been covered by a Notice of
Compulsory Acquisition (NCA), the said NCA was
declared null and void by the DARAB as early as
March 1, 1992. Deciding in favor of NQSRMDC, the
DARAB correctly pointed out that the subject
property could not validly be the subject of
compulsory acquisition until after the expiration of
the lease contract with Del Monte Philippines, or
until April 1994, and ordered the DAR Regional
Office and the Land Bank of the Philippines to
desist from pursuing any activity or activities
covering petitioner's land. Neither can the
assertion that there is no clear and tangible
compensation package arrangements for the
beneficiaries' hold water as, in the first place,
there are no beneficiaries to speak about, for the
land is not tenanted as already stated.
- DAR filed a motion for reconsideration of the OP
decision.
- in compliance with the OP decision, NQSRMDC
and DECS executed a MOA whereby the former
donated 4 hectares from the subject land to DECS
for the establishment of the NQSR High School.
When NQSRMDC was about to transfer the title to
DECS, it discovered that the title over the subject
property was no longer in its name. It soon found
out that during the pendency of the actions it filed
against DAR in the CA and the appeal to the
President filed by Fortich, the DAR, without giving
just compensation, caused the cancellation of
NQSRMDC's title and had it transferred in the
name of the Republic of the Philippines.
Thereafter, DAR caused the issuance of
Certificates of Land Ownership Award and had it
registered in the name of 137 farmer-beneficiaries.
- Thus, on April 10, 1997, NQSRMDC filed a
complaint with the RTC for annulment and
cancellation of title, damages and injunction
against DAR and 141 others. The RTC then issued
a TRO and a Writ of Preliminary Injunction
- Meanwhile, an Order was issued by Exec. Sec.
Torres denying DAR's MFR for having been filed
beyond the reglementary period of 15 days. The
said order further declared that the OP decision
had already become final and executory.
- On October 1997, some alleged farmer-
beneficiaries began their hunger strike in front of
the DAR Compound to protest the OP Decision.
Others filed a motion for intervention asking that
the OP Decision allowing the conversion of the
entire 144-hectare property be set aside.
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- President FVR then held a dialogue with the
strikers and promised to resolve their grievance.
He created an 8-man Fact Finding Task Force
(FFTF) to look into the controversy and
recommend possible solutions to the problem.
- the OP resolved the strikers' protest by
issuing the so-called "Win/Win" Resolution
penned by then Deputy Executive Secretary
Renato C. Corona: modified the approval of
the land conversion to agro-industrial area
only to the extent of 44 hectares, and
ordered the remaining 100 hectares to be
distributed to qualified farmer-beneficiaries
- Bukidnon officials and NQSRMDC filed the
present petition for certiorari, prohibition and
injunction with urgent prayer for a temporary
restraining order and/or writ of preliminary
injunction.
ISSUES
1. WON the recourse of petitioners is proper.
2. WON the petitioners committed a fatal
procedural lapse when they failed to file a MFR of
the assailed resolution before seeking judicial
recourse.
3. WON the filing by the petitioners of: (a) a
petition for certiorari, prohibition with preliminary
injunction with the Court of Appeals; (b) a
complaint for annulment and cancellation of title,
damages and injunction against DAR and 141
others with the RTC; and (c) the present petition,
constitute forum shopping.
4. WON the motion for intervention filed by alleged
farmer-beneficiaries must be approved.
5. WON the final and executory Decision dated
March 29, 1996 can still be substantially modified
by the "Win-Win" Resolution.
HELD
1. YES.
Ratio It is true that under Rule 43, appeals from
awards, judgments, final orders or resolutions of
any quasi-judicial agency exercising quasi-judicial
functions, including the OP, may be taken to the
CA by filing a verified petition for review within 15
days from notice of the said judgment, final order
or resolution, whether the appeal involves
questions of fact, of law, or mixed questions of fact
and law. However, we hold that, in this particular
case, the remedy prescribed in Rule 43 is
inapplicable considering that the present petition
contains an allegation that the challenged
resolution is "patently illegal" and was issued with
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"grave abuse of discretion" and "beyond his
Corona's jurisdiction" when said resolution
substantially modified the earlier OP Decision
which had long become final and executory. In
other words, the crucial issue raised here involves
an error of jurisdiction, not an error of judgment
which is reviewable by an appeal under Rule 43.
Thus, the appropriate remedy to annul and set
aside the assailed resolution is an original special
civil action for certiorari under Rule 65.
2. NO.
The said motion is not necessary when the
questioned resolution is a patent nullity.
3. NO.
Ratio There is forum-shopping whenever, as a
result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or
certiorari) in another. The test for determining
whether a party violated the rule against forum
shopping is, forum shopping exists where the
elements of litis pendentia are present or where a
final judgment in one case will amount to res
judicata in the other.
Reasoning A cursory examination of the cases
filed by the petitioners does not show that the said
cases are similar with each other. The petition for
certiorari in the Court of Appeals sought the
nullification of the DAR Secretary's order to
proceed with the compulsory acquisition and
distribution of the subject property. On the other
hand, the civil case in RTC was based on the
following grounds: (1) the DAR, in applying for
cancellation of petitioner NQSRMDC's title, used
documents which were earlier declared null and
void by the DARAB; (2) the cancellation of
NQSRMDC's title was made without payment of
just compensation; and (3) without notice to
NQSRMDC for the surrender of its title. The present
petition is entirely different from the said two
cases as it seeks the nullification of the assailed
"Win-Win" Resolution of the OP, which resolution
was issued long after the previous two cases were
instituted.
4. NO.
The movants are those purportedly "Found
Qualified and Recommended for Approval." In
other words, movants are merely recommendee
farmer-beneficiaries. The rule in this jurisdiction is
that a real party in interest is a party who would
be benefited or injured by the judgment or is the
party entitled to the avails of the suit. Real interest
means a present substantial interest, as
distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest.
Undoubtedly, movants' interest over the land in
question is a mere expectancy.
5. NO.
Ratio The rules and regulations governing appeals
to the Office of the President of the Philippines are
embodied in Administrative Order No. 18. Sec. 7
thereof provides:
Sec. 7. Decisions/resolutions/orders of the Office of
the President shall, except as otherwise provided
for by special laws, become final after the lapse of
15 days from receipt of a copy thereof by the
parties, unless a motion for reconsideration
thereof is filed within such period. Only one motion
for reconsideration by any one party shall be
allowed and entertained, save in exceptionally
meritorious cases.
It is further provided for in Section 9 that the Rules
of Court shall apply in a suppletory character
whenever practicable.
- When the OP issued the Order declaring the
earlier Decision final and executory, as no one has
seasonably filed a motion for reconsideration
thereto, the said Office had lost its jurisdiction to
re-open the case, more so modify its Decision.
Having lost its jurisdiction, the Office of the
President has no more authority to entertain the
second motion for reconsideration filed by
respondent DAR Secretary, which second motion
became the basis of the assailed "Win-Win"
Resolution. Sec.7 of AO 18 and Sec.4 Rule 43
mandate that only 1 motion for reconsideration is
allowed to be taken from the Decision of March 29,
1996. And even if a second MFR was permitted to
be filed in "exceptionally meritorious cases," still
the said motion should not have been entertained
considering that the first MFR was not seasonably
filed, thereby allowing the Decision of March 29,
1996 to lapse into finality. Thus, the act of the OP
in re-opening the case and substantially modifying
its March Decision which had already become final
and executory, was in gross disregard of the rules
and basic legal precept that accord finality to
administrative determinations.
Disposition the present petition is hereby
GRANTED.
ANTIQUE SAWMILL INC VS ZAYCO
GR No. 20051
REGALA; May 30, 1966
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NATURE
Appeal from the decision of the Court of first
Instance of Manila
FACTS
- A public bidding was conducted for the award of
a 12680-hectare forest area. Those who submitted
bid applications with the Bureau of Forestry are as
follows: the petitioner-appellant, Antique Sawmills,
Inc., the respondent-appellee, Aquiles Zayco,
Crisencio Milendez and Pedro T. Lo. The Director of
Forestry awarded the bid to the respondent-
appellee, Aquiles R. Zayco. Thereafter, the losing
bidders appealed the above award to the
Secretary of Agriculture and Natural Resources
who, on March 23, 1955, however, affirmed the
same.
- All the losing bidders filed a motion for
reconsideration with the Secretary of Agricultural
and Natural Resources and acting on this motion,
the said Secretary issued an order on July 14, 1955
modifying the original exclusive award to Aquiles
R. Zayco. Under this July 14, 1955 order, the forest
area in question was awarded in equal portions to
Aquiles R. Zayco and the petitioner-appellant,
Antique Sawmills, Inc. Zayco received a copy of
the above-mentioned order on July 28, 1955, and
on August 20, 1955, he filed against it a motion for
reconsideration. On September 10, 1955, this
motion for reconsideration was denied. Zayco
received a copy of this order on November 27,
1955.
- On December 19, 1955, Zayco filed with the
Secretary of Agriculture and Natural Resources a
second motion for reconsideration. The latter held
that the second motion for reconsideration was
filed too late because All in all, fifty (50) days had
elapsed from his receipt of the order sought to be
reconsidered to the filing of the herein motion.
Consequently, the said order of this office dated
July 14, 1955 had already become final and
executory pursuant to the aforecited regulation
(*From the time the movant received notice of the
order sought to be reconsidered on July 28, 1955,
to the time he filed his first motion for
reconsideration on August 20, 1955, twenty-three
(23) days had elapsed; and from his receipt of the
order of this Office dated September 10, 1955,
denying the first motion for reconsideration on
November 22, 1955, to the filing of the instant
motion on December 19, 1955, twenty-seven (27)
days had elapsed.)
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- On August 27, 1956, however, the Executive
Secretary rendered a decision sustaining the
appeal and reversing the order of the Secretary of
Agriculture and Natural Resources dated July 14,
1955. This order of the Executive Secretary
awarded the entire forest concession in question
to the respondent-appellee, Aquiles B. Zayco.
(*reasoning: It appears, however, in the affidavit of
the appellant and in the records of this case that
he was not duly represented by counsel in the
main stages of the proceedings, and that he was
not aware of the reglementary period within which
to take the various steps to protect his rights.
Moreover, there was no advertence on notice by
that Department upon the herein appellant that he
had to exercise his rights within certain fixed
periods.)
ISSUE
WON the Office of the President still retains or
possesses jurisdiction to review on appeal a
decision of the Secretary of Agriculture and
Natural Resources which has become final.
HELD
NO
- In a long line of cases,1 the Supreme Court has
ruled that compliance with the period provided by
law for the perfection of an appeal is not merely
mandatory but also a jurisdictional requirement
( Miranda vs. Guanzon) Such failure has the effect
of rendering final the judgment of the court, and
the certification of the record on appeal thereafter
cannot restore the jurisdiction which has been lost.
The dismissal of the appeal can be effected even
after the case has been elevated to the Court of
Appeals (Rule 52, Section 1[a]). Appellee's failure
to file a motion for dismissal of appeal in the court
of origin before the transmittal of the record to the
appellate court, does not constitute a waiver on his
part to interpose such objection
- That administrative rules and regulations have
the force of law can no longer be questioned. Only
recently, in the case of Valerio vs. Secretary of
Agriculture, The Court held that “it cannot be
contended, as the court a quo intimated, that an
administrative regulation should not be given the
same weight as to rule of court but should rather
be given a more liberal interpretation for, as is well
known, a regulation adopted pursuant to law has
the force and effect of law. In fact it is a wise
policy that administrative regulations be given the
same force as rules of court in order to maintain
the regularity of administrative proceedings.
- The appellees' view that the period fixed in
Administrative Order No. 6-2 of the Director of
Forestry cannot bind the Office of the President
since the latter has supervision and control over
the former cannot commend itself to sound public
policy. Even administrative decisions must and
sometime, as fully as public policy demands that
finality be written on judicial controversies In other
words, public interest requires that proceedings
already terminated should not be altered at every
step. The rule of non quieta movere prescribes
that what was already terminated should not be
disturbed (Espiritu vs. San Miguel Brewery).
VICENTE SOTTO vs. JUAN RUIZ
G.R. No. 17419
MALCOLM, J. (1921 March 18)
NATURE
Petition for mandamus.
FACTS
- SOTTO is the proprietor of the periodical The
Independent, while RUIZ is the Acting Director of
the Bureau of Posts. Copies of the January 29,
1921 issue of Independent were set for distribution
through the mails. RUIZ, however, refused such
distribution on the ground that the publication
contained libelous matter. RUIZ was referring to
the printed message on a postal card consisting of
the telegram from one official in Cebu to another
in Manila. Hence the petition.
ISSUE
Whether or not RUIZ is justified in refusing the
distribution of the subject periodical.
HELD
NO.
- The Administrative Code declares that no printed
matter of libelous character shall be carried by the
mails of the Philippines, or be delivered to its
addressee by any employee of the Bureau of
Posts. On the other hand, whether an article is
libelous is fundamentally a legal question. In
order for there to be due process of law, the
action of the Director of Posts must be
subject to revision by the courts in case he
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has abused his discretion or exceeded his
authority.
- The duty of determining whether a publication
contains printed matter of a libelous character
rests with the Director and involves the exercise of
his judgment and discretion. The rule is that
courts will not interfere with the decision of
the Director of Posts unless clearly of
opinion that it was wrong.
- The propriety of a periodical distributing copies of
a confidential telegram sent by one official to
another may well be questioned. But to do so is
not libelous per se. Even the squib following the
copy of the telegram is no more than attempted
humor and would not be taken seriously by the
reading public.
Disposition We reach the conclusion that the
action of the Director was wrong. An order shall
issue to RUIZ, directing him to receive, to carry,
and to deliver, the package containing the January
29, 1921 copies of Independent.
UY v PALOMAR
GRN L-23248
ZALDIVAR; February 28, 1969]
FACTS
- Postmaster General issued Fraud Order No. 3,
dated November 22, 1963, declaring Manuel Uy
Sweepstakes Agency as conducting a lottery or gift
enterprise and directing all postmasters and other
employees of the Bureau of Post concerned to
return to the sender any mail matter addressed to
Manuel Uy Sweepstakes Agency or to any of its
agents or representatives with the notation
"Fraudulent" stamped upon the cover of such mail
matter, and prohibiting the issuance or payment of
any money order or telegraphic transfer to the
said agency or to any of its agents and
representatives.
- This fraud order is in connection to a "Grand
Christmas Bonus Award" plan. The plan was
designed to boost the sales of tickets for the PCSO
Grand Christmas Sweepstakes Draw. According to
said plan, the appellee's sub-agents and
purchasers of whole sweepstakes tickets sold by
appellee and his sub-agents may, in addition to
the regular prize money of the December 15, 1963
draw, win bonuses and awards.
- Uy advertised his "Grand Christmas Bonus
Award" plan in the metropolitan newspapers of
nationwide circulation, the first of such
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advertisements appearing in seven such
newspapers in their issues of November 18, 1963.
The newspaper advertisements were repeated
almost every week after November 18, 1963, with
the last of them published in the issue of the "Daily
Mirror" of December 7, 1963. The fraud order in
question was issued by the Postmaster-General
under date of November 22, 1963. However, it was
only on December 10, 1963 Uy came to know of
the issuance and context thereof when he sought
clarification from the Manila Post Office why his
parcels containing sweepstakes tickets for his sub-
agents, as well as his other mail matters of purely
personal nature, were refused acceptance for
mailing the day previous.
- The Postmaster General claims that he had
made his decision based upon satisfactory
evidence that the "Grand Christmas Bonus Award"
plan of appellee is a lottery or gift enterprise for
the distribution of gifts by chance, and his decision
in this regard cannot be reviewed by the court.
ISSUE
WON the court can review the Postmaster
General’s decision
HELD
Yes.
- The Postal Law contains no provision for judicial
review of the decision of the Postmaster General.
This Court, however, in Reyes vs. Topacio had
stated that the action of the Director of Posts (now
Postmaster General) is subject to revision by the
courts in case he exceeded his authority or his act
is palpably wrong. And in "El Debate" Inc. vs.
Topacio, this Court said that the courts will not
interfere with the decision of the Director of Posts
(Postmaster General) as to what is, and what is
not, mailable matter unless clearly of opinion that
it was wrong. In other words, the courts will
interfere with the decision of the Postmaster
General if it clearly appears that the decision is
wrong. This Court, by said rulings, recognizes the
availability of judicial review over the action of the
Postmaster General, notwithstanding the absence
of statutory provision for judicial review of his
action. It may not be amiss to state that said
rulings are in consonance with American
jurisprudence to the effect that the absence of
statutory provisions for judicial review does not
necessarily mean that access to the courts is
barred. The silence of the Congress is not to be
construed as indicating a legislative intent to
preclude judicial review. In American School of
Magnetic Healing vs. McAnnulty, the U.S. Supreme
Court, speaking on the power of the courts to
review the action of the Postmaster General under
a statute similar to our Postal Law, said:
"That the conduct of the post office is a part of the
administrative department of the government is
entirely true, but that does not necessarily and
always oust the courts of jurisdiction to grant relief
to a party aggrieved by any action by the head, or
one of the subordinate officials, of that
Department, which is unauthorized by the statute
under which he assumes to act. The acts of all its
officers must be justified by some law, and in case
an official violates the law to the injury of an
individual the courts generally have jurisdiction to
grant relief."
MANUEL v VILLENA, THE DIRECTOR
OF FORESTRY
37 SCRA 745
MAKALINTAL, J : February 27, 1971
FACTS
This is an appeal from the order of the Court of
First Instance of Tarlac dismissing the complaint in
Civil Case No. 4226 entitled "Magno Manuel vs.
Mariano Villena, the Director of Forestry and the
Secretary of Agriculture and Natural Resources,"
wherein the plaintiff sought annulment of the
decision of said public officials rejecting his
application for a Tree Farm Permit over a 20-
hectare parcel of public land, which was included
in a 66-hectare area covered by a similar
application of private defendant Mariano Villena.
- The main thrust of the complaint is that the
administrative decision sought to be set aside
violated the plaintiff's right to due process. The
averments in support thereof are substantially as
follows: that the plaintiff had been in continuous
possession of the land in question since 1939; that
being an ignorant farmer he did not file his Tree
Farm application (No. 13312) until June 1954; that
the Director of Forestry rejected the same because
a prior application (No. 3852) had been filed by
Mariano Villena in November 1955; that two
motions for reconsideration of the rejection order
were turned down; that the plaintiff thereafter
appealed to the Secretary of Agriculture and
Natural Resources, but the appeal was dismissed
by him; that on motion for reconsideration the
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Secretary found that the previous investigation
conducted by the District Forester was not in
accordance with the rules and regulations of the
Bureau, and so ordered another investigation to be
made; but that before said investigation was
terminted the Secretary rendered a decision
dismissing the appeal.
- On December 6, 1966 the court issued an order
finding the defendants' objection meritorious, but
allowing the plaintiff to file an amended complaint
within a period of ten days.
- On March 21, 1967 defendant Villena moved to
dismiss the amended complaint on the ground that
it did not cure the defects of the original one, and
still contained sufficient allegations to make out a
cause of action or to confer jurisdiction upon the
court to set aside or annul the administrative
decision complained of. The court found the
motion meritorious and hence dismissed the
complaint in its order of June 24, 1967. The said
order of dismissal is the subject of the present
appeal.
ISSUE
WON the decision of the Director of Public Forestry
should be annulled.
HELD
No.
- Courts, as a rule, refuse to interfere with
proceedings undertaken by administrative bodies
or officials in the exercise of administrative
functions. This is so because such bodies are
generally better equipped technically to decide
administrative questions and that non-legal
factors, such as government policy on the matter,
are usually involved in the decisions.
- The proceedings challenged in the complaint
refer to the approval or rejection of an application
for a Tree Farm Permit. Under Section 1838 of the
Revised Administrative Code, this function falls
within the jurisdiction of the Director of Forestry
with the approval of the Secretary of Agriculture
and Natural Resources.
The power thus conferred on the Director of
Forestry with the approval of the Secretary of
Agriculture and Natural Resources is basically
executive or administrative in nature. And courts,
as a rule, refuse to interfere with proceedings
undertaken by administrative bodies or officials in
the exercise of administrative functions. This is so
because such bodies are generally better equipped
technically to decide administrative questions and
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that non-legal factors, such as government policy
on the matter, are usually involved in the
decisions.
There are, of course, limits to the exercise of
administrative discretion. Administrative
proceedings may be reviewed by the courts upon
a showing that "the board 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" or that the decision is vitiated by
fraud, imposition or mistake.
The complaint here alleges denial of due process
and grave abuse of discretion, in that appellant
was not formally represented by counsel at any
stage of the proceedings before the Director of
Forestry and the Secretary of Agriculture and
Natural Resources; that there was no showing that
notice was sent to him so as to afford him an
opportunity to obtain the services of a lawyer; and
that the Secretary dismissed the appeal before the
completion of the reinvestigation he had ordered.
The above circumstances however do not
necessarily constitute a violation of due process or
grave abuse of discretion. Section 1838 of the
Revised Administrative Code does not require that
the investigation be in the nature of a court trial. In
deciding administrative questions, administrative
bodies or officials generally enjoy wide discretion.
Technical rules of procedure are not strictly
enforced, and due process of law in the strict
judicial sense is not indispensable. 4 It is sufficient
that the substantive due process requirement of
fairness and reasonableness be observed.
SAN MIGUEL CORP V LABOR SEC,
NLRC, YANGLAY
64 SCRA 56
AQUINO; May 16, 1975
FACTS
- this is a labor case regarding the dismissal of
Yanglay from San Miguel Corp (SMC) for allegedly
trafficking drugs (medicines) to his fellow
employees (apparently, SMC gave its employees
some medicines to keep then healthy. What
Yanglay did was buy the rations of his fellow
employees after the company has distributed the
same)
- the case was submitted to the NLRC. Mediator-
fact-finder Cruz issued recommendation that
Yanglay be reinstated (although it admitted that
SMC did not commit ULP). The NLRC adopted this
recommendation. Thus, SMC filed this certiorari.
Yanglay then contests the jurisdiction of the SC to
over the case, alleging that SC cannot review
decisions of NLRC and Sec. of Labor under the
principle of separation of powers and that judicial
review is not provided for in PD21.
ISSUE
WON SC had jurisdiction over the petition for
certiorari
HELD
YES
Ratio It is generally understood that as to
administrative agencies exercising quasi-judicial or
legislative power there is an underlying power in
the courts to scrutinize the acts of such agencies
on questions of law and jurisdiction even though
no right of review is given by statute
Reasoning The purpose of judicial review is to
keep the administrative agency within its
jurisdiction and protect substantial rights of parties
affected by its decisions
- It is part of the system of checks and balances
which restricts the separation of powers and
forestalls arbitrary and unjust adjudications.
- Judicial review is proper in case of lack of
jurisdiction, grave abuse of discretion, error of law,
fraud or collusion (Timbancaya vs. Vicente;
Macatangay vs. Secretary of Public Works and
Communications; Ortua vs. Singson Encarnacion).
- The courts may declare an action or resolution of
an administrative authority to be illegal (1)
because it violates or fails to comply with some
mandatory provision of the law or (2) because it is
corrupt, arbitrary or capricious (Borromeo vs. City
of Manila and Rodriguez Lanuza; Villegas vs.
Auditor General).
- WRT to the labor case, SC declared the dismissal
to be a too drastic punishment for the drug
trafficking (it held that buying of the drugs (given
by SMC in gratis) of other employees should not
have been done, but the act merely was a
“misconduct”  term used by SC). Only
disciplinary action should have been imposed.
Disposition Petition denied. Reinstated WITHOUT
backwages
B. EXHAUSTION OF
ADMINISTRATIVE REMEDIES
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PASCUAL V PROVINCIAL BOARD OF
NUEVA ECIJA
106 PHIL 446
GUTIERREZ DAVID; October 31, 1959
FACTS
- October 6, 1956 > Acting Provincial Governor of
Nueva Ecija filed with the Provincial Board three
administrative charges against Arturo B. Pascual,
elected mayor of San Jose, Nueva Ecija, in
November 1951 and reelected in 1955, for
[CHARGE NO. 3] "Maladministrative, Abuse of
Authority, and Usurpation of Judicial Functions,"
committed by willfully, feloniously, criminally,
without legal authority, and with grave abuse of
authority, assumed and usurped the judicial
powers of the justice of the peace by accepting the
criminal complaint filed in the said court,
conducting the preliminary investigation thereof,
fixing the bail bond of P6,000.00, and issuing the
corresponding warrant of arrest; and after the
accused in the said criminal case had been
arrested, while the justice of the peace was in his
office in San Jose, Nueva Ecija, Pascual, in defiance
of the express refusal by the justice of the peace
to reduce the bail bond of the accused, acted on
the motion to reduce bail and did reduce the bail
bond to P3,000.00,
- Pascual filed with the Provincial Board a motion
to dismiss CHARGE NO. 3 above referred to, on the
ground that the wrongful acts alleged had been
committed during his previous term of office and
could not constitute a ground for disciplining him
during his second term. Motion to dismiss was
denied by resolution of the Board.
- Pascual filed with SC a petition for a writ of
prohibition with preliminary injunction to enjoin the
Provincial Board of Nueva Ecija from taking
cognizance of CHARGE NO. 3, but the petition was
denied by minute resolution "without prejudice to
action, if any, in the CFI."
- Accordingly, Pascual filed with CFI Nueva Ecija
a petition for prohibition with preliminary
injunction seeking to inhibit the said Provincial
Board from proceeding with the hearing of
CHARGE NO. 3, for lack of jurisdiction.
- Provincial Board moved for the dismissal of the
case on the ground that it states no cause of
action because the Pascual had not complied with
the cardinal principle of exhaustion of
administrative remedies before he could appeal to
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the courts, and because the Provincial Board had
jurisdiction over CHARGE NO. 3.
- CFI issued an order dismissing the petition "for
being premature," for the reason that the Pascual
had not first appealed to the Executive Secretary.
From that order, the case was brought before us
on appeal.
ISSUES
1. WON it was legally proper for Pascual to have
come to court without first bringing his case to the
Executive Secretary for review
2. WON disciplining an elective municipal official
for a wrongful act he committed during his
immediately preceding term of office is valid
HELD
1. YES
Doctrine Where the law has delineated the
procedure by which administrative appeal or
remedy could be effected, the same should be
followed before recourse to judicial action can be
initiated (Ang Tuan Kai vs. Import Control
Commission etc).
Ratio The rule will be relaxed where there is
grave doubt as to availability of the administrative
remedy; where the question in dispute is purely a
legal one, and nothing of an administrative nature
is to be or can be done; where although there are
steps to be taken, they are, under the admitted
facts, merely matters of from, and the
administrative process, as a process of judgment,
is over; or where the administrative remedy is not
exclusive but merely cumulative or concurrent to a
judicial remedy. A litigant need not proceed with
optional administrative process before seeking
juducial relief.
Reasoning
- Mondano vs. Silvosa > granted a writ of
prohibition against the provincial board of Capiz,
notwithstanding the fact that he did not appeal to
the Executive Secretary, the only question
involved being WON the charged filed against the
municipal mayor of Calibo, Capiz, constituted any
one of the grounds for suspension or removal
provided for in sec. 2188 of the Revised
Administrative Code.
2. NO
Ratio The underlying theory is that each term is
separate from other terms, and that the reelection
to office operates as a condonation of the officer's
previous misconduct to the extent of cutting off
the right to remove him therefor.
Reasoning
- SC resorted to American authorities. The weight
of authorities, however, seems to incline to the
rule denying the right to remove one from office
because of misconduct during a prior term, to
which we fully subscribe.
Offenses committed, or acts done, during
previous term are generally held not to furnish
cause for removal and this is especially true
where the constitution provides that the penalty
in proceedings for removal shall not extend
beyond the removal from office, and
disqualification from holding office for the term
for which the officer was elected or appointed.
- The Court should never remove a public officer
for acts done prior to his present term of office. To
do otherwise would be to deprive the people of
their right to elect their officers. When the people
have elected a man to office, it must be assumed
that they did this with knowledge of his life and
character, and that they disregarded or forgave
his faults or misconduct, if he had been guilty of
any. It is not for the court, by reason of such faults
or misconduct to practically overrule the will of the
people.
ALZATE v ALDANA
107 Phil 298
Barrera, J.; Feb 29, 1960
NATURE
Appeal from an order of La Union CFI
FACTS
- RA No. 842 was enacted to adjust the salaries of
Public school teachers and personnel. Under the
law salary adjustment of 4 grades was to be
effected for every five years of service plus
another grade for passing the examination for
Superintendent of Private school given by the Civil
Service Commission.
- Anacleto Alzate, Principal of a High School in La
Union, has been in service for 24 years, the last
one as secondary principal. His salary was
adjusted based only on his number of years of
service as secondary principal ( 9 years, 8 months,
15 days) and his having passed the test as earlier
mentioned was not considered. He appealed this
but even before the ruling from the Bureau of
Public School, he filed a mandamus proceeding in
the CFI of La Union fearing that the amount
appropriated for the payment of the salary
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adjustment of public schools teachers and officials,
if not disbursed or committed before the expiration
of the fiscal year on June 30, 1958, would be
reverted to the general funds of the Government.
- Thereafter, respondents filed their motion to
dismiss on the grounds that the petition stated no
cause of action against respondents; that
petitioner had not exhausted all administrative
remedies before coming to court, and that the
lower court had acquired no jurisdiction over the
case. Accordingly, the petition was dismissed
without prejudice to the right of the petitioner to
file an appropriate action at the opportune time.
-Hence this appeal to the SC
ISSUE/S
WON the CFI as correct in dismissing the case for
non exhaustion of administrative remedies
HELD
No. There is merit in petitioner's contention. The
fact that the parties had to agree and the court
had to approve the agreement that the Director of
Public Schools shall recommend to the proper
officials not later than June 30, 1958 and before
the closing of office hours on that date the
commitment of the sum of P840.00 claimed by
petitioner, to accounts payable in order to prevent
its reversion, is a recognition by the parties as well
as the court of the validity and urgency of the
action taken by the petitioner-appellant. It would
seem, therefore, that in the particular
circumstances of the present case, petitioner
had sufficient cause of action at the time of
the filing of his petition on June 11, 1958,
and a resort to the court without awaiting for
the final decision of the administrative
officers is not, in view of the special
situation, premature.
- . It appears from the petition that the reason for
its filing without awaiting the final action on the
part of the respondent Director of Public Schools
was the urgency of preventing the automatic
reversion as of July 1, 1958, after the expiration of
the then current fiscal year, of the sum
appropriated in Republic Act No. 2042 for the
adjustment of salary of public school officials and
teachers pursuant to Republic Act No. 842.
Petitioner contends that if he waited for the final
decision on his petition for reconsideration which
was not forthcoming, and in fact did not come,
before June 30, 1958, whatever action may
thereafter be taken by respondent, even if
Administrative Law
Dean Carlota
favorable to petitioner, would be of no avail after
the reversion of the funds appropriated for the
purpose of salary adjustment. Hence, he claims,
that to require him to exhaust the administrative
remedies would, in the circumstances of the case,
in effect amount to a nullification of his claim.
Disposition Petition is granted.
CIPRIANO v. MARCELINO
43 SCRA 291
CASTRO, February 28, 1972
FACTS
- Cipriano served as record clerk in the office of
municipal treasurer Gregorio P. Marcelino of
Calabanga, Camarines Sur. On the latter date she
resigned. Because the respondent municipal
treasurer, upon her severance from the service,
refused to pay her salary for a certain period, as
well as the commutation equivalent of her
accumulated vacation and sick leaves.
- Cipriano filed an action for mandamus to compel
the said municipal treasurer to pay her the total
amount of P949. She also asked for moral and
exemplary damages, attorney's fees and costs of
suit.
- Marcelino moved to dismiss upon the ground that
she had not "exhausted all administrative
remedies before filing the present action," arguing
that exhaustion of all administrative remedies is a
condition precedent before an aggrieved party
may have judicial recourse. Granting the motion,
the court a quo ordered the dismissal of the case.
Cipriano's motion for reconsideration was denied.
ISSUE
WON Cipriano did not exhaust all administrative
remedies before filing the present action.
HELD
- NO. The principle of exhaustion of administrative
remedies is not without exception, not is it a
condition precedent to judicial relief. The principle
may be disregarded when it does not provide a
plain, speedy and adequate remedy. It may and
should be relaxed when its application may cause
great and irreparable damage.
- It is altogether too obvious that to require the
petitioner Cipriano to go all the way to the
President of the Philippines on appeal in the
matter of the collection of the small total of nine
hundred forty-nine (P949) pesos, would not only be
oppressive but would be patently unreasonable. By
the time her appeal shall have been decided by
the President, the amount of much more than
P949, which is the total sum of her claim, would in
all likelihood have been spent.
- The theory that a party must first exhaust his
remedies in the administrative branch before
seeking the aid of the strong arm of equity must
give way to the reality that a government
employee must depend for the support of himself
and his family upon his salary, and were he to be
deprived of that even alone for a few months,
possibly even lees, that must mean starvation
because more often than not, a government
employee lives hand-to-mouth existence and he
awaits with eager hands the arrival of the
forthnightly envelope because upon it must hinge
the supply of rice and fish and clothing of his
spouse and children and himself and with it only
can be maintained, and therefore were the
dogmatic rule of exhaustion of administrative
remedies be made to mean that he should wait for
the most final administrative decision in his case,
the only logical result must be vital disaster to his
dependents and to himself, so that this is the
reason why the rule of exhaustion
administrative remedies has always been
understood to mean that the same have furnished
a plain, speedy and adequate remedy.
- All the documents required to support payment
of Cipriano's salary and the cash commutation of
her unused vacation and sick leaves have been
accomplished. Cipriano having thus earned the
right to the said payment, it has become the
corresponding duty of the respondent treasurer to
recognize such right and effect payment.
Disposition petition is granted. The municipal
treasurer of the Municipality of Calabanga,
Camarines Sur, is ordered to pay to petitioner,
without further delay, the total sum of P949.
CORPUS VS CUADERNO
G.R. No. L-17860
DE LEON ; March 30, 1962
FACTS
- Corpus held the position of Special
Assistant to the Governor of the Central
Bank of the Philippines a position
declared by the President of the
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Philippines as "highly technical in nature
and placed in the exempt class.
- He was charged in an administrative
case, for alleged dishonesty,
incompetence, neglect of duty and/or
abuse of authority, oppression,
misconduct, etc. preferred against him by
employees of the Bank. This resulted in
his suspension by the Monetary Board
and the creation of a 3-man committee to
investigate him. The committee was
composed of representatives of the Bank,
Bureau of Civil Service and the Office of
the City Fiscal of Manila. The committee
submitted a Final Report which finds that
there was no basis upon which to
recommend disciplinary action against
Corpus. The report recommends that he
immediately be reinstated.
- The MB did not agree with the committee
report and adopted Res’n. No 957 which
considered "the respondent, R. Marino
Corpus, resigned as of the date of his
suspension as his continuance of service
would be prejudicial to the best interest of
of
the bank.
- Corpus filed a petition for certiorari,
mandamus and quo warranto, with
preliminary mandatory injunction and
damages
- Filemon Mendoza, a central bank
employee filed a petition for intervention.
Together with the other respondents,
they filed a motion to dismiss. The
motion to dismiss was granted based on
the ground that Corpus was not able to
exhaust all administrative remedies.
- The lower court was of the opinion
that Corpus should have exhausted
all administrative remedies available
to him, such as an appeal to the
Commissioner of Civil Service, under
Republic Act No. 2260, or the
President of the Philippines who
under the Constitution and the law is
the head of all the executive
departments of the government
including its agencies and
instrumentalities.
ISSUE
Administrative Law
Dean Carlota
WON Corpus should have exhausted all
administrative remedies available to him such as
an appeal to the Commissioner of Civil Service or
the President of the Philippines
HELD
NO.
- There is no law requiring an appeal to the
President in a case like the one at bar. The fact
that the President had, in two instances cited in
the orders appealed from, acted on appeals from
decisions of the Monetary Board of the Central
Bank, should not be regarded as precedents, but
at most may be viewed as acts of condescension
on the part of the Chief Executive.
- While there are provisions in the Civil Service Law
regarding appeals to the Commissioner of Civil
Service and the Civil Service Board of Appeals, We
believe the petitioner is not bound to observe
them, considering his status and the Charter of the
Central Bank. In Castillo vs. Bayona, et al., we said
that Section 14, Republic Act 265, creating the
Central Bank of the Philippines, particularly
paragraph (c) thereof, "is sufficiently broad to vest
the Monetary Board with the power of
investigation and removal of its officials, except
the Governor thereof. In other words, the Civil
Service Law is the general legal provision for the
investigation, suspension or removal of civil
service employees, whereas Section 14 is a special
provision of law which must govern the
investigation, suspension or removal of employees
of the Central Bank, though they may be subject
to the Civil Service Law and Regulations in other
respects."
- In this case, the respondent Monetary Board
considered petitioner resigned from the office to
which he has been legally appointed as of the date
of his suspension, after he has been duly indicted
and tried before a committee created by the Board
for the purpose. An appeal to the Civil Service
Commission would thereby be an act of
supererogation, requiring the presentation of
practically the same witnesses and documents
produced in the investigation conducted at the
instance of the Monetary Board. Moreover,
considering again the fact that the Charter of the
Central Bank provides for its own power, through
the Monetary Board, relative to the investigation,
suspension or removal of its own employees
except the Governor, coupled with the fact that
petitioner has admitted that he belongs to the non-
competitive or unclassified service, it is evident
that an appeal by petitioner to the Commissioner
of Civil Service is not required or at most is
permissive and voluntary.
DE LARA v CLORIVEL
(Giulia)
PAREDES vs. CA (NAVARRO)
253 SCRA 126
KAPUNAN; Feb 11, 1996
FACTS
- Public respondents promulgated Administrative
Order Nos. 1 and 2, Series of 1992, revising the
rules of practice before the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT) in
patent and trademark cases, to take effect on 15
March 1993. Among the provisions of said
administrative orders are Rule 16 of A.O. No. 1 and
Rule 15 of A.O. No. 2, which increased the fees
payable to the BPTTT for registration of patents
and trademarks and Rule 59 of A.O. No. 2 which
prohibited the filing of multi-class applications,
that is, one application covering several classes of
goods.
- Petitioners, who are registered patent agents,
filed with the Court of Appeals a Petition for
Prohibition with prayer for the issuance of a Writ of
Preliminary Injunction to stop public respondents
from enforcing the aforementioned administrative
orders 2 and to declare Rule 16 of A.O. No. 1 and
Rules 15 and 59 of A.O. No. 2, series of 1992 of the
BPTTT null and void.
- CA dismissed the petition for prohibition and
denied the motion for reconsideration filed by
petitioners. Thus, this petition.
ISSUES
1. WON the CA erred in dismissing the petition on
the ground of non-exhaustion of administrative
remedies.
2. WON the CA erred in not holding that the
questioned administrative orders are null and void
for failure to comply with the
publicationrequirements of both the Administrative
Code and BP 325
3. WON the CA erred in not declaring null and void
Rule 59 of Administrative Order No. 1 on the
ground that the public respondents do not have
the power to amend the Trademark Law
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HELD
1. NO.
Ratio Prohibition is not the proper remedy. Where
the enabling statute indicates a procedure for
administrative review, and provides a system of
administrative appeal, or reconsideration, the
courts, for reasons of law, comity and
convenience, will not entertain a case unless the
available administrative' remedies have been
resorted to and the appropriate authorities have
been given opportunity to act and correct the
errors committed in the administrative forum.
- Prohibition is granted only in cases where no
other remedy is available which is sufficient to
afford redress. That the petitioners have another
and complete remedy at law either by appeal or
otherwise, is generally a sufficient reason for
dismissing the writ.
Reasoning The proposed rates and charges still
have to obtain the imprimatur of the Cabinet, and
prior to which, they have to undergo Cabinet
scrutiny. Thus, there is the contingency that the
same may not obtain the approval of the Cabinet.
2. NO.
Ratio B.P. Blg. 325 requires Cabinet review and
approval of the impugned administrative orders
before their publication. However, since the
Cabinet has yet to review and approve the
proposed revised rates of fees and charges, there
can be no proper publication.
3. NO.
- Since the challenged administrative orders have
not yet been submitted to the Cabinet for its
consideration and approval, this Court finds it
untimely to discuss and resolve the merits of the
questions of whether or not the rate increases and
charges are just and reasonable sufficient to cover
administrative costs, and/or that the same are
practicable and uniform for similar or comparable
services and functions, and/or that those rates
conform with the rules and regulations of the
Ministry of Finance.
- Courts should be reluctant to interfere with
administrative action prior to its completion or
finality, the reason being that absence of a final
order or decision, the power of the administrative
agency concerned has not been fully exercised
and there can be no irreparable harm.
Reasoning
a. To prevent the courts from being swamped by a
resort to them in the first instance
b. Rule on comity and convenience
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QUASHA V SEC & MANILA POLO
CLUB
320 SCRA 478
TEEHANKEE; May 31, 1978
FACTS
-Petitioner filed complaints with the SEC against
the filing of Manila Polo Club’s (MPC) Amended
Articles of Incorporation and Amended By-Laws
converting it into a proprietary club, alleging that
such amendments would enable the members to
appropriate the club’s property and use it as their
contribution to the ‘new’ club, essentially negating
the accrued contributions of past and present
member’s (including his) money, time, effort and
foresight for a paltry proprietary membership fee
(plus they allegedly had not been adopted by the
required two-thirds vote).
-SEC denied such injunctive relief for lack of merit
hence this petition with prayer for a restraining
order enjoining MPC from selling proprietary
shares (the latter later issued by the Court).
ISSUE/S
1. WON petitioner failed to exhaust all
administrative remedies before filing with the
court
2. WON resolution of the issues w/o a full blown
hearing on the merits deprived petitioner of due
process
HELD
1. NO.
In view of the limited time, and considering the
issuance of the order denying injunctive relief only
at the height of the Christmas holidays, petitioner
properly filed directly with the Court without going
through the prescribed procedure of filing before
the SEC en banc within the 30-day reglementary
period since such recourse would not be a plain,
speed and adequate remedy.
2. YES.
- The issues set forth, such as the necessary two-
thirds vote and the legality of the value of the
proprietary shares warrants the full-blown trial
sought hence the case should be remanded to the
SEC for such trial and determination on merits.
-As for the TRO, it shall be lifted subject to the
condition advanced by the SEC that should the
amendments be later annulled, all payments made
pursuant to it would be refunded to the members.
REPUBLIC OF THE PHILIPPINES
(PCGG) v SANDIGANBAYAN
255 SCRA 438
FRANCISCO; March 29, 1996
FACTS
- Petitioner PCGG issued separate sequestration
orders against Sipalay Trading Corporation and
Allied Banking Corporation, allegedly part of Lucio
Tan’s ill-gotten wealth. 2 separate petitions were
filed by Sipalay and Allied before the SC assailing
the sequestration orders. The SC referred the
cases to the Sandiganbayan for proper
disposition.
- The petitions were jointly heard. The
Sandiganbayan ordered the submission by PCGG
of its formal evidence in writing, but the latter
instead filed a Motion to Dismiss. This motion to
dismiss came nearly 7 years after Sipalay and
Allied originally filed their petitions before the SC.
The ground was Sialay’s and Allied’s alleged failure
to exhaust administrative remedies. The PCGG
argued that Sipalay and Allied should have first
appealed the sequestration orders to the Office of
the President before challenging them in court,
invoking the PCGG Rules and Regulations.
- The Sandiganbayan denied the motion and
voided the orders issued against Sipalay and
Allied.
ISSUES
WON Sandiganbayan’s denial of PCGG’s motion to
dismiss is proper
HELD
YES
- Hardly can it be disputed that a direct action in
court without prior exhaustion of administrative
remedies, when required, is premature, warranting
its dismissal on a motion to dismiss grounded on
lack of cause of action. The Court approves of the
filing of a motion to dismiss based upon failure to
state a cause of action at any stage of the
proceedings.
- As a general rule, a motion to dismiss is
interposed before the defendant pleads (Sec 1
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Rule 16 Rules of Court). However, there is no rule
or law prohibiting the defendant from filing a
motion to dismiss after an answer had been filed.
On the contrary, Section 2 of Rule 9, expressly
authorizes the filing of such motion at any stage of
the proceedings when it is based upon failure to
state a cause of action.
- These principles, at first impression, appear to
favor the PCGG. Sections 5 and 6 of the PCGG
Rules and Regulations indeed provide an
administrative mechanism for persons or entities
contesting the sequestration orders issued against
them.
Section 5. - Who may contest - The person against
whom a writ of sequestration or freeze or hold
order is directed may request the lifting thereof in
writing, either personally or through counsel within
5 days from the receipt of the writ of order.
Section 6. - Procedure for Review of writ or order -
After due hearing or motu propio for good cause
shown, the Commission may lift the writ or order
unconditionally or subject to such condition as it
may deem necessary, taking into consideration
the evidence and circumstances of the case. The
resolution of the Commission may be appealed by
the party concerned to the Office of the President
of the Philippines within15 days from receipt
thereof.
- Neither an initial request before the PCGG for the
lifting of the sequestration orders nor an appeal to
the Office of the President was made by Sipalay
and Allied before they filed their respective
petitions in court. The PCGG’s motion to dismiss
was anchored on lack of cause of action, albeit
filed beyond the period to answer.
- However, the peculiarities of this case preclude
the rightful application of the principles
aforestated. The Sipalay and Allied petitions were
both filed on the third quarter of 1986, while the
PCGG decided to file its motion to dismiss only in
the middle of 1993. Nearly 7 years came to pass
in between that so much has already transpired in
the proceedings during the interregnum. Sipalay
and Allied had rested their cases, and the PCGG
had finished presenting all its witnesses, not to
mention other various motions and incidents
already disposed of by the Sandiganbayan, with
special attention to the numerous postponements
granted the PCGG for presentation of its evidence
which prevented an earlier termination of the
proceedings. The motion to dismiss came only at
the penultimate stage of the proceedings where
the remaining task left for the PCGG was to file its
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written formal offer of evidence as required by the
Sandiganbayan.
- Failure to observe the doctrine of exhaustion of
administrative remedies does not affect the
jurisdiction of the Court. We have repeatedly
stressed this in a long line of decisions. The only
effect of non-compliance with this rule is that it
will deprive the complainant of a cause of action,
which is a ground for a motion to dismiss. If not
invoked at the proper time, this ground is deemed
waived and the court can take cognizance of the
case and try it.
- The length of time the PCGG allowed to drift
away and its decision to file its motion to dismiss
only at the homestretch of the trial hardly qualify
as “proper time.” Such tarried maneuver made the
PCGG guilty of estoppel by laches - “Laches has
been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to
do that which by exercising due diligence could
nor should have been done earlier; it is negligence
or omission to assert a right within a reasonable
time, warranting a presumption that the party
entitled to assert it either has abandoned it or
declined to assert it.”
- With its undenied belated action, 7 years in the
making at that, it is only proper to presume with
conclusiveness that the PCGG has abandoned or
declined to assert what it bewailed as the Sipalay
and Allied petitions’ lack of cause of action.
“Proper time” cannot mean nor sanction an
unexplained and unreasonable length of time such
as 7 years. The leniency extended by the Rules
(Rule 9, Section 2, Rules of Court) and by
jurisprudence in allowing a motion to dismiss
based on lack of cause of action filed after the
answer or at any stage of the proceedings cannot
be invoked to cover-up and validate the onset of
laches - or the failure to do something which
should be done or to claim or enforce a right at a
proper time which, in this case, was one of the
PCGG’s follies. Indeed, in matters of timeliness,
“indecent waste” is just as reprehensible as
“indecent haste.”
- Another equally forceful reason warranting the
denial of the PCGG’s motion to dismiss is that this
case falls under two recognized exceptions to the
general rule of prior exhaustion of administrative
remedies, and the Sandiganbayan’s brief but lucid
disquisition on one exception merits this Court’s
approval.
“The rule on non-exhaustion of administrative
remedies does not apply to petitioners’ case. This
rule, which is based on sound public policy and
practical considerations, is not inflexible. It is
subject to many exceptions, to wit: (i) where there
is estoppel on the part of the party invoking the
doctrine; (ii) where the challenged administrative
act is patently illegal amounting to lack of
jurisdiction; (iii) where there is unreasonable delay
or official inaction that will irretrievably prejudice
the complainant; and (iv) where the question
involved is purely legal and will ultimately have to
be decided by the courts of justice. x x x there
was no absolute necessity of appealing
respondent PCGG’s resolution to the Office of the
President, as purportedly required by Section 6 of
the PCGG Rules and Regulations, inasmuch as
respondent PCGG seemed to have exhibited
indifference towards petitioners’ pleas for the
lifting of the sequestration and search and seizure
orders. Official inaction or unreasonable delay, as
heretofore intimated, is one of the exceptions to
the rule on non-exhaustion of administrative
remedies. Hence, under the circumstance,
petitioners may not be faulted for seeking relief
directly from the courts.”
- The other exception is the first in the
enumeration, i.e., “where there is estoppel on the
part of the party invoking the doctrine,” consisting
in the PCGG’s being guilty of estoppel by laches
which has just been discussed in great length. In
answer therefore to the first key issue, this Court
rules in the affirmative. The denial of the PCGG’s
motion to dismiss was in order.
PAAT V CA (DE GUZMAN)
266 SCRA 167
TORRES, January 10, 1997
FACTS
-The truck of private respondent de Guzman was
seized by DENR personnel because the driver
could not produce the required documents for the
forest products found concealed in the truck.
Petitioner Layugan (Community Environment and
Natural Resources Officer) issued an order of
confiscation of the truck and gave de Guzman 15
days within which to submit an explanation why
the truck should not be forfeited. De Guzman
failed to submit the required explanation. Regional
Executive Director of DENR sustained Petitioner
Layugan’s action of confiscation and ordered the
forfeiture of the truck.
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-De Guzman filed a letter of reconsideration of the
Regional Executive Director’s order – denied.
-De Guzman filed a letter to DENR Sec, wherein it
was stated that in case the letter for
reconsideration would be denied, the letter should
be considered an appeal to the Secretary.
However, pending the decision of the DENR Sec,
De Guzman filed a suit for replevin with RTC.
Petitioners filed MD (De Guzman had no cause of
action for failure to exhaust administrative
remedies)
-RTC: MD denied – MFR – denied – filed petition for
certiorari with CA
-CA: affirmed RTC decision
Petitioner:. Doctrine of exhaustion of
administrative remedies
Respondent:. Doctrine does not apply because
(1) due process was violated (not given a chance
to be heard); (2) seizure and forfeiture was
unlawful because (a) DENR Sec and his
representatives had no authority to confiscate and
forfeit conveyances utilized in transporting illegal
forest products, (b) trucks were not used in the
commission of the crime
ISSUES
1. WON, without violating the principle of
exhaustion of administrative remedies, an action
for replevin may prosper to recover a movable
property which is the subject matter of an
administrative forfeiture proceeding in the DENR
pursuant to the Revised Forestry Code of the
Philippines
2. WON the DENR Sec and his representatives
empowered to confiscate and forfeit conveyances
used in transporting illegal forest products in favor
of the government (second contention of
respondents)
HELD
1. NO
Ratio. (GENERAL RULE) Before a party is
allowed to seek the intervention of the court, it is a
pre-condition that he should have availed of all the
means of administrative processes afforded him. If
a remedy within the administrative machinery can
still be resorted to by giving the administrative
officer concerned every opportunity to decide on a
matter that comes within his jurisdiction then such
remedy should be exhausted first before court’s
judicial power can be sought. The premature
invocation of court’s intervention is fatal to one’s
cause of action. Accordingly, absent any finding of
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waiver or estoppel the case is susceptible of
dismissal for lack of cause of action. This doctrine
of exhaustion of administrative remedies was not
without its practical and legal reasons, for one
thing, availment of administrative remedy entails
lesser expenses and provides for a speedier
disposition of controversies. It is no less true to
state that the courts of justice for reasons of
comity and convenience will shy away from a
dispute until the system of administrative redress
has been completed and complied with so as to
give the administrative agency concerned every
opportunity to correct its error and to dispose of
the case.
(EXCEPTION) It is disregarded (1) when there is a
violation of due process, (2) when the issue
involved is purely a legal question, (3) when the
administrative action is patently illegal amounting
to lack or excess of jurisdiction, (4) when there is
estoppel on the part of the administrative agency
concerned, (5) when there is irreparable injury, (6)
when the respondent is a department secretary
whose acts as an alter ego of the President bears
the implied and assumed approval of the latter, (7)
when to require exhaustion of administrative
remedies would be unreasonable, (8) when it
would amount to a nullification of a claim, (9)
when the subject matter is a private land in land
case proceedings, (10) when the rule does not
provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the
urgency of judicial intervention.
Reasoning. The controversy was pending before
the DENR Secretary when it was forwarded to him
following the denial by the petitioners of the MFR.
By appealing to him, the respondents
acknowledged the existence of an adequate and
plain remedy still available and open to them in
the ordinary course of law.
Obiter (on contention of respondents). ON
DUE PROCESS: Due process does not necessarily
mean or require a hearing, but simply an
opportunity or right to be heard. One may be
heard, not solely by verbal presentation, but also,
and perhaps many times more creditably and
practicable than oral argument, through pleadings.
ON ARGUMENT THAT THE TRUCKS SHOULD NOT
BE CONFISCATED BECAUSE IT WAS NOT USED IN
THE COMMISSION OF A CRIME: the truck was
indeed used in the commission of a crime – not
theft but violation of EO 277.
-a suit for replevin can not be sustained against
the petitioners for the subject truck taken and
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retained by them for administrative forfeiture (2) years after the effectivity of this Code and
proceedings in pursuant to Section 68-A of the P. every three (3) years thereafter.” This revision was
D. 705, as amended. Dismissal of the replevin suit not yet enforced in the City of Manila. Until 1995,
for lack of cause of action in view of the private the basis for collection of real estate taxes was the
respondents’ failure to exhaust administrative old, year-1979, real estate market values.
remedies should have been the proper course of - Mrs. Laderas, the newly appointed City Assessor
action by the lower court instead of assuming of Manila, began the process of general revision
jurisdiction over the case and consequently issuing based on the updated fair market values of the
the writ ordering the return of the truck. real properties. This was submitted to the City
Exhaustion of the remedies in the administrative Council. The Council then conducted public
forum, being a condition precedent prior to one’s hearings as required by law.
recourse to the courts and more importantly, being - As a consequence, petitioner filed a special
an element of private respondents’ right of action, proceeding for the declaration of nullity of the
is too significant to be waylaid by the lower court. ordinance with preliminary injunction and prayer
2. YES for temporary restraining order (TRO).
Ratio. Section 681 and 68-A2 of PD 70, as - At around the same time, Manila Ordinance No.
amended by EO 277. The Secretary and his duly 7905 took effect, reducing by 50% the assessment
authorized representatives are given the authority levels (depending on the use of property, e.g.,
to confiscate and forfeit any conveyances utilized residential, commercial) for the computation of tax
in violating the Code or other forest laws, rules and due. It also provides that the amendment shall
regulations. take effect retroactively to Jan 1, 1996. As a result,
Disposition. Petition is GRANTED it reduced the tax increase of petitioner’s
residential land to 155%, while the tax increase for
residential improvement was 82%.
LOPEZ V CITY OF MANILA - Despite this, the controversy proceeded. The
reason relied upon by the City of Manila for the
303 SCRA 448
dismissal of the petition was for failure of the
QUISUMBING; February 19, 1999 petitioner to exhaust administrative remedies.
- RTC directed the issuance of a writ of injunction.
FACTS Respondent filed MFR on the denial of its motion to
- Manila Ordinance No. 7894 (“An Ordinance dismiss. It also underscored the happening of a
Prescribed as the Revised Schedule of Fair Market supervening event, i.e., the enactment and
Values of Real Properties of the City of Manila”) approval of the City Mayor of Manila Ordinance No.
was enacted. With its implementation, the tax on 7905.
the land owned by the petitioner was increased by - RTC then granted MD. Lopez filed MFR, but was
580%. With respect to the improvement on his denied.
property, the tax increased by 250%. Petitioner’s Contentions
- Backstory: Sec 219 of RA 7160 or the Local Gov’t - When the trial court ruled that it has jurisdiction
Code of 1991 requires that: “The provincial, city or over the case, the question of whether he needs to
municipal assessor shall undertake a general resort to the exhaustion of administrative
revision of real property assessments within two remedies becomes moot and academic.
- The question of the constitutionality of the city
1 Section 68: The court shall further order the confiscation in favor of the government of ordinance may be raised on appeal, either to the
the timber or any forest products cut, gathered, collected, removed, or possessed, as Secretary of Justice or the RTC, both having
well as the machinery, equipments, implements and tools illegally used in the area concurrent jurisdiction over the case (BP 129).
where the timber or forest products are found. - At the time he instituted this complaint, it was
2 SECTION 68-A. Administrative Authority of the Department or His Duly Authorized premature to resort to the remedies provided by
Representative To Order Confiscation. In all cases of violation of this Code or other forest R.A. 7160 because he has not received the formal
laws, rules and regulations, the Department Head or his duly authorized representative, notice of assessment yet.
may order the confiscation of any forest products illegally cut, gathered, removed, or
possessed or abandoned, and all conveyances used either by land, water or air in the ISSUE
commission of the offense and to dispose of the same in accordance with pertinent laws, WON petitioner failed to exhaust all administrative
regulations and policies on the matter. remedies
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HELD
YES
Ratio As a general rule, where the law provides
for the remedies against the action of an
administrative board, body, or officer, relief to
courts can be sought only after exhausting all
remedies provided. The reason rests upon the
presumption that the administrative body, if given
the chance to correct its mistake or error, may
amend its decision on a given matter and decide it
properly. This should be done not only to give the
administrative agency the opportunity to decide
the matter by itself correctly, but also to prevent
unnecessary and premature resort to courts.
- There are however a number of instances when
the doctrine may be dispensed with and judicial
action validly resorted to immediately. Among
these exceptional cases are:
(1) when the question raised is purely legal,
(2) when the administrative body is in estoppel;
(3) when the act complained of is patently illegal;
(4) when there is urgent need for judicial
intervention;
(5) when the claim involved is small;
(6) when irreparable damage will be suffered;
(7) when there is no other plain, speedy and
adequate remedy;
(8) when strong public interest is involved;
(9) when the subject of controversy is private land;
and
(10) in quo-warranto proceeding.
* These exceptions are not present in the present
case.
What could have been done? With regard to
questions on the legality of a tax ordinance, the
remedies available to the taxpayer are provided
under Sections 187, 226, and 252 of R.A. 7160.
Taxpayer may bring an appeal before the
Secretary of Justice questioning legality of the city
ordinance (Sec 187); owner of real property who is
not satisfied with the assessment of his property
may, within sixty (60) days from notice of
assessment, appeal to the Board of Assessment
Appeals (Sec 226); should the taxpayer question
the excessiveness of the amount of tax, he must
first pay the amount due, then he must request
the annotation of the phrase “paid under protest”
and accordingly appeal to the Board of
Assessment Appeals (Sec 252).
** The crux of petitioner’s cause of action is the
determination of whether or not the tax is
excessive, oppressive or confiscatory. This issue is
essentially a question of fact and thereby,
precludes this Court from reviewing the same. The
ordinance is likewise, a social legislation intended
to soften the impact of the tremendous increase in
the value of the real properties subject to tax.
** The supervening circumstance of enactment of
Manila Ordinance No. 7905 has rendered the
petition, moot and academic, for failure of the
petitioner to amend his cause of action.
GARCIA V CA (PCA BOARD & GRATEDA)
G.R. No. 100579
VITUG; June 6, 2001
FACTS
-On 18 October 1988, the PCA Governing Board
(Board) passed Resolution No. 109-88, creating an
"Investigation Committee" which would look into
the complaint made by one Antonio Pua against
petitioner, then administrator of the Philippine
Coconut Authority, for supposed irregularities
committed by him.
-On 28 February 1989, the Investigation
Committee submitted its finding that there was a
prima facie case against Garcia, and
recommended that formal charges be filed against
him, and that he be placed under preventive
suspension
-On 01 March 1989, the PCA, through its then
Acting Board Chairman, Apolonio B. Bautista, filed
an administrative complaint against herein
petitioner Leandro P. Garcia for dishonesty,
falsification of official documents, grave
misconduct and violation of Republic Act No. 3019
-The Board placed petitioner under preventive
suspension
-On 20 April 1989, the Investigation Committee
scheduled hearings on the administrative case.
Petitioner was duly notified of these settings.
-Neither petitioner nor his counsel appeared during
the hearings.
-On 30 May 1989, the Board issued Resolution No.
046-89, saying that consistent with Presidential
Decree No. 807, the period of delay in the
disposition of the case resulting from the
petitions/requests for extension of time,
postponement/cancellation of the scheduled
hearings and related requests filed by the counsel
of Garcia, shall not be counted in computing the
period of preventive suspension, and that his re-
assumption of office as Administrator of PCA shall
require prior notice of reinstatement as may be
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issued by the Governing Board.
-Petitioner filed with the Regional Trial Court of
Quezon City a petition for certiorari, mandamus
and prohibition, with prayer for a writ of
preliminary injunction, seeking to enjoin the
hearing of the administrative charges against him;
the implementation of Resolution No. 046-89; and
the Board and persons acting in its behalf in
making an action/decision on the charges against
petitioner pending hearing on the merits of his
petition.
-The trial court issued a status quo order enjoining
the Board and all persons acting in its behalf from
"implementing its Resolution No. 046-89 extending
petitioner's preventive suspension."
-The trial court issued a writ of preliminary
injunction restraining the PCA Governing Board
from implementing its Resolution No. 046-89.
-Petitioner filed a motion praying for the creation
of a new investigating committee and that,
pending resolution, the Investigation Committee
be prevented from conducting further proceedings.
-On 14 July 1989, the trial court issued an order
denying the same but allowing the reception of
evidence on whether a temporary restraining order
shall issue.
-On 26 July 1989, the trial court issued an order
enjoining the Investigation Committee from further
conducting investigation "within a period of twenty
(20) days from receipt (of the order) and until
(after) respondents (would have been) heard"
-On 21 August 1989, the Grageda Investigation
Committee submitted to the Board its resolution
finding petitioner guilty as charged and so
recommended the penalty of forced resignation.
-On 25 August 1989, the Board passed Resolution
No. 070-89, adopting and approving the
Committee's recommendation and imposing,
effective 31 August 1989, the penalty of forced
resignation on petitioner.
-On 28 August 1989, petitioner filed a
supplemental petition with the trial court praying
for a writ of preliminary injunction to stop the
Board from implementing Resolution No. 070-89 .
-On 11 September 1989, the trial court issued a
temporary restraining order stopping respondent
Board from implementing its resolution of 21
August 1989 for a period of twenty (20) days from
receipt thereof until the question of whether or not
the issue of petitioner's alleged deprivation of due
process would have been resolved.
-On 25 September 1989, the trial court issued an
order directing the issuance of a writ of
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preliminary injunction restraining the PCA
Governing Board from enforcing its Resolution No.
070-89.
-The Board moved for a reconsideration of the
order, as well as the writ of preliminary injunction
of Oct 2 1989, which the trial court denied
-Respondents elevated the aforesaid orders to the
SC, which referred the case to the CA
-CA granted the petition and set aside the orders
of the TC granting the writ of preliminary
injunction in favor of respondent Garcia
-Petitioner’s MFR was denied, hence, this petition
ISSUE
WON the CA erred in declaring that the RTC
committed grave abuse of discretion in issuing the
questioned orders
HELD
NO
-The records would show that petitioner filed the
petition for certiorari, mandamus and prohibition
with TC even while the administrative investigation
was yet ongoing. Petitioner's immediate recourse
to the trial court was premature and precipitate.
From the decision of the PCA Board, once
rendered, an administrative remedy of appeal to
the Civil Service Commission would still be
available to him.
-Under the doctrine of exhaustion of administrative
remedies, recourse through court action, cannot
prosper until after all such administrative remedies
would have first been exhausted. The doctrine
does not warrant a court to arrogate unto itself the
authority to resolve, or interfere in, a controversy
the jurisdiction over which is lodged initially with
an administrative body, like the PCA Board and its
Investigation Committee, of special competence.
The rule is an element of petitioner's right of
action, and it is too significant a mandate to be
just waylaid by the courts.
-This Court has also said in a number of cases that:
"When an adequate remedy may be had within the
Executive Department of the government, but
nevertheless, a litigant fails or refuses to avail
himself of the same, the judiciary shall decline to
interfere. This traditional attitude of the courts is
based not only on convenience but likewise on
respect: convenience of the party litigants and
respect for a coequal office in the government. If a
remedy is available within the administrative
machinery, this should be resorted to before resort
can be made to (the) courts."
-Petitioner's invocation that his failure to exhaust
administrative remedies should be EXCEPTED by
the fact that irreparable damage would ensue
upon his overdue suspension and illegal ouster
from office cannot be countenanced because in
the case at bar, petitioner effectively, if not
deliberately, delayed the resolution of the
administrative case against him due to his
repeated requests for extension of time to file
answer and his inexcusable refusal to attend the
scheduled hearings thereon despite due notice.
-The observance of the mandate regarding
exhaustion of administrative remedies is a sound
practice and policy which should not be ignored.
The doctrine insures an orderly procedure and
withholds judicial interference until the
administrative process would have been allowed to
duly run its course. Even comity dictates that
unless the available administrative remedies have
been resorted to and appropriate authorities given
an opportunity to act and correct the errors
committed in the administrative forum, judicial
recourse must be held to be inappropriate and
impermissible
DAR v APEX INVESTMENT AND
FINANCING CORP.
401 SCRA 283
SANDOVAL-GUTIERREZ; April 10,
2003
FACTS
- Apex owns parcels of land in Dasmarinas, Cavite.
The Agrarian Reform Office in Dasmarinas initiated
compulsory acquisition proceedings pursuant to
RA 6657 (Comprehensive Agrarian Reform Law).
Apex claims the lots are residential. Apex
presented certification from the Municipal
Engineer that the lots were classified as residential
prior to the effectivity of the CARL.
- The deed of one lot in the name of Apex was
cancelled and a new one in the name of the RP
was registered. Later, it was transferred to a
farmer who allegedly occupied the land. So apex
filed a petition for certiorari and prohibition
praying that the compulsory acquisition
proceedings over its landholdings be declared
void.
ISSUES
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1. WON Apex violated the principle of exhaustion
of remedies
2. WON Apex was deprived of due process
HELD
1. NO.
- The Court has consistently held that the doctrine
of exhaustion of administrative remedies is a
relative one and is flexible depending on the
peculiarity and uniqueness of factual and
circumstantial settings of a case. Among others, it
is disregarded where, as in this case,
(a) there are circumstances indicating the urgency
of judicial intervention; and
(b) the administrative action is patently illegal and
amounts to lack or excess of jurisdiction.
- Records show that the PARO did not take
immediate action on respondent's Protest filed on
January 12, 1998. It was only on February 15,
1999, or after more than one year, that it
forwarded the same to petitioner DAR. Since then,
what petitioner has done was to require
respondent every now and then to submit copies
of supporting documents which were already
attached to its Protest. In the meantime,
respondent found that the PARO had caused the
cancellation of its title and that a new one was
issued to an alleged farmer-beneficiary.
- In Natalia Realty vs. Department of Agrarian
Reform, it was held that the aggrieved landowners
were not supposed to wait until the DAR acted on
their letter-protests (after it had sat on them for
almost a year) before resorting to judicial process.
Given the official indifference which, under the
circumstances could have continued forever, the
landowners had to act to assert and protect their
interests. Thus, their petition for certiorari was
allowed even though the DAR had not yet resolved
their protests. In the same vein, respondent here
could not be expected to wait for petitioner DAR to
resolve its protest before seeking judicial
intervention. Obviously, petitioner might continue
to alienate respondent's lots during the pendency
of its protest. Hence, the Court of Appeals did not
err in concluding that on the basis of the
circumstances of this case, respondent need not
exhaust all administrative remedies before filing
its petition for certiorari and prohibition.
2. YES.
- The CARL requires 2 notices: (1) notice of
coverage and letter of invitation and (2) notice of
acquisition.
- The 2-notice requirement was not complied with.
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Dean Carlota
Disposition CA decision affirmed with
modification.
SMART COMMUNICATIONS, INC v
NTC
408 SCRA 678
YNARES-SANTIAGO; August 12,
2003
FACTS
- The NTC issued a memorandum circular
regarding the billing of telecoms services,
including the sale of sim cards.
- Petitioners Islacom and Piltel alleged, inter alia,
that the NTC has no jurisdiction to regulate the
sale of consumer goods such as the prepaid call
cards since such jurisdiction belongs to the
Department of Trade and Industry under the
Consumer Act of the Philippines; that the Billing
Circular is oppressive, confiscatory and violative of
the constitutional prohibition against deprivation of
property without due process of law; that the
Circular will result in the impairment of the
viability of the prepaid cellular service by unduly
prolonging the validity and expiration of the
prepaid SIM and call cards; and that the
requirements of identification of prepaid card
buyers and call balance announcement are
unreasonable. Hence, they prayed that the Billing
Circular be declared null and void ab initio.
- Soon thereafter, petitioners Globe Telecom, Inc.
and Smart Communications, Inc. filed a joint
Motion for Leave to Intervene and to Admit
Complaint-in-Intervention. This was granted by the
trial court.
- RTC issued TRO enjoining NTC from
implementing the circular.
- NTC filed a motion to dismiss on the ground of
petitioners’ failure to exhaust administrative
remedies.
- RTC denied NTC’s motion. NTC filed a special civil
action certiorari and prohibition with the CA. CA
granted the petition and annunled and set aside
the decision of the lower court.
ISSUES
WON RTC has jurisdiction over the case
HELD
YES.
- In questioning the validity or constitutionality of a
rule or regulation issued by an administrative
agency, a party need not exhaust administrative
remedies before going to court. This principle
applies only where the act of the administrative
agency concerned was performed pursuant to its
quasi-judicial function, and not when the assailed
act pertained to its rule-making or quasi-legislative
power.
- Even assuming arguendo that the principle of
exhaustion of administrative remedies applies in
this case, the records reveal that petitioners
sufficiently complied with this requirement. Even
during the drafting and deliberation stages leading
to the issuance of Memorandum Circular No. 13-6-
2000, petitioners were able to register their
protests to the proposed billing guidelines.
- Where what is assailed is the validity or
constitutionality of a rule or regulation issued by
the administrative agency in the performance of
its quasi-legislative function, the regular courts
have jurisdiction to pass upon the same. The
determination of whether a specific rule or set of
rules issued by an administrative agency
contravenes the law or the constitution is within
the jurisdiction of the regular courts. Indeed, the
Constitution vests the power of judicial review or
the power to declare a law, treaty, international or
executive agreement, presidential decree, order,
instruction, ordinance, or regulation in the courts,
including the regional trial courts. This is within the
scope of judicial power, which includes the
authority of the courts to determine in an
appropriate action the validity of the acts of the
political departments. Judicial power includes the
duty of the courts of justice to settle actual
controversies involving rights which are legally
demandable and enforceable, and to determine
whether or not there has been a grave abuse of
discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.
ESTRADA ET AL V. CA (BACNOTAN
CEMENT CORPORATION)
442 SCRA 117
AUSTRIA-MARTINEZ; NOV 11, 2004
FACTS
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Estrada, Canilang and Lim, as concerned citizens
and taxpayers, filed on July 31, 1996, before the
Regional Trial Court (RTC) of Olongapo City, a
complaint for Injunction and Damages with Prayer
for Preliminary Injunction and Temporary
Restraining Order against Bacnotan Cement Corp.
(BCC), Wawandue Fishing Port, Inc. (WFPI), Khong
Hun as President of WFPI, Molina as Mayor of
Subic, Zambales, and Serrano as Regional Director
of the Department of Environment and Natural
Resources (DENR).
- The complaint alleges that: WFPI and the
Municipality of Subic entered into an illegal lease
contract, which in turn became the basis of a sub-
lease in favor of BCC; the sub-lease between WFPI
and BCC is a violation of the first lease because
the cement plant, which BCC intended to operate
in Wawandue, Subic, Zambales, is not related to
the fish port business of WFPI; and BCC’s cement
plant is a nuisance because it will cause pollution,
endanger the health, life and limb of the residents
and deprive them of the full use and enjoyment of
their properties. The plaintiffs prayed that an
order be issued: to restrain and prohibit BCC from
opening, commissioning, or otherwise operating its
cement plant; and to require the defendants to
jointly and solidarily pay the plaintiffs P205,000.00
by way of actual, moral and exemplary damages
and attorney’s fees.
- Defendants WFPI/Khong Hun and BCC filed
separate motions to dismiss, both alleging that the
complaint states no cause of action. BCC, in its
motion, added that: the plaintiffs failed to exhaust
administrative remedies before going to court; that
the complaint was premature; and that the RTC
has no jurisdiction on the matter. Respondent
Serrano of the DENR also filed a motion to dismiss
stating that there was no cause of action insofar as
he is concerned since there was nothing in the
complaint that shows any dereliction of duty on his
part.
- On December 6, 1996, Judge Ubiadas of RTC
Olongapo City, Branch 72, issued an order denying
respondents’ motions to dismiss and granting the
prayer for a writ of preliminary injunction.
Pertinent portions of the order read as follows:
- The powers vested by law under Executive Order
192, Republic Act 3931 and Presidential Decree
984 are regulatory merely and for the purpose of
determining whether pollution exists.
- However, under the laws above-mentioned, the
powers granted to the DENR thru the Pollution
Adjudication Board did not expressly exclude the
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Dean Carlota
Courts which under the law are empowered to try
both questions of facts and law to determine
whether pollution which maybe nuisance per se or
by accidents (sic) exist or likely to exist. Under the
Constitution, the courts are imbued the inherent
power of general jurisdiction to resolve these
issues. While it maybe (sic) true that petitioners
might have first to seek relief thru the DENR’s
Pollution Adjudication Board a resort to the remedy
provided under the Pollution Adjudication Board is
rendered useless and ineffective in the light of the
urgency that the said pollution be restrained
outright in lieu of the impending risk described in
the petition. It will be noted that the DENR did not
have the power either in Executive Order 192,
Republic Act 3931 and Presidential Decree 984 to
issue a writ of injunction. The argument therefore
for the exhaustion of administrative remedy and
lack of jurisdiction does not warrant the dismissal
of this petition against Bacnotan Cement
Corporation.
- Respondents’ motions for reconsideration were
likewise denied by the trial court in an order dated
May 13, 1997. Respondent BCC then went to the
Court of Appeals on a petition for certiorari and
prohibition with preliminary injunction and/or
temporary restraining order seeking to reverse
and set aside the orders dated December 6, 1996
and May 13, 1997 as well as to lift the writ of
preliminary injunction dated December 11, 1996.
- On April 6, 1998, the Court of Appeals rendered
its decision, granting BCC’s petition. The Court of
Appeals denied petitioners’ motion for
reconsideration on February 24, 1999.
ISSUE
WON the instant case falls under the exceptional
cases where prior resort to administrative
agencies need not be made before going to court.
HELD
NO.
- The doctrine of exhaustion of administrative
remedies requires that resort be first made with
the administrative authorities in the resolution of a
controversy falling under their jurisdiction before
the same may be elevated to a court of justice for
review. If a remedy within the administrative
machinery is still available, with a procedure
pursuant to law for an administrative officer to
decide the controversy, a party should first
exhaust such remedy before going to court. A
premature invocation of a court’s intervention
renders the complaint without cause of action and
dismissible on such ground.
- The reason for this is that prior availment of
administrative remedy entails lesser expenses and
provides for a speedier disposition
controversies. Comity and convenience also impel
courts of justice to shy away from a dispute until
the system of administrative redress has been
completed and complied with.
- As we explained in Gonzales vs. Court of Appeals,
the thrust of the rule on exhaustion of
administrative remedies is that the courts must
allow the administrative agencies to carry out their
functions and discharge their responsibilities
within the specialized areas of their respective
competence. It is presumed that an administrative
agency, if afforded an opportunity to pass upon a
matter, will decide the same correctly, or correct
any previous error committed in its forum.
Furthermore, reasons of law, comity and
convenience prevent the courts from entertaining
cases proper for determination by administrative
agencies. Hence, premature resort to the courts
necessarily becomes fatal to the cause of action of
the petitioner.
- While the doctrine of exhaustion
administrative remedies is flexible and may be
disregarded in certain instances, such as:
(1) when there is a violation of due process,
(2) when the issue involved is purely a legal
question,
(3) when the administrative action is patently
illegal amounting to lack or excess of
jurisdiction,
(4) when there is estoppel on the part of the
administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department
secretary whose acts as an alter ego of the
President bears [sic] the implied and
assumed approval of the latter,
(7) when to require exhaustion of
administrative remedies would be
unreasonable,
(8) when it would amount to a nullification of
a claim,
(9) when the subject matter is a private land
in land case proceedings,
(10) when the rule does not provide a
plain, speedy and adequate remedy,
(11) when there are circumstances
indicating the urgency of judicial
intervention,
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(12) when no administrative review is
provided by law,
(13) where the rule of qualified political
agency applies, and
of (14) when the issue of non-exhaustion of
administrative remedies has been rendered
moot.
- the case does not fall under any of the
exceptional circumstances.
- Petitioners claim that their action before the trial
court, without going to the DENR first, is justified
because they are in danger of suffering grave and
irreparable injury from the operation of
respondent’s cement repacking plant and the
DENR does not have the power to grant them the
relief they are praying for.
- RA 3931, An Act Creating the National Water and
Air Pollution Control Commission, was passed on
June 18, 1964 to maintain reasonable standards of
purity for the waters and air of the country with
their utilization for domestic, agricultural,
industrial and other legitimate purposes. It
created the NPCC which had the power, to issue,
renew, or deny permits, for the prevention and
abatement of pollution.
of - In 1976, Presidential Decree No. 984 was enacted
to strengthen the NPCC giving it, among others,
the following:
Sec. 6. Powers and Functions – xxx
(e) Issue orders or decisions to compel
compliance with the provisions of this Decree
and its implementing rules and regulations only
after proper notice and hearing.
(f) Make, alter or modify orders requiring the
discontinuance of pollution specifying the
conditions and the time within which such
discontinuance must be accomplished.
(g) Issue, renew, or deny permits, under such
conditions as it may determine to be reasonable,
for the prevention and abatement of pollution,
for the discharge of sewage, industrial waste, or
for the installation or operation of sewage works
and industrial disposal system or parts thereof…
xxx
(j) serve as arbitrator for the determination
of reparations, or restitution of the damages and
losses resulting from pollution.
- P.D. No. 984 also empowered the commission to
issue ex parte orders directing the discontinuance
or temporary suspension or cessation of operation
of an establishment or person generating sewage
or wastes without the necessity of prior public
hearing whenever it finds a prima facie evidence
Administrative Law
Dean Carlota
that the discharged sewage or wastes are of
immediate threat to life, public health, safety or
welfare, or to animal or plant life, or exceed the
allowable standards set by the commission.
- In 1987, Executive Order No. 192 was passed,
reorganizing the DENR. It transferred the power of
the NPCC to the Environmental Management
Bureau and created the PAB, under the Office of
the Secretary, which assumed the powers and
functions of the NPCC with respect to the
adjudication of pollution cases under R.A. No. 3931
and P.D. No. 984.
- In Pollution Adjudication Board vs. Court of
Appeals, the PAB is the very agency of the
government with the task of determining whether
the effluents of a particular industrial
establishment comply with or violate applicable
anti-pollution statutory and regulatory provisions.
We also recognized its power to issue, ex parte,
cease and desist orders. As a general rule, the
adjudication of pollution cases generally pertains
to the Pollution Adjudication Board (PAB), except in
cases where the special law provides for another
forum.
REGINO v. PANGASINAN COLLEGES
OF SCIENCE AND TECHNOLOGY,
GAMUROT & BALADAD
443 SCRA 56
PANGANIBAN; November 18, 2004
FACTS
- Khristine Regino was a 1st yr computer science
student at PCST. Reared in a poor family, Regino
went to college mainly through the financial
support of her relatives. During the second
semester of school year 2001-2002, she enrolled
in logic and statistics subjects under Gamurot and
Baladad, as teachers.
- In Feb 2002, PCST held a fund raising campaign
dubbed the "Rave Party and Dance Revolution,"
the proceeds of which were to go to the
construction of the school's tennis and volleyball
courts. Each student was required to pay for two
tickets at P100 each. The project was allegedly
implemented by recompensing students who
purchased tickets with additional points in their
test scores; those who refused to pay were denied
the opportunity to take the final examinations.
- Financially strapped and prohibited by her
religion from attending dance parties and
celebrations, Regino refused to pay for the tickets.
Consequently, her respondent teachers disallowed
her from taking the tests. (Gamurot made her sit
out her logic class while her classmates were
taking their examinations. The next day, Baladad,
after announcing to the entire class that she was
not Khristine and another student to take their
statistics examinations for failing to pay for their
tickets, allegedly ejected them from the
classroom.)
- Khristine's pleas ostensibly went unheeded by
Gamurot and Baladad, who defended their
positions as compliance with PCST's policy. She
filed complaint for damages against PCST,
Gamurot and Baladad.
- PCST filed a MD on the ground of failure to
exhaust administrative remedies. According to
respondents, the question raised involved the
determination of the wisdom of an administrative
policy of the PCST; hence, the case should have
been initiated before the proper administrative
body, the Commission of Higher Education (CHED).
- In her response to MD, Khristine argued that prior
exhaustion of administrative remedies was
unnecessary, because her action was not
administrative in nature, but one purely for
damages arising from respondents' breach of the
laws on human relations.
- RTC dismissed the Complaint for lack of cause of
action w/o explaining the ground. RTC citing said
that Sec 54 of the Education Act of 1982 vested in
the Commission on Higher Education (CHED) the
supervision and regulation of tertiary schools.
Thus, it ruled that the CHED, not the courts, had
jurisdiction over the controversy.
ISSUES
1. WON doctrine of exhaustion of administrative
remedies is applicable
2. WON the Complaint stated sufficient cause(s) of
action
HELD:
1. NO.
Factoran Jr. v. CA: "The doctrine of exhaustion
of administrative remedies is basic. Courts,
for reasons of law, comity, and convenience,
should not entertain suits unless the
available administrative remedies have first
been resorted to and the proper authorities
have been given the appropriate opportunity
to act and correct their alleged errors, if any,
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committed in the administrative forum. x x
x."
- Khristine isn’t asking for the reversal of the
policies of PCST. Neither is she demanding it to
allow her to take her final examinations; she was
already enrolled in another educational institution.
- Exhaustion of administrative remedies is
applicable when there is competence on the part
of the administrative body to act upon the matter
complained of. (Miriam College Foundation v. CA)
- United Residents of Dominican Hill, Inc. v.
Commission on the Settlement of Land Problems:
Administrative agencies are not courts; they are
neither part of the judicial system, nor are they
deemed judicial tribunals. Specifically, the CHED
does not have the power to award damages.
Hence, petitioner could not have commenced her
case before the Commission.
- The exhaustion doctrine admits of exceptions,
one of which arises when the issue is purely legal
and well within the jurisdiction of the trial court.
Petitioner's action for damages inevitably calls for
the application and the interpretation of the Civil
Code, a function that falls within the jurisdiction of
the courts.
2. YES, breach of contract and liability for
tort.
- Every complaint must sufficiently allege a cause
of action; failure to do so warrants its dismissal. A
complaint is said to assert a sufficient cause of
action if, admitting what appears solely on its face
to be correct, the plaintiff would be entitled to the
relief prayed for. Assuming the facts that are
alleged to be true, the court should be able to
render a valid judgment in accordance with the
prayer in the complaint.
Reciprocity of the School-Student Contract
- Alcuaz v. PSBA: the Court characterized the
relationship between the school and the student as
a contract, in which "a student, once admitted by
the school is considered enrolled for one
semester." Two years later, in Non v. Dames II, the
Court modified the "termination of contract theory"
in Alcuaz by holding that the contractual
relationship between the school and the student is
not only semestral in duration, but for the entire
period the latter are expected to complete it.”
Except for the variance in the period during which
the contractual relationship is considered to
subsist, both Alcuaz and Non were unanimous in
characterizing the school-student relationship as
contractual in nature.
Administrative Law
Dean Carlota
- The school-student relationship is also reciprocal.
Thus, it has consequences appurtenant to and
inherent in all contracts of such kind -- it gives rise
to bilateral or reciprocal rights and obligations. The
school undertakes to provide students with
education sufficient to enable them to pursue
higher education or a profession. On the other
hand, the students agree to abide by the academic
requirements of the school and to observe its rules
and regulations.
- The terms of the school-student contract are
defined at the moment of its inception -- upon
enrolment of the student. Standards of academic
performance and the code of behavior and
discipline are usually set forth in manuals
distributed to new students at the start of every
school year. Further, schools inform prospective
enrollees the amount of fees and the terms of
payment.
- Magtibay v. Garcia, Licup v. University of San
Carlos and Ateneo de Manila University v. Garcia:
“barring any violation of the rules on the part of
the students, an institution of higher learning has a
contractual obligation to afford its students a fair
opportunity to complete the course they seek to
pursue.”
- In the present case, PCST imposed the assailed
revenue-raising measure belatedly, in the middle
of the semester. It exacted the dance party fee as
a condition for the students' taking the final
examinations, and ultimately for its recognition of
their ability to finish a course. The fee, however,
was not part of the school-student contract
entered into at the start of the school year. Hence,
it could not be unilaterally imposed to the
prejudice of the enrollees.
- The school-student contract "is imbued with
public interest, considering the high priority given
by the Constitution to education and the grant to
the State of supervisory and regulatory powers
over all educational institutions." Sec. 5 (1) and (3)
of Article XIV of the 1987 Constitution provide:
"The State shall protect and promote the right of
all citizens to quality education at all levels and
shall take appropriate steps to make such
declaration accessible to all.
"Every student has a right to select a profession
or course of study, subject to fair, reasonable
and equitable admission and academic
requirements."
Sec. 9(2) of BP 232, otherwise known as the
Education Act of 1982:
"Section 9. Rights of Students in School. � In
addition to other rights, and subject to the
limitations prescribed by law and regulations,
students and pupils in all schools shall enjoy the
following rights:
xxx xxx xxx
(2) The right to freely choose their field of study
subject to existing curricula and to continue
their course therein up to graduation, except in
cases of academic deficiency, or violation of
disciplinary regulations."
Liability for Tort
- Khristine anchors her complaint for tort on Art.
19, 21, 26 of the NC C (she alleged that PCST
"inhumanly punish students x x x by reason only of
their poverty, religious practice or lowly station in
life, which inculcated upon her the feelings of guilt,
disgrace and unworthiness;" as a result of such
punishment, she was allegedly unable to finish any
of her subjects for the second semester of that
school year and had to lag behind in her studies by
a full year.
- Generally, liability for tort arises only between
parties not otherwise bound by a contract. An
academic institution, however, may be held liable
for tort even if it has an existing contract with its
students, since the act that violated the contract
may also be a tort.
- PSBA vs. CA: "x x x A perusal of Article 2176 [of
the Civil Code] shows that obligations arising from
quasi-delicts or tort, also known as extra-
contractual obligations, arise only between parties
not otherwise bound by contract, whether express
or implied. However, this impression has not
prevented this Court from determining the
existence of a tort even when there obtains a
contract. In Air France v. Carrascoso (124 Phil.
722), the private respondent was awarded
damages for his unwarranted expulsion from a
first-class seat aboard the petitioner airline. It is
noted, however, that the Court referred to the
petitioner-airline's liability as one arising from tort,
not one arising form a contract of carriage. In
effect, Air France is authority for the view that
liability from tort may exist even if there is a
contract, for the act that breaks the contract may
be also a tort. x x x This view was not all that
revolutionary, for even as early as 1918, this Court
was already of a similar mind. In Cangco v. Manila
Railroad (38 Phil. 780), Mr. Justice Fisher
elucidated thus: 'x x x. When such a contractual
relation exists the obligor may break the contract
under such conditions that the same act which
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constitutes a breach of the contract would have
constituted the source of an extra-contractual
obligation had no contract existed between the
parties.'
"Immediately what comes to mind is the chapter of
the Civil Code on Human Relations, particularly
Article 21 x x x."
Academic Freedom (PCST’s defense which SC
didn’t buy  )
- Academic freedom encompasses the
independence of an academic institution to
determine for itself (1) who may teach, (2) what
may be taught, (3) how it shall teach, and (4)
who may be admitted to study.
- Garcia v. the Faculty Admission Committee,
Loyola School of Theology: “freedom of an
academic institution thus: "to decide for itself aims
and objectives and how best to attain them x x x
free from outside coercion or interference save
possibly when overriding public welfare calls for
some restraint."
- Tangonan v. Paño: “once a school has, in the
name of academic freedom, set its standards,
these should be meticulously observed and should
not be used to discriminate against certain
students. After accepting them upon enrollment,
the school cannot renege on its contractual
obligation on grounds other than those made
known to, and accepted by, students at the start of
the school year.”
FLORES v SANGGUNIANG
PANLALAWIGAN NG PAMPANGA,
GOV LAPID, MUNICIPAL
COUNCILORS
GR NO. 159022
SANDOVAL-GUTIERREZ; Feb 23, 2000
FACTS
- An administrative complaint for dishonesty and
gross misconduct against Mayor Flores was filed w/
Sangguniang Panlalawigan of Pampanga.
Complainants were the councilors.
- Case was about acquisition of communication
equipment w/o resolution or ordinance by
Sangguniang Bayan. Kai Electronics won in
bidding. While bidding was still being conducted,
Kai delivered the equipment. It was overpriced.
- Sangguniang Panlalawigan recommended to
Lapid that Flores be preventively suspended.
Administrative Law
Dean Carlota
- Without seeking reconsideration of that
recommendation, Flores wrote to Lapid, requesting
him to veto the same
- And without waiting for Lapid’s action, Flores filed
with CA petition for certiorari. CA denied petition
because of failure to exhaust administrative
remedies. Also, CA found no grave abuse of
discretion. Flores’ MFR was denied. Hence, this
petition.
ISSUE
WON Flores failed to exhaust administrative
remedies
HELD
YES
- After receiving order of preventive suspension,
Flores should have filed MFR to give Sangguniang
Panlalawigan opportunity to correct itself if
necessary. This MFR is a condition sine qua non
before filing petition for certiorari under Rule 65.
- Petitioner must not only show that respondent
Sangguniang Panlalawigan, in issuing the
questioned Order, “acted without or in excess of
its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction,” but
that “there is no appeal, nor any plain, speedy,
and adequate remedy in the ordinary course of
law.”
- he should have waited for Lapid’s action since it
is Lapid, as Governor, who is empowered to
suspend him, according to Local Government
Code.
- The rationale rests upon presumption that the
administrative body, if given chance to correct its
mistake / error, may amend its decision. It will
also prevent unnecessary and premature resort to
the court.
CSC V DBM
G.R. No. 158791
CARPIO-MORALES; July 22, 2005
FACTS
- CSC seeks to compel the DBM to release the
balance of its budget for fiscal year 2002. At the
same time, it seeks a determination by this Court
of the extent of the constitutional concept of fiscal
autonomy.
- Petitioner claims the amount of P215,270,000.00
was appropriated for its Central Office by the
General Appropriations Act of 2002, while the total
allocations for the same Office, if all sources of
funds are considered, amount to P285,660,790.44.
It complains, however, that the total fund releases
by respondent to its Central Office during the fiscal
year 2002 was only P279,853,398.14, thereby
leaving an unreleased balance of P5,807,392.30.
- The balance was intentionally withheld by
respondent on the basis of its “no report, no
release” policy whereby allocations for agencies
are withheld pending their submission of the
documents mentioned in Sections 3.8 to 3.10 and
Section 7.0 of National Budget Circular No. 478 on
Guidelines on the Release of the FY 2002 Funds.
Petitioner contends that the application of the “no
report, no release” policy upon independent
constitutional bodies of which it is one is a
violation of the principle of fiscal autonomy and,
therefore, unconstitutional.
ISSUE
1. WON petition should be dismissed because of
procedural defects
2. WON DBM is justified in withholding the funds
HELD
1. NO
- The rule on exhaustion of administrative
remedies invoked by respondent applies only
where there is an express legal provision requiring
such administrative step as a condition precedent
to taking action in court. As petitioner is not
mandated by any law to seek clarification from the
DBM Secretary prior to filing the present action, its
failure to do so does not call for the application of
the rule.
- As for the rule on hierarchy of courts, it is not
absolute. A direct invocation of this Court's
original jurisdiction may be allowed where there
are special and important reasons therefor, clearly
and specifically set out in the petition. Petitioner
justifies its direct filing of the petition with this
Court “as the matter involves the concept of fiscal
autonomy granted to [it] as well as other
constitutional bodies, a legal question not
heretofore determined and which only the
Honorable Supreme Court can decide with
authority and finality.”
2. NO
- Province of Batangas v. Romulo, on “automatic
release” in Sec 6, Article X of the Constitution:
Webster’s Third New International Dictionary
defines “automatic” as “involuntary either wholly
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or to a major extent so that any activity of the will
is largely negligible; of a reflex nature; without
volition; mechanical; like or suggestive of an
automaton.” Further, the word “automatically” is
defined as “in an automatic manner: without
thought or conscious intention.” Being
“automatic,” thus, connotes something
mechanical, spontaneous and perfunctory. As such
the LGUs are not required to perform any act
to receive the “just share” accruing to them from
the national coffers.
- By parity of construction, “automatic release” of
approved annual appropriations to petitioner, a
constitutional commission which is vested with
fiscal autonomy, should be construed to mean that
no condition to fund releases to it may be
imposed. This is consistent with the Resolution of
this Court which effectively prohibited the
enforcement of a “no report, no release” policy
against the Judiciary which has also been granted
fiscal autonomy by the Constitution.
- On respondent’s justification for withholding
funds from petitioner as due to a shortfall in
revenues, the same does not lie. The alleged
shortfall is totally unsubstantiated. Even assuming
that there was indeed such a shortfall, that does
not justify non-compliance with the mandate of
above-quoted Article IX (A), Section 5 of the
Constitution.
- To hold that petitioner may be subjected to
withholding or reduction of funds in the event of a
revenue shortfall would, to that extent, place
petitioner and the other entities vested with fiscal
autonomy on equal footing with all others which
are not granted the same autonomy, thereby
reducing to naught the distinction established by
the Constitution. The agencies vested with fiscal
autonomy should thus be given priority in the
release of their approved appropriations over all
other agencies not similarly vested when there is a
revenue shortfall.
- While the retention or reduction of
appropriations for an office is generally allowed
when there is an unmanageable budget deficit, the
Year 2002 GAA, in conformity with the
Constitution, excepted from such rule the
appropriations for entities vested with fiscal
autonomy. Thus, even assuming that there was a
revenue shortfall as respondent claimed, it could
not withhold full release of petitioner’s funds
without violating not only the Constitution but also
Section 64 of the General Provisions of the Year
2002 GAA.
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- Guiding principle on the Constitutional Mandate
on the Judiciary’s Fiscal Autonomy: “After approval
by Congress, the appropriations for the Judiciary
shall be automatically and regularly released
subject to availability of funds.” This phrase
“subject to availability of funds” does not
contradict the present ruling that the funds of
entities vested with fiscal autonomy should be
automatically and regularly released, a shortfall in
revenues notwithstanding. What is contemplated
in the said quoted phrase is a situation where total
revenue collections are so low that they are not
sufficient to cover the total appropriations for all
entities vested with fiscal autonomy.
- petitioner’s claim that its budget may not be
reduced by Congress lower than that of previous
fiscal year, as is the case of the Judiciary, must be
rejected. Article IX (A), Section 5 does not contain
the similar provision in Art VIII, Section 3, which
says, “Appropriations for the Judiciary may not be
reduced by the legislature below the amount
appropriated for the previous year.” The plain
implication of the omission of the provision
proscribing such reduction of appropriations below
that for the previous year is that Congress is not
prohibited from reducing the appropriations of
Constitutional Commissions below the amount
appropriated for them for the previous year.
C. PRIMARY JURISDICTION ON
PRELIMINARY RESORT
TEXAS & PACIFIC RAILROAD CO. v
ABILENE COTTON OIL
204 US 426
WHITE; February 25, 1907
FACTS
- The Abilene Cotton Oil Co. (Abilene) sued Texas &
Pacific Railroad Co. (Texas & Pac) to recover
$1,951.83 alleging that on shipments of car loads
of cotton seed made from various points in
Louisiana east of Alexandria, in that state, to
Abilene, Texas, the carrier had exacted, over the
protest of Abilene, the payment of an unjust and
unreasonable rate, which exceeded, in the
aggregate, by the sum sued for, a just and
reasonable charge. Moreover, the rate exacted
was discriminatory, constituted an undue
preference, and amounted to charging more for a
shorter than for a longer haul.
- Texas & Pac argued that the shipments were
interstate, and were, therefore, covered by the act
of Congress to regulate commerce. As the rate was
the one fixed in the rate sheets which the
company had established, filed, published, and
posted, as required by that act, the state court
was without jurisdiction to entertain the cause,
and, even if it had jurisdiction, it could not, without
disregarding the act to regulate commerce, grant
relief upon the basis that the established rate was
unreasonable, when it had not been found to be so
by the Interstate Commerce Commission (ICC).
- The trial court ruled for Texas & Pac saying that it
complied with the interstate commerce law and
the rates, though excessive, were posted in the
depots for the inspection of the public and were
approved by the ICC. The Court of Civil Appeals
adopted the findings of fact but reversed judgment
saying that a shipper may be granted relief under
common law despite the fact that the excessive
rates are in accordance with law.
ISSUES
WON a shipper may maintain an action at law
against a common carrier to recover damages
because of the exaction of an unreasonable rate
although the rate was in accordance with the act
to regulate commerce and was the duty of the
carrier to enforce
HELD
1. NO.
Ratio A shipper seeking reparation predicated
upon the unreasonableness of the established rate
must, under the act to regulate commerce,
primarily invoke redress through the ICC, which
body alone is vested with power originally to
entertain proceedings for the alteration of an
established schedule, because the rates fixed
therein are unreasonable.
Reasoning The act to regulate commerce was
intended to afford an effective means for
redressing the wrongs resulting from unjust
discrimination and undue preference. The means
by which these purposes were to be accomplished
was the placing upon all carriers the positive duty
to establish schedules of reasonable rates which
should have a uniform application to all, and which
should not be departed from so long as the
established schedule remained unaltered in the
manner provided by law.
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- If it be that the standard of rates fixed in the
mode provided by the statute could be treated on
the complaint of a shipper by a court and jury as
unreasonable, without reference to prior action by
the ICC, finding the established rate to be
unreasonable, and ordering the carrier to desist, a
shipper might obtain relief and thus such shipper
would receive a preference or discrimination not
enjoyed by those against whom the schedule of
rates was continued to be enforced. If, without
previous action by the ICC, power might be
exerted by courts and juries to determine the
reasonableness of an established rate, it would
follow that, unless all courts reached an identical
conclusion, a uniform standard of rates in the
future would be impossible, as the standard would
fluctuate and vary, dependent upon the divergent
conclusions reached by the various courts. The
recognition of such a right is wholly inconsistent
with the administrative power conferred upon the
ICC and its duty under the statute of seeing to it
that the statutory requirement as to uniformity
and equality of rates is observed.
PHIL. GLOBAL COMMUNICATIONS
INC v RELOVA
GR No. L-52819
FERNANDO; OCT. 2, 1980
FACTS
- Petitioner filed with the Board of
Telecommunications an application for authority to
establish a branch or station in Cebu City "for the
purpose of rendering international
telecommunications services from Cebu City to
any point outside the Philippines where it is
authorized to operate. The SolGen and private
respondents opposed such application. The Board
of Communications rendered a decision,
recognizing the right of petitioners under its
legislative franchise to establish branches or
stations anywhere in the Philippines, subject to its
prior approval. A joint motion for reconsideration
came from private respondents, followed as could
be expected by an opposition from petitioner. In a
reply to such opposition, private respondents put
in issue the jurisdiction of the Board of
Communications, now the National
Telecommunications Commission, to act on such
application. Such motion is still pending. Private
respondents filed before respondent Judge an
action for declaratory judgment to ascertain the
scope and coverage of the legislative franchise of
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Dean Carlota
petitioner, it was ratified to Branch XI, presided by
respondent Judge.
- There was a motion to dismiss by petitioner on
the ground that the question raised in such suit
pertained to the National Telecommunications
Commission, the body with primary jurisdiction.
Respondent Judge denied petitioner's motion to
dismiss as in his opinion the ground relied is not
indubitable. Hence this certiorari and prohibition
proceeding.
ISSUES
WON the petition for declaratory relief lies.
HELD
YES.
- A suit for declaratory relief lies and, therefore,
the petition must be dismissed. There was such a
limitation concerning the ingress and egress of its
messages or signals only thru a "sole gateway"
(Manila) or only thru any point or single location in
the Philippines. Absent such clarity as to the scope
and coverage of its franchise a legal question
arises which is more appropriate for the judiciary
than for an administrative agency to resolve. The
doctrine of primary jurisdiction calls for application
when there is such competence to act on the part
of an administrative body. Petitioner assumes that
such is the case. That is to beg the question. There
is merit, therefore, to the approach taken by
private respondents to seek judicial remedy as to
whether or not the legislative franchise could be so
interpreted as to enable the National
Telecommunications Commission to act on the
matter. A jurisdictional question thus arises and
calls for an answer.
- The conclusion reached is reinforced by the
nature of the assailed order of respondent Judge. It
was merely a denial of a motion to dismiss the suit
for declaratory relief for the reason that the
ground relied upon "is not indubitable." There is
thus the appearance and the reality of an
unseemly haste in which the matter was brought
to this Court considering that the well-known
doctrine that certiorari to be available as set forth
in Panaligan vs. Adolfo, requires a showing of "a
capricious, arbitrary and whimsical exercise of
power, the very antithesis of the judicial
prerogative in accordance with centuries of both
civil law and common law traditions."
DISPOSITION petition is dismissed for lack of
merit. The restraining order issued is set aside.
VIDAD v RTC OF NEGROS ORIENTAL
227 SCRA 271
VITUG; October 18, 1993
FACTS
- A group of public school teachers held a strike
from their classes, to demand the release of their
salaries by the Department of Budget. They also
assailed alleged corruption in the DECS.
- DECS Regional Director issued a return-to-work
order, with a warning that if the striking school
teachers didn’t resume their classes within 24
hours, administrative charges would be filed. The
order wasn’t heeded, so administrative complaints
against the teachers were filed. Constituted to look
into the cases was an investigation panel
composed of 3 DECS lawyers, Baclaso, Montes and
Capuyan.
- A group of school teachers administratively
charged filed with the RTC a complaint fo
injunction, prohibition and damages, with a prayer
for preliminary injunction, against the aforenamed
DECS officials. The TRO prohibiting the defendants
from continuin with the administrative
investigation was granted by the court.
- the defendants filed their answer and a motion to
dismiss. The school teachers moved to strike out
the appearance of the Office of the Solicitor
General and to accordingly declare the defendants
in default. Both motions were denied by the court.
- both parties filed with this Court their respective
petitions for Certiorari, Prohibition, and Mandamus.
The teachers’ petition was docketed as GR No
98084, and that of the DECS officials as GR No
98922. Both these cases were consolidated in this
Court’s resolution.
ISSUES
WON the lower court’s denial of both parties’
motions was improper
HELD
NO
Reasoning The various complaints against the
DECS officials have prescinded from the
administrative actions taken, and contemplated to
be yet taken, against public school teachers, the
plaintiffs in the cases pending with the court a quo.
The said complaints charge the defendants, all
government officials, with having illegally withheld
their salaries, having wrongfully filed
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administrative charges against the plaintiffs,
having unjustifiably refused to inform the latter of
the nature and accuse of accusation upon which
the charges were initiated, having inexcusably
violated elemental due process, and having
erroneously applied the law.
- The contention of the school teachers that the
DECS officials are being sued solely in their private
capacity certainly is not borne out by their above
allegations and prayers. The root of the cases filed
below deals, in fact, on the performance of official
functions by the DECS officials. Whether the
actions they have taken were proper or improper,
or whether they have acted in good faith or bad
faith, cannot, pending a full hearing that would
aptly afford all parties an opportunity to ventilate
their respective contentions, be yet determined.
Until then, it must be presumed that official duties
have been regularly performed.
- There’s also no reversible error in the denial of a
the defendant’s motion to dismiss the complaints.
The various complaints filed by the public school
teachers allege bad faith on the part of the DECS
officials. It cannot be pretended this early that the
same could be impossible of proof. On the
assumption that the plaintiffs are able to establish
their allegations of bad faith, a judgment for
damages can be warranted. Public officials are
certainly not immune from damages in their
personal capacities arising from the acts done in
bad faith; in these and similar cases, the public
officials may not be said to have acted within the
scope of their official authority, and no longer are
they protected by the mantle of immunity for
official actions.
- The court cases and the administrative matters
are closely interrelated, if not, indeed, interlinked.
While no prejudicial question strictly arises where
one is a civil case and the other is an
administrative proceeding, in the interest of good
order, it behooves the court to suspend its action
on the cases before it pending the final outcome of
the administrative proceedings. The doctrine of
primary jurisdiction does not warrant a court to
arrogate unto itself the authority to resolve a
controversy the jurisdiction over which is initially
lodged with an administrative body of special
competence. We see, in these petitions before us,
no cogent reason to deviate from the rule.
INDUSTRIAL ENTERPRISES, INC. V
CA (MARINDUQUE MINING)
Administrative Law
Dean Carlota
184 SCRA 426
MELENCIO-HERRERA; April 18, 1990
FACTS
- Petitioner IEI was granted a coal operating
contract by the Government through the Bureau of
Energy Development (BED) for the exploration of
two coal blocks in Eastern Samar. Subsequently,
IEI also applied with the then Ministry of Energy for
another coal operating contract for the exploration
of 3 add’l. coal blocks which, together with the
original 2 blocks, comprised the so-called "Giporlos
Area."
- IEI was later on advised that in line with the
objective of rationalizing the country's over-all coal
supply-demand balance… the logical coal operator
in the area should be the Marinduque Mining and
Industrial Corporation (MMIC), which was already
developing the coal deposit in another area
(Bagacay Area) and that the Bagacay and Giporlos
Areas should be awarded to MMIC. Thus, IEI and
MMIC executed a Memorandum of Agreement
whereby IEI assigned and transferred to MMIC all
its rights and interests in the 2 coal blocks which
are the subject of IEI's coal operating contract.
- Subsequently, however, IEI filed an action for
rescission of the Memorandum of Agreement with
damages against MMIC and the then Minister of
Energy Velasco before RTC Makati, Branch 150,
alleging that MMIC took possession of the subject
coal blocks even before the MOA was finalized and
approved by the BED; that MMIC discontinued
work thereon; that MMIC failed to apply for a coal
operating contract for the adjacent coal blocks;
and that MMIC failed and refused to pay the
reimbursements agreed upon and to assume IEI's
loan obligation as provided in the MOA. IEI also
prayed that the Energy Minister be ordered to
approve the return of the coal operating contract
from MMIC to petitioner, with a written
confirmation that said contract is valid and
effective, and, in due course, to convert said
contract from an exploration agreement to a
development/production or exploitation contract in
IEI's favor.
- In a summary judgment, the Trial Court ordered
the rescission of the MOA, declared the continued
efficacy of the coal operating contract in favor of
IEI; ordered the reversion of the 2 coal blocks
covered by the coal operating contract; ordered
BED to issue its written affirmation of the coal
operating contract and to expeditiously cause the
conversion thereof from exploration to
development in favor of IEI; directed BED to give
due course to IEI's application for a coal operating
contract; directed BED to give due course to IEI's
application for 3 more coal blocks; and ordered the
payment of damages and rehabilitation expenses.
- In reversing the TC, the CA held that the rendition
of the summary judgment was not proper since
there were genuine issues in controversy between
the parties, and more importantly, that the TC had
no jurisdiction over the action considering that,
under Presidential Decree No. 1206, it is the BED
that has the power to decide controversies relative
to the exploration, exploitation and development
of coal blocks.
ISSUE/S
WON the civil court has jurisdiction to hear and
decide the suit for rescission of the Memorandum
of Agreement concerning a coal operating contract
over coal blocks.
HELD
NO.
Ratio It may occur that the Court has jurisdiction
to take cognizance of a particular case, which
means that the matter involved is also judicial in
character. However, if the case is such that its
determination requires the expertise, specialized
skills and knowledge of the proper administrative
bodies because technical matters or intricate
questions of facts are involved, then relief must
first be obtained in an administrative proceeding
before a remedy will be supplied by the courts
even though the matter is within the proper
jurisdiction of a court. This is the doctrine of
primary jurisdiction. It applies "where a claim
is originally cognizable in the courts, and
comes into play whenever enforcement of
the claim requires the resolution of issues
which, under a regulatory scheme, have
been placed within the special competence
of an administrative body, in such case the
judicial process is suspended pending
referral of such issues to the administrative
body for its view".
Reasoning While the action filed by IEI sought the
rescission of what appears to be an ordinary civil
contract cognizable by a civil court, the fact is that
the Memorandum of Agreement sought to be
rescinded is derived from a coal-operating contract
and is inextricably tied up with the right to develop
coal-bearing lands and the determination of
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whether or not the reversion of the coal operating
contract over the subject coal blocks to IEI would
be in line with the integrated national program for
coal-development and with the objective of
rationalizing the country's over-all coal-supply-
demand balance, IEI's cause of action was not
merely the rescission of a contract but the
reversion or return to it of the operation of the coal
blocks. Thus it was that in its Decision ordering the
rescission of the Agreement, the Trial Court, inter
alia, declared the continued efficacy of the coal-
operating contract in IEI's favor and directed the
BED to give due course to IEI's application for
three (3) IEI more coal blocks. These are matters
properly falling within the domain of the BED.
For the BED, as the successor to the Energy
Development Board (abolished by Sec. 11, P.D. No.
1206, dated 6 October 1977) is tasked with the
function of establishing a comprehensive and
integrated national program for the exploration,
exploitation, and development and extraction of
fossil fuels, such as the country's coal resources;
adopting a coal development program; regulating
all activities relative thereto; and undertaking by
itself or through service contracts such
exploitation and development, all in the interest of
an effective and coordinated development of
extracted resources.
Clearly, the doctrine of primary jurisdiction finds
application in this case since the question of what
coal areas should be exploited and developed and
which entity should be granted coal operating
contracts over said areas involves a technical
determination by the BED as the administrative
agency in possession of the specialized expertise
to act on the matter. The Trial Court does not have
the competence to decide matters concerning
activities relative to the exploration, exploitation,
development and extraction of mineral resources
like coal. These issues preclude an initial judicial
determination. It behooves the courts to stand
aside even when apparently they have statutory
power to proceed in recognition of the primary
jurisdiction of an administrative agency.
The application of the doctrine of primary
jurisdiction, however, does not call for the
dismissal of the case below. It need only be
suspended until after the matters within the
competence of the BED are threshed out and
determined. Thereby, the principal purpose behind
the doctrine of primary jurisdiction is salutarily
served.
Disposition the Court Resolved to DENY the
Administrative Law
Dean Carlota
petition.
CONRAD AND CO v CA (Fitrite and
Victoria Biscuit)
246 SCRA 691
VITUG; July 18, 1995
FACTS:
-FITRITE INC and VICTORIA biscuit co
(respondents) are owners of the trademark
“SUNSHINE” granted by the Bureau of Patents,
Trademarks and Technology Transfer (BPTTT).
Respondents, sister local companies, engaged in
the business of manufacturing, selling and
distributing Sunshine Biscuits.
-respondents found out that Conrad and Co had
been importing, selling and distributing biscuits
and cookies, and other food items bearing this
trademark in the Philippines. Although CONRAD
had never before been engaged in the importation,
sale and distribution of products similar to those of
plaintiffs, CONRAD was suddenly designated
exclusive importer and dealer of the products of
"Sunshine Biscuits, Inc." (apparently, an
international trademark for “Sunshine Biscuits”
was already in existence) for sale in the Philippine
market.
-a case for "Injunction with Damages with Prayer
for Preliminary Injunction" against Conrad was
filed. Conrad opposed this stating the court has no
jurisdiction due to a pending case before the
BPTTT filed by Sunshine America against herein
respondents for the cancellation of trademark.
-trial court ruled for Conrad and dismissed the
case due to lack of jurisdiction. CA reversed stating
that the cause of action in the injunction case and
in the cancellation case were different. CA ordered
the continuation of the case before the RTC.
ISSUE:
WON trial court has jurisdiction over the injunction
case pending a cancellation of patent case before
the BPTTT.
HELD:
NO.
Conrad contends that:
-the doctrine of primary jurisdiction should be
made to apply in this case considering that the
BPTTT had already acquired jurisdiction over the
suit brought by defendant's principal against the
plaintiffs involving the right of plaintiffs to use said
trademark. No doubt the BPTTT is better situated,
considering its experience and special knowledge
to determine the matters of fact involved.
-"Petitions for Cancellation" of Fitrite's Certificate
of Registration with BPTTT cast a cloud of doubt on
private respondents' claim of ownership and
exclusive right to the use of the trademark
"Sunshine." Considering that this matter is at issue
before the BPTTT, which has primary jurisdiction
over the case, petitioner argues, an injunctive
relief from any court would be precipitate and
improper.
However, the SC affirmed CA in saying that :
The issue involved in the action a quo is not
whether the "SUNSHINE" trademark in question is
registerable or cancelable since the trademark has
already been registered in both the Supplemental
and Principal Registers of BPTTT in the name of
FITRITE; actually, the issue involved in the action a
quo is whether CONRAD's acts of importing, selling
and distributing biscuits, cookies and other food
items bearing said registered "SUNSHINE"
trademark in the Philippines without the consent of
its registrant (FITRITE) constitute infringement
thereof in contemplation of Sec. 22 of Republic Act
No. 166, as amended.
-But, even assuming — which is not the case —
that the issue involved here is technical in nature
requiring specialized skills and knowledge, still
Industrialized Enterprises does not authorize the
outright dismissal of a case originally cognizable in
the courts; what it says is where primary
jurisdiction comes into play in a case "the judicial
process is suspended pending referral of such
issues to the administrative body for its view.
-an action for infringement or unfair competition,
as well as the remedy of injunction and relief for
damages, is explicitly and unquestionably within
the competence and jurisdiction of ordinary courts.
PHILIPPINE VETERANS BANK V. CA
G.R. No. 132767
Mendoza:January 18, 2000
FACTS:
- Petitioner Philippine Veterans Bank owned
four parcels of land in Tagum, Davao. The
lands were taken by the Department of
Agrarian Reform for distribution to
landless farmers pursuant to the
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Comprehensive Agrarian Reform Law
(R.A. No. 6657). Dissatisfied with the
valuation of the land made by
respondents Land Bank of the Philippines
and the Department of Agrarian Reform
Adjudication Board (DARAB), petitioner
filed a petition for a determination of the
just compensation for its property.
- The petition was filed on January 26, 1994
with the Regional Trial Court, Branch 2,
Tagum, Davao, which on February 23,
1995, dismissed the petition on the
ground that it was filed beyond the 15-
day reglementary period for filing appeals
from the orders of the DARAB.
- On appeal to the Court of Appeals, the
decision was affirmed. It was held that
jurisdiction over land valuation cases is
lodged in the Department of Agrarian
Reform Adjudication Board, as is plainly
provided under Rule II of the DARAB
Revised Rules of Procedure.
- In pursuance thereof, it is clear that the
right of a landowner who disagrees with
the valuation fixed by the DAR to file a
petition for the judicial fixing of just
compensation before special agrarian
courts must be exercised within the
period provided in Rule XIII, Section 11.1
- In this case, appellant neither gives
information regarding the date of its
receipt of the questioned Order of the
DAR Provincial Adjudicator, nor disputes
the conclusion made by the trial court
- Petitioner filed MFR, but its motion was
likewise denied.
ISSUE:
WON the petition for judicial fixing of just
compensation be filed within the period provided
in Rule XIII, Sec. 11 of the DARAB Rules of
Procedure
HELD:
YES
Reasoning Petitioner argues that DAR
adjudicators have no jurisdiction to determine the
just compensation for the taking of lands under the
Comprehensive Agrarian Reform Program,
because such jurisdiction is vested in Regional
Trial Courts designated as Special Agrarian Courts
and, therefore, a petition for the fixing of just
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Dean Carlota
compensation can be filed beyond the 15-day
period of appeal provided from the decision of the
DAR adjudicator.
- On the other hand, respondents argue
that actions for the fixing of just
compensation must be filed in the
appropriate courts within 15 days from
receipt of the decision of the DAR
adjudicator, otherwise such decision
becomes final and executory, pursuant
R.A. No. 6657.
- The pertinent provisions of R.A. No. 6657
provides:
Sec. 50 Quasi-Judicial Power of the DAR
The DAR is hereby vested with primary jurisdiction
to determine and adjudicate agrarian reform
matters involving the implementation of agrarian
reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA)
and the Department of Environment and Natural
Resources (DENR)
Sec. 57 Special Jurisdiction
The Special Agrarian Courts shall have original and
exclusive jurisdiction over all petitions for the
determination of just compensation to landowners,
and the prosecution of all criminal offenses under
this Act. The Rules of Court shall apply to all
proceedings before the Special Agrarian Courts,
unless modified by this Act.
The Special Agrarian Courts shall decide all
appropriate cases under their special jurisdiction
within thirty (30) days from submission of the case
for decision.
- Under R.A. No. 6657, the Land Bank of
the Philippines is charged with the
preliminary determination of the value of
lands placed under land reform program
and the compensation to be paid for their
taking. It initiates the acquisition of
agricultural lands by notifying the
landowner of the government's intention
to acquire his land and the valuation of
the same as determined by the Land
Bank. Within 30 days from receipt of
notice, the landowner shall inform the
DAR of his acceptance or rejection of the
offer. In the event the landowner rejects
the offer, a summary administrative
proceeding is held by the provincial
(PARAD), the regional (RARAD) or the
central (DARAB) adjudicator, as the case
may be, depending on the value of the
land, for the purpose of determining the
compensation for the land. The
landowner, the Land Bank, and other
interested parties are then required to
submit evidence as to the just
compensation for the land. The DAR
adjudicator decides the case within 30
days after it is submitted for decision. If
the landowner finds the price
unsatisfactory, he may bring the matter
directly to the appropriate Regional Trial
Court.
- To implement R.A. No. 6657, Rule XIII,
Sec. 11 of the DARAB Rules of Procedure
provides: Land Valuation Determination
and Payment of Just Compensation. The
decision of the Adjudicator on land
valuation and preliminary determination
and payment of just compensation shall
not be appealable to the Board but shall
be brought directly to the Regional Trial
Courts designated as Special Agrarian
Courts within15 days from receipt of the
notice thereof. Any party shall be entitled
to only one motion for reconsideration.
D. STANDING TO CHALLENGE
URSAL V CTA
101 PHIL 209
BENGZON; April 26, 1957
FACTS
- Ursal is the City Assessor of Cebu. In the exercise
of his powers, he assessed for taxation certain real
properties of Consuelo Noel and Jesusa Samson in
the City of Cebu. The taxpayers protested and the
Cebu Board of Assessment Appeals reduced the
assessments. Ursal took the matter to the Court of
Tax Appeals insisting on his valuation, but said
Court refused to entertain the appeal saying it was
late, and that the assessor had no personality to
bring the matter before it under section 11 of
Republic Act No. 1125, which reads as follows:
"SEC. 11. Who may appeal; effect of appeal. - Any
person, association or corporation adversely
affected by a decision or ruling of the Collector of
Internal Revenue, the Collector of Customs or any
provincial or city Board of Assessment Appeals
may file an appeal in the Court of Tax Appeals
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within thirty days after the receipt of such decision
or ruling."
ISSUE
WON the city assessor has personality to
resort to the CTA
HELD
NO
- The rulings of the Board of Assessment Appeals
did not "adversely affect" him. At most it was the
City of Cebu that had been adversely affected in
the sense that it could not thereafter collect higher
realty taxes from the abovementioned property
owners. His opinion, it is true had been overruled;
but the overruling indicted no material damage
upon him or his office. The Court of Tax Appeals
was not created to decide conflicts of opinion
between administrative officers or agencies.
- The appellant invites attention to the fact that
the Court of Tax Appeals is the successor of the
former Central Board of Tax Appeals created by
Commonwealth Act No. 530 and of the Board of
Tax Appeals established by Executive Order No.
401-A, and that said Commonwealth Act No. 530
(section 2) explicitly authorized the city assessor
to appeal to the Central Board of Tax Appeals.
Here is precisely another argument against his
position: as Republic Act No. 1125 failed to reenact
such express permission, it is deemed withheld.
- Oversight could not have been the cause of such
withholding, since there were proper grounds: (a)
discipline and command responsibility in the
executive branches; and (b) instead of being
another superior administrative agency as was the
former Board of Tax Appeals the Court of Tax
Appeals as created by Republic Act No. 1125 is a
part of the judicial system presumably to act only
on protests of private persons adversely affected
by the tax, custom, or assessment.
ACTING COLLECTOR v CTA
(Rean)
LOZADA (IGOT) v COMELEC
120 SCRA 337
De Castro ; 1983 January 27
FACTS
Administrative Law
Dean Carlota
- Petitioner Lozada claims that he is a taxpayer
and a bonafide elector of Cebu City and a transient
voter of Quezon City, Metro Manila, who desires to
run for the position in the Batasan Pambansa;
while petitioner Romeo B. Igot alleges that, as a
tax payer, he has standing to petition by
mandamus the calling of a special election as
mandated by the 1973 Constitution. As reason for
their petition, petitioners allege that they are ". . .
deeply concerned about their duties as citizens
and desirous to uphold the constitutional mandate
and rule of law . . ."; that they have filed the
instant petition "on their own and in behalf of all
other Filipinos since the subject matters are of
profound and general interest." It is actually the
inaction of the COMELEC to call a special election.
Issues
1. WON peitioners may file the instant petition
2.WON SC has jurisdiction over the COMELEC
3. WON the said provision applies to the Interim
National Assembly
Held
1. No.
- As taxpayers, petitioners may not file the
petition, for nowhere therein is it alleged that tax
money is being illegally spent. The act complained
of is the inaction of the COMELEC to call a special
election, as is allegedly its ministerial duty under
the constitutional provision abovecited, and
therefore, involves no expenditure of public funds.
It is only when an act complained of, which may
include a legislative enactment or statute, involves
the illegal expenditure of public money that the so-
called taxpayer suit may be allowed. What the
case at bar seeks is one that entails expenditure of
public funds which may be illegal because it would
be spent for a purpose - that of calling a special
election - which, as will be shown, has no authority
either in the Constitution or a statute.
- the alleged inaction of the COMELEC to call a
special election to fill-up the existing vacancies in
the Batasan Pambansa, standing alone, would
adversely affect only the generalized interest of all
citizens. Petitioners' standing to sue may not be
predicated upon an interest of the kind alleged
here, which is held in common by all members of
the public because of the necessarily abstract
nature of the injury supposedly shared by all
citizens. Concrete injury, whether actual or
threatened, is that indispensable element of a
dispute which serves in part to cast it in a form
traditionally capable of judicial resolution. When
the asserted harm is a "generalized grievance"
shared in substantially equal measure by all or a
large class of citizens, that harm alone normally
does not warrant exercise of jurisdiction.
2. The Supreme Court's jurisdiction over the
COMELEC is only to review by certiorari the latter's
decision, orders or rulings. This is as clearly
provided in Article XII-C, Section 11 of the New
Constitution which reads:
"Any decision, order, or ruling of the Commission
may be brought to the Supreme Court on certiorari
by the aggrieved party within thirty days from his
receipt of a copy thereof."
- There is in this case no decision, order or ruling of
the COMELEC which is sought to be reviewed by
this Court under its certiorari jurisdiction as
provided for in the aforequoted provision, which is
the only known provision conferring jurisdiction or
authority on the Supreme Court over the
COMELEC. It is not alleged that the COMELEC was
asked by petitioners to perform its alleged duty
under the Constitution to call a special election,
and that COMELEC has issued an order or
resolution denying such petition.
- Even from the standpoint of an action for
mandamus, with the total absence of a showing
that COMELEC has unlawfully neglected the
performance of a ministerial duty, or has refused
on being demanded, to discharge such a duty; and
as demonstrated above, it is not shown, nor can it
ever be shown, that petitioners have a clear right
to the holding of a special election which is equally
the clear and ministerial duty of COMELEC to
respect, mandamus will not lie. 5 The writ will not
issue in doubtful cases.
- It is obvious that the holding of special elections
in several regional districts where vacancies exist,
would entail huge expenditure of money. Only the
Batasan Pambansa can make the necessary
appropriation for the purpose, and this power of
the Batasan Pambansa may neither be subject to
mandamus by the courts much less may COMELEC
compel the Batasan to exercise its power of
appropriation. From the role Batasan Pambansa
has to play in the holding of special elections,
which is to appropriate the funds for the expenses
thereof, it would seem that the initiative on the
matter must come from said body, not the
COMELEC, even when the vacancies would occur
in the regular not interim Batasan Pambansa. The
power to appropriate is the sole and exclusive
prerogative of the legislative body, the exercise of
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which may not be compelled through a petition for
mandamus. What is more, the provision of Section
5(2), Article VIII of the Constitution was intended to
apply to vacancies in the regular National
Assembly, now Batasan Pambansa, not to the
Interim Batasan Pambansa, as will presently be
shown.
3. No.
- The Interim National Assembly was to be
composed by the delegates to the Constitutional
Convention, as well as the then incumbent
President and Vice-President, and the members of
the Senate and House of Representatives of
Congress under the 1935 Constitution. With such
number of representatives representing each
congressional district, or a province, not to
mention the Senators, there was felt absolutely no
need for filing vacancies occurring in the Interim
National Assembly, considering the uncertainty of
the duration of its existence. What was in the mind
of the Constitutional Convention in providing for
special elections to fill up vacancies is the regular
National Assembly, because a province or
representative district would have only one
representative in the said National Assembly. Even
as presently constituted where the representation
in the Interim Batasan Pambansa is regional and
sectoral, the need to fill up vacancies in the Body
is neither imperative nor urgent. No district or
province would ever be left without representation
at all, as to necessitate the filling up of vacancies
in the Interim Batasan Pambansa. There would
always be adequate representation for every
province which only forms part of a certain region,
specially considering that the Body is only
transitory in character. The unmistakable intent of
the Constitutional Convention as adverted to is
even more positively revealed by the fact that the
provision of Section 5(2) of Article VIII of the New
Constitution is in the main body of the said
Constitution, not in the transitory provisions in
which all matters relating to the Interim Batasan
Pambansa are found. No provision outside of
Article VIII on the "Transitory Provisions" has
reference or relevance to the Interim Batasan
Pambansa. Also under the original provision of the
Constitution (Section 1, Article XVII - Transitory
Provisions), the Interim National Assembly had
only one single occasion on which to call for an
election, and that is for the election of members of
the regular National Assembly. The Constitution
could not have at that time contemplated to fill up
vacancies in the Interim National Assembly the
Administrative Law
Dean Carlota
composition of which, as already demonstrated,
would not raise any imperious necessity of having
to call special elections for that purpose, because
the duration of its existence was neither known or
pre-determined. It could be for a period so brief
that the time prescriptions mentioned in Section
5(2), Article VIII of the Constitution cannot be
applicable. The foregoing observations make it
clear that the aforementioned provision for calling
special elections to fill up vacancies apply only to
the regular Batasan Pambansa. This is evident
from the language thereof which speaks of a
"vacancy in the Batasan Pambansa," which means
the regular Batasan Pambansa as the same words
"Batasan Pambansa" found in all the many other
sections of Article VIII, undoubtedly refer to the
regular Batasan, not the interim one. A word or
phrase used in one part of a Constitution is to
receive the same interpretation when used in
every other part, unless it clearly appears, from
the context or otherwise, that a different meaning
should be applied.
OPOSA V FACTORAN
224 SCRA 792
DAVIDE JR; JULY 30, 1993
FACTS
- In 1991 a case was filed by minors (represented
by their parents) and the Philippine Ecological
Network (PENI) against the then Secretary of the
Department of Environment and Natural Resources
(DENR), Fulgencio Factoran, Jr. who was
substituted by the new secretary, Angel Alcala.
The complaint was instituted to be a taxpayer’s
class suit as it alleges that all citizen’s of the
Philippines are entitled to benefit, use and
enjoyment of the country’s virgin tropical
rainforests. The suit also alleges that this suit
represents people who are sharing the same
sentiment towards the preservation of our natural
resources (since not all of them could go before
the court). Furthermore, this was also asserted to
be representative of the current generation and
generation that are yet to be born.
- The suit calls for two primary actions that orders
the Department of Environment and Natural
Resources (DENR), its agents, representatives, and
those acting on its behalf to, 1. Cancel all existing
timber license agreements in the country and 2. to
cease and desist from receiving, accepting,
processing, and renewing or approving new timber
license agreements. .
- The petition was dismissed on the grounds of lack
of cause of action, of being political question, and
of causing the impairment of contracts. The
petitioners filed for certiorari hence this case.
They contend that there is a cause of action using
articles 19, 20, and 21 of the Civil Code (the right
to a sound environment), Section 4 of Executive
Order No. 192 that calls for the creation of the
Department of Environment and Natural Resources
(DENR) to safeguard the people’s right to a
healthful environment, Section 3 of Presidential
Decree No. 1151 ( Philippine Environmental
Policy), and Section 16, Article II of the 1987
Constitution that recognizes the right of the people
to a balanced and healthful ecology. As well as the
concept of generational genocide in Criminal Law
and the concept of man’s inalienable right to self-
preservation and self-perpetuation in natural law.
ISSUE
WON the petitioners have standing
HELD
YES. The civil case is a class suit
Reasoning The subject matter of the complaint is
of common and general interest not just to
several, but to all citizens of the Philippines.
Consequently, since the parties are so numerous,
it, becomes impracticable, if not totally impossible,
to bring all of them before the court. We likewise
declare that the plaintiffs therein are numerous
and representative enough to ensure the full
protection of all concerned interests. Hence, all the
requisites for the filing of a valid class suit under
Section 12, Rule 3 of the RoC.
- Petitioners minors assert that they represent
their generation as well as generations yet unborn.
We find no difficulty in ruling that they can, for
themselves, for others of their generation and for
the succeeding generations, file a class suit. Their
personality to sue in behalf of the succeeding
generations can only be based on the concept of
intergenerational responsibility insofar as the right
to a balanced and healthful ecology is concerned.
Every generation has a responsibility to the next to
preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology.
Put a little differently, the minors' assertion of their
right to a sound environment constitutes, at the
same time, the performance of their obligation to
ensure the protection of that right for the
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generations to come.
JOYA v PCGG
(Jonas)
KILOSBAYAN v GUINGONA, JR
232 SCRA 110
DAVIDE, JR; May 5, 1994
FACTS
- Petitioner KILOSBAYAN is a non-stock domestic
corporation composed of civic-spirited citizens,
pastors, priests, nuns and lay leaders who are
committed to the cause of truth, justice and
national renewal. The rest of the petitioners
(except Webb, Tañada, Joker Arroyo, who are suing
as members of Congress and taxpayers) are suing
in their capacities as members of the Board of
Trustees of KILOSBAYAN and as taxpayers and
concerned citizens.
- Pursuant to the charter of PCSO which grants it
authority to hold and conduct “charity
sweepstakes races, lotteries and other similar
activities,” PCSO decided to establish an online
lottery system to increasee its revenue base and
diversifying its sources of funds.
- The Berjaya Group Berhad from Malaysia
engaged in successful lottery operations became
interested to offer its services to PCSO. As an
initial step Berjaya Group organized with some
Filipino investors a Philippine corporation known as
the Philippine Gaming Management Corporation
(PGMC) which was intended to be the medium
through which the technical and management
services required for the project would be offered
and delivered to PCSO.
- Considering the citizenship requirement, the
Berjaya Group undertook to reduce its equity
stakes in PGMC to 40% by selling 35% out of its
original 75% foreign stockholdings to local
investors.
- Oct. 21, 1993: the Office of the President
announced that it had given PGMC the go-signal to
operate the online lottery system.
- Nov. 4, 1993: KILOSBAYAN sent an open letter to
Pres. FVR strongly opposing the setting-up of the
online lottery on the basis of serious moral and
ethical considerations.
Petitioners’ Claim
Administrative Law
Dean Carlota
- PCSO cannot validly enter into the assailed
Contract of Lease with the PGMC because it is an
arrangement wherein the PCSO would hold and
conduct the lottery system in collaboration or
association with the PGMC in violation of Sec 1(B)
of RA 1169 which prohibits the PCSO from holding
and conducting lotteries “in collaboration,
association or joint venture with any person,
association, company or entity, foreign or
domestic.
Respondents’ Comments
- PGMC asserts that it is merely an independent
contractor for a piece of work, and as such
independent contractor, PGMC is not a ci0ioeratir
of the lottery franchise with PCSO, nor is PCSO
sharing its franchise in collaboration, association
or joint venture with PGMC.
- The issue on morality of lottery franchise granted
to PCSO is political, not judicial or legal, which
should be ventilated in another forum.
- The petitioners do not appear to have the legal
standing or the real interest in the subject contract
and in obtaining the relief sought.
- PCSO as a corporate entity is vested with the
basic and essential prerogative to enter into all
kinds of transactions or contracts as may be
necessary for the attainment of its purposes and
objectives.
ISSUE
1. WON the petitioners have legal standing3
2. WON Contract of Lease entered into by PCSO
and PGMC is valid.
HELD
1. YES
Ratio In line with the liberal policy of the Court on
locus standi, ordinary taxpayers, members of
Congress, and even association of planters, and
non-profit civic organizations were allowed to
initiate and prosecute actons before this Court to
question the constitutionality or validity of laws,
acts, decisions, rulings or orders of various
government agencies or instrumentalities.
Reasoning A party’s standing before the SC is a
procedural technicality which it may, in the
3 Sec 1 of its charter, the PCSO cannot share its
There must be an actual case or controversy; the
question of constitutionality must be raised by the proper
party; the constitutional question must be raised at the
earliest possible time; the decision of the constitutionality
must be necessary to the determination of the case itself.
exercise of its discretion set aside in view of the
importance of the issues raised.
- The rule is that the person who impugns the
validity of a statute must have personal and
substantial interest in the case such that he has
sustained or will sustain, direct injury as a result of
its enforcement.
- Even if, strictly speaking, they are not covered by
the definition, it is still within the wide discretion of
the Court to waive the requirement and so remove
the impediment to its addressing and resolving the
serious constitutional questions raised.
- The instant petition is of transcendental
importance to the public. The issues it raised are
of paramount public interest and of a category
even higher than those involved in many of the
mention cases. The ramifications of such issues
immeasurably affect the social, economic and
moral well-being of the people in the remotest
barangays of the country and the counter-
productive and retrogressive effects of the
envisioned lottery system are as staggering as the
billions in pesos it is expected to raise.
2. NO
Sec 1 RA 1169
Sec. 1. The Philippine Charity Sweepstakes Office
xxx shall have the authority:
A. To hold and conduct charity sweepstakes
races, lotteries and other similar activities, in
such frequency and manner, as shall be
determined, and subject to such rules and
regulations as shall be promulgated by the
Board of Directors.
B. Subject to the approval of the Minister of
Human Settlements, to engage in health and
welfare-related investments, programs, projects
and activities which may be profit-oriented, by
itself or in collaboration, association or joint
venture with any person, association, company
or entity, whether domestic or foreign, except
for the activities mentioned in the preceding
paragraph A.
- The language of the section is clear that the
PCSO cannot exercise its privilege to hold and
conduct charity sweepstakes races, lotteries etc. in
collaboration, association or joint venture with any
party.
- By the exception explicitly made in paragraph B,
franchise with another by way of collaboration,
association or joint venture.
- The intention of the parties is the soul of the
instrument. The arrangement between the parties
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would leave to the PGMC the technical, operations
and management aspects of the online lottery
system while the PCSO would primarily provide the
franchise.
DISPOSITION The Contract of Lease violates the
exception of Sec 1(B) of the PCSO charter, and is
invalid for being contrary to law.
SEPARATE OPINIONS
CRUZ, Concurring;
Concerning the doctrine of locus standi, Cruz
cannot agree that out of the millions of Filipinos
affected by the proposed lottery, not a single
solitary citizen can question the agreement. “It is
not only the owner of the burning house who has
the right to call the firemen. Every one has the
right and responsibility to prevent the fire from
spreading even if he lives in the other block.
FELICIANO, Concurring;
It is not enough for the Court simply to invoke
“public interest” or even “paramount
considerations of national interest,” and to say
that the specific requirements of such public
interest can only be ascertained on a “case to
case” basis. Such an approach is not intellectually
satisfying. And such an answer appears to come
too close to saying that locus standi exists
whenever at least a majority of the Members of
the SC participating in a case feel that an
appropriate case for judicial intervention has
arisen.
- The funds or assets involved in the case are
important. The funds are clearly public in nature.
The funds to be generated by the lottery are to be
raised from the population at large, and are
designed to benefit the general public. The
dissenters insist that because the funds will not
have been generated by the exercise of the taxing
power of government, the present petition cannot
be regarded as a taxpayer’s suit and must be
disregarded. It is known that the principal sources
of funding for government operations today
include not just taxes and customs duties, but also
revenues derived from activities of PAGCOR.
PADILLA, Separate Opinion;
The case falls within the De Guia doctrine (the
Court may brush aside procedure if the case is of
paramount interest). When the contract of lease in
question seeks to establish and operate a
nationwide gambling network with substantial if
not controlling foreign participation, then the issue
Administrative Law
Dean Carlota
is of paramount national interest and importance
as to justify and warrant a relaxation of the above-
mentioned procedural rule on locus standi.
MELO, Dissenting;
- Petitioners have no legal standing as taxpayers
and members of Congress.
- No public fund raised by taxation is involved in
this case. It is even doubtful if the rentals which
the PCSO will pay to the lessor for its operation of
the lottery system may be regarded as public fund.
The PCSO is not a revenue-collecting arm of the
government. The money it will raise shall remain
with the corporation. It is public only insofar as
PCSO is a government-owned/ controlled entity.
- The contract does not involve the disbursement
of public funds but of strictly corporate money.
PUNO, Dissenting;
- Courts are neither free to decide all kinds of
cases dumped into their laps nor are they free to
open their doors to all parties or entities claiming a
grievance.
- Not one of the petitioners is a party to the
Contract of Lease executed between PCSO and
PGMC. None of the petitioners participated in the
bidding, and hence they are not losing bidders.
They are complete strangers to the contract.
- Petitioners have no standing as taxpayers
because the case does not involve any
expenditure of public money on the part of the
PCSO.
- Puno suggests that the doctrine of De Guia be
reviewed. It treated the rule on locus standi as a
mere procedural rule. It is not a plain procedural
rule but a constitutional requirement derived from
Sec 1 Art VIII of the Constitution which mandates
courts of justice to settle only “actual
controversies involving rights which are legally
demandable and enforceable.” By downgrading
the requirement on locus standi as a procedural
rule which can be discarded in the name of public
interest, is in effect an amendment the
Constitution by judicial fiat.
VITUG, Separate Opinion;
Petitioners assert that the lottery violates morals.
However, “what evils should be corrected as
pernicious to the body politic, and how correction
should be done, is a matter primarily addressed to
the discretion of the legislative department, not of
the courts.”
KAPUNAN, Dissenting;
The petitioners have no personal stake in the case.
The constitutional requirement for an actual case
and controversy limits this Court’s power of review
to precisely those suits between adversary
litigants with real interests at stake thus
preventing it from making all sorts of hypothetical
pronouncement on abstract, contingent and
amorphous issues. The Court will therefore not
pass upon the validity of an act of government or a
statute passed by a legislative body without a
requisite showing of injury. A personal stake is
essential, which absence renders our
pronouncements gratuitous and certainly violative
of the constitutional requirement for actual cases
and controversies.
KILOSBAYAN, INC., V MORATO
246 SCRA 540
MENDOZA; July 17, 1995
FACTS
-In Kilosbayan, Inc v. Guingona, 232 SCRA 110
(1994), SC invalidated the Contract of Lease
between the PCSO and the Philippine Gaming
Management Corp. (PGMC) on the ground that it
had been made in violation of the charter of the
PCSO. The parties entered into negotiations for a
new agreement resulting in an Equipment Lease
Agreement (ELA) whereby the PGMC leased on-line
lottery equipment and accessories to the PCSO in
consideration of a certain amount of rentals.
-Petitioners filed this suit seeking to declare the
ELA invalid on the ground that it is substantially
the same as the Contract of Lease nullified in the
first case. They allege that said ELA is violative of
PCSO’s charter, of the SC decision in the first case,
of the Law on Public Bidding (EO 301 & 298), of
COA Circular No. 85-55-A, and of Sec. 2(2), Art. IX-
D of the 1987 Constitution.
-Respondents filed comments questioning the
petitioners' standing to bring this suit.
ISSUE
WON petitioners have legal standing to bring this
suit
<For the discussion on the substantive issues
(validity of the ELA, interpretation of Sec. 1 of RA
1169, requirement of public bidding), please see
the original.>
133
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HELD
NO.
- Kilosbayan, Inc., its trustees and the petitioner-
senators, not being parties to the contract of lease
which they seek to nullify, have no personal and
substantial interest likely to be injured by the
enforcement of the contract. The previous ruling
sustaining petitioners' intervention may itself be
considered a departure from settled rulings on
"real parties in interest" because no constitutional
issues were actually involved.
-Also, the voting on petitioners' standing in the
previous case was a narrow one (7-6); majority
was a tenuous one not likely to be maintained in
any subsequent litigation. In addition, there have
been changes in the membership of the Court,
(Justices Cruz and Bidin have retired; and Justices
Francisco and Mendoza are newly appointed).
-The doctrine of the law of the case does not
apply. This may be a sequel to the first case, but it
is certainly not its continuation. The parties are the
same but the cases are not.
-The doctrine of conclusiveness of judgment is also
inapplicable because the issue is one of law, and
the two actions involve claims that are
substantially unrelated. Hence the determination
in the prior case that petitioners had standing to
challenge the validity of the 1993 Contract of
Lease of the parties does not preclude
determination of their standing in the present suit.
-Strictly speaking, petitioners’ legal standing
is not even an issue in this case since
standing is a concept in constitutional law
and here no constitutional question is
actually involved. The issue in this case is
whether petitioners are the "real parties in
interest" within the meaning of Rule 3, Sec. 2
of the ROC.
In short: questions of constitutionality 
legal standing
otherwise  real
party in interest (because this
is a civil case)
-This cannot be treated as taxpayer’s suit since
there is no allegation that public funds are being
misspent.
-Art. II, Sections 5, 12, 13 and 17 of the 1987
Constitution are not self executing provisions, the
disregard of which can give rise to a cause of
action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for
legislation. Thus, while constitutional policies are
Administrative Law
Dean Carlota
invoked, this case involves basically questions of
contract law.
-In actions for the annulment of contracts, such as
this action, the real parties are those who are
parties to the agreement or are bound either
principally or subsidiarily or are prejudiced in their
rights with respect to one of the contracting
parties and can show the detriment which would
positively result to them from the contract even
though they did not intervene in it, or who claim a
right to take part in a public bidding but have been
illegally excluded from it.
-These are parties with "a present substantial
interest, as distinguished from a mere expectancy
or future, contingent, subordinate, or
consequential interest. . . . The phrase 'present
substantial interest' more concretely is meant such
interest of a party in the subject matter of action
as will entitle him, under the substantive law, to
recover if the evidence is sufficient, or that he has
the legal title to demand and the defendant will be
protected in a payment to or recovery by him."
Disposition Petition dismissed.
(1) petitioners have neither standing to bring this
suit nor substantial interest to make them real
parties in interest (Rule 3, Sec 2);
(2) a determination of petitioners' right to bring
this suit is not precluded or barred by the decision
in the prior case between the parties;
(3) the ELA of January 25, 1995 is valid as a lease
contract under the Civil Code and is not contrary to
the charter of the PCSO;
(4) under Sec1(A) of R.A. 1169, the PCSO has
authority to enter into a contract for the holding of
an on-line lottery, whether alone or in association,
collaboration or joint venture with another party,
so long as it itself holds or conducts such lottery;
and
(5) the ELA in question did not have to be
submitted to public bidding as a condition for its
validity.
SEPARATE OPINIONS
PADILLA, J., concurring:
-It is the duty of the Supreme Court to apply the
laws enacted by Congress and approved by the
President, (unless they are violative of the
Constitution) even if such laws run counter to a
Member's personal conviction that gambling
should be totally prohibited by law.
-The rule on locus standi, being merely a
procedural rule, should be relaxed, as when the
issue is of paramount national interest and
importance. The core issue in the present case is
the same as the issue in the first lotto case, i.e.,
the validity of a changed agreement between
PCSO and PGMC. Thus, it is my view that the
principle of locus standi should not stand in the
way of a review by this Court of the validity of such
changed agreement.
VITUG, J., concurring:
-reiterates his separate opinion in Kilosbayan, Inc.
vs. Guingona.
-The matter of the legal standing of petitioners in
their suit assailing the subject-contract appears,
both under substantive law and the rules of
procedure, to still be an insuperable issue. Art. VIII,
Sec. 1, 1987 Consti has not been intended to
unduly mutate, let alone to disregard, the long
established rules on locus standi. Neither has it
been meant to do away with the principle of
separation of powers.
FELICIANO, J., dissenting:
-reiterates his concurring opinion in the first
Kilosbayan case: All the factors which pressed for
recognition of locus standi on the part of
petitioners in the first Kilosbayan case, still exist
and demand, with equal weight and insistence,
such recognition in the present or second
Kilosbayan case.
REGALADO, J., dissenting:
-In the first lotto case, the Court excepted
petitioners from the traditional locus standi
proscription because the issues raised on the
indiscriminate operation of a nationwide on-line
lottery system are of paramount public interest
and of a category higher than those involved in
former cases wherein the application of that rule
was sustained. The court acted correctly; creating
exceptions to doctrines and even rejecting the
same in the interest of justice are not unusual.
-Withal, the relaxation or the locus standi doctrine
in the first lotto case is impugned and lamented in
the second one now at bar. In the first lotto case,
the minority therein rested its position entirely on
procedural grounds, that is, by merely challenging
the legal standing of petitioners but without any
comment on the merits of the contract in question.
Since the case at bar is in truth a reprise of the
first, I had expected that this case would now be
decided purely on the merits of the putative
expanded lease agreement but the Court's
judgment turn again on technical procedural
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grounds, by hiding within the shroud of the locus
standi mystique!
-Majority opinion says: petitioners are not parties
to the contract  not real parties in interest  no
cause of action  no right of action  they cannot
maintain the present petition.
-Minority says: Standing because of its
constitutional and public policy underpinnings, is
very different from questions relating to whether a
particular plaintiff is the real party in interest or
has the capacity to sue. Although all three
requirements are directed towards ensuring that
only certain parties can maintain an action,
standing restrictions require a partial
consideration of the merits, as well as of broader
policy concerns relating to the proper role of the
judiciary in certain areas.
-The matter of the right of petitioners to file and
maintain this action – whether the objection
thereto is premised on lack of locus standi or right
of action – has already been foreclosed by our
judgment in the first lotto case. The principles of
"law of the case'' and res judicata are applicable.
DAVIDE, JR., J., dissenting:
NOTE: he is ponente of first Kilosbayan case and
author of the exception to paragraph B, Section 1
of R.A. No. 1169, as amended.
-disturbed by the sudden reversal of SC rulings in
Kilosbayan, Inc. vs. Guingona and believes such
reversal upsets the salutary doctrines of the law of
the case, res judicata, and stare decisis.
-In first Kilosbyan, SC sustained the locus standi of
the petitioners, citing transcendental importance /
paramount public interest. The ramifications of
such issues immeasurably affect the social,
economic, and moral well-being of the people even
in the remotest barangays of the country and the
counter-productive and retrogressive effects of the
envisioned on-line lottery system are as staggering
as the billions of pesos its is expected to raise.
-The prevailing doctrines in taxpayer's suits are to
allow taxpayers to question contracts entered into
by the national government or GOCCs allegedly in
contravention of the law and to disallow the same
when only municipal contracts are involved. As
long as the ruling in Kilosbayan on locus standi is
not reversed, we have no choice but to follow it
and uphold the legal standing of petitioners as
taxpayers to institute the present action.
-Under the principle of either the law of the case or
res judicata, the PCSO and the PGMC are bound by
the ruling in the first lotto case on the locus standi
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of the petitioners and the application or
interpretation of the exception clause in par. B,
Sec. 1 of R.A.1169, as amended. Moreover, that
application or interpretation has been laid to rest
under the doctrine of stare decisis and has also
become part of our legal system pursuant to
Article 8 of the Civil Code.
-The legal question of locus standi which was
resolved in favor of the petitioners in the first lotto
case is the same in this case and in every
subsequent case which would involve contracts
relating or incidental to the conduct or holding of
lotteries by the PCSO in collaboration, association,
or joint venture with any person, association,
company, or entity. For one thing, the question of
the petitioners' legal standing in the first lotto case
and in this case is one and the same issue of law.
For another, these cases involve the same and not
substantially unrelated subject matter, viz., the
second contract between the PCSO and the PGMC
on the operation of the on-line lottery system.
-It must be pointed out that the rule in ordinary
civil procedure on real party in interest was never
put in issue in the previous case. It was the clear
understanding of the Members of the Court that in
the light of the issues raised and the arguments
adduced therein, only locus standi deserved
consideration.
-Friedenthal; et al., whose book is cited in the
majority opinion in its discussion of the rule on real
party in interest and the doctrine of locus standi,
admit that there is a difference between the two,
and that the former is not strictly applicable in
public law cases, thus: “It is important to note,
however, that standing, because of its
constitutional and public policy underpinnings, is
very different from questions relating to whether a
particular plaintiff is the real party in interest or
has capacity to sue. Although all three
requirements are directed toward ensuring that
only certain parties can maintain an action,
standing restrictions require a partial consideration
of the merits, as well as of broader policy concerns
relating to the proper role of the judiciary in
certain areas.” xxx In the realm of public law, the
real party in interest rule is not applicable.
-The attempt to use the real-party-in-interest rule
is to resurrect the abandoned restrictive
application of locus standi. Such attempt directly
or indirectly restricts the exercise of the judicial
authority of this Court in an original action to
determine whether or not there has been grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government. Only a very
limited few may qualify, under the real-party-in-
interest rule, to bring actions to question acts or
contracts tainted with such vice.
-Locus standi is not such an absolute rule that it
cannot admit of exceptions under certain
conditions or circumstances like those attending
this transaction.
KMU V GARCIA, JR
239 SCRA 386
KAPUNAN; December 23, 1994
FACTS
- Then Secretary of DOTC, Oscar M. Orbos, issued
Memorandum Circular No. 90-395 to then LTFRB
Chairman, Remedios A.S. Fernando allowing
provincial bus operators to charge passengers
rates within a range of 15% above and 15% below
the LTFRB official rate for a period of one (1) year.
- Finding the implementation of the fare range
scheme "not legally feasible," Remedios A.S.
Fernando submitted memorandum to Oscar M.
Orbos suggesting that the implementation of the
proposed fare range scheme be further studied
and evaluated.
- Respondent Provincial Bus Operators Association
of the Philippines, Inc. (PBOAP) filed an application
for fare rate increase. An across-the-board
increase of P0.085 per kilometer for all types of
provincial buses with a minimum-maximum fare
range of 15% over and below the proposed basic
per kilometer fare rate, with the said minimum-
maximum fare range applying only to ordinary,
first class and premium class buses and P0.50
minimum per kilometer fare for aircon buses, was
sought.
- PBOAP reduced its applied proposed fare to an
across-the-board increase of 0.065 centavos per
kilometer for ordinary buses. The decrease was
due to the drop in the expected price of diesel.
- The application was opposed by the Philippine
Consumers Foundation, Inc. and Perla C. Bautista
alleging that the proposed rates were exorbitant
and unreasonable and that the application
contained no allegation on the rate of return of the
proposed increase in rates.
- LTFRB rendered a decision granting the fare rate
increase
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- Then Secretary of DOTC issued Department
Order No. 92-587 defining the policy framework on
the regulation of transport services.
- Respondent Secretary of the DOTC Jesus B.
Garcia, Jr. issued a memorandum to the Acting
Chairman of the LTFRB suggesting swift action on
the adoption of rules and procedures to implement
above-quoted Department Order No. 92-587 that
laid down deregulation and other liberalization
policies for the transport sector.
- LTFRB issued Memorandum Circular No. 92-009
promulgating guidelines for implementation of
DOTC Department Order No. 92-587.
- PBOAP, availing itself of the deregulation policy
of the DOTC allowing provincial bus operators to
collect plus 20% and minus 25% of the prescribed
fare without first having filed a petition for the
purpose and without the benefit of a public
hearing, announced a fare increase of twenty
(20%) percent of the existing fares.
- KMU filed a petition with LTFRB opposing the
upward adjustment of bus fares. LTFRB issued one
of the assailed orders dismissing the petition for
lack of merit.
ISSUE
WON KMU has the standing to sue.
HELD
YES.
- The requirement of locus standi inheres from the
definition of judicial power.
- Lamb v. Phipps: judicial power is the power to
hear and decide causes pending between parties
who have the right to sue in the courts of law and
equity. Corollary to this provision is the principle of
locus standi of a party litigant. One who is directly
affected by and whose interest is immediate and
substantial in the controversy has the standing to
sue. The rule therefore requires that a party must
show a personal stake in the outcome of the case
or an injury to himself that can be redressed by a
favorable decision so as to warrant an invocation
of the court's jurisdiction and to justify the
exercise of the court's remedial powers in his
behalf.
- Petitioner, whose members had suffered and
continue to suffer grave and irreparable injury and
damage from the implementation of the
questioned memoranda, circulars and/or orders,
has shown that it has a clear legal right that was
violated and continues to be violated with the
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enforcement of the challenged memoranda,
circulars and/or orders.
- KMU members, who avail of the use of buses,
trains and jeepneys everyday, are directly affected
by the burdensome cost of arbitrary increase in
passenger fares. They are part of the millions of
commuters who comprise the riding public.
Certainly, their rights must be protected, not
neglected nor ignored.
- Assuming arguendo that petitioner is not
possessed of the standing to sue, this court is
ready to brush aside this barren procedural
infirmity and recognize the legal standing of the
petitioner in view of the transcendental
importance of the issues raised. And this act of
liberality is not without judicial precedent. As early
as the Emergency

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