G.R. No.

178647

February 13, 2009

GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS, Petitioner, vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, Respondents. RESOLUTION NACHURA, J.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedure, petitioner General Santos Coca-Cola Plant Free Workers Union-Tupas (Union) is seeking the reversal of the April 18, 2006 Decision1and May 30, 2007 Resolution2 of the Court of Appeals in CA-G.R. SP No. 80916. The CA affirmed the January 31, 2003 and August 29, 2003 Resolutions3 of the National Labor Relations Commission (NLRC) in favor of respondent Coca-Cola Bottlers Phil., Inc. (CCBPI). Sometime in the late 1990s, CCBPI experienced a significant decline in profitability due to the Asian economic crisis, decrease in sales, and tougher competition. To curb the negative effects on the company, it implemented three (3) waves of an Early Retirement Program.4 Meanwhile, there was an inter-office memorandum sent to all of CCBPIs Plant Human Resources Managers/Personnel Officers, including those of the CCBPI General Santos Plant (CCBPI Gen San) mandating them to put on hold "all requests for hiring to fill in vacancies in both regular and temporary positions in [the] Head Office and in the Plants." Because several employees availed of the early retirement program, vacancies were created in some departments, including the production department of CCBPI Gen San, where members of petitioner Union worked. This prompted petitioner to negotiate with the Labor Management Committee for filling up the vacancies with permanent employees. No resolution was reached on the matter.5 Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services Corporation (JLBP), a company in the business of providing labor and manpower services, including janitorial services, messengers, and office workers to various private and government offices.6 On January 21, 2002, petitioner filed with the National Conciliation and Mediation Board (NCMB), Regional Branch 12, a Notice of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out services regularly performed by union members ("union busting"). After conciliation and mediation proceedings before the NCMB, the parties failed to come to an amicable settlement. On July 3, 2002, CCBPI filed a Petition for Assumption of Jurisdiction with the Office of the Secretary of Labor and Employment. On July 26, 2002, the Secretary of Labor issued an Order enjoining the threatened strike and certifying the dispute to the NLRC for compulsory arbitration.7
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In a Resolution8 dated January 31, 2003, the NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the validity of the "Going-to-the-Market" (GTM) system implemented by the company, which called for restructuring its selling and distribution system, leading to the closure of certain sales offices and the elimination of conventional sales routes. The NLRC held that petitioner failed to prove by substantial evidence that the system was meant to curtail the right to selforganization of petitioners members. Petitioner filed a motion for reconsideration, which the NLRC denied in a Resolution9 dated August 29, 2003. Hence, petitioner filed a Petition for Certiorari before the CA. The CA issued the assailed Decision10 on April 18, 2006 upholding the NLRCs finding that CCBPI was not guilty of unfair labor practice. The CA based its decision on the validity of CCBPIs contracting out of jobs in its production department. It held that the contract between CCBPI and JLBP did not amount to labor-only contracting. It found that JLBP was an independent contractor and that the decision to contract out jobs was a valid exercise of management prerogative to meet exigent circumstances. On the other hand, petitioner failed to adduce evidence to prove that contracting out of jobs by the company resulted in the dismissal of petitioners members, prevented them from exercising their right to self-organization, led to the Unions demise or that their

group was singled out by the company. Consequently, the CA declared that CCBPI was not guilty of unfair labor practice. Its motion for reconsideration having been denied,11 petitioner now comes to this Court seeking the reversal of the CA Decision. The petition is bereft of merit. Hence, we deny the Petition. Under Rule 45 of the Revised Rules on Civil Procedure, only questions of law may be raised in a Petition for Review on Certiorari.12 There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The resolution of the issue must rest solely on what the law provides on a given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to one another, the issue in that query is factual.13 An examination of the issues raised by petitioner reveals that they are questions of fact. The issues raised, i.e., whether JLBP is an independent contractor, whether CCBPIs contracting-out of jobs to JLBP amounted to unfair labor practice, and whether such action was a valid exercise of management prerogative, call for a reexamination of evidence, which is not within the ambit of this Courts jurisdiction. Moreover, factual findings of the NLRC, an administrative agency deemed to have acquired expertise in matters within its jurisdiction, are generally accorded not only respect but finality especially when such factual findings are affirmed by the CA.14 Furthermore, we find no reversible error in the assailed Decision.
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It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the GTM system, which actually affected CCBPIs sales and marketing departments, and had nothing to do with petitioners complaint. However, this does not diminish the NLRCs finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged the services of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head Office. On the other hand, the CA squarely addressed the issue of job contracting in its assailed Decision and Resolution. The CA itself examined the facts and evidence of the parties15 and found that, based on the evidence, CCBPI did not engage in labor-only contracting and, therefore, was not guilty of unfair labor practice. The NLRC found and the same was sustained by the CA that the companys action to contract-out the services and functions performed by Union members did not constitute unfair labor practice as this was not directed at the members right to self-organization. Article 248 of the Labor Code provides: ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. It shall be unlawful for an employer to commit any of the following unfair labor practices: xxx (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization; xxx

Unfair labor practice refers to "acts that violate the workers right to organize." The prohibited acts are related to the workers right to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices.16 Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practice. It was the Union that had the burden of adducing substantial evidence to support its allegations of unfair labor practice,17which burden it failed to discharge. WHEREFORE, the foregoing premises considered, the Petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 80916 are AFFIRMED. SO ORDERED. G.R. No. 161910 June 17, 2008

DEPARTMENT OF AGRARIAN REFORM, rep. by OIC SECRETARY JOSE MARI B. PONCE, petitioner, vs. MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents. G.R. No. 161930 June 17, 2008

LEOLITO EDA, MARCELO DE CLARO, TORIBIO BENZUELA, DONATA MENDOZA, ARSENIO MACASADIA, FELICIANO DE CLARO, FELICIDAD C. DE CLARO, SALVACION BALONDO, PETRA LEZARDO, CONSOLACION L. DE CLARO, LEONARDO C. DE CLARO, AGRIPINO DE CLARO, VIRGILIO ESTRECOMIN, ELVIE GALANO, EVARESTO DE CLARO, represented by LEOLITO EDA as their attorney-in-fact, REGISTRY OF DEEDS, CALAMBA, LAGUNA PROVINCE and HON. HORACIO R. MORALES, JR., in his capacity as Secretary of Agrarian Reform, petitioners, vs. MA. REGINA I. SAMSON, J. DOMINIC SAMSON, ANNE-MARIE SAMSON and LIESL MARIE EUGENIE SAMSON, respondents. DECISION YNARES-SANTIAGO, J.: These consolidated petitions assail the October 10, 2003 Decision1 of the Court of Appeals in CA-G.R. SP No. 60036, reversing and setting aside the June 29, 20002 Decision of the Office of the President and enjoining the Secretary of the Department of Agrarian Reform (DAR) and the Register of Deeds of Calamba, Laguna from implementing the same. Also assailed is the January 27, 20043 Resolution denying the motion for reconsideration. During his lifetime, Enrique T. Samson4 applied for exemption from the coverage of the Comprehensive Agrarian Reform Program (CARP) over nine (9) parcels of land with an aggregate area of 27.7359 hectares, located in Barangays Pansol and Sukol, Calamba, Laguna, and covered by Transfer Certificate of Title Nos. T151979, T-151980, T-94607, T-94605, T-94606, T-60653, T-203493, T-203494, T-203495 issued by the Register of Deeds for Calamba, Laguna in the name of Samson. In an undated Order issued sometime in 1995, the subject lots were declared exempt from CARP coverage by DAR Regional Director Percival C. Dalugdug.5 The dispositive portion of said Order reads: WHEREFORE, premises considered and pursuant to AO No. 10, Series of 1994, Order is hereby issued approving the exclusion from CARP Coverage of the subject nine (9) parcels of land provided, however, that their disposition or any project to be implemented therein shall be subject to DENRs

clearance and to the Moratorium contained in Section 5 of Executive Order 121 dated August 24, 1993. SO ORDERED.6 On March 19, 1997, petitioners-farmers filed an Opposition/Petition alleging that they received the undated Order of DAR only on January 27, 1997. They prayed that the same be set aside and nullified because although the lands covered by the Order have a slope of more than 18%, the same were fully developed and planted with variety of plants, and to which some of them have their farm houses built.7 In an Order8 dated March 4, 1998, DAR considered the Opposition/Petition filed as an appeal and disposed of the same as follows: WHEREFORE, premises considered order is hereby issued, ordering the Regional Office No. IV to segregate the areas with agricultural developments and cover the same (under) the Comprehensive Agrarian Reform Program (CARP) and exempting the balance. SO ORDERED.9 DAR found no evidence that the subject lots are within the Makiling Forest Reserve Area; and the fact that these are titled lands supports the contention that these are neither public lands nor within the reservation area. It also noted that the ocular inspection report submitted by their team confirms the presence of agriculturally developed portions in the area. Hence, portions of the subject landholding even with a slope of more than 18% may still be covered by CARP due to the presence of agriculturally developed areas. On July 12, 1999, Samson learned that a group of surveyors inspected the subject properties for the purpose of determining which portions should be distributed to his tenants. When he sought clarification from the DAR Provincial Agrarian Reform Officer, Felixberto Kagahastian, as to the purpose of the survey, he was informed for the first time about the "Appeal" filed by the farmers which was subsequently granted by DAR. Samson was able to secure a copy of the March 4, 1998 Order only on July 16, 1999. On August 9, 1999, Samson assailed the Order before the Office of the President arguing that he was not notified of the appeal; that had he been properly apprised, he could have presented evidence to prove that the properties have a slope of 18% or over and are not developed; and that petitioner-farmers are not qualified beneficiaries of the CARP. He denied that he was represented during the alleged ocular inspection conducted by DAR on February 17, 1998.10 On June 29, 2000, the Office of the President rendered a Decision,11 the dispositive portion of which reads: WHEREFORE, foregoing premises considered, the assailed DAR order dated March 4, 1998 is hereby AFFIRMED and the instant appeal DISMISSED. SO ORDERED.12 The Office of the President ruled that any alleged procedural lapses committed in the proceedings before the DAR were cured when Samson interposed the appeal before it which gave him an opportunity to present evidence and to substantiate the claim that the subject land is exempt from CARP coverage. Likewise, the DAR Secretary considered all available records including Samsons application for exemption thus, there is no denial of due process. The Office of the President sustained DARs ruling that the subject properties were within the coverage of CARP after finding that although the land has a slope of more than 18%, there are portions which are agriculturally developed. These findings were based on the supplemental report submitted by Marino A. Austria, DARs Senior Agrarian Reform Technologist on August 23, 1994 and the report of the DAR team who

conducted the ocular inspection on February 17, 1998. The Office of the President also ruled that the Order granting Samsons application for exemption was not supported by evidence.13 Samson appealed to the Court of Appeals which rendered the assailed Decision reversing and setting aside the Decision of the Office of the President and enjoining the DAR Secretary and the Register of Deeds for Calamba, Laguna, from implementing the June 29, 2000 Decision of the Office of the President. The dispositive portion of the Decision reads: WHEREFORE, the instant petition is given DUE COURSE and GRANTED. The respondent DAR Secretary, his successors, agents and representatives, and the Register of Deeds for Calamba, Laguna are hereby enjoined from implementing the Decision dated June 29, 2000 of the Office of the President in O.P. Case No. 99-D-889 as well as those from which it was derived. SO ORDERED.14 The Court of Appeals ruled that there was a final decree of CARP exemption issued in favor of Samson and its reversal by DAR and the Office of the President is grossly irregular. It ruled that DAR committed grave abuse of discretion in entertaining the belated appeal of the farmers. Though technical rules of procedure and evidence are not strictly applied in administrative proceedings, entertaining an appeal filed after more than a year had lapsed is a total disregard of the rules, an abuse of discretion to favor one party. Petitioners filed separate motions for reconsideration which were denied by the Court of Appeals in a Resolution15dated January 27, 2004. Thereafter, they filed separate petitions for review on certiorari which was ordered consolidated by the Court in its Resolution dated March 10, 2004.16 In G.R. No. 161910, petitioner DAR alleged that the Court of Appeals erred: 1. WHEN IT RULED THAT PETITIONER COMMITTED A FAUX PAS WHICH WAS FATAL AND DAMAGING TO THE DEFENSE OF BOTH PUBLIC AND PRIVATE RESPONDENTS AND FAILED TO CONSIDER THE ESTABLISHED FACT, AND EXISTING JURISPRUDENCE, THAT RESPONDENT OR THEIR PREDECESSOR WERE ALLOWED TO BE HEARD AND THERE WAS AVAILMENT THEREOF. 2. WHEN IT REVERSED THE DECISIONS OF THE OFFICE OF THE PRESIDENT AND OF DAR ON THE GROUND THAT PETITIONER COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT ENTERTAINED THE 1997 APPEAL OF THE FARMERS.17 On the other hand, in G.R. No. 161930, petitioners-farmers raised the following issues: I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE OFFICE OF THE PRESIDENT AS WELL AS THAT OF THE DEPARTMENT OF AGRARIAN REFORM. II. WHETHER THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENTS WERE DENIED DUE PROCESS OF LAW.18 The resolution of these consolidated cases revolves around the propriety of the appeal interposed by farmerspetitioners before the DAR. Petitioners insist there was no grave abuse of discretion when DAR entertained the appeal and that respondents were not denied due process during the proceedings. On the other hand, respondents argue that they were denied due process because they were not able to participate in the

proceedings before the DAR and that their appeal with the Office of the President did not cure the said procedural lapse. Administrative Order No. 13 series of 1990 (A.O. No. 13-90)19 as revised by Administrative Order No. 10 series of 1994 (A.O. No. 10-94)20 provides that the Order of the Regional Director approving or denying the application for exemption shall become final 15 days from receipt of the same unless an appeal is made to the Secretary.21Though the undated Order of Regional Director Dalugdug appears to have been issued sometime in 1995, the farmers-petitioners alleged that they were notified of said Order only on January 27, 1997. Hence, when petitioners-farmers filed their Opposition/Petition on March 19, 1997, the period to appeal had expired. However, we find no error on the part of petitioner DAR when it entertained the appeal of farmers-petitioners after finding the same meritorious, consistent with the declared policies of RA 6657 in giving the welfare of the landless farmers and farm workers the highest consideration. In several instances, even the Court entertained and allowed lapsed appeals in the higher interest of justice.22 Moreover, proceedings before the DAR are summary and pursuant to Section 50 of RA 6657, the department is not bound by technical rules of procedure and evidence, to the end that agrarian reform disputes and other issues will be adjudicated in a just, expeditious and inexpensive action or proceeding.23 It is important to reiterate that administrative agencies are not bound by the technical niceties of law and procedure and the rules obtaining in the courts of law. It is well-settled that rules of procedure are construed liberally in proceedings before administrative bodies and are not to be applied in a very rigid and technical manner, as these are used only to help secure and not to override substantial justice.24 Besides, we find that respondents were not denied due process. In administrative proceedings, a fair and reasonable opportunity to explain ones side suffices to meet the requirements of due process.25 In Casimiro v. Tandog,26 the Court held: The essence of procedural due process is embodied in the basic requirement of notice and a real opportunity to be heard. In administrative proceedings, such as in the case at bar, procedural due process simply means the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of. "To be heard" does not mean only verbal arguments in court; one may be heard also thru pleadings. Where opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial of procedural due process. In administrative proceedings, procedural due process has been recognized to include the following: (1) the right to actual or constructive notice of the institution of proceedings which may affect a respondents legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in ones favor, and to defend ones rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected.27 In the instant case, it was not shown that farmers-petitioners sent notices or copies of their Opposition/Petition to respondents. However, as correctly ruled by the Office of the President, there is no denial of due process because the DAR Secretary, in issuing the assailed Order, considered all available records of the case at the DAR Regional Office, including respondents application for exemption and its supporting documents, as well as the farmers-petitioners petition/opposition. Neither can the DAR be faulted for sending its notices to respondents predecessors previous address in Quezon City as it was the same address appearing in the undated Order of Director Dalugdug. Thus, it was proper for the said agency to rely on the last known address appearing in their records. In any event, the Court agrees with petitioners that any procedural defect in the proceedings before the DAR was cured when Samson appealed before the Office of the President. In Gonzales v. Civil Service Commission,28 the Court ruled that any seeming defect in the observance of due process is cured by the filing

of a motion for reconsideration and that denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard thereon.29 Likewise, in Autencio v. City Administrator Maara and the City of Cotabato,30the Court ruled that where the party has the opportunity to appeal or seek reconsideration of the action or ruling complained of, defects in procedural due process may be cured.31 It should be noted that although the March 4, 1998 ruling of the DAR had attained finality, the Office of the President still entertained respondents appeal thus giving them the opportunity to be heard. Courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency. Administrative agencies are given wide latitude in the evaluation of evidence and in the exercise of their adjudicative functions, latitude which includes the authority to take judicial notice of facts within their special competence.32 As to whether the subject properties are exempt from CARP coverage, the Court of Appeals did not make any findings inasmuch as it limited its discussion in resolving the procedural issues raised before it. Considering that these issues involve an evaluation of the DARs findings of facts, this Court is constrained to accord respect to such findings. It is settled that factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence. The factual findings of the Secretary of DAR who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed.33 The DAR and the Office of the President ruled that only certain portions of the subject properties may be placed under the coverage of the CARP due to the agricultural developments they found thereon. Hence, it ordered that these areas be segregated for CARP coverage while the rest of the subject properties shall remain exempt. The Court notes however that there is no final determination yet as to which portions of the properties are to be covered and whether the farmers-petitioners herein are qualified beneficiaries. As such, respondents may still participate in the segregation of these areas and exercise other rights provided for landowners under RA 6657. WHEREFORE, the instant petitions for review on certiorari are GRANTED. The assailed Decision of the Court Appeals dated October 10, 2003 and the Resolution dated January 27, 2004, in CA-G.R. SP No. 60036 areREVERSED and SET ASIDE. The Order of the Department of Agrarian Reform dated March 4, 1998, as affirmed by the Office of the President, ordering the Regional Office No IV (of the DAR) to segregate the areas with agricultural developments and place the same under the CARP coverage and exempting the rest of the subject properties, is hereby REINSTATED and AFFIRMED. SO ORDERED. G.R. No. 124915 February 18, 2008

RIZAL SECURITY & PROTECTIVE SERVICES INC., and/or RUFINO S. ANTONIO, JR., petitioners, vs. HON. DIRECTOR ALEX E. MARAAN, Regional Sheriff of DOLE, Cordillera Administrative Region, and RICO GOMEZ, ROLANDO TUPAS, DETECIO VICENTE, EDWIN TUPAS, ROBERTO RUIZ, RONNIE LEABRES, DENNIS LEABRES, and SANDY FIGER, respondents. DECISION CHICO-NAZARIO, J.: The Petition brought before this Court is a special civil action under Rule 65 of the Revised Rules of Court, with petitioners praying for the issuance of a writ of certiorari and a temporary restraining order (TRO) enjoining from execution the Order1 dated 24 January 1996 issued by public respondent Alex E. Maraan, then Department of Labor and Employment (DOLE) Regional Director for the Cordillera Administrative Region (CAR), in CAR00-9507-CI-25.

Petitioner Rizal Security and Protective Service, Inc. (Rizal Security) is a corporation organized under Philippine laws and is doing business as a security agency. Petitioner Rufino S. Antonio, Jr. (Antonio) is the president of the aforesaid corporation. On the other hand, private respondents were formerly employed by petitioner Rizal Security as security guards detailed at Rainbow End Village in Baguio City. The instant case arose on 19 May 1995, when private respondents Rico Gomez (Gomez) and Edwin O. Tupas (Tupas), who were then still employed as security guards of petitioner Rizal Security, filed a Complaint with the DOLE-CAR Regional Office, docketed as CAR00-9507-CI-25, to seek assistance regarding petitioners alleged violation of laws on labor standards, to wit: 1. Illegal deduction of wages 2. Underpayment of night shift differential 3. Underpayment of minimum wage 4. Nonpayment of overtime pay and legal holiday pay 5. Nonpayment of 13th month pay Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment or his duly authorized representative under Article 128 of the Labor Code, as amended, an inspection was conducted on petitioner Rizal Securitys establishment by the Labor Inspector on 1 June 1995. The said inspection yielded the following violations as indicated in the Notice of Inspection Results dated 9 October 1995: 1. Underpayment of wages 2. Underpayment of COLA 3. Nonpayment of overtime pay 4. Nonpayment of service incentive leave 5. Underpayment of Night-Shift Differential 6. Frequency of Payment 7. Nonpayment of 13th month pay 8. No emergency medicines2 Hearings were scheduled by the DOLE-CAR to give petitioners the opportunity to present their side. In the meantime, two significant events apparently took place. First, private respondents signed and submitted a resignation letter addressed to the personnel manager of petitioner Rizal Security on 10 July 1995, to be effective 1 September 1995.3 And second, a notice of Termination of Services dated 25 July 1995 was sent by Dominador N. Valmonte, Jr., Resident Manager of Rainbow End Village to petitioner Antonio, President of co-petitioner Rizal Security.4Through the said Notice, Rainbow End Village informed petitioner Rizal Security of the termination of their Security Services also effective 1 September 1995.

In a hearing conducted on 23 October 1995 before the DOLE-CAR Regional Office, petitioner Rizal Security submitted a Manifestation and Motion assailing the jurisdiction of the DOLE-CAR Regional Office over the case. Petitioner Rizal Security alleged that the DOLE-CAR Regional Office had lost its jurisdiction to try the case considering there was no longer any employer-employee relationship between petitioner Rizal Security and private respondents when the latter ceased to be employees of petitioner Rizal Security due to their resignation effective 1 September 1995. Thereafter, on 24 January 1996, the DOLE-CAR Regional Office, through public respondent Director Maraan, issued the assailed Order denying petitioner Rizal Securitys Manifestation and Motion. It further ordered the payment of the deficiencies owing the private respondents amounting to P560,989.70. The Order reads: WHEREFORE, in the light of the foregoing, the manifestation and motion filed by the respondent, Rizal Security & Protective Service, through Atty. Salvador M. Solis, is hereby DENIED and is hereby ORDERED to pay the computed deficiencies owing to the affected Security Guards in the total amount of FIVE HUNDRED SIXTY THOUSAND, NINE HUNDRED EIGHTY-NINE PESOS & 70/100 (P560,989.70) covering eight (8) guards which is hereto itemized as to the following employees, to wit: NAME 1. Rico E. Gomez 2. Rolando Tupas 3. Detecio S. Vicente 4. Edwin Tupas 5. Roberto P. Ruiz 6. Ronnie Llabres 7. Dennis Llabres 8. Sandy Figer TOTAL P 99,088.125 P110,377.170 P107,904.92 P113,532.67 P110,604.92 P 9,608.25 P 6,626.60 P 3,247.05 P560,989.705 This office further holds Mr. Dominador Valmonte, Resident Manager of Rainbow End Village, to be jointly and severally liable pursuant to Articles 107 and 109 of the Labor Code of the Philippines. In view hereof, respondents Mr. Rufino Antonio of Rizal Security and Protective Service and Mr. Dominador Valmonte, of Rainbow End Village, are directed to pay the above-stated amount within ten (10) calendar days from receipt hereof. Otherwise, this Office shall be constrained to issue a Writ of Execution resulting from noncompliance thereof.5 Petitioners deny that a copy of such Order was ever officially sent to their undersigned counsel. According to petitioners counsel: Despite the fact that the records of the said case disclose that the appearance of the undersigned as counsel for the petitioner has been duly acknowledged and recognized, no copy of such Order was ever sent officially to the undersigned counsel. The undersigned counsel was able to secure a copy thereof from the DOLE Regional Office in Baguio City only on June 18, 1996.6 On 8 May 1996, counsel for petitioners received a copy of the Writ of Execution dated 12 March 1996 issued by public respondent DOLE-CAR Director Maraan ordering the Regional Sheriff to enforce the Order dated 24 January 1996. Pertinent portions of the Writ of Execution are quoted below: WHEREAS, a copy of said Order was received by respondent on February 1, 1996. WHEREAS, the period for appeal has already expired without respondent having perfected an appeal from said decision.

WHEREAS, the Order has now become final and executory but respondent has not yet effected the necessary payments of the Monetary Awards due the employee/s concerned. NOW THEREFORE, pursuant to the provisions of the Labor Code as amended as well as the Rules in the disposition of Labor Standard Cases in the Regional Office, you are hereby directed to cause Messers. Rufino Antonio/ Dominador Valmonte and/or Rizal Security and Protective Service with business address at 37 Rainbow End Village, Tacay Road, Pinsao Proper, Baguio City or wherever they/he/it may be found to pay the amount of FIVE HUNDRED SIXTY THOUSAND NINE HUNDRED EIGHTY-NINE (P560,989.70) PESOS and 70/100 plus legal fee for execution in the amount of FIVE THOUSAND ONE HUNDRED (P5,100.00) PESOS from the goods, chattels or other properties of the respondent/s and to tender to the concerned employees through the Department of Labor and Employment their claims as aforementioned.7 Petitioners are now asking for the issuance of a writ of certiorari and a Temporary Restraining Order to enjoin public respondents from executing the Order of 24 January 1996 and from enforcing the Writ of Execution. Petitioners pray that this Court order that the case be endorsed, on the ground of lack of jurisdiction, from the DOLE-CAR Regional Office to the National Labor Relations Commission (NLRC) and that judgment be rendered annulling and setting aside the 24 January 1996 Order and quashing the 12 March 1996 Writ of Execution. Petitioners presented the following assignment of errors: I. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE ORDER DATED JANUARY 24, 1996 WITHOUT OR IN EXCESS OF HIS JURISDICTION AND IN NOT ENDORSING THE CASE TO THE APPROPRIATE BRANCH OF THE NATIONAL LABOR RELATIONS COMMISSION FOR HEARING. II. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE WRIT OF EXECUTION AGAINST PETITIONERS PREMATURELY AND CONTRARY TO LAW OR WITHOUT DUE PROCESS OF LAW. III. GRANTING FOR THE SAKE OF ARGUMENT THAT THE ORDER DATED JANUARY 24, 1996 IS VALID, THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN DECLARING PETITIONER RUFINO ANTONIO AS LIABLE JOINTLY AND SEVERALLY FOR THE PAYMENT OF THE MONETARY CLAIMS OF THE PRIVATE RESPONDENTS. The Petition was initially dismissed by this Court on 24 July 1996 for failure to comply strictly with the Rules of Court in not submitting a certified true copy of the questioned Writ of Execution dated 12 March 1996. However, upon Motion for Reconsideration and compliance with the foregoing requirement, this Court resolved to grant the reconsideration, thus reinstating the Petition. The pivotal issue to be resolved in this Petition is whether public respondent DOLE-CAR Regional Director Maraan acted without jurisdiction in issuing the Order dated 24 January 1996. Certiorari being a remedy narrow in its scope and inflexible in character, it is limited to the issue of jurisdiction and grave abuse of discretion.8 This is the same rule followed in applying the Supreme Courts power to review labor cases which is limited to the issue of jurisdiction and grave abuse of discretion.9 As this Court has eloquently explained in Condo Suite Club Travel, Inc. v. National Labor Relations Commission10: Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion amounting to lack of jurisdiction. The respondent acts without jurisdiction if he does not have the legal power to determine the case. There is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps his authority as determined by law. And there is grave abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction. x x x.

This Court has explained the role and function of Rule 65 as an extraordinary remedy in numerous pronouncements, among which is the case of Caltex Refinery Employees Association v. Brillantes11 citing Flores v. National Labor Relations Commission,12 to wit: It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases -- those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRCs evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. (Emphasis supplied.) After a careful scrutiny of petitioners arguments, this Court sustains the jurisdiction of public respondent DOLECAR Director Maraan over CAR00-9507-CI-25 and, thus, finds that the writ of certiorari does not lie herein. In support of their position, petitioners call the attention of this Court to the fact that Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices stipulates: Section 3. Complaints where no employer-employee relationship actually exists. Where employeremployee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship no longer exists, the case, whether or not accompanied by an allegation of illegal dismissal, shall immediately be endorsed by the Regional Director to the appropriate Branch of the National Labor Relations Commission (NLRC). It follows, petitioners contend, that where the employer-employee relationship no longer exists by the fact of its severance, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the Labor Arbiters. Petitioners claim that the supervening event of private respondents voluntarily resigning from petitioners employ in the course of the proceedings in CAR00-9507-CI-25 automatically ousted public respondent DOLE-CAR Director Maraan of his jurisdiction to continue to hear and determine said case. Petitioners insist that public respondent DOLE-CAR Director Maraan should have desisted from further handling the case and should have instead indorsed it to the appropriate regional branch of the NLRC for further hearing, since the jurisdiction over the same belongs to the Labor Arbiter. Petitioners reliance on Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices is inappropriate. While it is true that the quoted provision states that where employee-employer relations have been severed, complaints or claims for payment of monetary benefits fall within the exclusive and original jurisdiction of Labor Arbiters; however, such is not the case in the present Petition. To emphasize, at the time private respondents instituted CAR00-9507-CI-25 by filing a complaint with the DOLE-CAR Regional Office, they were still employees of petitioners. Private respondents Gomez and Tupas filed the Complaint on 19 May 1995 before the DOLE-CAR Regional Office, seeking a routine inspection to be conducted on petitioner Rizal Security relative to underpayment in wages and nonpayment of other benefits under the Labor Code. At the time of filing of the Complaint on said date, the employer-employee relationship between private respondents and petitioner Rizal Security had not yet been severed. As alleged by petitioner Rizal Security itself, deemed as an admission on its part, the employer-employee relations between petitioner Rizal Security and private respondents were terminated on 1 September 1995, or more than three months after the institution of CAR00-9507-CI-25 before the DOLE Regional Office. Well-settled is the rule that the jurisdiction of a court over the subject matter of an action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to

recover upon all or some of the claims asserted therein.13 Time and again, this Court has held that the allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts.14 It is but axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein, the character of the relief prayed for, and the law existing at the time of the filing of the complaint or petition.15 It has already been established in a plethora of cases that once jurisdiction is vested, the same is retained up to the end of litigation.16 Neither can it be ousted by subsequent events, although of a character which would have prevented jurisdiction from attaching in the first instance. Even subsequent legislation vesting jurisdiction over such proceedings in another tribunal will not affect such jurisdiction.17 Considering that it is uncontroverted that there still existed an employer-employee relationship between petitioner Rizal Security and private respondents at the time of filing of the complaint on 19 May 1995, and that the case is one involving violations of labor standard provisions of the Labor Code, this Court finds that DOLE-CAR Director Maraan properly retained jurisdiction to hear and decide CAR00-9507-CI-25 and issue the assailed Order dated 24 January 1996, pursuant to the power vested in him by Article 128(b) of the Labor Code, which states: Art. 128. Visitorial and Enforcement Power. xxxx (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. Secondary to the issue of jurisdiction is the issue of whether or not public respondent DOLE-CAR Director Maraan acted without or in excess of his jurisdiction in issuing the Writ of Execution dated 12 March 1996. Petitioners insist that the issuance of the said Writ of Execution was unlawful and premature, without legal basis or due process of law, and implemented against a person not a party litigant. Petitioners maintain that since the DOLE-CAR Regional Office never furnished petitioners counsel a copy of the 24 January 1996 Order, then the said Order never became final with respect to them, and cannot be the subject of a Writ of Execution. Rule II, Section 4 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that notices and copies of orders shall be served on the parties or their duly authorized representatives at their last known office or home addresses or, if they are represented by counsel, through the latter. This procedure on service of Orders and Decisions as provided under the Rules on the Disposition of Labor Standards Cases in the Regional Offices is in line with the established rule that notice to counsel is notice to party and when a party is represented by counsel, notices should be made upon the counsel of record at his given address to which notices of all kinds emanating from the court should be sent. Petitioners counsel never received an official copy of the 24 January 1996 Order and was only able to personally secure a copy thereof from the DOLE-CAR Regional Office in Baguio City on 18 June 1996.18 The

records support this allegation. The following is a quote from an internal DOLE correspondence attached to the records of the case: Is it okay with you if we will schedule this for another hearing despite the Dismissal of respondents petition for certiorari? In the interest of justice respondents did not receive a copy of our Order dated 1/24/96 as it was "returned to sender" by the post office.19 A Notice and a copy of the Order dated 24 January 1996 was sent by the DOLE-CAR Regional Office through registered mail to the address of petitioners then counsel-of-record Atty. Salvador Solis (Atty. Solis) on 29 January 1996. However, the same was not received by Atty. Solis. Indicated on the envelope containing the Notice of the Order dated 24 January 1996 were the following notations by the post office on 5 February 1996: RTS20 for better address No #5 at Sto. Nino Street Not at (illegible) No such number #5 at Sto. Nino St. 2-5-96 This Court notes that prior notices of the hearings were all sent to the very same address and were received always by petitioners counsel. It is a source of no little wonder, therefore, why the post office reported that there was "[n]o such number #5 at Sto. Nio St." We could only conclude, at this time, that the notice was not received by the petitioners not through their fault. Thus, we say that the post office failed to deliver the Notice and copy of the 24 January 1996 Order thereto. This fact was admitted by public respondent.21 Private respondents further argue that petitioners may already be deemed notified of the contents of the 24 January 1996 Order for it merely reiterated the findings in the report on the inspection conducted on 1 June 1995 which was served and duly received by petitioners. This Court is very much aware that the nature of proceedings before the DOLE Regional Office shall be summary and non-litigious in nature, and that the technicalities of law and procedure and the rules governing admissibility and sufficiency of evidence obtaining in the courts of law do not strictly apply thereto, subject, only to the requirements of due process.22 However, the foregoing is obviously not the notice contemplated under the Labor Code. The inspection report is undeniably a distinct and separate document from the Order dated 24 January 1996. More than merely restating the findings on the inspection report, the Order of 24 January 1996 ruled on the Manifestation and Motion of the petitioners assailing the jurisdiction of the DOLE-CAR Regional Office by refusing to dismiss and retaining jurisdiction over CAR00-9507-CI-25. Procedural rules are tools designed to facilitate the adjudication of cases and not defeat justice.23 While the Court, in some instances, allows a relaxation in the application of the rules, it was never intended to forge a bastion for a violation of due process. And although it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice. The essence of due process is to provide an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or seek a reconsideration of the action or ruling complained of. Rule III, Section 17 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that an aggrieved party may file a motion for reconsideration of the Order of the Regional Office within seven calendar days from receipt by him of a copy of said Order. The judgment becomes "final and executory" when the reglementary period to appeal lapses, and no appeal is perfected within such period. In this case, petitioners never had the opportunity to contest the Order of 24 January 1996 considering that they never received a notice of the issuance thereof nor were they provided with a copy of the same.

Without receipt by the petitioners of the notice and copy of the Order dated 24 January 1996, the same has not yet become final and executory and the Writ of Execution issued pursuant thereto on 12 March 1996 was premature and without legal basis. This renders the Writ of Execution fatally defective and, thus, null. Finally, the Court declines from addressing at this point the question of petitioner Antonios solidary liability with co-petitioner Rizal Security for the payment of the monetary awards granted to the private respondents. Considering that the Order dated 24 January 1996 has not yet attained finality and the Writ of Execution dated 12 March 1996 has been quashed by reason thereof, to resolve the last issue now would be injudicious and would pre-empt whatever action public respondent DOLE-CAR Director Maraan may still take on CAR00-9507CI-25. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly. Thus, for reasons of comity and convenience, our courts of justice 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 every opportunity to correct its error and to dispose of the case.24 WHEREFORE, premises considered, the Court PARTIALLY GRANTS the instant Petition and ISSUES a Writ of Certiorari to quash the Writ of Execution dated 12 March 1996 for being issued prematurely. The Department of Labor and Employment Cordillera Administrative Region is further DIRECTED to proceed with CAR00-9507-CI-25 with DISPATCH. No costs. SO ORDERED.

A.M. No. RTJ-06-2017

June 19, 2008

LT. GEN. ALFONSO P. DAGUDAG (Ret.), complainant, vs. JUDGE MAXIMO G.W. PADERANGA, Regional Trial Court, Branch 38, Cagayan de Oro City, respondent. DECISION PER CURIAM, J.: This is a complaint for gross ignorance of the law and conduct unbecoming a judge filed by retired Lt. Gen. Alfonso P. Dagudag (Gen. Dagudag), Head of Task Force Sagip Kalikasan, against Judge Maximo G. W. Paderanga (Judge Paderanga), Presiding Judge of the Regional Trial Court, Branch 38, Cagayan de Oro City. On or about 30 January 2005, the Region VII Philippine National Police Regional Maritime Group (PNPRMG) received information that MV General Ricarte of NMC Container Lines, Inc. was shipping container vans containing illegal forest products from Cagayan de Oro to Cebu. The shipments were falsely declared as cassava meal and corn grains to avoid inspection by the Department of Environment and Natural Resources (DENR).1 On 30 and 31 January 2005, a team composed of representatives from the PNPRMG, DENR, and the Philippine Coast Guard inspected the container vans at a port in Mandaue City, Cebu. The team discovered the undocumented forest products and the names of the shippers and consignees: Container Van No. NCLU 2000492-22GI IEAU 2521845-2210 NOLU 2000682-22GI INBU 3125757-BB2210 Shipper Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot Consignee Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot

NCLU 20001591-22GI GSTU 339074-US2210 CRXU 2167567 NCLU 2001570-22GI

Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez

Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez

The crew of MV General Ricarte failed to produce the certificate of origin forms and other pertinent transport documents covering the forest products, as required by DENR Administrative Order No. 07-94. Gen. Dagudag alleged that, since nobody claimed the forest products within a reasonable period of time, the DENR considered them as abandoned and, on 31 January 2005, the Provincial Environment and Natural Resources Office (PENRO) Officer-in-Charge (OIC), Richard N. Abella, issued a seizure receipt to NMC Container Lines, Inc.2 On 1 February 2005, Community Environment and Natural Resources Office (CENRO) OIC Loreto A. Rivac (Rivac) sent a notice to NMC Container Lines, Inc. asking for explanation why the government should not confiscate the forest products.3 In an affidavit4 dated 9 February 2005, NMC Container Lines, Inc.s Branch Manager Alex Conrad M. Seno stated that he did not see any reason why the government should not confiscate the forest products and that NMC Container Lines, Inc. had no knowledge of the actual content of the container vans. On 2, 9, and 15 February 2005, DENR Forest Protection Officer Lucio S. Canete, Jr. posted notices on the CENRO and PENRO bulletin boards and at the NMC Container Lines, Inc. building informing the unknown owner about the administrative adjudication scheduled on 18 February 2005 at the Cebu City CENRO. Nobody appeared during the adjudication.5 In a resolution6 dated 10 March 2005, Rivac, acting as adjudication officer, recommended to DENR Regional Executive Director Clarence L. Baguilat that the forest products be confiscated in favor of the government. In a complaint7 dated 16 March 2005 and filed before Judge Paderanga, a certain Roger C. Edma (Edma) prayed that a writ of replevin be issued ordering the defendants DENR, CENRO, Gen. Dagudag, and others to deliver the forest products to him and that judgment be rendered ordering the defendants to pay him moral damages, attorneys fees, and litigation expenses. On 29 March 2005, Judge Paderanga issued a writ of replevin8 ordering Sheriff Reynaldo L. Salceda to take possession of the forest products. In a motion to quash the writ of replevin,9 the defendants DENR, CENRO, and Gen. Dagudag prayed that the writ of replevin be set aside: (1) Edmas bond was insufficient; (2) the forest products were falsely declared as cassava meal and corn grains; (3) Edma was not a party-in-interest; (4) the forest products were not covered by any legal document; (5) nobody claimed the forest products within a reasonable period of time; (6) the forest products were already considered abandoned; (7) the forest products were lawfully seized under the Revised Forestry Code of the Philippines; (8) replevin was not proper; (9) courts could not take cognizance of cases pending before the DENR; (10) Edma failed to exhaust administrative remedies; and (11) the DENR was the agency responsible for the enforcement of forestry laws. In a motion to dismiss ad cautelam10 dated 12 April 2005, the defendants prayed that the complaint for replevin and damages be dismissed: (1) the real defendant is the Republic of the Philippines; (2) Edma failed to exhaust administrative remedies; (3) the State cannot be sued without its consent; and (4) Edma failed to allege that he is the owner or is entitled to the possession of the forest products. In an order11 dated 14 April 2005, Judge Paderanga denied the motion to quash the writ of replevin for lack of merit. Gen. Dagudag filed with the Office of the Court Administrator (OCA) an affidavit-complaint12 dated 8 July 2005 charging Judge Paderanga with gross ignorance of the law and conduct unbecoming a judge. Gen. Dagudag stated that: During the x x x hearing, [Judge Paderanga] showed manifest partiality in favor of x x x Edma. DENRs counsel was lambasted, cajoled and intimidated by [Judge Paderanga] using words such as "SHUT UP" and "THATS BALONEY."

xxxx Edma in the replevin case cannot seek to recover the wood shipment from the DENR since he had not sought administrative remedies available to him. The prudent thing for [Judge Paderanga] to have done was to dismiss the replevin suit outright. xxxx [Judge Paderangas] act[s] of taking cognizance of the x x x replevin suit, issuing the writ of replevin and the subsequent denial of the motion to quash clearly demonstrates [sic] ignorance of the law. In its 1st Indorsement13 dated 1 August 2005, the OCA directed Judge Paderanga to comment on the affidavitcomplaint. In his comment14 dated 6 September 2005, Judge Paderanga stated that he exercised judicial discretion in issuing the writ of replevin and that he could not delve into the issues raised by Gen. Dagudag because they were related to a case pending before him. In its Report15 dated 10 July 2006, the OCA found that Judge Paderanga (1) violated the doctrine of exhaustion of administrative remedies; (2) violated the doctrine of primary jurisdiction; and (3) used inappropriate language in court. The OCA recommended that the case be re-docketed as a regular administrative matter; that Judge Paderanga be held liable for gross ignorance of the law and for violation of Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary;16 and that he be fined P30,000. In its Resolution17 dated 16 August 2006, the Court re-docketed the case as a regular administrative matter and required the parties to manifest whether they were willing to submit the case for decision based on the pleadings already filed. Judge Paderanga manifested his willingness to submit the case for decision based on the pleadings already filed.18 Since Gen. Dagudag did not file any manifestation, the Court considered him to have waived his compliance with the 16 August 2006 Resolution.19 The Court finds Judge Paderanga liable for gross ignorance of the law and for conduct unbecoming a judge. The DENR is the agency responsible for the enforcement of forestry laws. Section 4 of Executive Order No. 192 states that the DENR shall be the primary agency responsible for the conservation, management, development, and proper use of the countrys natural resources. Section 68 of Presidential Decree No. 705, as amended by Executive Order No. 277, states that possessing forest products without the required legal documents is punishable. Section 68-A states that the DENR Secretary or his duly authorized representatives may order the confiscation of any forest product illegally cut, gathered, removed, possessed, or abandoned. In the instant case, the forest products were possessed by NMC Container Lines, Inc. without the required legal documents and were abandoned by the unknown owner. Consequently, the DENR seized the forest products. Judge Paderanga should have dismissed the replevin suit outright for three reasons. First, under the doctrine of exhaustion of administrative remedies, courts cannot take cognizance of cases pending before administrative agencies. In Factoran, Jr. v. Court of Appeals,20 the Court held that: 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 an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. (Emphasis ours) In Dy v. Court of Appeals,21 the Court held that a party must exhaust all administrative remedies before he can resort to the courts. In Paat v. Court of Appeals,22 the Court held that:

This Court in a long line of cases has consistently held that 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. Hence, 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 courts judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. (Emphasis ours) In the instant case, Edma did not resort to, or avail of, any administrative remedy. He went straight to court and filed a complaint for replevin and damages. Section 8 of Presidential Decree No. 705, as amended, states that (1) all actions and decisions of the Bureau of Forest Development Director are subject to review by the DENR Secretary; (2) the decisions of the DENR Secretary are appealable to the President; and (3) courts cannot review the decisions of the DENR Secretary except through a special civil action for certiorari or prohibition. In Dy,23 the Court held that all actions seeking to recover forest products in the custody of the DENR shall be directed to that agency not the courts. In Paat,24 the Court held that: Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over the case and consequently issuing the writ [of replevin]. Exhaustion of the remedies in the administrative forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element of private respondents right of action, is too significant to be waylaid by the lower court. xxxx Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and forfeiture issued by the DENR in pursuance to the authority given under P.D. 705, as amended. Section 8 of the said law is explicit that actions taken by the Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law are subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary except through a special civil action for certiorari or prohibition. (Emphasis ours) Second, under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence. The DENR is the agency responsible for the enforcement of forestry laws. The complaint for replevin itself stated that members of DENRs Task Force Sagip Kalikasan took over the forest products and brought them to the DENR Community Environment and Natural Resources Office. This should have alerted Judge Paderanga that the DENR had custody of the forest products, that administrative proceedings may have been commenced, and that the replevin suit had to be dismissed outright. In Tabao v. Judge Lilagan25 a case with a similar set of facts as the instant case the Court held that: The complaint for replevin itself states that the shipment x x x [was] seized by the NBI for verification of supporting documents. It also states that the NBI turned over the seized items to the DENR "for official disposition and appropriate action." x x x To our mind, these allegations [should] have been sufficient to alert respondent judge that the DENR has custody of the seized items and that administrative proceedings may have already been commenced concerning the shipment. Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence. x x x The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. (Emphasis ours) In Paat,26 the Court held that:

[T]he enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. 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. (Emphasis ours) Third, the forest products are already in custodia legis and thus cannot be the subject of replevin. There was a violation of the Revised Forestry Code and the DENR seized the forest products in accordance with law. In Calub v. Court of Appeals,27 the Court held that properties lawfully seized by the DENR cannot be the subject of replevin: Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our view the [properties seized] were validly deemed in custodia legis. [They] could not be subject to an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not otherwise. (Emphasis ours) Judge Paderangas acts of taking cognizance of the replevin suit and of issuing the writ of replevin constitute gross ignorance of the law. In Tabao,28 the Court held that: Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative of special competence. x x x [T]he plaintiff in the replevin suit who [sought] to recover the shipment from the DENR had not exhausted the administrative remedies available to him. The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. Under Section 78-A of the Revised Forestry Code, the DENR secretary or his authorized representatives may order the confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned. xxxx Respondent judges act of taking cognizance of the x x x replevin suit clearly demonstrates ignorance of the law. x x x [J]udges are expected to keep abreast of all laws and prevailing jurisprudence. Judges are duty bound to have more than just a cursory acquaintance with laws and jurisprudence. Failure to follow basic legal commands constitutes gross ignorance of the law from which no one may be excused, not even a judge. (Emphasis ours) Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that competence is a prerequisite to the due performance of judicial office. Section 3 of Canon 6 states that judges shall take reasonable steps to maintain and enhance their knowledge necessary for the proper performance of judicial duties. Judges should keep themselves abreast with legal developments and show acquaintance with laws.29 The rule that courts cannot prematurely take cognizance of cases pending before administrative agencies is basic. There was no reason for Judge Paderanga to make an exception to this rule. The forest products were in the custody of the DENR and Edma had not availed of any administrative remedy. Judge Paderanga should have dismissed the replevin suit outright. In Espaol v. Toledo-Mupas,30 the Court held that: Being among the judicial front-liners who have direct contact with the litigants, a wanton display of utter lack of familiarity with the rules by the judge inevitably erodes the confidence of the public in the

competence of our courts to render justice. It subjects the judiciary to embarrassment. Worse, it could raise the specter of corruption. When the gross inefficiency springs from a failure to consider so basic and elemental a rule, a law, or a principle in the discharge of his or her duties, a judge is either too incompetent and undeserving of the exalted position and title he or she holds, or the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. The OCA found Judge Paderanga liable for using inappropriate language in court: "We x x x find respondents intemperate use of "Shut up!" and "Baloney!" well nigh inappropriate in court proceedings. The utterances are uncalled for."31 Indeed, the 14 and 22 April 2005 transcripts of stenographic notes show that Judge Paderanga was impatient, discourteous, and undignified in court: Atty. Luego: Your Honor, we want to have this motion because that is... Judge Paderanga: I am asking you why did you not make any rejoinder[?] xxxx Atty. Luego: I apologize, Your Honor. We are ready to... Judge Paderanga: Ready to what? Proceed. Atty. Luego: Yes, Your Honor. We filed this motion to quash replevin, Your Honor, on the grounds, first and foremost, it is our contention, Your Honor, with all due respect of [sic] this Honorable Court, that the writ of replevin dated March 29, 2005 was improper, Your Honor, for the reasons that the lumber, subject matter of this case, were apprehended in accordance with... Judge Paderanga: Where is your proof that it was apprehended? Where is your proof? Is that apprehension proven by a seizure receipt? Where is your seizure receipt? Atty. Luego: Under the rules... Judge Paderanga: Where is your seizure receipt? You read your rules. What does [sic] the rules say? Where in your rules does it say that it does not need any seizure receipt? You look at your rules. You point out the rules. You take out your rules and then you point out. Do you have the rules? xxxx Atty. Luego: Your Honor, there was no seizure receipt, but during the apprehension, Your Honor, there was no claimant. Judge Paderanga: Answer me. Is there a seizure receipt? Atty. Luego: But during the apprehension, Your Honor, no owner has [sic] appeared. xxxx Atty. Luego: According to [the] rules, Your Honor, if there is no... Judge Paderanga: Whom are you seizing it from? To [sic] whom are you taking it from?

Atty. Luego: From the shipping company, Your Honor. xxxx Atty. Luego: Your Honor please, the shipping company denied the ownership of that lumber. xxxx Atty. Luego: But the shipping company, Your Honor,... Judge Paderanga: Shut up. Thats baloney. You are seizing it from nobody. Then how can you seize it from the shipping company. Are you not? You are a lawyer. Who is in possession of the property? The shipping company. Why did you not issue [a] seizure receipt to the shipping company? Atty. Luego: But the... May I continue, Your Honor? xxxx Judge Paderanga: Stop talking about the shipping company. Still you did not issue a seizure receipt here. Well, Im telling you you should have issued [a] seizure receipt to the shipping company. xxxx Judge Paderanga: You are a lawyer. You should know how to write pleadings. You write the pleadings the way it should be, not the way you think it should be. Atty. Luego: Im sorry, Your Honor. Judge Paderanga: You are an officer of the court. You should be careful with your language. You say that I am wrong. Its you who are [sic] wrong because you do not read the law. xxxx Judge Paderanga: Then you read the law. How dare you say that the Court is wrong. xxxx Judge Paderanga: Are you not representing [the DENR]? Atty. Luego: Yes, in this case, Your Honor. Judge Paderanga: Then you are representing them. They are your clients. What kind of a lawyer are you?32 xxxx Atty. Tiamson: Specifically it was stated in the [Factoran] versus Court of Appeals [case] that the Court should not interfere, Your Honor. Judge Paderanga: No. xxxx

Judge Paderanga: The problem with you people is you do not use your heads. Atty. Tiamson: We use our heads, your Honor. xxxx Atty. Tiamson: Your Honor, we would like to put on record that we use our heads, your Honor.33 (Emphasis ours) Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that judges shall be patient, dignified, and courteous in relation to lawyers. Rule 3.04, Canon 3 of the Code of Judicial Conduct states that judges should be patient and courteous to lawyers, especially the inexperienced. They should avoid the attitude that the litigants are made for the courts, instead of the courts for the litigants. Judicial decorum requires judges to be temperate in their language at all times. They must refrain from inflammatory, excessively rhetoric, or vile language.34 They should (1) be dignified in demeanor and refined in speech; (2) exhibit that temperament of utmost sobriety and self-restraint; and (3) be considerate, courteous, and civil to all persons who come to their court.35 In Juan de la Cruz v. Carretas,36 the Court held that: A judge who is inconsiderate, discourteous or uncivil to lawyers x x x who appear in his sala commits an impropriety and fails in his duty to reaffirm the peoples faith in the judiciary. He also violates Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary. xxxx It is reprehensible for a judge to humiliate a lawyer x x x. The act betrays lack of patience, prudence and restraint. Thus, a judge must at all times be temperate in his language. He must choose his words x x x with utmost care and sufficient control. The wise and just man is esteemed for his discernment. Pleasing speech increases his persuasiveness. Equanimity and judiciousness should be the constant marks of a dispenser of justice. A judge should always keep his passion guarded. He can never allow it to run loose and overcome his reason. He descends to the level of a sharp-tongued, ill-mannered petty tyrant when he utters harsh words x x x. As a result, he degrades the judicial office and erodes public confidence in the judiciary. Judge Paderangas refusal to consider the motion to quash the writ of replevin, repeated interruption of the lawyers, and utterance of "shut up," "thats baloney," "how dare you say that the court is wrong," "what kind of a lawyer are you?," and "the problem with you people is you do not use your heads" are undignified and very unbecoming a judge. In Office of the Court Administrator v. Paderanga,37 the Court already reprimanded Judge Paderanga for repeatedly saying "shut up," being arrogant, and declaring that he had "absolute power" in court. He has not changed. Section 8, Rule 140 of the Rules of Court classifies gross ignorance of the law as a serious offense. It is punishable by (1) dismissal from the service, forfeiture of benefits, and disqualification from reinstatement to any public office; (2) suspension from office without salary and other benefits for more than three months but not exceeding six months; or (3) a fine of more than P20,000 but not exceeding P40,000.38 Section 10 of Rule 140 classifies conduct unbecoming a judge as a light offense. It is punishable by (1) a fine of not less than P1,000 but not exceeding P10,000; (2) censure; (3) reprimand; or (4) admonition with warning.39 The Court notes that this is Judge Paderangas third offense. In Office of the Court Administrator v. Paderanga,40the Court held him liable for grave abuse of authority and simple misconduct for unceremoniously citing a lawyer in contempt while declaring himself as having "absolute power" and for repeatedly telling a lawyer to "shut up." InBeltran, Jr. v. Paderanga,41 the Court held him liable for undue delay in rendering an order for the delay of nine months in resolving an amended formal offer of exhibits. In both cases, the Court sternly warned Judge Paderanga that the commission of another offense shall be dealt with more severely. The

instant case and the two cases decided against him demonstrate Judge Paderangas arrogance, incorrigibility, and unfitness to become a judge. Judge Paderanga has two other administrative cases pending against him one42 for gross ignorance of the law, knowingly rendering an unjust judgment, and grave abuse of authority, and the other43 for gross misconduct, grave abuse of authority, and gross ignorance of the law. The Court will not hesitate to impose the ultimate penalty on those who have fallen short of their accountabilities. It will not tolerate any conduct that violates the norms of public accountability and diminishes the faith of the people in the judicial system.44 WHEREFORE, the Court finds Judge Maximo G.W. Paderanga, Regional Trial Court, Branch 38, Cagayan de Oro City, GUILTY of GROSS IGNORANCE OF THE LAW and UNBECOMING CONDUCT. Accordingly, the CourtDISMISSES him from the service, with forfeiture of all retirement benefits, except accrued leave credits, and with prejudice to reinstatement or appointment to any public office, including government-owned or controlled corporations. SO ORDERED. G.R. No. 180666 February 18, 2009

LEODEGARIO R. BASCOS, JR. and ELEAZAR B. PAGALILAUAN, Petitioners, vs. ENGR. JOSE B. TAGANAHAN and OFFICE OF THE OMBUDSMAN, Respondents. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court challenging the Decision2dated 28 May 2007 and the Resolution3 dated 20 November 2007 of the Court of Appeals in CA-G.R. SP No. 92533. In its assailed Decision, the appellate court affirmed the Decision4 dated 19 July 2005 and the Order5dated 20 October 2005 of the Office of the Ombudsman in OMB-C-A-02-0379-I, which found herein petitioners Leodegario R. Bascos, Jr. (Bascos) and Eleazar B. Pagalilauan (Pagalilauan) guilty of Dishonesty and sentenced them to a penalty of dismissal from service. The assailed Resolution of the appellate court denied petitioners Motion for Reconsideration of its earlier Decision. The antecedents of the case, both factual and procedural, are set forth hereunder. The Contract On 14 December 2000, a Contract for the Supply, Delivery, Installation and Commissioning of Two (2) Units [of] 2.5 Tons Per Hour Rice Mill[s]6 (Contract) was entered into by the National Food Authority (NFA), represented by Acting Administrator Domingo F. Panganiban, as purchaser, and Alheed International Trading Corporation (Alheed Corp.), represented by its President Herculano C. Co, Jr., as supplier. The Contract provided, inter alia, that Alheed Corp. shall supply, deliver, install, test and commission two units of rice mills, including their standard tools, equipment and accessories, for a total contract price of P19,398,042.00. Seventy percent (70%) of the contract price shall be paid by the NFA upon the delivery of the equipment at the site, and the submission of delivery receipt(s)/original invoice(s) and of proof of payment of customs duties; while the remaining thirty percent (30%) shall be paid after the installation, testing, and commissioning of the equipment, and the issuance by the appropriate NFA Field Office of a Certificate of Final Acceptance upon the submission by Alheed Corp. of other documents which may be required. The requirements which Alheed Corp. must submit, before the appropriate NFA Field Office shall issue the Certificate of Final Acceptance, were identified as follows:

(1) Certificate of Final Acceptance by the Technical Services Directorate [TSD]7; (2) Certificate of conformity to specifications and inspection report by the TSD Project Engineer at the site; (3) Guarantee Bond posted by Alheed International Trading Corporation in favor of NFA in the amount equivalent to 10% of the Contract Price with a statement under oath of full payment of premium which shall be effective within a period of one year from the final acceptance. The payments to be made in favor of Alheed Corp. under the Contract shall be subject to NFA accounting and auditing rules and regulations. The Contract further provided that the labor materials, equipment, delivery and installation at the site, as well as the testing and commissioning of the rice mills, shall be undertaken by Alheed Corp. at its own account. Commissioning was defined therein as the completion of the mechanical and electrical systems of the rice mills, tested with and without load at the appropriate NFA Field Office. The testing with load shall be conducted for at least eight hours of continuous operation for three times. Special provisions were also incorporated in the Contract. One of these special provisions stated that no substitution of materials or equipment including brand and type shall be made, unless otherwise approved in writing by the purchaser NFA, as represented by its Administrator; and another which provided that the duly authorized representative of the purchaser may, at any time, inspect the basic unit as well as the progress of the installation. Said inspection shall not be interpreted as exempting or diminishing the liability of the supplier Alheed Corp. as provided in the Contract. Per the Contract, the two rice mills were initially set to be supplied and installed by Alheed Corp. at the NFA grain centers that were being constructed at Talavera, Nueva Ecija and Sablayan, Mindoro Occidental. Instead, the rice mills were eventually installed at San Jose, Occidental Mindoro and Pili, Camarines Sur. The Complaint-Affidavit On 23 August 2002, private respondent Jose B. Taganahan (Taganahan), an Engineer-III (with Salary Grade 19) at the TSD of NFA, filed a Complaint-Affidavit8 with the Office of the Ombudsman in connection with the allegedly anomalous acceptance and full payment of the two rice mills installed in San Jose, Occidental Mindoro and in Pili, Camarines Sur. The Complaint-Affidavit charged (1) herein petitioner Bascos, in his capacity as Director of the TSD (Salary Grade 26); (2) herein petitioner Pagalilauan, in his capacity as the Chief Grains Operations Officer (Salary Grade 24) of the NFA; (3) Tomas R. Escarez (Escarez), in his capacity as Provincial Manager (Salary Grade 24) of the NFA for the province of Occidental Mindoro; and (4) Alheed Corp., represented by its President Heculano C. Co, Jr., with Falsification of Public Documents, violation of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act), violation of Republic Act No. 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees), and Perjury. Taganahan related that from 30 June to 6 July 2001, he went on an official travel to San Jose, Occidental Mindoro, to conduct the test-milling of a newly installed 2.5 ton per hour (TPH) rice mill. Upon returning to the NFA Central Office in Quezon City, Taganahan submitted on 9 July 2001 a Travel Accomplishment Report9 to petitioner Bascos, then TSD Director, through Acting Facility Installation and Maintenance Division (FIMD) Chief Ramoncito Padilla. Taganahan reported that: (1) the test milling could not be conducted on the newly installed rice mill because the electric generator at the site broke down during the initial hour of the rice mill operation; (2) some rice mill components which should be installed were either undelivered or uninstalled; and (3) some of the installed rice mill components did not conform with the plans and specifications. Based on the foregoing, Taganahan recommended that the payment of the thirty percent (30%) balance of the contract price of the rice mill be deferred until: (1) the supplier, Alheed Corp., shall have completed the delivery and installation of the rice mill components according to plans and specifications; (2) the rice mill commissioning, through proper milling tests, had been successfully completed; and (3) the training of NFA technicians and other contractual obligations of Alheed Corp. had been fully complied with.

The above violations notwithstanding, petitioners Bascos and Pagalilauan still submitted to the NFA Accounting Department on 3 July 2001 the voucher10 for the full payment of the rice mill installed at San Jose, Occidental Mindoro. Attached to the voucher were the following allegedly spurious documents, viz: a) Certificate of Inspection11 dated June 11, 2001 xxx signed by [herein petitioner] Eleazar B. Pagalilauan (who misrepresented himself as a "TSD Engineer," despite the fact that he never passed any board examination for engineers), falsely certifying to the complete installation of [the] contracted [rice mill]; b) Accomplishment Report12 dated 13 June 2001 xxx prepared by [petitioner] Eleazar B. Pagalilauan (who misrepresented himself this time as "Project Manager," despite the fact that such was not his position or designation), and duly noted by [herein petitioner] Leodegario R. Bascos, Jr., falsely certifying to the alleged 100% delivery and installation of the contracted [rice mill]; c) Certificate of Conformity to Specifications13 dated June 14, 2001 x x x issued by [petitioner] Leodegario R. Bascos, Jr., falsely attesting to the 100% installation of the [rice mill], and to its conformity with all specifications; and d) Letter14 of [Herculano C. Co, Jr.], dated June 05, 2002 xxx, addressed to then NFA Administrator Edgar S. Asuncion, falsely stating that Alheed Corp. had successfully installed and commissioned the Buivanngo [rice mill] at San Jose, Occidental Mindoro, and requesting payment of the 30% balance of the contract amount. Attached to the voucher were a Certificate of Complete Installation, Commissioning and Final Acceptance,15 dated 20 July 2001, signed by Escarez as NFA Provincial Manager for Occidental Mindoro, falsely certifying the complete installation and commissioning of the rice mill at San Jose, Occidental Mindoro. On the basis of the aforementioned documents, the check payment for the balance of the contract price of the rice mill was released in favor of Alheed Corp. on 17 August 2001. Taganahan claimed that the Certification dated 20 July 2001 by Escarez was spurious considering that the latter even sent a radio message16 to petitioner Bascos on 4 July 2001, stating that the test milling of the rice mill in San Jose, Occidental Mindoro could not proceed as scheduled because the electric generator malfunctioned during the test run. Subsequently, Escarez sent a fax message, dated 26 September 2001 and addressed to Melvin Co of Alheed Corp., which scheduled the commissioning of the said rice mill on 27 to 29 September 2001, or more than two months after Escarez certified that the rice mill was already duly commissioned. Taganahan asserted that the findings in his report were bolstered by an audit report IAS No. H-00617 dated 6 September 2001 of the Internal Audit Services (IAS) Department of the NFA, submitted to the NFA Administrator, which cited many violations of the Contract and the plans and specifications relative to the supply and installation of the rice mills in question. In reply to the audit report, petitioner Bascos sent a Memorandum18 dated 22 November 2001 to the NFA Administrator, untruthfully declaring therein that Alheed Corp. had complied with all the requirements of the Contract as certified by TSD Engineers. Taganahan averred, however, that contrary to petitioner Bascos claims, there was actually no issuance from any of the TSD Engineers certifying the completeness of the delivery, installation, and commissioning of the rice mill; hence, petitioner Pagalilauan "unprofessionally and anomalously" signed the needed certifications himself, as "TSD Engineer" in one and as "Project Manager" in another, attesting that the project had been completed. Insofar as the other rice mill was concerned, Taganahan asseverated that petitioner Pagalilauan inveigled TSD Engineers Bobby Quilit and James Vincent Del Valle to sign the pre-dated certifications of the supposedly complete installation of the rice mill in Pili, Camarines Sur and its conformity to NFA specifications. Subsequently, the IAS submitted another audit report, IAS No. A-002 dated 7 January 2002, which cited thirteen (13) other violations of the Contract and of the NFA specifications. Taganahan maintained that the second audit report, in effect, confirmed his allegations of the various violations of the Contract committed by Alheed Corp.

On account of the allegations in Taganahans Complaint-Affidavit, an administrative case for Dishonesty and Grave Misconduct, docketed as OMB-C-A-02-0379-I,19 was filed against petitioners Bascos and Pagalilauan, as well as Escarez. Decision of the Office of the Ombudsman On 19 July 2005, the Office of the Ombudsman promulgated its Decision20 in OMB-C-A-02-0379-I, making the following findings: Initially, this Office finds the absence of enough proof to hold the herein respondents responsible for the irregularities committed in the installation of the [rice mill] at Pili, Camarines Sur. Worth mentioning herein is the observation that the certificates relative to the completion of the project thereat were issued by the officials at the NFA Office therein. Hence, the anomaly therein, if any, is the responsibility of the latter. Viewed therewith, this Office in the instant decision shall deal solely on the alleged irregularities committed in the execution of the project for the installation of [the rice mill] at San Jose, Occidental Mindoro, and in the claimed anomalous full payment of the contract amount to Alheed Corporation. Significantly, [herein petitioner] Bascos is being held liable herein for the issuance of the Certificate of Conformity to Specifications on June 14, 2001, attesting to the 100% delivery and installation of the [rice mill] as of June 5, 2001, while [herein petitioner] Pagalilauan for his Certificate of Inspection, dated June 11, 2001, certifying to the supply, delivery, installation and commissioning of the [rice mill], and its compliance with the contract specifications, as per the inspection conducted on June 9, 2001, and finally, Escarez for having signed the Certificate of Complete Installation, Commissioning and Final Acceptance, dated July 20, 2001, of Acting Plant Engineer Agosto Quijano in the "Noted" portion thereof. Ruling on this case, records revealed that [petitioners] Bascos and Pagalilauan in their issuances committed falsification by causing it to appear in their individual certifications that the newly installed [rice mill] at the NFA San Jose Office in issue had been inspected and found in conformity with the NFA approved specifications, knowing fully (sic) well that the supplier, Alheed Corporation, violated certain provisions of the contract and/or committed deviations thereof without the approval of the NFA Administrator.21 (Emphasis ours.) The Office of the Ombudsman noted more specifically the transgressions committed by petitioners Bascos and Pagalilauan: The deficiencies/defects in the project were made known to [herein petitioner] Bascos prior to the release of the full payment to Alheed Corporation on August 17, 2001. Supporting the same was the observation that FIMD Officer-In-Charge Ramoncito Padilla in a letter, dated June 15, 2001, to [petitioner] Bascos submitted the [Travel/ Project Accomplishment Report] of TSD Engineers Carlito Castro and Placido Asprec who supervised the electro-mechanical works and installation of the [rice mill]. Apparently, the undelivered items and some unauthorized deviations from the contract specifications of Alheed Corporation in violation of the contract had been formally reported to [petitioner Bascos]. However, the former instead of preventing further damage to the government still allowed the release of the payment to Alheed Corporation. x x x. The letter of advise (sic), dated July 16, 2001, of [petitioner] Bascos to Alheed Corporation, informing the latter of the alleged installation of undersized wiring in the [rice mill] subject hereof, and Alheed Corporations replyletter thereto of July 17, 2001, explicitly revealed the absence of any correction made therein. Let it be noted that Alheed Corporation in the said letter merely took upon itself the responsibility to answer for any damage which maybe (sic) caused by the alleged undersized wiring. Thus, [the same] can be treated as an express admission of defiance to the contract. Moreover, the admission (sic) of [herein petitioners] Bascos and Pagalilauan in their counter-affidavits of noncompliance with the test milling requirement for at least eight (8) hours continuous operation for three (3) times as provided in the contract tacitly established the fact that they have full knowledge of the deviations from the NFA approved specifications.

xxxx Emphasis is made on the fact that the issuance of the Certificate of Conformity to Specification presupposes actual inspection and testing of the equipment. In the case at bar[,] the discovery of the defects in the contested installation after the issuance thereof clearly revealed absence of actual inspection of the project. Considering the same, therefore, the issuances of [petitioner] Bascos, dated July 14, 2001, and [petitioner] Pagalilauan, dated June 11, 2001, are irregular. [Petitioner] Pagalilauans administrative liability herein was even bolstered by the established fact that he acted in two (2) capacities in the preparation and submission of the required documents to facilitate the payment to Alheed Corporation, i.e., as the TSD Engineer in the Certificate of Inspection and as Project Manager in the report on the project completion, the authority to act as such not having been entrenched with sufficient proofs (sic). Further substantiating the foregoing observation is the undisputed fact that while it is true that the IAS Report No. H-006, dated September 6, 2001, of the NFA Internal Audit Services stating certain deficiencies and/or defects in the implementation of the project in question had been answered by [petitioner] Bascos in his Memorandum to the NFA Administrator, dated November 22, 2001, however, (sic) the subsequent report of the same unit containing the same observations showed that the justifications of respondent Bascos therein did not satisfactorily explain the reported irregularities committed in the execution of the project. Exemplifying the same are the IAS findings contained in its second report, coded as IAS Report No. A-002, dated January 7, 2002, to wit: "FINDINGS NON-CONFORMITY WITH SOP GS-PD15 1. Purchase of two units rice mill was not referred to IAS for Technical Inspections. xxxx Under its Implementing Guidelines, No. 22 of the General Policies of SOPGS-PD15 (sic) states that: "All purchases/fabrication shall be subject to technical inspection by the Technical Inspection Unit, Internal Audit Services (TIU-IAS) and final acceptance by the requisitioning office." The contract for the purchase of two units rice mills was consummated and fully paid even without the technical inspection by the [TIU-IAS] in violation of the foregoing provision. xxxx IAS position is buttressed by the fact that the contract states that all payments shall be subject to NFA accounting and auditing procedures and as such should conform to the expense (sic) mandate of SOP GSPD15. xxxx COMPLIANCE WITH CONTRACT AND TECHNICAL SPECIFICATIONS 1. Non-delivery of One (1) Unit Bucket Elevator 140/5m. During the inspection, it was noticed that three (3) units [were] installed at the site. However, when cross checked with the breakdown of the bid at Alhud (sic), item No. 26 Bucket Elevator 140/5m, [showed] an original quantity of four (4) units. Apparently, there was an erasure appearing in the face of the document reflecting therein three (3) units instead of 4 without the corresponding reduction as to the amount.

xxxx 3. Change in the dimensions of the Bran Room The Bran Room dimensions were changed from twelve (12) meters by six (6) meters to ten (10) meters by five (5) meters which change was only approved by the TSD Director and not by the proper approving authority, the Administrator. Likewise, a corresponding reduction in cost should be made. 4. Use of Undersized Wiring 1. [It] was also found out that the wire used for the 40 HP motor of mist polisher CB-2EB and whitener CDE40A were undersized x x x. xxxx 6. Replacement of One (1) Unit Bran Sieve without prior approval of the Administrator: TSD approved the request of the supplier to replace the Bran Sieve with Dust Filter Cyclone with Exhauster, which according to them the replacement will improve the efficiency of the rice mill. However, it did not seek prior approval from the Administrator. 7. Non-Compliance with the training requirement under the contract. Inspection revealed that the required training of NFA concerned personnel has not been undertaken by the supplier. xxxx 11. Non-Conformity with the Grading Section Specification. xxxx Under NFA Specifications, the grading of rice is by indented cylinder. Two indented cylinder grades is (sic) mounted [atop] the grading tank. x x x. Based in the as-built plan, there is only one indented cylinder." xxxx The abovestated (sic), IASs findings appeared to be unrefuted for failure of [petitioners] Bascos and Pagalilauan to either sufficiently controvert the same or justify the deficiencies found in the project. Hence, it (sic) stand.22 According to the Office of the Ombudsman, the actuations of petitioners Bascos and Pagalilauan, as described above, constituted dishonesty: Before making a pronouncement on the liability of the [petitioners], it is important to make a clear definition of Dishonesty as an administrative offense. Section 8 of Presidential Decree No. 971, adopted by the Civil Service Commission [CSC] in its Resolution No. 97-0799 of January 28, 1997, defined the offense as the "concealment or distortion of the truth in a matter of fact relevant to ones office or connected with the performance of his duties." As further held by the CSC in its Resolution No. 00-0821, dated March 28, 2000, "dishonesty as a censurable conduct assumes greater meaning when the offender is a public officer who is circumscribed with a heavy burden of responsibility to the public, and whose conduct must at all times be impressed with decency, decorum and propriety."

Premised on the observations of this Office and the undisputed findings of the NFA Internal Audit Services, this Office concludes that [herein petitioners] Bascos and Pagalilauan by issuing the Certificate of Conformity with the Specifications and Certificate of Inspection, respectively, to facilitate the full payment of the contract amount to Alheed Corporation, despite full knowledge of lack of actual inspection conducted on the equipment and its non-conformity with the contract specifications, are liable for Dishonesty. x x x.23 However, as regards the alleged liability of Escarez, the Office of the Ombudsman adjudged: Lastly, on the issuance of the Certificate of Complete Installation, Commissioning and Final Acceptance, dated July 20, 2001 by Plant Engineer Agosto Quijano, this Office is of the considered view that the signing of [Escarez] in the "Noted" portion thereof merely serves as an acknowledgment of the notice given to him on the development in the project. The disputed certification can speak for itself that it was done and issued by another. Good faith can likewise be appreciated in his favor as evidenced by his subsequent acts of informing all concerned, including [herein petitioner] Bascos and Alheed Corporation, on the new schedule for the commissioning of the [rice mill]. Thus, negating intent to conceal the truth. Based thereon, the exoneration of [Escarez] herein is warranted.24 In the end, the Office of the Ombudsman decreed: WHEREFORE, premises considered, and finding [herein petitioners] TSD Director LEODEGARIO R. BASCOS, JR. and Grains Operations Officer ELEAZAR B. PAGALILAUAN, both of the National Food Authority, GUILTY OF DISHONESTY, they should be meted the penalty of DISMISSAL FROM THE SERVICE, pursuant to Section 52 (A) (1) of Rule IV of the Uniform Rules on Administrative Cases. Finding [Provincial Manager] TOMAS R. ESCAREZ of NFA San Jose, Occidental Mindoro, to be not guilty of the offense charged, the complaint against him is, as it is hereby, DISMISSED. Let a copy of this Decision be furnished the Office of the Administrator of the National Food Authority for proper implementation upon finality hereof.25 (Emphasis ours.) Petitioners filed an Omnibus Motion for Reconsideration and/or Reinvestigation,26 but the same was denied by the Office of the Ombudsman in an Order27 dated 20 October 2005. Petitioners then filed before the Court of Appeals a Petition for Review28 under Rule 43 of the Rules of Court, contesting the judgment against them of the Office of the Ombudsman in OMB-C-A-02-0379-I. Their Petition was docketed as CA-G.R. SP No. 92. In a Resolution29 dated 18 January 2006, the Court of Appeals dismissed the Petition, inasmuch as its Verification and Certification of Non-Forum Shopping was signed only by petitioner Pagalilauan, and there was no attached document to prove that petitioner Bascos had authorized the former to sign on his behalf. On 6 February 2006, petitioner Pagalilauan filed a Motion for Reconsideration30 of the 18 January 2006 Resolution, explaining that his co-petitioner Bascos had gone to the United States of America in the middle of November 2005 to undergo medical check-up and treatment. Petitioner Bascos had not returned since then. When Pagalilauan received, on 7 December 2005, the Order dated 20 October 2005 of the Office of the Ombudsman denying their Omnibus Motion for Reconsideration and/or Reinvestigation, he informed petitioner Bascos of the same only by telephone and other means of communication. Despite the physical absence of petitioner Bascos, petitioner Pagalilauan claimed that the former had a hand in the preparation and the filing of their Petition for Review before the Court of Appeals. In a Resolution31 dated 15 February 2006, the Court of Appeals ordered petitioner Pagalilauan to submit, within fifteen (15) days from notice, a written authorization duly executed by petitioner Bascos, empowering petitioner Pagalilauan to execute the Verification and Certification of Non-Forum Shopping in the Petition on Bascoss behalf. The Court of Appeals further required that petitioner Bascos written authorization be duly authenticated by the proper consular officer of Philippines in the United States of America where he was staying.

On 6 March 2006, petitioners Bascos and Pagalilauan filed their Compliance32 with the 15 February 2006 Resolution of the Court of Appeals. In lieu of a written authorization, petitioner Bascos himself signed the required Verification and Certification of Non-Forum Shopping, having arrived from the United States of America on 7 February 2006. Resultantly, in an Order33 dated 20 March 2006, the Court of Appeals set aside its Resolution dated 18 January 2006 and reinstated the Petition. Procedurally, the Court of Appeals initially declared that petitioners failed to exhaust administrative remedies before filing their Petition under Rule 43. Section 11 of Republic Act No. 677034 states that the Ombudsman has the power of control and supervision over the Offices of the Ombudsmen. Such being the case, the Decision dated 19 July 2005 rendered by the Overall Deputy Ombudsman should have been questioned first before the Ombudsman prior to the filing of a Petition for Review under Rule 43 before the Court of Appeals. The Court of Appeals also ruled that the 19 July 2005 Decision of the Office of the Ombudsman was supported by substantial evidence. The appellate court cited with favor the following pieces of evidence that the Office of the Ombudsman considered in its Decision: (1) the Accomplishment Report of TSD Engineers Castro and Asprec, who supervised the electro-mechanical works and installation of the rice mill; (2) the Travel Report prepared by Taganahan dated 9 July 2001; (3) the letter of advise (sic) dated 16 July 2001 of Bascos to Alheed Corp., informing the latter of the alleged installation of undersized wirings, and the reply-letter of Alheed Corp. thereto dated 17 July 2001; (4) the admissions of petitioners Bascos and Pagalilauan in their Counter-Affidavits of non-compliance with the testing requirement for the rice mill of at least eight hours continuous operation for three times, as provided in the Contract; (5) IAS Report No. H-006 dated 6 September 2001; and (6) IAS report No. A-002 dated 7 January 2002. Thereupon, on 28 May 2007, the Court of Appeals promulgated its assailed decision, affirming the ruling of the Office of the Ombudsman in this wise: WHEREFORE, the petition is DISMISSED. The assailed Decision of the Office of the Ombudsman dated July 19, 2005 finding petitioners guilty of Dishonesty under Civil Service law and implementing rules and penalizing them with dismissal from service, as well as its Decision dated October 20, 2005 denying herein petitioners motion for reconsideration, are AFFIRMED.35 In the assailed Resolution36 dated 20 November 2007, the Court of Appeals denied the Motion for Reconsideration37 of petitioners Bascos and Pagalilauan. Petitioners, thereafter, elevated their case to us via the instant Petition for Review on Certiorari, raising the following issues for our consideration: I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT AFFIRMED THE DECISION OF THE OFFICE OF THE OMBUDSMAN BY SUSTAINING THE UNSUBSTANTIATED ALLEGATIONS OF THE PRIVATE COMPLAINANT, CONTRARY TO LAW AND EXISTING JURISPRUDENCE. II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT DISMISSED THE PETITION FOR REVIEW DATED 04 JANUARY 2006 ON THE GROUND OF FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. Petitioners Bascos and Pagalilauan contend that it was error for the Court of Appeals to affirm the decision of the Office of the Ombudsman, which sustained the unsubstantiated allegations of Taganahan. They believe that the findings of fact of the Office of the Ombudsman, regarding the falsity of the Certificate of Conformity to

Specifications dated 14 June 2001 and the Certificate of Inspection dated 11 June 2001, do not conform to the evidence on record. Both Taganahan and the Office of the Ombudsman should not have relied heavily on the IAS reports, inasmuch as the same had already been sufficiently answered and the IAS did not have technical knowledge of the specifications of a rice milling system to begin with, they being mere accountants, not engineers like petitioners. Petitioners Bascos and Pagalilauan even lament the fact that the IAS allegedly did not give them a chance to explain their side despite their desire to do so. Petitioners Bascos and Pagalilauan maintain that the certifications they signed were based on authentic documents, and that they were not aware of the total lack of actual inspection conducted on the equipment and its non-conformity with the Contract specifications, since the Certificate of Inspection was issued by petitioner Pagalilauan on 11 June 2001, while the reports on the alleged non-conformity with the plans were submitted only on 15 June 2001. As regards the ruling of the Court of Appeals that they failed to exhaust administrative remedies before seeking judicial intervention, petitioners Bascos and Pagalilauan argue that they seasonably filed an Omnibus Motion for Reconsideration and/or Reinvestigation before the Office of the Ombudsman and it was only upon the denial thereof that they filed their Petition for Review under Rule 43 with the Court of Appeals. Also, Republic Act No. 6770 and its implementing rules do not provide that the decision of the Overall Deputy Ombudsman is appealable to the Ombudsman. Prefatorily, we agree with petitioners Bascos and Pagalilauan that, contrary to the pronouncement of the Court of Appeals, they have indeed exhausted their administrative remedies before they elevated their case to the appellate court, in accordance with the relevant rules of procedure38 of the Office of the Ombudsman. Verily, the records indicate that when petitioners received the decision of the Office of the Ombudsman which was unfavorable to them, they correctly filed their Omnibus Motion for Reconsideration and/or Reinvestigation. Upon the denial of the said motion, petitioners instituted a petition under Rule 43 before the Court of Appeals. We now proceed to the substantive merits of the case. After carefully evaluating the instant Petition, we find that the vital issue which we must resolve is whether the administrative liability of the petitioners for dishonesty was adequately established by substantial evidence. We rule in the affirmative. In administrative and quasi-judicial proceedings, only substantial evidence is necessary to establish the case for or against a party. Substantial evidence is more than a mere scintilla of evidence. It is that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion,39 even if other minds, equally reasonable, might conceivably opine otherwise.40 Elementary is the rule that the findings of fact of the Office of the Ombudsman are conclusive when supported by substantial evidence and are accorded due respect and weight, especially when they are affirmed by the Court of Appeals. It is only when there is grave abuse of discretion by the Ombudsman that a review of factual findings may aptly be made.41 In reviewing administrative decisions, it is beyond the province of this Court to weigh the conflicting evidence, determine the credibility of witnesses, or otherwise substitute its judgment for that of the administrative agency with respect to the sufficiency of evidence.42 It is not the function of this Court to analyze and weigh the parties evidence all over again except when there is serious ground to believe that a possible miscarriage of justice would thereby result.43 Although there are exceptions44 to this rule, we find the same to be inapplicable to the instant case. In the case at bar, the Office of the Ombudsman pronounced that the liability of petitioners Bascos and Pagalilauan for the administrative offense of dishonesty was proven by substantial evidence. The Office of the Ombudsman adjudged that petitioners Bascos and Pagalilauan committed misrepresentation when they imprudently signed the Certificate of Conformity to Specifications dated 14 June 2001 and the Certificate of Inspection dated 11 June 2001, respectively, only for the matters they attested to therein to be later disproved and controverted by documents and circumstances that tell an entirely different story. The Certificate of Conformity to Specifications45 dated 14 June 2001 executed by petitioner Bascos is as follows:

CERTIFICATE OF CONFORMITY TO SPECIFICATIONS This is to certify that the Alheed International Trading Corporation have delivered and installed 100% accomplishment of the 2.5 TPH Rice Mill for NAWACO I, San Jose, Occidental Mindoro on June 5, 2001 per attached accomplishment report no. 2, which was certified and inspected by the TSD inspector at the site. This certification is issued for billing purposes by the Alheed International Trading Corporation. Certified Correct: (signed) LEODEGARIO R. BASCOS, JR. Director, TSD (Emphasis ours.) On the other hand, the Certificate of Inspection46 dated 11 June 2001 of petitioner Pagalilauan reads: CERTIFICATE OF INSPECTION This is to certify that one (1) unit 2.5 TPH Buivanggo [Rice mill] supplied, delivered, installed and commissioned by Alheed International Trading Corporation at San Jose, Occidental Mindoro has been inspected on June 9, 2001 and found to be in accordance with the NFA specifications. This certification is issued in accordance with the contract provisions, only for billing purposes. Issued on June 11, 2001. (signed) ELEAZAR B. PAGALILAUAN TSD Engineer (Emphasis ours.) As pointed out by the Office of the Ombudsman, as early as 15 June 2001, the Travel/Project Accomplishment Report47 of TSD Engineers Castro and Asprec informed petitioner Bascos of some of the irregularities regarding the installation of the rice mill in San Jose, Occidental Mindoro. Itemized in the report were the goods or materials that were undelivered or were, otherwise, delivered in excess, the costs of which were then to be shouldered by the NFA. Also included in said report was a list of some equipment the actual specifications of which were different from those indicated in the Bid Proposal of Alheed Corp. After being subsequently apprised of the possible violations of the Contract and the deviations from the NFA specifications for the rice mills, petitioners still failed to cause the deferment of the payment of the remaining 30% of the contract price to Alheed Corp. Instead, petitioners allowed the final payment to proceed on 17 August 2001 on the basis of their apparently erroneous (if not false) certificates, thus, causing damage to the government. Similarly, the Office of the Ombudsman noted that in the audit report IAS No. H-00648 dated 06 September 2001, certain procedural oversights appeared to have been committed in the implementation of the Contract, contrary to its specific terms. Particularly, in the conduct of its audit, the IAS observed that the payment of the contract price was consummated without first coursing the documents to IAS, which was in violation of the provision subjecting all payments made under the Contract to NFA accounting and auditing procedures. On 22 November 2001, petitioner Bascos sent a Memorandum49 to the NFA Administrator, seeking to clarify and refute the contents of the audit report IAS No. H-006. The Office of the Ombudsman ruled, however, that the justifications put forward by petitioner Bascos proved to be unsatisfactory, given that the IAS submitted another audit report, IAS No. A-00250 dated 7 January 2002, to the NFA Administrator, which incorporated the

same findings contained in the previous audit report. The second audit report also included additional observations and findings of violations of the Contract. Moreover, petitioner Bascos, in his Counter-Affidavit51 before the Office of the Ombudsman, neither confirmed nor denied that the required testing of the rice mill for a period of at least eight hours of continuous operation for three times was not complied with. Petitioner Pagalilauan, on the other hand, admitted in his CounterAffidavit52 that the testing requirement as provided in the Contract with Alheed Corp. was not observed, but, in place thereof, the evaluation team that conducted the testing allegedly followed the NFA standard test milling of two hours per batch. Clearly, the actions of the evaluation team were in clear contravention of the explicit terms of the Contract.
1avv phi1

On the basis of the aforementioned evidence and circumstances, the Office of the Ombudsman ruled, and the Court of Appeals affirmed, that petitioners Bascos and Pagalilauan indeed committed acts of dishonesty. As an administrative offense, dishonesty is defined as the disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or betray.53 It is the concealment or distortion of truth in a matter of fact relevant to one's office or connected with the performance of his duties.54 Dishonesty is considered as a grave offense punishable by dismissal for the first offense under Section 23, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 29255 and Section 52(A)(1), Rule IV of Resolution No. 99-1936.56 It is apparent to us that petitioners Bascos and Pagalilauan signed the Certificate of Conformity to Specifications dated 14 June 2001 and the Certificate of Inspection dated 11 June 2001, respectively, in a hasty and irregular fashion. Their misrepresentations in said certificates that Alheed Corp. had effected 100% delivery and installation of the rice mill in San Jose, Occidental Mindoro, and that the same was duly inspected and found to be in accordance with the NFA specifications, were satisfactorily exposed by evidence to the contrary. Petitioner Pagalilauan himself admits before this Court that he was not aware of the total lack of actual inspection conducted on the equipment and its non-conformity with the Contract specifications, since he executed the Certificate of Inspection on 11 June 2001, ahead of the submission of the report on the alleged non-conformity of the rice mill with the plans on 15 June 2001.57 Such an admission, instead of benefiting petitioner Pagalilauan, actually works against him because it shows that he signed the said Certificate without the complete and necessary information. To certify would be to attest to certain matters or to confirm them as true. Before issuing such certificates, it behooves the public officer to verify the contents thereof, for, undoubtedly, other people would be relying on said certificates for some legal or other purpose. To make matters worse, petitioners Bascos and Pagalilauan failed to prove that they had exercised due diligence by investigating the alleged inconsistencies with and ostensible violations of the provisions of the Contract before facilitating the payment to Alheed Corp. of the balance of the purchase price for the rice mill. What they could only proffer were belated justifications for what they try to downplay as trivial deviations from the Contract. Considering the substantial amount of public funds involved in this Contract, as well as the vital public interest at stake, petitioners as public officials should have exercised more good sense in the performance of their functions in this case. Public service requires utmost integrity and discipline. A public servant must exhibit at all times the highest sense of honesty and integrity, for no less than the Constitution mandates the principle that a public office is a public trust; and all public officers and employees must at all times be accountable to the people and serve them with utmost responsibility, integrity, loyalty and efficiency.58 In fine, the confluence of the foregoing circumstances leads to the inevitable conclusion that petitioners Bascos and Pagalilauan, in signing certifications that contained untruthful statements, were indeed guilty of acts of dishonesty in the exercise of their public functions, thus, warranting their dismissal from the service in accordance with Section 52(A)(1), Rule IV of the Revised Uniform Rules on Administrative Cases in the Civil Service.

WHEREFORE, premises considered, the Petition for Review is hereby DENIED. The Decision dated 28 May 2007 and the Resolution dated 20 November 2007 of the Court of Appeals in CA-G.R. SP No. 92533 are hereby AFFIRMED. Costs against the petitioners. SO ORDERED. G.R. No. 172585 June 26, 2008

CRISTITA BUSTON-ARENDAIN and HEIRS OF BAUTISTA ARENDAIN represented by CRISTITA BUSTON-ARENDAIN, petitioners, vs. ANTONIA GIL, MIGUEL ANTONIO GIL, MARLYN GIL and MANOLO GIL, respondents. DECISION CHICO-NAZARIO, J.: Assailed in the instant Petition for Review on Certiorari are (1) the Decision1 of the Court of Appeals in CA-G.R. CV No. 63440 dated 20 January 2006 denying the appeal of the petitioners; and (2) the Resolution2 of the same court dated 31 March 2006 denying their Motion for Reconsideration. The antecedent facts of the present case are as follows: On 24 October 1995, herein respondent Antonia Gil (married to the late Miguel Gil) and her children, the herein respondents Miguel Antonio, Marlyn, and Manolo, all surnamed Gil, filed a complaint with the Regional Trial Court (RTC) of Davao City, Branch 16, for the declaration of nullity of titles, quieting of title, recovery of possession, accounting, damages with notice of lis pendens, with prayer for receivership, against spouses Domingo Arendain and Irene Taroy-Arendain (spouses Domingo and Irene); spouses Bautista Arendain and herein petitioner Cristita Buston-Arendain (spouses Bautista and Cristita); the Register of Deeds of Davao City; the Community Environment Natural Resources Office (CENRO), Davao City; and the Director of Lands. Their complaint was docketed as Civil Case No. 23963-95. In their complaint,3 respondents alleged that they are co-owners of parcels of land with a total land area of 50,130 square meters located in Cabantian, Davao City, and covered by the following original certificates of title (OCTs): (1) OCT No. P-6075, in the name of Miguel Gil, covering 25,080 square meters; (2) OCT No. P6079, in the name of Miguel Gil, covering 10,771 square meters; and (3) OCT No. P-6080, in the name of Antonia Gil, covering 14,279 square meters. Respondents averred that Miguel and Antonia acquired their titles as early as 1976. Respondents accused the spouses Domingo and Irene and spouses Bautista and Cristita of fraudulently and maliciously obtaining, sometime in March 1981, the following OCTs: (1) OCT No. 10541, in the name of Domingo Arendain, married to Irene Taroy-Arendain, including therein the lot already registered in the name of respondent Miguel Gil under OCT No. P-6079; and (2) OCT No. P-10522, in the name of Bautista Arendain married to petitioner Cristita Buston-Arendain, covering the same lot registered in the name of respondent Antonia Gil under OCT No. P-6080. Since 1976 up to the present, through threats of bodily harm utilized by the spouses Domingo and Irene and Bautista and Cristita, respondents were illegally deprived of enjoyment and possession over the aforementioned parcels of land. The former being adjacent owners of lands having common boundaries with respondents land, have extended their boundaries and enlarged their parcels of lands by usurping the real rights of ownership/possession of the latter over the said lands. The CENRO, in its answer to respondents complaint, explained that:

4. That there is pending before the DENR-CENRO XI-4C x x x involving Original Certificate of Title No. P-10552, issued in the name of Bautista Arendain, and Original Certificate of Title No. P-6080, issued in the name of Antonia C. Gil; 5. That the administrative case above-mentioned is docketed as Lot No. 7566 (portion of Lot 1080), Cad-102, Cabantian, Davao City, as shown in the enclosed Order of Investigation, dated August 03, 1993, herewith attached as Annex "A"4; 6. That parties were previously sent copies of said Annex "A" but as of date, the Applicant-Patentee Antonia C. Gil has not actively pursued the matter with the DENR, hence, said Office cannot categorically state at this point in time whether or not any of the certificates of title above-mentioned has preference over that of the other pending the termination of administrative proceedings; 7. That the then District Land Officer was Mr. Uldarico G. Aquino at the time Original Certificate of Title No. P-6080 was issued to Antonia C. Gil, whereas the then District Land Officer was Atty. Bienvenido Sambrano at the time Original Certificate of Title No. P-10522 was issued to Bautista Arendain, married to Cristita Buston; 8. That undersigned public respondent has no objection to the pursuit of this case before this Honorable Court provided that Plaintiff Antonia C. Gil submit[s] the necessary manifestation before the DENR-CENRO XI-4C x x x for the withdrawal of the case x x x so that the matter can be singly and fully litigated before this forum only. WHEREFORE, it is respectfully prayed of this Honorable Court that the instant complaint be heard without need of separate administrative proceedings before the DENR-CENRO x x x.5 In their answer6 to respondents complaint, spouses Domingo and Irene and spouses Bautista and Cristita essentially sought the outright dismissal of the same on the grounds that respondents had no cause of action against them and the RTC lacked jurisdiction over the case because respondents had not exhausted all administrative remedies. The case was thereafter called for pre-trial conference. Both spouses Domingo and Irene and spouses Bautista and Cristita failed to file their pre-trial brief and to appear for pre-trial; sequentially, the RTC issued an Order7dated 11 September 1996 declaring them "as in default." The spouses Bautista and Cristita via a Petition for Certiorari8 filed with the Court of Appeals, docketed as CAG.R. SP No. 44118, assailed the issuance by the RTC of the order of default against them. However, in a Decision dated 30 September 1997,9 the appellate court dismissed CA-G.R. SP No. 44118 and affirmed the order of default of the RTC.10 The spouses Bautista and Cristita11 then filed a Petition for Review on Certiorari before this Court, docketed as G.R. No. 131877, challenging the dismissal by the Court of Appeals of their Petition in CA-G.R. SP No. 44118. In a Resolution of this Court dated 18 March 1998,12 G.R. No. 131877 was dismissed since the said appeal was filed beyond the reglementary period13 and the petition failed to sufficiently show that the Court of Appeals had committed any reversible error in rendering the questioned judgment.14 Hence, the proceedings in Civil Case No. 23963-95 resumed. On the basis of the evidence presented by the respondents, the RTC rendered its Decision on 28 October 1998, the dispositive portion of which reads: PREMISES CONSIDERED, judgment is hereby rendered: I DECLARING 1) OCT No. P-10522 in the name of Bautista Arendain as totally null and void;

2) OCT No. P-10541 in the name of Domingo Arendain as null and void but only in so far as it covers/involves or/affects the 10,771 square meters in P-6079; II ORDERING 1) the Register of Deeds of Davao City to cancel totally OCT No. P-10522 and OCT No. P10541 but only in so far as it involves the 10,771 square meters in P-6079; 2) Defendants-spouses Domingo Arendain and Irene Taroy-Arendain and defendantsspouses Bautista Arendain and Cristita Buston Arendain to vacate the parcels of land covered by OCT No. P-6075, P-6079 and P-6080.15 From the foregoing judgment rendered by the trial court, only the spouses Bautista and Cristita filed with the Court of Appeals an appeal docketed as CA-G.R. CV No. 63440. Spouses Domingo and Irene no longer appealed; hence, the RTC Decision dated 28 October 1998 has become final and executory as to them.16 In a Decision dated 20 January 2006, the Court of Appeals denied spouses Bautista and Cristitas appeal, ratiocinating that: As correctly found by the court a quo, OCT No. P-6079 in the name of MIGUEL GIL married to ANTONIA GIL which was transcribed in the registration book for the province of Davao City on 13 August 1976 covered Lot 5022-C, Csd-11-001848, consisting of ten thousand seven hundred and seventy-one (10,771) square meters. This parcel of land is one of the two parcels of land embraced in OCT No. P-10541 in the name of DOMINGO ARENDAIN married to IRENE TAROY and which was transcribed in the registration book for the province of Davao City on 18 March 1981. Likewise, OCT No. P-6080 in the name of ANTONIA C. GIL married to MIGUEL GIL which was transcribed in the registration book for the province of Davao City on 13 August 1976 included the same parcel of land covered by OCT No. P-10522 in the name of Bautista Arendain married to CRISTITA BUSTON and which was transcribed in the registration book for the province of Davao City on 12 March 1981. It is well-settled that once a patent is registered and the corresponding certificate of title is issued, the land ceases to be part of public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction. Equally settled is the rule that the doctrine requiring prior exhaustion of administrative remedies before recourse to courts may be had is confined to public lands. It is inapplicable to private lands. xxxx In the case at bench, the records disclosed that original certificates of title were issued over subject parcels of land in favor of MIGUEL GIL and ANTONIA GIL as early as 1976, thus, subject parcels of land ceased to be part of the public domain and became private property over which the Director of Lands has neither control nor jurisdiction. Consequently, the doctrine of exhaustion of administrative remedies before recourse to courts does not apply.17 The Court of Appeals thus ruled: WHEREFORE, the appeal DENIED (sic) and the assailed Decision is AFFIRMED in toto.18 Herein petitioners now come before this Court raising the following issues in their petition: FIRST: The Honorable Court of Appeals erred in affirming the decision of the trial court declaring as null and void OCT No. P-10522 in the name of Petitioners when respondents have not yet exhausted the administrative remedies, thus, in effect, departed from the accepted and usual

course of judicial proceedings as would justify the call for an exercise of the power of supervision by this Honorable Court. SECOND: In filing the instant petition for review on certiorari, the Petitioners did not commit forum shopping.19 Significantly, in their petition,20 herein petitioners Cristita Buston-Arendain and heirs of Bautista Arendain,21represented by Cristita Buston-Arendain, insist that herein respondents failed to exhaust administrative remedies when they filed Civil Case No. 23,963-95 before the RTC, Branch 16 of Davao City, on 24 October 199522 without awaiting the resolution by the DENR-CENRO Davao City of the administrative case filed by Antonia Gil involving OCT No. P-10552 covering Lot No. 7566 in the name of spouses Bautista and Cristita Buston-Arendain. The Court denies the petition at bar. Under the doctrine of exhaustion of administrative remedies, an administrative decision must first be appealed to the administrative superiors at the highest level before it may be elevated to a court of justice for review.23 This Court has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed himself of all the means of administrative processes afforded him. Hence, 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 the courts judicial power can be sought. The premature invocation of the courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel, the case is susceptible of dismissal for lack of cause of action.24 This doctrine of exhaustion of administrative remedies is 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.25 However, the principle of exhaustion of administrative remedies, as tested by a battery of cases, is not an ironclad rule. This doctrine is a relative one, and its flexibility is called upon by the peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, 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.26 Based on the ninth exception stated in the preceding paragraph, the doctrine requiring the prior exhaustion of administrative remedies before recourse to the courts can be had is confined to land cases involving public lands; it is inapplicable to cases in which the subject matter is private lands. Upon registration, the homestead granted to Antonia and Miguel Gil ceased to have the character of public land and so was removed from the operation of the doctrine of exhaustion of administrative remedies.27 Since the free patent applications of Miguel and Antonia Gil over the disputed lots were granted and the corresponding certificates of title were accordingly issued in their names in 1976, the said properties then became private and ceased to be part of the public domain, over which the Director of Lands no longer has control or jurisdiction. The pieces of land thus covered by OCTs No. P-6079 and No. P-6080, in the names of

Miguel and Antonia Gil, respectively, thereby assume the character of registered properties in accordance with the provisions of Section 12228 of the Land Registration Act, and the remedy of any party who has been injured by their alleged fraudulent registration is an action for reconveyance instituted before the proper trial courts.29 An original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding and becomes indefeasible and incontrovertible upon the expiration of one year from the date of promulgation of the order of the Director of Lands for the issuance of the patent. Thus, while the Director of Lands has the power to review homestead patents, he may do so only so long as the land remains part of the public domain, but once the patent is registered and a certificate of title issued, the land ceases to be part of the public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction. 30 Upon its registration, the land falls under the operation of Act No. 49631 and becomes registered land. Time and again, we have said that a Torrens certificate is evidence of an indefeasible title to property in favor of the person whose name appears thereon.32 That the patent applications of Miguel and Antonia Gil over the disputed lots were approved and that their certificates of title thereto were issued five years ahead of respondents are questions of fact already settled by both the RTC and the Court of Appeals. It is axiomatic that factual findings of trial courts, when adopted and confirmed by the Court of Appeals, are binding and conclusive and will not be disturbed on appeal. This Court is not a trier of facts. It is not its function to examine and determine the weight of evidence supporting the assailed decision. Moreover, well-rooted is the prevailing jurisprudence that only errors of law and not of facts are reviewable by this Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court.33 On the issue that petitioners committed forum shopping when they filed the Petition at bar, respondents beckon this Court to bring our attention to the fact that way back 17 December 1970, the late Bautista Arendain already filed Civil Case No. 7068 before the then Court of First Instance (CFI) of Davao City, Branch 1, entitled, "Bautista Arendain v. The Honorable Director of Lands and Miguel Gil" for Declaration of judgment and/or Order as null and void. 34 In his complaint in Civil Case No. 7068 against the Director of Lands and Miguel Gil, Bautista Arendain prayed that the Order dated 17 July 196135 of the Director of Lands giving due course to Homestead Application No. 85563 in the name of Miguel Gil be declared null and void ab initio. However, while it appears that the then CFI of Davao City, Branch I, already resolved Civil Case No. 7068 filed by Bautista Arendain when it issued an Order36 dated 19 February 1971 dismissing the complaint therein, only the homestead application number and sketch of the land being disputed were provided in connection with Civil Case No. 7068. This Court cannot therefore ascertain whether said case involves the same property subject of the present petition. Forum shopping is the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. In Balite v. Court of Appeals,37 the Court held that there is forum shopping when a party seeks to obtain remedies in an action in one court, which has already been solicited, and in other courts and other proceedings in another tribunal. While a party may avail himself of the remedies prescribed by the Rules of Court, such party is not free to resort to them simultaneously or at his/her pleasure or caprice. A party should not be allowed to present simultaneous remedies in two different forums, for it degrades and wreaks havoc upon the rule on orderly procedure. A party must follow the sequence and hierarchical order in availing himself of such remedies and not resort to shortcuts in procedure or to playing fast and loose with the said rules. Forum shopping, an act of malpractice, is considered as trifling with the courts and abusing their processes. It is improper conduct and degrades the administration of justice.38 In the case at bar, since it was not sufficiently established that Civil Case No. 7068 and the present petition involve the same subject matter and/or issues, this Court refrains from making a finding herein that petitioners are indeed guilty of forum shopping.

Nonetheless, all told, the Court still denies the Petition on the basis of its earlier discussion that the doctrine of non-exhaustion of administrative remedies, on which petitioners essentially anchor their Petition, cannot justify the position they have taken. WHEREFORE, premises considered, the instant Petition is DENIED for lack of merit. The Decision of the Court of Appeals dated 20 January 2006 in CA-G.R. CV No. 63440 affirming in toto the Decision dated 28 October 1998 of the Regional Trial Court, Branch 16, Davao City, in Civil Case No. 23,963-95 is AFFIRMED. Costs against petitioners. SO ORDERED. G.R. No. 170901 January 20, 2009

DAVAO ORIENTAL ELECTRIC COOPERATIVE, INC., Petitioner, vs. THE PROVINCE OF DAVAO ORIENTAL, Respondent. DECISION PUNO, C.J.: On appeal is the Court of Appeals (CAs) November 15, 2005 Decision1 in CA-G.R. CV No. 67188 setting aside the March 15, 2000 Decision2 of the Regional Trial Court (RTC) of Mati, Davao Oriental in Civil Case No. 1550 that dismissed the complaint for collection of delinquent real property taxes filed by the Province of Davao Oriental against the Davao Oriental Electric Cooperative, Inc. The facts are as follows: Petitioner Davao Oriental Electric Cooperative, Inc. was organized under Presidential Decree (PD) No. 269 which granted a number of tax and duty exemption privileges to electric cooperatives.3 In 1984, PD No. 19554 was enacted by then President Ferdinand E. Marcos. It withdrew all exemptions from or any preferential treatment in the payment of duties, taxes, fees, imposts, and other charges granted to private business enterprises and/or persons engaged in any economic activity. Due to the failure of petitioner to declare the value of its properties, the Office of the Provincial Assessor assessed its properties.5 On October 8, 1985, the Provincial Assessor sent the Notice of Assessment to petitioner which duly received it. During the same year of 1985, the Fiscal Incentive Review Board (FIRB) issued FIRB Resolution No. 13-85, the Ministry of Finance issued Local Tax Regulation No. 3-85, and the Office of the Local Government Finance, Region XI, Davao City issued Regional Office Memorandum Circular No. 42-85, all of which reiterated the withdrawal of tax exemptions previously granted to business entities including electric cooperatives. On January 8, 1986, then Pres. Marcos issued PD No. 2008,6 requiring the Minister of Finance to immediately restore the tax exemption of all electric cooperatives. However, in December 1986, then Pres. Corazon C. Aquino issued Executive Order (EO) No. 93 which withdrew all tax and duty exemptions granted to private entities effective March 10, 1987. But Memorandum Order No. 65, dated January 23, 1987, suspended the implementation of the said EO until June 30, 1987 for cooperatives. Effective July 1, 1987, FIRB No. 24-87 restored the tax and duty exemption privileges of electric cooperatives under PD No. 269. FIRB Resolution No. 24-87 reads: BE IT RESOLVED, as it is hereby resolved, That the tax and duty exemption privileges of electric cooperatives granted under the terms and conditions of Presidential Decree No. 269 (creating the National Electrification Administration as a corporation, prescribing its powers and activities, appropriating the necessary funds therefore and declaring a national policy objective for the total electrification of the Philippines on an area

coverage basis; the organization, promotion and development of electric cooperatives to attain the said objective, prescribing terms and conditions for their operations, the repeal of Republic Act No. 6038, and for other purposes), as amended, are restored effective July 1, 1987: Provided, however, That income from their electric service operations and other sources including the interest income from bank deposits and yield or any other monetary benefit from bank deposits and yield or any other similar arrangements shall remain taxable: Provided, further, That the electric cooperatives shall furnish the FIRB on an annual basis or as often as the FIRB may require them to do so, statistical and financial statements of their operations and other information as may be required, for purposes of effective and efficient tax and duty exemption availment. (SGD.) JAIME V. ONGPIN Secretary of Finance Chairman, FIRB In May 1990, respondent filed a complaint for collection of delinquent real property taxes against petitioner for the years 1984 until 1989, amounting to one million eight hundred twenty-five thousand nine hundred twentyeight pesos and twelve centavos (P1,825,928.12). Petitioner contends that it was exempt from the payment of real estate taxes from 1984 to 1989 because the restoration of tax exemptions under FIRB Resolution No. 24-87 retroacts to the date of withdrawal of said exemptions. Further, petitioner questions the classification made by respondent of some of its properties as real properties when it believes them to be personal properties, hence, not subject to realty tax. On March 15, 2000, the RTC rendered its decision in favor of petitioner. It ruled, thus: Inasmuch as the Fiscal Incentive Review Board (FIRB) Resolution No. 24-87 issued on June 14, 1987, RESTORED the duty and tax exemptions enjoyed by Electric Cooperatives established pursuant to PD 269 (Sec. 39) which were previously withdrawn, and that the said Resolution No. 24-87 was issued in compliance with the mandate of Executive Order No. 93 which has been declared as a valid delegation of legislative power pursuant to the Maceda7 case, there is no question that the herein defendant as an electric cooperative established under PD 269 is exempt from the payment of its realty taxes during the period covered by the herein complaint 1985 to December 31, 1987. xxx The dispositive portion of the decision reads as follows: WHEREFORE, in view of the foregoing, judgment is rendered dismissing the complaint. Counterclaim is likewise dismissed. No pronouncement as to costs. SO ORDERED.8 Respondent appealed to the CA which set aside the ruling of the RTC. It held that: A cursory reading of the aforecited resolution fails to indicate any semblance of retroactivity of the restoration of tax exemptions, in contrast to the ruling of the court a quo and to the contention of the Appellee that such restoration is retroactive from the date of withdrawal of exemption. The FIRB Resolution No. 24-87 is very specific and clear that the tax and duty exemption privileges of electric cooperatives are restored effective 1 July 1987. Besides, it is settled that laws have no retroactive effect. It is settled that a "sound statutory construction is that a statute operates prospectively, unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication." . . . The dispositive portion of the decision of the CA reads as follows:

WHEREFORE, premises considered, herein Appeal is GRANTED and the assailed Decision of the court a quo is hereby SET ASIDE. Plaintiff-Appellee Davao Oriental Electric Cooperative is hereby ordered to PAY PlaintiffAppellant Province of Davao Oriental delinquent real property taxes from 1 January 1985 up to 31 December 1989 plus the corresponding penalties and surcharges imposed by law. SO ORDERED.9 Hence, this appeal.10 Petitioner raises the following issues: (1) WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAD GRAVELY ERRED IN RULING THAT THE RESTORATION OF THE TAX EXEMPTION UNDER FIRB RESOLUTION NO. 24-87 WAS NOT RETROACTIVE TO THE DATE OF EFFECTIVITY OF PD 1955. (2) WHETHER OR NOT THE HONORABLE COURT OF APPEALS WAS CORRECT IN HOLDING THAT NOTWITHSTANDING THE RESTORATION OF SUCH TAX EXEMPTIONS UNDER FIRB RESOLUTION NO. 24-87, THE PETITIONER SHOULD STILL BE LIABLE FOR UNPAID TAXES FOR THE SUPPOSED FAILURE TO SUBMIT TO THE FIRB FINANCIAL STATEMENTS OF ITS OPERATIONS. (3) WITHOUT CONCEDING ON THE FOREGOING, WHETHER OR NOT THE PETITIONER COULD BE MADE TO PAY TAXES BASED ON A WIDE-SWEEPING AND ERRONEOUS ASSESSMENT OF ITS REAL PROPERTIES.11 First, we resolve the issue of retroactivity of FIRB Resolution No. 24-87. We affirm the ruling of the CA. Indeed, even a cursory reading of the resolution, quoted above, bares no indicia of retroactivity of its application. FIRB Resolution No. 24-87 is crystal clear in stating that "the tax and duty exemption privileges of electric cooperatives granted under the terms and conditions of Presidential Decree No. 269 . . . are restored effective July 1, 1987." There is no other way to construe it. The language of the law is plain and unambiguous. When the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. Further, because taxes are the lifeblood of the nation, the court has always applied the doctrine of strict interpretation in construing tax exemptions. A claim for exemption from tax payments must be clearly shown and be based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception.12 Second, we rule on the issue of assessment of petitioners real properties. Petitioner contests the assessment by respondent of its properties. It claims that the tax declarations covering its properties were issued without prior consultation, and without its knowledge and consent. In addition, it argues that respondent classified its poles, towers and fixtures, overhead conductors and devices, station equipment, line transformers, etc. as real properties "when by [their] nature, use, purpose, and destination and by substantive law and jurisprudence, they are personal properties."13 However, petitioner does not deny having duly received the two Notices of Assessment dated October 8, 1985 on October 10, 1985.14 It also admits that it did not file a protest before the Board of Assessment Appeals to question the assessment.15 Section 30 of PD No. 464,16 otherwise known as the "The Real Property Tax Code," provides: Sec. 30. Local Board of Assessment Appeals. Any owner who is not satisfied with the action of the provincial or city assessor in the assessment of his property may, within sixty days from the date of receipt by him of the written notice of assessment as provided in this Code, appeal to the Board of Assessment Appeals of the province or city, by filing with it a petition under oath using the form prescribed for the purpose, together with copies of the tax declarations and such affidavit or documents submitted in support of the appeal.

Having failed to appeal the assessment of its properties to the Board of Assessment Appeals, petitioner cannot now assail the validity of the tax assessment against it before the courts. Petitioner failed to exhaust its administrative remedies, and the consequence for such failure is clear the tax assessment, as computed and issued by the Office of the Provincial Assessor, became final. Petitioner is deemed to have admitted the correctness of the assessment of its properties. In addition, Section 64 of PD No. 464 requires that the taxpayer must first pay under protest the tax assessed against him before he could seek recourse from the courts to assail its validity. The said section provides: SEC. 64. Restriction upon power of court to impeach tax. No court shall entertain any suit assailing the validity of tax assessed under this Code until the taxpayer shall have paid, under protest, the tax assessed against himnor shall any court declare any tax invalid by reason of irregularities or informalities in the proceedings of the officers charged with the assessment or collection of taxes, or of failure to perform their duties within this time herein specified for their performance unless such irregularities, informalities or failure shall have impaired the substantial rights of the taxpayer; nor shall any court declare any portion of the tax assessed under the provisions of Code invalid except upon condition that the taxpayer shall pay the just amount of the tax, as determined by the court in the pending proceeding. (Emphasis supplied) IN VIEW WHEREOF, petitioners appeal is DENIED. The November 15, 2005 Decision of the Court of Appeals in CA-G.R. CV No. 67188 is AFFIRMED. Costs against petitioner. SO ORDERED. G.R. No. 91927 January 13, 1992 IGNACIO R. BUNYE, JAIME R. FRESNEDI, CARLOS G. TENSUAN, VICTOR E. AGUINALDO, ALEJANDRO I. MARTINEZ, EPIFANIO A. ESPELETA, REY E. BULAY, LUCIO B. CONSTANTINO, ROMAN E. NIEFES, NEMESIO O. MOZO, ROGER SMITH, RUFINO B. JOAQUIN, NOLASCO I. DIAZ, RUFINO IBE and NESTOR SANTOS,petitioners, vs. THE SANDIGANBAYAN, THE OMBUDSMAN and ROGER C. BERBANO, Special Prosecutor III, respondents. Jose O. Villanueva and Roberto B. Romanillos for petitioners in G.R. No. 85439. Alampay & Manhit Law Offices for petitioners in G.R. No. 91927.

DAVIDE, JR., J.: These cases have been consolidated because they are closely linked with each other as to factual antecedents and issues. The first case, G.R. No. 85439 (hereinafter referred to as the Kilusang Bayan case), questions the validity of the order of 28 October 1988 of then Secretary of Agriculture Hon. Carlos G. Dominguez which ordered: (1) the take-over by the Department of Agriculture of the management of the petitioner Kilusang Bayan sa Paglilingkod Ng Mga Magtitinda ng Bagong Pamilihang Bayan ng Muntilupa, Inc. (KBMBPM) pursuant to the Department's regulatory and supervisory powers under Section 8 of P.D. No. 175, as amended, and Section 4 of Executive Order No. 13, (2) the creation of a Management Committee which shall assume the management of KBMBPM upon receipt of the order, (3) the disbandment of the Board of Directors, and (4) the turn over of all assets, properties and records of the KBMBPM the Management Committee. The second case. G.R. No. 91927 (hereinafter referred to as the Bunye case), seeks the nullification of the Resolution of 4 January 1990 of the Sandiganbayan admitting the Amended Information against petitioners in

Criminal Case No. 13966 and denying their motion to order or direct preliminary investigation, and its Resolution of 1 February 1990 denying the motion to reconsider the former. The procedural and factual antecedents are not disputed. On 2 September 1985, the Municipal Government of Muntinlupa (hereinafter, Municipality), Metro Manila, thru its then Mayor Santiago Carlos, Jr., entered into a contract with the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA SA BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC. (KBMBPM) represented by its General Manager, Amado Perez, for the latter's management and operation of the new Muntinlupa public market. The contract provides for a twenty-five (25) year term commencing on 2 September 1985, renewable for a like period, unless sooner terminated and/or rescinded by mutual agreement of the parties, at a monthly consideration of Thirty-Five Thousand Pesos (P35,000) to be paid by the KBMBPM within the first five (5) days of each month which shall, however, be increased by ten percent (10%) each year during the first five (5) years only. 1 The KBMBPM is a service cooperative organized by and composed of vendors occupying the New Muntinlupa Public Market in Alabang, Muntinlupa, Metro Manila pursuant to Presidential Decree No. 175 and Letter of Implementation No. 23; its articles of incorporation and by-laws were registered with the then Office of the Bureau of Cooperatives Development (thereafter the Bureau of Agricultural Cooperatives Development or BACOD and now the Cooperative Development Authority). 2 Following his assumption into office as the new mayor succeeding Santiago Carlos, Jr., petitioner Ignacio Bunye, claiming to be particularly scandalized by the "virtual 50-year term of the agreement, contrary to the provision of Section 143, paragraph 3 of Batas Pambansa Blg. 337," and the "patently inequitable rental," directed a review of the aforesaid contract. 3 He sought opinions from both the Commission on Audit and the Metro Manila Commission (MMC) on the validity of the instrument. In separate letters, these agencies urged that appropriate legal steps be taken towards its rescission. The letter of Hon. Elfren Cruz of the MMC even granted the Municipality authority "to take the necessary legal steps for the cancellation/recission of the above cited contract and make representations with KBMBPM for the immediate transfer/takeover of the possession, management and operation of the New Muntinlupa Market to the Municipal Government of Muntinlupa." 4 Consequently, upon representations made by Bunye with the Municipal Council, the latter approved on 1 August 1988 Resolution No. 45 abrogating the contract. To implement this resolution, Bunye, together with his co-petitioners and elements of the Capital Command of the Philippine Constabulary, proceeded, on 19 August 1986, to the public market and announced to the general public and the stallholders thereat that the Municipality was taking over the management and operation of the facility, and that the stallholders should henceforth pay their market fees to the Municipality, thru the Market Commission, and no longer to the KBMBPM. 5 On 22 August 1988, the KBMBPM filed with Branch 13 of the Regional Trial Court of Makati a complaint for breach of contract, specific performance and damages with prayer for a writ of preliminary injunction against the Municipality and its officers, which was docketed as Civil Case No. 88-1702. 6 The complaint was premised on the alleged illegal take-over of the public market effected "in excess of his (Bunye's) alleged authority" and thus "constitutes breach of contract and duty as a public official." The writ applied for having been denied, 7 the KBMBPM officers resisted the attempts of Bunye and company to complete the take-over; they continued holding office in the KBS building, under their respective official capacities. The matter having been elevated to this Court by way of certiorari, 8 We remanded the same to the Court of Appeals which docketed it as C.A.-G.R. No. L-16930. 9 On 26 August 1988, Amado Perez filed with the Office of the Ombudsman a letter-complaint charging Bunye and his co-petitioners with oppression, harassment, abuse of authority and violation of the Anti-Graft and Corrupt Practices Act 10 for taking over the management and operation of the public market from KBMBPM. 11 In a subpoena dated 7 October 1988, prosecutor Mothalib C. Onos of the Office of the Special Prosecutor directed Bunye and his co-petitioners to submit within ten (10) days from receipt thereof counter-affidavits,

affidavits of their witnesses and other supporting documents. 12 The subpoena and letter-complaint were received on 12 October 1988. On 20 October 1988, two (2) days before the expiration of the period granted to file said documents, Bunye, et al. filed by mail an urgent motion for extension of "at least fifteen (15) days from October 22, 1988" within which to comply 13 with the subpoena. Thereafter, the following transpired which subsequently gave rise to these petitions: G.R. No. 85439 In the early morning of 29 October 1988, a Saturday, respondent Madriaga and Coronado, allegedly accompanied by Mayor Bunye and the latters' heavily armed men, both in uniform and in civilian clothes, together with other civilians, namely: Romulo Bunye II, Alfredo Bunye, Tomas Osias, Reynaldo Camilon, Benjamin Taguibao, Benjamin Bulos and other unidentified persons, allegedly through force, violence and intimidation, forcibly broke open the doors of the offices of petitioners located at the second floor of the KBS Building, new Muntinlupa Public Market, purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture dated 28 October 1988, and to implement the same, by taking over and assuming the management of KBMBPM, disbanding the then incumbent Board of Directors for that purpose and excluding and prohibiting the General Manager and the other officers from exercising their lawful functions as such. 14 The Order of the Secretary reads as follows: 15 ORDER WHEREAS, the KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), Alabang, Muntinlupa, Metro Manila is a Cooperative registered under the provisions of Presidential Decree No. 175, as amended; WHEREAS, the Department of Agriculture is empowered to regulate and supervise cooperatives registered under the provisions of Presidential Decree No. 175, as amended; WHEREAS, the general membership of the KBMBPM has petitioned the Department of Agriculture for assistance in the removal of the members of the Board of Directors who were not elected by the general membership of said cooperative; WHEREAS, the on-going financial and management audit of the Department of Agriculture auditors show (sic) that the management of the KBMBPM is not operating that cooperative in accordance with PD. 175, LOI No. 23, the Circulars issued by DA/BACOD and the provisions of the by-laws of KBMBPM; WHEREAS, the interest of the public so demanding it is evident and urgently necessary that the KBMBPM MUST BE PLACED UNDER MANAGEMENT TAKE-OVER of the Department of Agriculture in order to preserve the financial interest of the members of the cooperative and to enhance the cooperative development program of the government; WHEREAS, it is ordered that the Department of Agriculture in the exercise of its regulatory and supervisory powers under Section 8 of PD 175, as amended, and Section 4 of Executive Order No. 113, take over the management of KBMBPM under the following directives: 1. THAT a Management Committee is hereby created composed of the following: a) Reg. Dir. or OIC RD DA Region IV

b) Atty. Rogelio P. Madriaga BACOD c) Mr. Recto Coronado KBMBPM d) Mrs. Nadjasda Ponsones KBMBPM e) One (1) from the Municipal Government of Muntinlupa to be designated by the Sangguniang Pambayan ng Muntinlupa; 2. THAT the Management Committee shall, upon receipt of this Order, assume the management of KBMBPM; 3. THAT the present Board of Directors is hereby disbanded and the officers and Manager of the KBMBPM are hereby directed to turnover all assets, properties and records of the KBMBPM to the Management Committee herein created; 4. THAT the Management Committee is hereby empowered to promulgate rules of procedure to govern its workings as a body; 5. THAT the Management Committee shall submit to the undersigned thru the Director of BACOD monthly reports on the operations of KBMBPM; 6. THAT the Management Committee shall call a General Assembly of all registered members of the KBMBPM within Ninety (90) days from date of this Order to decide such matters affecting the KBMBPM, including the election of a new set of Board of Director (sic). This Order takes effect immediately and shall continue to be in force until the members of the Board of Directors shall have been duly elected and qualified. Done this 28th day of October, 1988 at Quezon City. As claimed by petitioners, the Order served on them was not written on the stationary of the Department, does not bear its seal and is a mere xerox copy. The so-called petition upon which the Order is based appears to be an unverified petition dated 10 October 1988 signed, according to Mayor Bunye, 16 by 371 members of the KBMBPM. On 2 November 1988, petitioners filed the petition in this case alleging, inter alia, that: (a) Respondent Secretary acted without or in excess of jurisdiction in issuing the Order for he arrogated unto himself a judicial function by determining the alleged guilt of petitioners on the strength of a mere unverified petition; the disbandment of the Board of Directors was done without authority of law since under Letter of Implementation No. 23, removal of officers, directors or committee members could be done only by the majority of the members entitled to vote at an annual or special general assembly and only after an opportunity to be heard at said assembly. (b) Respondent Secretary acted in a capricious, whimsical, arbitrary and despotic manner, so patent and gross that it amounted to a grave abuse of discretion.

(c) The Order is a clear violation of the By-Laws of KBMBPM and is likewise illegal and unlawful for it allows or tolerates the violation of the penal provisions under paragraph (c), Section 9 of P.D. No. 175.

(d) The Order is a clear violation of the constitutional right of the individual petitioners to be heard. 17
They pray that upon the filing of the petition, respondents, their agents, representatives or persons acting on their behalf be ordered to refrain, cease and desist from enforcing and implementing the questioned Order or from excluding the individual petitioners from the exercise of their rights as such officers and, in the event that said acts sought to be restrained were already partially or wholly done, to immediately restore the management and operation of the public market to petitioners, order respondents to vacate the premises and, thereafter, preserve the status quo; and that, finally, the challenged Order be declared null and void. In the Resolution of 9 October 1988, 18 We required the respondents to Comment on the petition. Before any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion praying that respondent Atty. Rogelio Madriaga, who had assumed the position of Chairman of the Management Committee, be ordered to stop and/or cancel the scheduled elections of the officers of the KBMBPM on 6 January 1989 and, henceforth, desist from scheduling any election of officers or Members of the Board of Directors thereof until further orders on the Court. 19 The elections were, nevertheless, held and a new board of directors was elected. So, on 19 January 1989, petitioners filed a supplemental motion 20 praying that respondent Madriaga and the "newly elected Board of Directors be ordered to cease and desist from assuming, performing or exercising powers as such, and/or from removing or replacing the counsels of petitioners as counsels for KBMBPM and for Atty. Fernando Aquino, Jr., to cease and desist from unduly interfering with the affairs and business of the cooperative." Respondent Bunye, by himself, filed his Comment on 23 January 1989. 21 He denies the factual allegations in the petition and claims that petitioners failed to exhaust administrative remedies. A reply thereto was filed by petitioners on 7 February 1989. 22 Respondent Recto Coronado filed two (2) Comments. The first was filed on 6 February 1989 23 by his counsel, Atty. Fernando Aquino, Jr., and the second, which is for both him and Atty. Madriaga, was filed by the latter on 10 February 1989. 24 On 20 February 1989, petitioners filed a Reply to the first Comment of Coronado 25 and an Ex-Parte Motion for the immediate issuance of a cease and desist order 26 praying that the so-called new directors and officers of KBMBPM, namely: Tomas M. Osias, Ildefonso B. Reyes, Paulino Moldez, Fortunato M. Medina, Aurora P. del Rosario, Moises Abrenica, and Lamberto Casalla, be ordered to immediately cease and desist from filing notices of withdrawals or motions to dismiss cases filed by the Cooperative now pending before the courts, administrative offices and the Ombudsman and Tanodbayan, and that if such motions or notices were already filed, to immediately withdraw and desist from further pursuing the same until further orders of this Court. The latter was precipitated by the Resolution No. 19 of the "new" board of directors withdrawing all cases filed by its predecessors against Bunye, et al., and more particularly the following cases: (a) G.R. No. 85439 (the instant petition), (b) Civil Case No. 88-1702, (c) OSP Case No. 88-2110 before the Ombudsman, (d) IBP Case No. 880119 before the Tanodbayan, and Civil Case No. 88-118 for Mandamus. 27 On 1 March 1989, We required the Solicitor General to file his Comment to the petition and the urgent motion for the immediate issuance of a cease and desist order. 28 A motion to dismiss the instant petition was filed on 30 March 1989. 29 On 19 April 1989, We resolved to dismiss the case and consider it closed and terminated. 30 Thereupon, after some petitioners filed a motion for clarification and reconsideration, We set aside the dismissal order and required the new directors to comment on the Opposition to Motion to Dismiss filed by the former. 31 The new board, on 14 June 1989, prayed that its Manifestation of 6 June 1989 and Opposition dated 9 June 1989, earlier submitted it response to petitioners' motion for reconsideration of the order dismissing the instant

petition, be treated as its Comment. 32 Both parties then continued their legal fencing, serving several pleadings on each other. In Our Resolution of 9 August 1989, 33 We gave the petition due course and required the parties to submit their respective Memoranda. On 14 August 1989, petitioners filed an urgent ex-parte motion for the immediate issuance of a cease and desist order 34 in view of the new board's plan to enter into a new management contract; the motion was noted by this Court on 23 August 1989. A second ex-parte motion, noted on 18 October 1989, was filed on 19 September 1989 asking this court to consider the "Invitation to pre-qualify and bid" for a new contract published by respondent Bunye. 35 In a belated Comment 36 for the respondent Secretary of Agriculture filed on 22 September 1989, the Office of the Solicitor General asserts that individual petitioners, who were not allegedly elected by the members or duly designated by the BACOD Director, have no right or authority to file this case; the assailed Order of the Secretary was issued pursuant to P.D. No. 175, more particularly Section 8 thereof which authorizes him "(d) to suspend the operation or cancel the registration of any cooperative after hearing and when in its judgment and based on findings, such cooperative is operating in violation of this Decree, rules and regulations, existing laws as well as the by-laws of the cooperative itself;" the Order is reasonably necessary to correct serious flaws in the cooperative and provide interim measures until election of regular members to the board and officers thereof; the elections conducted on 6 January 1989 are valid; and that the motion to dismiss filed by the new board of directors binds the cooperative. It prays for the dismissal of the petition. Respondent Secretary of Agriculture manifested on 22 September 1989 that he is adopting the Comment submitted by the Office of the Solicitor General as his memorandum; 37 petitioners and respondents Coronado and Madriaga filed their separate Memoranda on 6 November 1989; 38 while the new board of directors submitted its Memorandum on 11 December 1989. 39 The new KBMBPM board submitted additional pleadings on 16 February 1990 which it deemed relevant to the issues involved herein. Reacting, petitioners filed a motion to strike out improper and inadmissible pleadings and annexes and sought to have the pleaders cited for contempt. Although We required respondents to comment, the latter did not comply. Nevertheless, a manifestation was filed by the same board on 25 February 1991 40 informing this Court of the holding, on 9 January 1991, of its annual general assembly and election of its board of directors for 1991. It then reiterates the prayer that the instant petition be considered withdrawn and dismissed. Petitioners filed a counter manifestation alleging that the instant petition was already given due course on 9 August 1989. 41 In its traverse to the counter manifestation, the new board insists that it "did not derive authority from the October 28, 1988 Order, the acts of the Management Committee, nor (sic) from the elections held in (sic) January 6, 1989," but rather from the members of the cooperative who elected them into office during the elections. Petitioners filed a rejoinder asserting that the election of new directors is not a supervening event independent of the main issue in the present petition and that to subscribe to the argument that the issues in the instant petition became moot with their assumption into office is to reward a wrong done. G. R. NO. 91927 Petitioners claim that without ruling on their 20 October 1988 motion for an extension of at last 15 days from 22 October 1988 within which to file their counter-affidavits, which was received by the Office of the Special Prosecutor on 3 November 1988, Special Prosecutor Onos promulgated on 11 November 1988 a Resolution finding the evidence on hand sufficient to establish a prima facie case against respondents (herein petitioners) and recommending the filing of the corresponding information against them before the Sandiganbayan. 42Petitioners also claim that they submitted their counter-affidavits on 9 November 1988. 43

In their motion dated 2 December 1988, petitioners move for a reconsideration of the above Resolution, 44 which was denied by Onos 45 in his 18 January 1989 Order. The information against the petitioners was attached to this order. Upon submission of the records for his approval, the Ombudsman issued a first indorsement on 4 April 1989 referring to "Judge Gualberto J. de la Llana, Acting Director , IEO/RSSO, this Office, the within records of OSP Case No. 88-02110 . . . for further preliminary investigation . . ." 46 Thereafter, on 28 April 1989, Bunye and company received a subpoena from de la Llana requiring them to appear before the latter on 25 April 1989, 47 submit a report and file comment. After being granted an extension, Bunye and company submitted their comment on 18 May 1989. 48 On 22 August 1989, de la Llana recommended the filing of an information for violation of section 3 (e) of the Anti-Graft and Corrupt Practices Act. 49 The case was referred to special prosecuting officer Jose Parentela, Jr. who, in his Memorandum 50 to the Ombudsman through the Acting Special Prosecutor, likewise urged that an information be filed against herein petitioners. On 3 October 1989, the Ombudsman signed his conformity to the Memorandum and approved the 18 January information prepared by Onos, which was then filed with the Sandiganbayan. Consequently, Bunye, et al. were served arrest warrants issued by the Sandiganbayan. Detained at the NBI on 9 October 1989, they claim to have discovered only then the existence of documents recommending and approving the filing of the complaint and a memorandum by special prosecutor Bernardita G. Erum proposing the dismissal of the same. 51 Arraignment was set for 18 October 1989. 52 However, on 14 October 1989, petitioners filed with the Sandiganbayan an "Omnibus Motion to Remand to the Office of the Ombudsman; to Defer Arraignment and to Suspend Proceedings." 53 Subsequently, through new counsel, petitioners filed on 17 October 1989 a Consolidated Manifestation and Supplemental Motion 54 praying, inter alia, for the quashal of the information on the ground that they were deprived of their right to a preliminary investigation and that the information did not charge an offense. The Sandiganbayan issued an order on 18 October 1989 deferring arraignment and directing the parties to submit their respective memoranda, 55 which petitioners complied with on 2 November 1989. 56 On 16 November 1989, special Prosecutor Berbano filed a motion to admit amended information. 57 On 17 November 1989, the Sandiganbayan handed down a Resolution 58 denying for lack of merit the Omnibus Motion to Remand the Case To The Office of the Ombudsman, to Defer Arraignment and to Suspend Proceedings. Petitioners then filed a motion to order a preliminary investigation 59 on the basis of the introduction by the amended information of new, material and substantive allegations, which the special prosecutor opposed,60 thereby precipitating a rejoinder filed by petitioners. 61 On 4 January 1990, the Sandiganbayan handed down a Resolution 62 admitting the Amended Information and denying the motion to direct preliminary investigation. Their motion to reconsider this Resolution having been denied in the Resolution of 1 February 1990, 63 petitioners filed the instant petition on 12 February 1990. Petitioners claim that respondent Sandiganbayan acted without or in excess of jurisdiction or with manifest grave abuse of discretion amounting to lack of jurisdiction in denying petitioners their right to preliminary investigation and in admitting the Amended Information. They then pray that: (a) the 4 January and 1 February 1990 Resolutions of the Sandiganbayan, admitting the amended information and denying the motion for reconsideration, respectively, be annulled; (b) a writ be issued

enjoining the Sandiganbayan from proceeding further in Criminal Case No. 13966; and (c) respondents be enjoined from pursuing further actions in the graft case. We required the respondents to Comment on the petition. On 21 February 1990, petitioners' counsel filed a motion to drop Epifanio Espeleta and Rey E. Dulay as petitioners, 64 and in the Comment they filed on 30 March 1990, in compliance with Our Resolution of 1 March 1990, they state that they do not interpose any objection to the motion. On 20 March 1990, the Office of the Solicitor General moved that it be excused from filing comment for the respondents as it cannot subscribe to the position taken by the latter with respect to the questions of law involved.65 We granted this motion in the resolution of 8 May 1990. Respondent Berbano filed his comment on 10 September 1991 and petitioners replied on 20 December 1990; Berbano subsequently filed a Rejoinder thereto on 11 January 1991. 66 The Sandiganbayan then filed a manifestation proposing that it be excused from filing comment as its position on the matters in issue is adequately stated in the resolutions sought to be annulled. 67 On 7 March 1991, We resolved to note the manifestation and order the instant petition consolidated with G.R. No. 85439. The present dispute revolves around the validity of the antecedent proceedings which led to the filing of the original information on 18 January 1989 and the amended information afterwards. THE ISSUES AND THEIR RESOLUTION 1. G. R. No. 85439. As adverted to in the introductory portion of this Decision, the principal issue in G.R. No. 85439 is the validity of the 28 October 1988 Order of respondent Secretary of Agriculture. The exordium of said Order unerringly indicates that its basis is the alleged petition of the general membership of the KBMBPM requesting the Department for assistance "in the removal of the members of the Board of Directors who were not elected by the general membership" of the cooperative and that the "ongoing financial and management audit of the Department of Agriculture auditors show (sic) that the management of the KBMBPM is not operating that cooperative in accordance with P.D. 175, LOI 23, the Circulars issued by DA/BACOD and the provisions and by-laws of KBMBPM." It is also professed therein that the Order was issued by the Department "in the exercise of its regulatory and supervisory powers under Section 8 of P.D. 175, as amended, and Section 4 of Executive Order No. 113." Respondents challenge the personality of the petitioners to bring this action, set up the defense of nonexhaustion of administrative remedies, and assert that the Order was lawfully and validly issued under the above decree and Executive Order. We find merit in the petition and the defenses interposed do not persuade Us. Petitioners have the personality to file the instant petition and ask, in effect, for their reinstatement as Section 3, Rule 65 of the Rules of Court, defining an action for mandamus, permits a person who has been excluded from the use and enjoyment of a right or office to which he is entitled, to file suit. 68 Petitioners, as ousted directors of the KBMBPM, are questioning precisely the act of respondent Secretary in disbanding the board of directors; they then pray that this Court restore them to their prior stations. As to failure to exhaust administrative remedies, the rule is well-settled that this requirement does not apply where the respondent is a department secretary whose acts, as an alter ego of the President, bear the implied approval of the latter, unless actually disapproved by him. 69 This doctrine of qualified political agency ensures speedy access to the courts when most needed. There was no need then to appeal the decision to the office of the President; recourse to the courts could be had immediately. Moreover, the doctrine of exhaustion of administrative remedies also yields to other exceptions, such as when the question involved is purely legal, as

in the instant case, 70 or where the questioned act is patently illegal, arbitrary or oppressive. 71 Such is the claim of petitioners which, as hereinafter shown, is correct. And now on the validity of the assailed Order. Regulation 34 of Letter of Implementation No. 23 (implementing P.D. No. 175) provides the procedure for the removal of directors or officers of cooperatives, thus: An elected officer, director or committee member may be removed by a vote of majority of the members entitled to vote at an annual or special general assembly. The person involved shall have an opportunity to be heard. A substantially identical provision, found in Section 17, Article III of the KBMBPM's by-laws, reads: Sec. 17. Removal of Directors and Committee Members. Any elected director or committee member may be removed from office for cause by a majority vote of the members in good standing present at the annual or special general assembly called for the purpose after having been given the opportunity to be heard at the assembly. Under the same article are found the requirements for the holding of both the annual general assembly and a special general assembly. Indubitably then, there is an established procedure for the removal of directors and officers of cooperatives. It is likewise manifest that the right to due process is respected by the express provision on the opportunity to be heard. But even without said provision, petitioners cannot be deprived of that right. The procedure was not followed in this case. Respondent Secretary of Agriculture arrogated unto himself the power of the members of the KBMBPM who are authorized to vote to remove the petitioning directors and officers. He cannot take refuge under Section 8 of P.D. No. 175 which grants him authority to supervise and regulate all cooperatives. This section does not give him that right. An administrative officer has only such powers as are expressly granted to him and those necessarily implied in the exercise thereof. 72 These powers should not be extended by implication beyond what may to necessary for their just and reasonable execution. 73 Supervision and control include only the authority to: (a) act directly whenever a specific function is entrusted by law or regulation to a subordinate; (b) direct the performance of duty; restrain the commission of acts; (c) review, approve, reverse or modify acts and decisions of subordinate officials or units; (d) determine priorities in the execution of plans and programs; and (e) prescribe standards, guidelines, plans and programs. Specifically, administrative supervision is limited to the authority of the department or its equivalent to: (1) generally oversee the operations of such agencies and insure that they are managed effectively, efficiently and economically but without interference with day-to-day activities; (2) require the submission of reports and cause the conduct of management audit, performance evaluation and inspection to determine compliance with policies, standards and guidelines of the department; (3) take such action as may be necessary for the proper performance of official functions, including rectification of violations, abuses and other forms of mal-administration; (4) review and pass upon budget proposals of such agencies but may not increase or add to them. 74 The power to summarily disband the board of directors may not be inferred from any of the foregoing as both P.D. No. 175 and the by-laws of the KBMBPM explicitly mandate the manner by which directors and officers are to be removed. The Secretary should have known better than to disregard these procedures and rely on a mere petition by the general membership of the KBMBPM and an on-going audit by Department of Agriculture auditors in exercising a power which he does not have, expressly or impliedly. We cannot concede to the proposition of the Office of the Solicitor General that the Secretary's power under paragraph (d), Section 8 of P.D. No. 175 above quoted to suspend the operation or cancel the registration of any cooperative includes the "milder authority of suspending officers and calling for the election of new officers." Firstly, neither suspension

nor cancellation includes the take-over and ouster of incumbent directors and officers, otherwise the law itself would have expressly so stated. Secondly, even granting that the law intended such as postulated, there is the requirement of a hearing. None was conducted. Likewise, even if We grant, for the sake of argument, that said power includes the power to disband the board of directors and remove the officers of the KBMBPM, and that a hearing was not expressly required in the law, still the Order can be validly issued only after giving due process to the affected parties, herein petitioners. Due process is guaranteed by the Constitution 75 and extends to administrative proceedings. In the landmark case of Ang Tibay vs. Court of Industrial Relations, 76 this Court, through Justice Laurel, laid down the cardinal primary requirements of due process in administrative proceedings, foremost of which is the right to a hearing, which includes the right to present one's case and submit evidence in support thereof. The need for notice and the opportunity to be heard is the heart of procedural due process, be it in either judicial or administrative proceedings. 77 Nevertheless, a plea of a denial of procedural due process does not lie where a defect consisting in an absence of notice of hearing was thereafter cured by the aggrieved party himself as when he had the opportunity to be heard on a subsequent motion for reconsideration. This is consistent with the principle that what the law prohibits is not the absence of previous notice but the absolute absence thereof and lack of an opportunity to be heard. 78 In the instant case, there was no notice of a hearing on the alleged petition of the general membership of the KBMBPM; there was, as well, not even a semblance of a hearing. The Order was based solely on an alleged petition by the general membership of the KBMBPM. There was then a clear denial of due process. It is most unfortunate that it was done after democracy was restored through the peaceful people revolt at EDSA and the overwhelming ratification of a new Constitution thereafter, which preserves for the generations to come the gains of that historic struggle which earned for this Republic universal admiration. If there were genuine grievances against petitioners, the affected members should have timely raise these issues in the annual general assembly or in a special general assembly. Or, if such a remedy would be futile for some reason or another, judicial recourse was available. Be that as it may, petitioners cannot, however, be restored to their positions. Their terms expired in 1989, thereby rendering their prayer for reinstatement moot and academic. Pursuant to Section 13 of the by-laws, during the election at the first annual general assembly after registration, one-half plus one (4) of the directors obtaining the highest number of votes shall serve for two years, and the remaining directors (3) for one year; thereafter, all shall be elected for a term of two years. Hence, in 1988, when the board was disbanded, there was a number of directors whose terms would have expired the next year (1989) and a number whose terms would have expired two years after (1990). Reversion to the status quo preceding 29 October 1988 would not be feasible in view of this turn of events. Besides, elections were held in 1990 and 1991. 79 The affairs of the cooperative are presently being managed by a new board of directors duly elected in accordance with the cooperative's by-laws. 2. G. R. No. 91927. The right of an accused to a preliminary investigation is not among the rights guaranteed him in the Bill of Rights. As stated in Marcos, et al. vs. Cruz, 80 "the preliminary investigation in criminal cases is not a creation of the Constitution; its origin is statutory and it exists and the right thereto can be invoked when so established and granted by law. It is so specifically granted by procedural law. 81 If not waived, absence thereof may amount to a denial of due process. 82 However, lack of preliminary investigation is not a ground to quash or dismiss a complaint or information. Much less does it affect the court's jurisdiction. In People vs. Casiano, 83 this Court ruled: Independently of the foregoing, the absence of such investigation [preliminary] did not impair the validity of the information or otherwise render it defective. Much less did it affect the jurisdiction of the court of first instance over the present case. Hence, had the defendantappellee been entitled to another preliminary investigation, and had his plea of not guilty upon arraignment not implied a waiver of said right, the court of first instance should have, either conducted such preliminary investigation, or ordered the Provincial Fiscal to make it, in

pursuance of section 1687 of the Revised Administrative Code (as amended by Republic Act No. 732), or remanded the record for said investigation to the justice of the peace court, instead of dismissing the case as it did in the order appealed from. This doctrine was thereafter reiterated or affirmed in several case. 84 In the instant case, even if it is to be conceded for argument's sake that there was in fact no preliminary investigation, the Sandiganbayan, per Doromal vs. Sandiganbayan, 85 "should merely suspend or hold in abeyance proceedings upon the questioned Amended Information and remand the case to the Office of the Ombudsman for him to conduct a preliminary investigation." It is Our view, however, that petitioners were not denied the right to preliminary investigation. They, nevertheless, insist that the preliminary investigation conducted by the Office of the Special Prosecutor existed more in form than in substance. This is anchored on the failure by prosecutor Onos to consider the counteraffidavits filed by petitioners. The same sin of omission is ascribed to Acting Director de la Llana who purportedly failed to consider the comments submitted by the petitioners pursuant to a subpoena dated 13 April 1989. The failure of special prosecutor Berbano to conduct a preliminary investigation before amending the information is also challenged. It is finally urged that the Sandiganbayan completely disregarded the "glaring anomaly that on its face the Information filed by the Office of the Special Prosecutor" was prepared and subscribed on 18 January 1989, while the records indicate that the preliminary investigation was concluded on 3 October 1989. In his Comment, respondent Berbano dispassionately traces the genesis of the criminal information filed before the Sandiganbayan. His assessment that a preliminary investigation sufficient in substance and manner was conducted prior to the filing of the information reflects the view of the Sandiganbayan, maintained in both the 17 November 1989 and 4 January 1990 resolutions, that there was compliance with the requirements of due process. Petitioners were provided a reasonable period within which to submit their counter-affidavits; they did not avail of the original period; they moved for an extension of at least fifteen (15) days from 22 October 1988. Despite the urgency of its nature, the motion was sent by mail. The extension prayed for was good up to 6 November 1988. But, as admitted by them, they filed the Counter-Affidavits only on 9 November 1988. Yet, they blamed prosecutor Onos for promulgating the 11 November 1989 Resolution and for, allegedly, not acting on the motion. Petitioners then should not lay the blame on Onos; they should blame themselves for presuming that the motion would be granted. This notwithstanding, petitioners were able to file a Motion for Reconsideration on 13 December 1988 requesting that the reviewing prosecutor consider the belatedly filed documents; 86 thus, there is the recommendation of prosecutor Bernardita Erum calling for the dismissal of the charges on 2 March 1989, which, however, was not sustained upon subsequent review. The Sandiganbayan, in its 17 November 1989 Resolution, succinctly summed up the matter when it asserted that "even granting, for the sake of argument, that prosecutor Onos . . . failed to consider accused-movants' counter-affidavits, such defect was cured when a "Motion for Reconsideration" was filed, and which . . . de la Llana took into account upon review." It may not then be successfully asserted that the counter-affidavits were not considered by the Ombudsman in approving the information. Perusal of the factual antecedents reveals that a second investigation was conducted upon the "1st Indorsement" of the Ombudsman of 4 April 1989. As a result, subpoenas were issued and comments were asked to be submitted, which petitioners did, but only after a further extension of fifteen (15) days from the expiration of the original deadline. From this submission the matter underwent further review. Moreover, in the 18 January 1989 Order of prosecutor Onos, there was an ample discussion of the defenses raised by the petitioners in their counter-affidavits, thus negating the charge that the issues raised by them were not considered at all. 87

It is indisputable that the respondents were not remiss in their duty to afford the petitioners the opportunity to contest the charges thrown their way. Due process does not require that the accused actually file his counteraffidavits before the preliminary investigation is deemed completed. All that is required is that he be given the opportunity to submit such if he is so minded. 88 In any event, petitioners did in fact, although belatedly, submit their counter-affidavits and as a result thereof, the prosecutors concerned considered them in subsequent reviews of the information, particularly in the reinvestigation ordered by the Ombudsman. And now, as to the protestation of lack of preliminary investigation prior to the filing of the Amended Information. The prosecution may amend the information without leave of court before arraignment, 89 and such does not prejudice the accused. 90 Reliance on the pronouncements in Doromal vs. Sandiganbayan 91 is misplaced as what obtained therein was the preparation of an entirely new information as contrasted with mere amendments introduced in the amended information, which also charges petitioners with violating Section 3 (e) of the Anti-Graft Law. In Gaspar vs. Sandiganbayan, 92 We held that there is no rule or law requiring the Tanodbayan to conduct another preliminary investigation of a case under review by it. On the contrary, under P.D. No. 911, in relation to Rule 12, Administrative Order No. VII, the Tanodbayan may, upon review, reverse the findings of the investigator and thereafter "where he finds a prima facie case, to cause the filing of an information in court against the respondent, based on the same sworn statements or evidence submitted, without the necessity of conducting another preliminary investigation." Respondent Sandiganbayan did not then commit any grave abuse of discretion in respect to its Resolutions of 4 January 1990 and 1 February 1990. The petition then must fail. CONCLUSION WHEREFORE, judgment is hereby rendered: 1. GRANTING the petition in G.R. No. 85439; declaring null and void the challenged Order of 28 October 1988 of the respondent Secretary of Agriculture; but denying, for having become moot and academic, the prayer of petitioners that they be restored to their positions in the KBMBPM. 2. DISMISSING, for lack of merit, the petition in G.R. No. 91927. No pronouncement as to costs. IT IS SO ORDERED. G.R. Nos. 115121-25 February 9, 1996

NATIONAL FOOD AUTHORITY and ROMEO G. DAVID, petitioners, vs. THE HON. COURT OF APPEALS, HON. BERNARDO P. ABESAMIS, Presiding Judge, Regional Trial Court, Branch 85, Quezon City, HON. RODOLFO ORTIZ, Presiding Judge, Regional trial Court, Branch 89, Quezon City, HON. TIRSO D. C. VELASCO, Presiding Judge, Regional Trial Court, Branch 88, Quezon City, HON. BENEDICTO B. ULEP, Presiding Judge, Branch 105, Quezon City, HON. JUSTO M. SULTAN, Presiding Judge, Branch 98, Quezon City, COL. FELIX M. MANUBAY, MASADA SECURITY AGENCY, CONTINENTAL WATCHMAN AND SECURITY AGENCY, ALBERTO T. LASALA, and NORMAN D. MAPAGAY,respondents. DECISION

PUNO, J.: The case at bar involves the legality of negotiated security contracts awarded by the National Food Authority (NFA), a government-owned and controlled corporation and its Administrator, Romeo G. David, to several private security agencies, in default of a public bidding. Petitioners NFA and David seek a modification of the decision of the Court of Appeals insofar as it nullifies and enjoins the implementation of the said negotiated security contracts. The facts are not disputed. In 1990, the NFA, through then Administrator Pelayo J. Gabaldon, conducted a public bidding to award security contracts for the protection of its properties and facilities all over the country . Twelve security agencies were awarded one-year contracts, among whom were private respondents Col. Felix M. Manubay (doing business under the name Greenview Investigation and Security Agency), Continental Watchman and Security Agency, Alberto T. Lasala (doing business under the name PSF Watchman and Investigation Agency) and Norman D. Mapagay (doing business under the name People's Protective and Security Agency). In August 1992, petitioner Romeo G. David became NFA Administrator. He caused a review of all security service contracts, procedures on the accreditation of private security agencies and the bidding for security services. Pending this review, Administrator David extended the services of private respondents and the other incumbent security agencies on a periodic basis. The review was completed in March 1993 and new terms for accreditation, bidding and hiring of security agencies were made. The bidding areas were also reclassified and reduced from fourteen NFA regions to only five NFA areas nationwide. A special order was thereafter issued for the implementation of the new rules and procedure. On April 6, 1993, Special Order No. 04-07 was issued under which Administrator David created a Prequalification, Bids and Awards Committee (PBAC) to undertake the prequalification of prospective bidders, conduct the bidding, evaluate the bids tendered and recommend to the Administrator the bids accepted. Notices for prequalification and bidding for security services were published in a newspaper of national circulation. All incumbent security contractors were required to prequalify and only those prequalified were to be allowed to participate in the prebidding and bidding scheduled on June 4 and 18, 1993, respectively. The prebidding and bidding dates were later reset to June 18 and 30, 1993 to give more time for the participants to comply with documentary requirements. Forty-one security agencies, composed of the incumbents and new applicants, including private respondent Masada Security Agency, submitted the necessary documents for prequalification. Upon a review of the documents submitted, the PBAC disqualified respondent Mapagay for failure to submit proof of his financial capability to support his bid. It also disqualified respondent Lasala for alleged failure to meet the five-year service requirement. Only respondents Manubay, Continental and Masada participated in the prebidding and were declared on June 17, 1993 prequalified to bid. Meanwhile, however, two of the applicants who failed to prequalify, namely Lanting Security and Watchman Agency and respondent Lasala, filed separate complaints with the Regional Trial Court, Quezon City to restrain Administrator David and the PBAC from proceeding with the public bidding. As prayed for, restraining orders were issued by the two courts on June 29, 1993 which the NFA received on June 30, 1993, the day of the scheduled bidding. No bidding thus took place on said date. On respondent Lasala's application, the Regional Trial Court, Branch 93, Quezon City issued on July 20, 1993 a preliminary injunction ordering the PBAC to refrain from proceeding with the bidding until the merits of the case shall have been heard and resolved. During the effectivity of the writ of preliminary injunction, Administrator David sent to all incumbent security agencies, including four of herein private respondents, notices of termination dated July 30, 1993. Private

respondents .were informed that their services were to end on August 16, 1993 inasmuch as their respective contracts had expired and they no longer enjoyed the trust and confidence of the NFA. They were thus instructed to withdraw their security guards from all NFA installations. On August 4, 1993, Administrator David contracted the services of seven new security agencies starting August 16, 1993 on a month-to-month basis pending resolution of the injunction against the bidding. Private respondents forthwith filed separate complaints with the Regional Trial Court, Branches 85, 89, 88, 105 and 98, Quezon City for prohibition, mandamus and damages with a prayer for the issuance of a preliminary injunction and restraining order.1 The trial courts issued five separate restraining orders and injunctions ordering the NFA to desist from terminating the services of respondents, and from awarding and installing the new security agencies replacing them. These orders were challenged by NFA and David in separate petitions before the Court of Appeals alleging grave abuse of discretion by respondent judges. The Court of Appeals consolidated the petitions and on March 11, 1994 rendered a decision partially granting the same by annulling that part of the orders restraining NFA from terminating the contracts with the incumbent security agencies but affirming the orders insofar as they enjoined NFA from awarding the contracts to the seven new security agencies. The Court of Appeals ordered: WHEREFORE, premises considered, the petition is found meritorious in part and partially given DUE COURSE . The assailed orders and writs of preliminary injunction are ANNULLED and SET ASIDE insofar as they order petitioners to cease and desist from terminating or implementing the termination of private respondents' expired security contracts with NFA. The said assailed orders and writs of preliminary injunction issued are, however, declared LEGAL, VALID and NOT issued in excess of jurisdiction or with grave abuse of discretion insofar as they enjoin petitioners from awarding the security service contracts to the seven (7) security agencies named by petitioners and/or implementing said awards. To this extent the petitions are DISMISSED for lack of merit.2 Reconsideration was denied on April 15, 1994. Petitioners now assail that part of the decision of the Court of Appeals nullifying and enjoining the implementation of the contracts with the new security agencies. They plead that we restrain the lower courts from enforcing the injunction as against the new security agencies. They argue that the new security agencies were hired as an "emergency measure" after the contracts with the incumbent security agencies expired. They claim that without the new security agencies, the properties of the NFA worth billions of pesos would be exposed to danger of loss and dissipation.3 On May 18, 1994, we issued a temporary restraining order enjoining respondents from enforcing the decision of the Court of Appeals and the writs of preliminary injunction issued by the trial courts "insofar as the same nullify or otherwise stop the implementation of the subject interim negotiated NFA security contracts." We however ordered petitioners to "proceed with the public bidding of the security contracts without delay and submit to us a report on the result of such bidding within 30 days from the holding thereof.4 On July 21, 1994, petitioners submitted a report dated July 19, 1994 informing the Court that a public bidding was held on June 21, 1994 but no contract had been awarded because the PBAC had to study and evaluate each and every bid proposal.5 A second report dated March 3, 1995 was filed by petitioners informing us that deliberation on the bids was prolonged by the necessity of passing upon the technical merits of each bid and by the discovery of collusion between two bidders "which spawned threats against the life of the members of the PBAC." The PBAC decided to conduct a rebidding in Areas 1, 2 and 3 and apprise the court of the results thereof.6 A third report dated July 13, 1995 was submitted where petitioners manifested that still no contract had been awarded because the minimum number of bidders per area was not met. Two bidders7 for Areas 3, 4 and 5 submitted identical bids which were held collusive by the PBAC per advice of the Office of the Government

Corporate Counsel. The rejection of the two agencies reduced the number of bidders in each area below the required minimum compelling the PBAC to recommend a failure of bidding in all five NFA areas. Petitioners, however, could not act on the PBAC's recommendation because a temporary restraining order was issued on April 10, 1995 by the Regional Trial Court, Branch 17, Davao. One of the bidders found in collusion8 filed a complaint with the said Regional Trial Court questioning the legality of the PBAC's rejection of its bids and enjoining NFA and the PBAC from awarding security contracts to any lowest or next lowest qualified bidder.9 We shall now resolve the contentions of petitioners that the Court of Appeals gravely erred: I IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS HAVE NO RIGHT AND CAUSE OF ACTION AGAINST PETITIONERS, AND THEREFORE, ARE NOT ENTITLED TO THE QUESTIONED RELIEF GRANTED THEM BY RESPONDENTS RTC JUDGES AND COURT OF APPEALS; II IN FAILING TO CONSIDER THAT PRIVATE RESPONDENTS DID NOT AVAIL OF, MUCH LESS EXHAUST, AVAILABLE ADMINISTRATIVE REMEDIES, THEREBY RENDERING THEIR COMPLAINT PREMATURE AND LEGALLY DEFICIENT TO MERIT THE GRANT OF JUDICIAL RELIEF; III IN ITS FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE NEW INTERIM MONTHLY NEGOTIATED SECURITY CONTRACTS OF NFA, INTENDED TO PROVIDE NFA WITH AMPLE SECURITY DURING THE TEMPORARY EMERGENCY PERIOD THAT A PUBLIC BIDDING CANNOT BE CONDUCTED BY REASON OF THE INJUNCTIVE ORDERS OF THE COURTS A QUO, ARE SANCTIONED BY LAW, BEING LEGITIMATE EXCEPTION TO THE GENERAL REQUIREMENT OF A PUBLIC BIDDING; IV IN ITS GENERAL FAILURE TO RECOGNIZE THAT THE EXECUTION OF THE INTERIM MONTHLY NEGOTIATED NFA SECURITY CONTRACTS ARE A VALID EXERCISE OF BUSINESS JUDGMENT WITHIN THE PERIMETERS OF NFA MANAGEMENT'S AREA OF COMPETENCE. THE CA, MOREOVER, SERIOUSLY ERRED WHEN IT FAILED TO CONSIDER THAT THE LAW AND THE SITUATIONAL FACTS OF THE CASE SANCTION AND EVEN CALL FOR THE IMMEDIATE IMPLEMENTATION OF SAID INTERIM CONTRACTS.10 We reject these contentions. The principle of exhaustion of administrative remedies is not a hard and fast rule. It is subject to some limitations and exceptions. In this case, private respondents' contracts were terminated in the midst of bidding preparations and their replacements hired barely five days after their termination. In fact, respondent Masada, a prequalified bidder, submitted all requirements and was preparing for the public bidding only to find out that contracts had already been awarded by negotiation. Indeed, an appeal to the NFA Board or Council of Trustees and the Secretary of Agriculture pursuant to the provisions of the Administrative Code of 1987 11 was not a plain, speedy and adequate remedy in the ordinary course of the law. 12 The urgency of the situation compelled private respondents to go to court to stop the implementation of these negotiated security contracts. We are neither impressed by petitioners' claim that the subject contracts were negotiated as a necessity to stave off a crisis that gripped the NFA, i.e., the loss, destruction and dissipation of their properties, warehouses, rice and corn stocks and facilities with an estimated value of P19 billion. Petitioners allege they were merely

exercising their sound business judgment in an emergency situation brought about by respondent security agencies themselves who, in the first place, obtained the injunctions from the Quezon City trial courts. First of all, the restraining orders and writ of preliminary injunction issued by the two Quezon City trial courts on complaint by Lanting and respondent Lasala suspending the public bidding scheduled on June 30, 1993 did not result in the emergency situation petitioners alleged. The security vacuum was created when petitioners terminated the services of the incumbent security agencies after the issuance of the said orders and before the injunctions issued by respondent trial courts on application by private respondents. When the bidding did not take place on June 30, 1993, the incumbent security agencies continued rendering services to petitioners, albeit on a temporary and provisional basis. However, one month later, they were all terminated on grounds of expiration of contract and loss of trust and confidence. We agree with the Court of Appeals that it was well within the power of petitioners to discontinue the services of the incumbent security agencies. Their contracts with the NFA expired in 1992, hence, their services were deemed terminated on said date. 13 The fact that these agencies continued rendering services to NFA did not amount to an implied. renewal of their respective contracts. Respondents do not have any vested right to continue their contracts with NFA. They remained and continued performing their tasks at the tolerance of NFA who, by sending the notices of termination, simply reminded them of the expiration of their contracts. 14 These contracts can be renewed, revived or extended only by mutual consent of the parties. No court can compel a party to agree to a contract thru the instrumentality of a writ of preliminary injunction. Nevertheless, what causes eyebrows to arch is the act of petitioners in discontinuing the incumbents' services. Respondents Manubay and Lasala allege that their agencies had been rendering security services to the NFA since 1985 15 and 1988, 16 respectively. Moreover, Manubay and Continental passed the prequalification stage and were declared by the PBAC eligible to join the public bidding. Scarcely a month later, however, their services were terminated at the same time and for the same reasons as the rest of the incumbent security agencies. It is certainly strange why petitioners chose to do away with the incumbents' services at a time when a "security void" would directly and most necessarily result from their withdrawal. The least petitioners could have done under the circumstances was to maintain the status quo until the writ of preliminary injunction obtained by respondent Lasala shall have been lifted. Assuming arguendo that an emergency actually existed and the negotiated contracts were justified, petitioners' continued failure to conduct a public bidding and select the bidder within a reasonable time casts doubts on the good faith behind the negotiated contracts. This Court, on May 18, 1994, specifically ordered petitioners to conduct a public bidding and report the results within thirty days from holding thereof. In compliance, a public bidding was conducted on June 21, 1994 but until now no bidder has been chosen and no contract has been awarded. Petitioners cited various reasons for the delay. They alleged that the minimum number of bidders in three of the five areas had not been met and that two bidders in the other two areas were in collusion. This suspicion of collusion generated so much controversy that the PBAC could not decide whether to include the bids of the two agencies. Finally, the PBAC excluded them and recommended that the Administrator declare a failure of bidding in all five areas of responsibility. The Administrator should have immediately acted upon the PBAC's recommendation and accordingly scheduled another public bidding but somehow petitioners chose to abide by a restraining order of the Davao trial court. It must be noted that what the Davao trial court issued was a temporary restraining order enjoining petitioners from awarding the contracts to the lowest or next lowest bidder at the June 21, 1994 public bidding. It was not a writ of preliminary injunction nor was an order restraining the holding of another bidding. Petitioners and the PBAC are obviously taking their sweet time to select and award security contracts to winning bidders. They took one year evaluating and deliberating on thirteen bid proposals only to declare a failure of bidding in all five areas of responsibility. Then they relied on a restraining order of a trial court after no less that this Highest Court specifically ordered them to conduct and conclude a public bidding.

Litigants should be conscious of the position lower courts occupy in the operation of the integrated judicial system of the nation. 17 There is only one Supreme Court and all courts and litigants should take their bearings from this Court. 18 Petitioners' manifest reluctance to hold a public bidding and award a contract to the winning bidder smacks of favoritism and partiality toward the security agencies to whom it awarded the negotiated contracts and cannot be countenanced. A competitive public bidding aims to protect the public interest by giving the public the best possible advantages thru open competition. It is a mechanism that enables the government agency to avoid or preclude anomalies in the execution of public contracts. 19 The General Appropriations Act (GAA) of 1993 20 cannot be used by petitioners to justify their actuations. An appropriations act is primarily a special type of legislation whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit. 21 Section 31 on the General Provisions of the GAA of 1993 merely authorizes the heads of departments, bureaus, offices or agencies of the national government to hire, through public bidding or negotiated contracts, contractual personnel to perform specific activities or services related or incidental to their functions. This law specifically authorizes expenditures for the hiring of these personnel. 22 It is not the governing law on the award of service contracts by government agencies nor does it do away with the general requirement of public bidding. 23 IN VIEW WHEREOF, the petition is dismissed and the decision dated March 11, 1994 and resolution dated April 15, 1994 of the Court of Appeals in CA-G.R. SP Nos. 32213, 32230 and 32274-76 are affirmed. The temporary restraining order issued by this Court on May 18, 1994 is hereby lifted. Treble costs against petitioners. SO ORDERED. G.R. No. L-27793 February 28, 1972 LETICIA CIPRIANO, petitioner, vs. GREGORIO P. MARCELINO and the HONORABLE RAFAEL DELA CRUZ, Presiding Judge of the Third Branch, Court of First Instance, Camarines Sur, respondents. Jaime C. Viola for petitioner. Borja and Noval for respondent Gregorio P. Marcelino.

CASTRO, J.:p Leticia Cipriano served as record clerk in the office of municipal treasurer Gregorio P. Marcelino of Calabanga, Camarines Sur, from January 1, 1963 to January 15, 1966, at a monthly salary of eighty pesos (P80). On the latter date she resigned. Because the respondent municipal treasurer, upon her severance from the service, refused to pay her salary corresponding to the period from September 1, 1965 to January 15, 1966, inclusive (P349), as well as the commutation equivalent of her accumulated vacation and sick leaves (P600), Cipriano filed on May 5, 1966 with the Court of First Instance of Camarines Sur an action for mandamus (civil case 6152) 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 on May 15, 1967.

Hence, the present petition for certiorari on pure questions of law. Cipriano contends that there is no law that requires an appeal to the Provincial Treasurer, Secretary of Finance, Auditor General and then the President of the Philippines, from the refusal by a municipal treasurer to pay the salary and money value of the unused vacation and sick leaves of a municipal employee; that assuming that an appeal all the way up to the President of the Philippines is an administrative remedy authorized by law, the same is not plain, speedy and adequate; that the doctrine of exhaustion is not applicable when the questions to be resolved are purely of law; that the payment of her claim being a ministerial duty of the municipal treasurer,mandamus is the proper remedy to compel such payment; and, finally, that to require a small government employee such as the petitioner Cipriano to appeal all the way up to the President of the Philippines on such an inconsequential matter as the collection of the sum of P949, would be oppressive and expensive not only to the employee but also to her dependents as well. Upon the other hand, Marcelino insists that the petition for mandamus below states no cause of action as the petitioner Cipriano has not exhausted all administrative remedies available to her; that she has not acquired any right to be paid her salary and accumulated vacation and sick leave pay by reason of her failure to comply with the requirements prescribed in the 1966 Manual on Pre-audit of Government Disbursements; and that she still has outstanding accountability in the sense she has not accounted for the missing triplicate copies of three official receipts which were in her custody. The documents required to be accomplished before Cipriano can be paid her salary and her accumulated vacation and sick leave pay are (a) a letter of resignation duly accepted, (b) a certificate of clearance from money and property accountability, and (c) a certificate of clearance from the Government Service Insurance System (p. 9, 1966 Manual on Pre-audit of Government Disbursements). In her memorandum filed on December 22, 1967 with this Court, Cipriano avers that she has a written resignation duly accepted by the mayor of Calabanga; that in the investigation conducted personally by the respondent Marcelino with respect to the triplicate copies adverted to by him, it was his finding that other persons, and not the petitioner, are accountable for them; that the petitioner has no money or property accountability; and, finally, that she need not present a certificate of clearance from the GSIS because she is not a member of the System. These assertions are not controverted. We have held time and time again that the principle of exhaustion of administrative remedies is not without exception, 1 not is it a condition precedent to judicial relief. 2 The principle may be disregarded when it does not provide a plain, speedy and adequate remedy. 3 It may and should be relaxed when its application may cause great and irreparable damage. 4 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. In De Leon vs. Libay (see footnote 3), this Court, with considerable emphasis, made this statement which isapropos of the case at bar: . 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 less, 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 of 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. ACCORDINGLY, the present petition is granted, and the orders a quo of April 14 and May 14, 1967 are set aside. The municipal treasurer of the Municipality of Calabanga, Camarines Sur, is hereby ordered to pay to the petitioner, Leticia Cipriano, without further delay, the total sum of nine hundred forty-nine (P949) pesos. No pronouncement as to costs. G.R. No. L-21653 May 31, 1965

VICENTE DE LARA, JR., ET AL., petitioners, vs. GAUDENCIO CLORIBEL, ET AL., respondents. Tranquilino O. Calo, Jr. and Angel B. Quimpo for petitioners. Ramon Encarnacion, Jr. for respondents. BAUTISTA ANGELO, J.: On June 17, 1963, the P & B Enterprises Co., Inc. filed a complaint before the Court of First Instance of Manila for injunction and damages against Vicente de Lara, Jr. and the Bureau of Forestry. It was alleged that Vicente de Lara, Jr. was granted on August 5, 1957 a timber license to log over an area of about 300 hectares in Claveria, Misamis Oriental, for which he was authorized to cut annually about 600 cubic meters of timber. Although De Lara failed to undertake any operation in the area covered by his license, he was, however, able to secure its renewal from year to year up to 1961, while his latest renewal for 1962 was rejected by the Bureau of Forestry. During De Lara's period of non-renewal of his timber license, the application for a similar forest concession filed by P & B Enterprises Co., Inc. was processed, the same having been finally approved on September 25, 1961 over a forest area of approximately 25,000 hectares also situated in Claveria, Misamis Oriental. Immediately after the granting of its timber license, the company procured heavy equipment and introduced substantial improvements thereon consisting of access road, base camps, fuel facilities and the like, in compliance with the rules and regulations of the Bureau of Forestry. Likewise, by virtue of the authority granted by said Bureau to construct logging roads within the forest area covered by the license, the company commenced in December, 1961 the construction of a logging road of approximately 7 kilometers in length which extended not only along the plaintiff's concession but partially within the area covered by the latter's timber concession, which project cost the company approximately P139,000.00. In the meantime, De Lara's petition for renewal of his license for 1963 was approved, which, as amended, included a portion of the forest concession area originally granted to P & B Enterprises Co., Inc., whereupon the latter protested against such approval insofar as the portion of the area in conflict is concerned, but the protest was overruled. Hence, the company appealed the Director of Forestry's decision to the Secretary of Agriculture and Natural Resources, but until now the appeal remains pending study and consideration by said official. Despite its protest and its appeal is abovestated, however, De Lara, aided by his men as well as by Acting Governor Maximo G. Rodriguez of Misamis Oriental, continued his logging operation even if, in doing so, he trespassed upon and used the road constructed by the company in the transportation of his logs cut within the contested area. The protest of the company against such act and usurpation was at first heeded by the Director of the Bureau of Forestry by prohibiting De Lara to use the road constructed by the company, but the same was later countermanded thus prompting the company to appeal to the Secretary of Agriculture and

Natural Resources, who on June 7, 1963 issued an order prohibiting De Lara from entering and operating within the contested area until after the conflict existing between the two loggers shall have been finally decided. However, since despite this order De Lara continued to operate and cut logs within the contested area to the great damage and prejudice of the company, the latter commenced the present action as stated in the early part of this decision. Acceding to plaintiff's request, respondent court issued ex parte the writ of preliminary injunction prayed for enjoining Vicente De Lara and his aids from cutting, hauling, shipping, and exporting logs from the forest area covered by the timber license issued in plaintiff's favor. De Lara filed a motion to dismiss as well as to dissolve the injunction alleging, among other grounds, that the complaint fails to state a cause of action in that plaintiff has failed to exhaust its administrative remedies it appearing that the appeal taken to the Secretary of Agriculture and Natural Resources regarding the conflict in the logging area of the litigants was still pending determination by said official. But respondent court denied both the motion to dismiss as well as the dissolution of the writ of preliminary injunction. As a consequence, defendant De Lara interposed the present petition for certiorari with a request for the issuance of a writ of preliminary injunction in order to maintain the status quo of the logging operations of the parties prior to the institution of the instant case. This petition was given due course, and upon posting a bond of P5,000.00, this Court issued the injunction prayed for. Respondents, in their answer, admitted the issuance by respondent court of an ex parte writ of injunction restraining petitioner De Lara from cutting, hauling, shipping and exporting logs from the contested forest area and from exporting his logs along the road constructed by respondent company exclusively for its use, but they averred that such injunction was necessary to prevent bodily injury and violence to the employees of respondent company in view of De Lara's threat to appropriate and utilize the private logging road constructed by said company through the use of force and political influence and in open defiance of an order of the Secretary of Agriculture and Natural Resources not to do so until the conflict existing between the two loggers shall have been finally decided. They prayed that the petition be dismissed and the writ issued dissolved.
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The issue now to be resolved is: Has respondent court committed a grave abuse of discretion in issuing ex partethe writ of preliminary injunction prayed for by respondent company? It should be recalled that one of the grounds invoked by the petitioner De Lara before respondent court in his motion to dismiss the complaint filed by respondent company is that the latter has failed to exhaust all its administrative remedies in that it filed said complaint before the appeal taken from the order of the Director of Forestry allowing De Lara to use the logging road constructed within the contested forest area could be finally acted upon by the Secretary of Agricultural and Natural Resources, thereby implying that such action was premature. 1 But this motion was denied expecting only insofar as it affects the logs already cut by De Lara on the uncontested area whose transportation was allowed to pass through the logging road constructed by the company. And now it is contended that such denial constitutes a grave abuse of discretion. While as a rule of petition for cetiorari which is interposed to dispute the validity of an order or decision that may be rendered by an administrative official in pursuance of the powers and duties with which he is invested cannot be entertained if the party in interest fails to avail of the administrative remedies officials are the most competent to pass upon matters that exclusively come within their jurisdiction, such rule may be relaxed when its application may cause great and irreparable damage which cannot otherwise be prevented except by taking the opportune appropriate court action. Stated otherwise, the rule is inapplicable if it should appear that an irreparable damage and injury will be suffered by a party if he should await, before taking court action, the final action of the administrative official concerned on the matter. This is the situation herein obtained. Because of the conflict existing between petitioner and respondent company regarding a portion of the logging area awarded to them, as well as the use of the logging road constructed by the company, the case was taken to the Secretary of Agriculture and Natural Resources for his final resolution, who in the meantime directed petitioner "to refrain from entering and operating within the contested area until the said case shall have been finally decided," but before such resolution could come De Lara disregarded the directive and continued operating within the contested area to the irreparable damage and injury of the company. This act of defiance prompted the company to take the needed appropriate action. In the circumstances, we find the action taken by respondent court proper and justified even if no final decision has as yet been rendered by the Secretary of

Agriculture and Natural Resources. Respondent court did nothing but to maintain and put into effect the directive issued by said official. Indeed, before the protest lodged by the company could be decided regarding the conflicting interests it is best that the status quo be maintained as was done by respondent court. We see on this no abuse of discretion. WHEREFORE, petition is dismissed with costs against petitioner Vicente De Lara, Jr. The injunction issued by this Court is hereby dissolved. G.R. No. L-19180 October 31, 1963

NATIONAL DEVELOPMENT COMPANY, ET AL., petitioners-appellees, vs. THE COLLECTOR OF CUSTOMS OF MANILA, respondent-appellant. Ross, Selph and Carrascoso for petitioners-appellees. Office of the Solicitor General for respondent-appellant. BAUTISTA ANGELO, J.: The National Development Company which is engaged in the shipping business under the name of "Philippine National Lines" is the owner of steamship "S.S. Doa Nati" whose local agent in Manila is A. V. Rocha. On August 4, 1960, the Collector of Customs sent a notice to C.F. Sharp & Company as alleged operator of the vessel informing it that said vessel was apprehended and found to have committed a violation of the customs laws and regulations in that it carried an unmanifested cargo consisting of one RCA Victor TV set 21" in violation of Section 2521 of the Tariff and Customs Code. Inserted in said notice is a note of the following tenor: "The above article was being carried away by Dr. Basilio de Leon y Mendez, official doctor of M/S "Doa Nati" who readily admitted ownership of the same." C.F. Sharp & Company was given 48 hours to show cause why no administrative fine should be imposed upon it for said violation. C.F. Sharp & Company, not being the agent or operator of the vessel, referred the notice to A. V. Rocha, the agent and operator thereof, who on August 8, 1960, answered the notice stating, among other things, that the television set referred to therein was not a cargo of the vessel and, therefore, was not required by law to be manifested. Rocha stated further: "If this explanation is not sufficient, we request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to sustain the charge and to present evidence in its defense." The Collector of Customs replied to Rocha on August 9, 1960 stating that the television set in question was a cargo on board the vessel and that he does not find his explanation satisfactory enough to exempt the vessel from liability for violating Section 2521 of the Tariff and Customs Code. In said letter, the collector imposed a fine of P5,000.00 on the vessel and ordered payment thereof within 48 hours with a threat that he will deny clearance to said vessel and will issue a warrant of seizure and detention against it if the fine is not paid. And considering that the Collector of Customs has exceeded his jurisdiction or committed a grave abuse of discretion in imposing the fine of P5,000.00 on the vessel without the benefit of an investigation or hearing as requested by A. V. Rocha, the National Development Company, as owner of the vessel, as well as A. V. Rocha as agent and operator thereof, filed the instant special civil action of certiorari with preliminary injunction before the Court of First Instance of Manila against the official abovementioned. The court, finding the petition for injunction sufficient in form and substance, issued ex parte the writ prayed for upon the filing of a bond in the amount of P5,00.00. Respondent set up the following special defenses: (1) the court a quo has no jurisdiction to act on matters arising from violations of the Customs Law, but the Court of Tax Appeals; (2) assuming that it has, petitioners have not exhausted all available administrative remedies, one of which is to appeal to the Commissioner of Customs; (3) the requirements of administrative due process have already been complied with in that the written notice given by respondent to petitioner Rocha clearly specified the nature of the violation complained of and that the defense set up by Rocha constitute merely a legal issue which does not require further

investigation; and (4) the investigation conducted by the customs authorities showed that the television set in question was unloaded by the ship's doctor without going thru the custom house as required by law and was not declared either in the ship's manifest or in the crew declaration list. On the basis of the stipulation of facts submitted by the parties, the court a quo rendered decision setting aside the ruling of respondent which imposes a fine of P5,000.00 on the vessel Doa Nati payable within 48 hours from receipt thereof. The court stated that said ruling appears to be unjust and arbitrary because the party affected has not been accorded the investigation it requested from the Collector of Customs. Respondent interposed the present appeal. When the customs authorities found that the vessel Doa Nati carried on board an unmanifested cargo consisting of one RCA Victor TV set 21" in violation of Section 2521 of the Tariff and Customs Code, respondent sent a written notice to C. F. Sharp & Company, believing it to be the operator or agent of the vessel, and when the latter referred the notice to A. V. Rocha, the real operator of the vessel, for such step as he may deem necessary to be taken the latter answered the letter stating that the television set was not cargo and so was not required by law to be manifested, and he added to his answer the following: "If this explanation is not sufficient, we request that this case be set for investigation and hearing in order to enable the vessel to be informed of the evidence against it to sustain the charge and to present evidence in its defense. "Respondent, however, replied to this letter saying that said television was a cargo within the meaning of the law and so he does not find his explanation satisfactory and then and there imposed on the vessel a fine of P5,00.00. Respondent even went further. He ordered that said fine be paid within 48 hours from receipt with a threat that the vessel would be denied clearance and a warrant of seizure would be issued if the fine will not be paid. Considering this to be a grave abuse of discretion, petitioners commenced the present action for certiorari before the court a quo. We find this action proper for it really appears that petitioner Rocha was not given an opportunity to prove that the television set complained of is not a cargo that needs to be manifested as required by Section 2521 of the Tariff and Customs Code. Under said section, in order that an imported article or merchandise may be considered a cargo that should be manifested it is first necessary that it be so established for the reason that there are other effects that a vessel may carry that are excluded from the requirement of the law, among which are the personal effects of the members of the crew. The fact that the set in question was claimed by the customs authorities not to be within the exception does not automatically make the vessel liable. It is still necessary that the vessel, its owner or operator, be given a chance to show otherwise. This is precisely what petitioner Rocha has requested in his letter. Not only was he denied this chance, but respondent collector immediately imposed upon the vessel the huge fine of P5,000.00. This is a denial of the elementary rule of due process. True it is that the proceedings before the Collector of Customs insofar as the determination of any act or irregularity that may involve a violation of any customs law or regulation is concerned, or of any act arising under the Tariff and Customs Code, are not judicial in character, but merely administrative, where the rules of procedure are generally disregarded, but even in the administrative proceedings due process should be observed because that is a right enshrined in our Constitution. The right to due process is not merely statutory. It is a constitutional right. Indeed, our Constitution provides that "No person shall be deprived of life, liberty, or property without due process of law", which clause epitomize the principle of justice which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. That this principle applies with equal force to administrative proceedings was well elaborated upon by this Court in the Ang Tibay case as follows: ... The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justiciable case coming before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. ... There are cardinal primary rights which must be respected even in proceedings of this character. The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. Not only must the party be

given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. No only must there be some evidence to support a finding or conclusion, but the evidence must be substantial. The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reason for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. (Ang Tibay, et al. v. The Court of Industrial Relations, et al., 40 O.G., No. 11, Supp. p. 29). There is, therefore, no point in the contention that the court a quo has no jurisdiction over the present case because what is here involved is not whether the imposition of the fine by the Collector of Customs on the operator of the ship is correct or not but whether he acted properly in imposing said fine without first giving the operator an opportunity to be heard. Here we said that he acted improvidently and so the action taken against him is in accordance with Rule 67 of our Rules of Court. Another point raised is that petitioners have brought this action prematurely for they have not yet exhausted all the administrative remedies available to them, one of which is to appeal the ruling to the Commissioner of Customs. This may be true, but such step we do not consider a plain, speedy or adequate remedy in the ordinary course of law as would prevent petitioners from taking the present action, for it is undisputed that respondent collector has acted in utter disregard of the principle of due process. WHEREFORE, the decision appealed from is affirmed. No costs. G.R. No. L-39655 March 21, 1975 ARROW TRANSPORTATION CORPORATION, petitioner, vs. BOARD OF TRANSPORTATION and SULTAN RENT-A-CAR, INC., respondents. Manuel Imbong for petitioner. Office of the Solicitor General Estelito P. Mendoza and Assistant Solicitor General Reynato S. Puno for respondent Board. Pastor C. Bacani and Ernesto Ganiban for private respondent.

FERNANDO, J.:

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It must have been the realization that a challenge to a provisional permit issued by respondent Board of Transportation 1 based on the absence of a hearing is not likely to be attended with success that prompted petitioner to rely on another aspect of procedural due process, the infirmity alleged being traceable to what it considered lack of jurisdiction. 2 There is the invocation of Philippine Long Distance Telephone Company v. Medina 3 with its mention of both competitors and the public being notified. It does not suffice. Something more, which more, is necessary. The reliance is misplaced. Its applicability is by no means obvious. As was pointed out in the answer of respondent Board of Transportation, such a claim is hardly persuasive with the procedure set forth in Presidential Decree No. 101 being followed and the provisional authority to operate being based on an urgent public need. Such a contention merits the approval of the Court. The petition cannot prosper.

Both petitioner and private respondent Sultan Rent-a-Car are domestic corporations. 4 The former has in his favor a certificate of public convenience to operate a public utility bus air-conditioned-auto-truck service from Cebu City to Mactan International Airport and vice-versa with the use of twenty (20) units. 5 Private respondent on September 12, 1974 filed a petition with the respondent Board for the issuance of a certificate of public convenience to operate a similar service on the same line. 6 Eight days later, without the required publication, the Board issued an order granting it provisional permit to operate such auto-truck service on the line applied for. 7There was a motion for reconsideration and for the cancellation of such provisional permit filed on October 21, 1974, 8 but without awaiting final action thereon, this petition was filed. 9 This is the explanation: "That petitioner has not waited for the resolution of his Motion for Reconsideration before going to this Court considering that the question involved herein is purely a legal one, aside from the fact that the issuance of the Order without the Board having acquired jurisdiction of the case yet, is patently illegal or was performed without jurisdiction." 10 So it was set forth in the petition filed on November 16, 1974. As a preliminary injunction was likewise sought, a hearing was scheduled for November 29, 1974. It was cancelled, this Court issuing a resolution instead, requiring respondents to file an answer not later than December 6, 1974 and setting the hearing on the merits of the case on Wednesday, December 11, 1974. In the answer submitted the facts alleged were substantially admitted. 11 It denied the allegation that there must be a publication before a provisional permit can be issued, reference being made, as noted, to Presidential Decree No. 101, which authorized respondent Board to grant provisional permits when warranted by compelling circumstances and to proceed promptly along the method of legislative inquiry. 12The case was then argued on December 11, 1974, Attorney Manuel Imbong appearing for petitioner and Assistant Solicitor General Reynato S. Puno appearing for respondent Board of Transportation. 13 Thereafter, the parties were given twenty days to file their respective memoranda and an additional ten-day period to submit replies thereto if so minded. In time all the pleadings were submitted, and the case was ready for decision. The petition, to repeat, cannot prosper. 1. It is to be, admitted that the claim for relief on the asserted constitutional deficiency based on procedural due process, not from the standpoint of the absence of a hearing but from the lack of jurisdiction without the required publication having been made, was argued vigorously and developed exhaustively in the memoranda of petitioner. The arguments set forth, while impressed with plausibility, do not suffice to justify the grant of certiorari. Moreover, the doctrine announced in the Philippine Long Distance Telephone Company decision, heavily leaned on by petitioner is, at the most, a frail and insubstantial support and gives way to decisions of this Court that have an even more specific bearing on this litigation. 2. A barrier to petitioner's pretension, not only formidable but also insurmountable, is the well-settled doctrine that for a provisional permit, an ex parte hearing suffices. 14 The decisive consideration is the existence of the public need. 15 That was shown in this case, respondent Board, on the basis of demonstrable data, being satisfied of the pressing necessity for the grant of the provisional permit sought. There is no warrant for the nullification of what was ordered by it. It must have been, as already noted, this state of the law that did lead petitioner to harp on its interpretation of what for it is the teaching of the Philippine Long Distance Telephone Company decision. 16 There was therein stated that one of the compelling reasons that led this Court to hold that the defunct Public Service Commission did not acquire jurisdiction was that no provision was made for bringing in as parties thereto the competitors of the Philippine Long Distance Telephone Company. 17 That is the basis for the objection on procedural due process ground. While no doubt such a holding was necessary for the decision of that case which dealt with a petition for the reexamination of a decision that was held to be final and executory, it finds no application to this controversy dealing with a provisional permit. This is made clear by this portion of the opinion of Justice Sanchez: "Araneta seeks reexamination of the rates approved by the Commission. Araneta avers that PLDT can carry out its improvement and expansion program at less onerous terms to the subscribers. But Araneta [University] was not a party to the rate-fixing case or to any of the other proceedings below. These rate-fixing and allied cases terminated with the final judgment of January 9, 1964. Not being a party, it could not have moved to reconsider said decision. Nor could it have appealed from that decision it had no standing in that case. Even if we treat Araneta's reexamination petition as one for reconsideration, the time therefor has long passed. 18 It was then stated: The reexamination herein sought by Araneta, perforce seeks the fixing of new and different rates. 19Further: Araneta in effect, institutes a fresh petition for new rates different from those already established. Such petition is a proceeding separate and distinct from those concluded by the final judgment of PSC of January 9, 1964. 20 The conclusion, therefore,

necessarily follows:" We hold that the Public Service Commission may not reduce or increase rates established in a judgment that has become final, without proper notice; and that a Commission order reducing or increasing said rates without such notice is void." 21 Under the facts of that case, the procedural due process infirmity amounting to lack of jurisdiction is quite apparent. The opposite is true with this present petition which deals with a grant of provisional permit. It would be to lift out of context the reference made in the aforesaid opinion with reference to notification to the competitors to give a color of applicability to the situation before us. Clearly then, the allegation of a failure to follow the command of the due process guarantee is bereft of any legal foundation. 3. The question of whether the controversy is ripe for judicial determination was likewise argued by the parties. For it is undeniable that at the time the petition was filed. there was pending with the respondent Board a motion for reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection grounded on prematurity can be raised. Nonetheless, counsel for petitioner would stress that certiorari lies as the failure to observe procedural due process ousted respondent Board of whatever jurisdiction it could have had in the premises. This Court was impelled to go into the merits of the controversy at this stage, not only because of the importance of the issue raised but also because of the strong public interest in having the matter settled. As was set forth in Executive Order No. 101 which prescribes the procedure to be followed by respondent Board, it is the policy of the State, as swiftly as possible, to improve the deplorable condition of vehicular traffic, obtain maximum utilization of existing public motor vehicles and eradicate the harmful and unlawful trade of clandestine operators, as well as update the standard of those carrying such business, making it "imperative to provide, among other urgently needed measures, more expeditious methods in prescribing, redefining, or modifying the lines and mode of operation of public utility motor vehicles that now or thereafter, may operate in this country. 22 It is essential then both from the standpoint of the firms engaged as well as of the riding public to ascertain whether or not the procedure followed in this case and very likely in others of a similar nature satisfies the procedural due process requirement. Thus its ripeness for adjudication becomes apparent. To paraphrase what was said in Edu v. Ericta 23 where the validity of a legislation was passed upon in a certiorari proceeding to annul and set aside a writ of preliminary injunction, to so act would be to conserve both time and effort. Those desiring to engage in public utility business as well as the public are both vitally concerned with the final determination of the standards to be followed in the procedure that must be observed. There is, to repeat, a great public interest in a definitive outcome of the crucial issue involved. One of the most noted authorities on Administrative Law, professor Kenneth Culp Davis, discussing the ripeness concept, is of the view that the resolution of what could be a debilitating uncertainty with the conceded ability of the judiciary to work out a solution of the problem posed is a potent argument for minimizing the emphasis laid on its technical aspect. 24 WHEREFORE, the petition for certiorari is dismissed. No costs. G.R. No. 96605 May 8, 1992 FELICIANO MORCOSO, petitioner, vs. HON. COURT OF APPEALS * and SPS. TOMAS MAQUIRANG and ROSA TIROLMAQUIRANG, respondents. Bonifacio, Dela Cruz & Bonifacio Law Offices for petitioner.

PARAS, J.: In 1984, private respondent Rosa Tirol (now Rosa Tirol-Maquirang) filed a complaint against the petitioner Feliciano Morcoso for the recovery of possession and declaration of ownership of a fishpond situated in Barangay Aslum, Ibajay, Aklan.

In her complaint, she alleged that the said fishpond is a part of the 4.5 hectare of land she inherited from her father Eriberto Tirol in 1930; that in December 28, 1979, she entered into a lease agreement with Morcoso, allowing the latter without paying rental and for a period of six years, to develop into a fishpond a 5,880 sq.m. portion of the land she inherited, with usufructuary rights (Exhibit "A"); that while working on the fishpond, Morcoso was informed by the personnel of the Bureau of Fisheries and Aquatic Resources (BFAR, for brevity) that said portion of the land of Tirol leased to him is within the area of alienable and disposable public land; that in 1973, Morcoso applied for a fishpond permit with the BFAR; that the latter subsequently refused to surrender the possession of the fishpond to Tirol in 1976 when the term of the lease expired; and that Tirol filed an unlawful detainer case against Morcoso but the same was dismissed for not having been timely filed. As his defense, Morcoso claimed that the fishpond in dispute from which he is being evicted is not the fishpond subject of the contract of lease; that he developed two fishponds: (a) the fishpond subject of the lease, from which he was forcibly ejected by Tirol in 1971 as a result of a disagreement with her; and (b) the fishpond in dispute, which adjoins the first fishpond and which he developed after the BFAR personnel assured him that the area he had moved to is a forested area, suitable for fishpond development; that he applied for a fishpond permit in 1973; and that he declared said fishpond in his name for taxation purposes. Morcoso also assailed the jurisdiction of the trial court because of a pending administrative case before the BFAR regarding their conflicting claims. (pp. 13-14,Rollo) After trial, the trial court ruled that the fishpond in dispute belongs to Tirol. The dispositive portion of the decision reads thus WHEREFORE, the judgment is hereby rendered in favor of the plaintiffs and against the defendant a) Declaring the plaintiffs the owners and entitled to the possession of the fishpond in question; b) Ordering the defendant to deliver to the plaintiffs the possession of said fishpond in question; c) Ordering the defendant to pay to the plaintiffs the amount of One Thousand five Hundred (P1,500.00) pesos per annum from December 28, 1976 to 1980 and Three Thousand (P3,000.00) pesos per annum from 1980 up to time the possession of the fishpond in question is delivered to the plaintiffs, as reasonable compensation for the use and occupation thereof; d) Ordering the defendant to pay to the plaintiffs Three Thousand (P3,000.00) as attorney's fee, and to pay the costs of this suit. (pp. 14-15, Rollo) The Court of Appeals affirmed said decision on appeal. In this petition, the petitioner asserts that the trial court erred: IN TAKING COGNIZANCE OF A CONFLICT OF CLAIMS INVOLVING A PARCEL OF LAND OF THE PUBLIC DOMAIN UNDER THE ADMINISTRATION AND CONTROL OF ANOTHER GOVERNMENT AGENCY; IN DECLARING TIROL AS THE OWNER OF SAID PARCEL OF LAND OF THE PUBLIC DOMAIN (pp. 4-5, Rollo) We find no merit in the petition.

The doctrine requiring prior exhaustion of administrative remedies before recourse to courts is inapplicable to the instant case because the fishpond in dispute is private and not public land. (Obanana v. Boncaros, 128 SCRA 457) What the Court of Appeals found in this regard need not be further elaborated upon. The appellate Court ruled: In the sketch of the 4.5 hectare land (Exh. B ) of plaintiff-appellee Rosa T. Maquirang, are two lots, identified as Lot 1 (Exh. B-1) and Lot 2 (Exh. B-2). During the pre-trial, the parties agreed as to the identity of the land in dispute, which is Lot 1. It is claimed by defendant-appellant that the subject of the lease contract (Exh. A) is Lot 2 and that he transferred to Lot 1, and developed the same into a fishpond, upon being informed that it was a public land by BFAR personnel. However, appellee insists that Lot 1 is the same fishpond which was the subject of the lease contract (Exh. A). We find merit to appellee's contention. In the lease contract, the land subject of the lease is bounded as follows: North, Luciano Tirol Sitiar; East, Ciriaco, Rosa all Tirol; South, Ipil Creek; and, West, Adiango Creek. In the sketch (Exh. B), Lot 1 (Exh. B-1) which admittedly is the land in dispute, has the same boundaries in the north, east and south, except in the West side, which is Aslum River. The discrepancy, however, is more apparent than real. As explained by Gil Maquirang, the son of Appellee, Adiango Creek became Aslum River "due to the change of course of Aslum River flowing through the way of the former Adiango Creek it became a dominant river and therefore it is now called Aslum River." (p. 6 tsn; May 31, 1988) Thus, the former Adiangco Creek is now known as Aslum River. Moreover, even the sketch plan of the Bureau of Fisheries, which is appellant's Exhibit 5 shows the same area with the same adjoining owners as Lot 1 of appellee's sketch (Exh. B). Without doubt, Lot 1 (Exh. B-1) was the subject of the lease contract between appellee Rosa Tirol, as lessor and appellant Feliciano Morcoso, as lessee. Contrary to the claim of appellant, Lot 2 was not the subject of the lease contract, for the simple reason that the boundaries thereof are different from that of Lot 1. In the lease contract, the adjoining owner on the North is Luciana Tirol. In the sketch (Exh. B), the adjoining owner of Lot 2 is Rosa Tirol. The other adjoining owners of Lot 2, as depicted in the sketch (Exh. 2), are clearly different from those appearing in the lease contract (Exh. A). It is not true, therefore, that appellant developed Lot 2 in 1968 for the appellees and it was the subject of the lease contract. Neither is it true that Lot 1 was never leased to him and he developed it into a fishpond only in 1972 when he allegedly learned that it was a public land. . .. The fishpond is not part of the public domain, as claimed by appellant. We agree with the trial court's reasoning that The plaintiffs have sufficiently established that they and their predecessorsin-interest have been in possession of the land in question under claim of ownership for a very long period of time. Eriberto Tirol, father of Rosa Tirol, purchased the land in question which was then included in a bigger parcel on June 28, 1918 by means of a public instrument, Exhibit 1 (Exh. I-1-English translation), and had it declared for taxation purposes as early as 1921, Exhibit J. He paid the corresponding land taxes thereon as shown by his tax receipts mentioned above. Upon his death in 1930, Rosa Tirol succeeded to its possession, had it declared for taxation purposes and paid continuously the real estate taxes thereon. Nobody had disturbed them in their possession and usufruct of the land up to the time the defendant made an unwarranted claim over it. The defendant, emboldened and taking advantage of the information he got from the personnel of the Bureau of Fisheries and Aquatic Resources that the fishpond under lease was a public land, applied for a fishpond permit and thereby refused to recognize the existing and legitimate claim of ownership over the land by the plaintiffs.' (pp. 15-17, Rollo)

We find the foregoing conclusions drawn by the trial court from the documentary evidence submitted by the parties to be in order. The technical descriptions of the fishpond stated in the lease contract and in the sketch plan of the BFAR personnel who conducted an ocular inspection of the fishpond area applied for by Morcoso explicitly show that the latter was the subject of the lease contract between Tirol and Morcoso. The fishpond not having been part of the public domain, the trial court correctly adjudged Tirol as the rightful owner thereof. Well settled is the rule that the factual findings of the trial court are entitled to great weight and respect on appeal especially then established by unrebutted testimonial and documentary evidence, as in this case. WHEREFORE, the judgment of the appellate court is hereby AFFIRMED. SO ORDERED. G.R. No. 100874 February 13, 1992 GOVERNOR BENJAMIN I. ESPIRITU, petitioner, vs. NELSON B. MELGAR and HON. JUDGE MARCIANO T. VIROLA, respondents. Luna, Sison & Manas for petitioner. Panganiban, Benitez, Parlade, Africa & Barinaga Law Offices for private respondent.

GRIO-AQUINO, J.: The issue in this special civil action of certiorari and prohibition is the jurisdiction of respondent Judge of the Regional Trial Court of Oriental Mindoro to stop the provincial governor from placing a municipal mayor under preventive suspension pending the investigation of administrative charges against the latter. On April 11, 1991, one Ramir Garing of Naujan, Oriental Mindoro, filed a sworn letter-complaint with Secretary Luis Santos of the Department of Interior and Local Government charging Mayor Nelson Melgar of Naujan, Oriental Mindoro, with grave misconduct, oppression, abuse of authority, culpable violation of the Constitution and conduct prejudicial to the best interest of the public service. The charge against Mayor Melgar reads: On or about 4:30 in the afternoon of March 26, 1991, in the Municipality of Naujan, Oriental Mindoro, the aforementioned person, Nelson Melgar, being the Municipal Mayor of Naujan, Oriental Mindoro, with abuse of official function, did then and there wilfully, unlawfully and feloniously attack, assault and use personal violence upon the person of Ramir Garing, by then and there boxing and kicking thereby inflicting upon the latter physical injuries on different parts of his body and not being contented ordered his arrest and detention in the municipal jail of Naujan, Oriental Mindoro without filing any charges until he was released the following day March 27, 1991 at about 8:30 in the morning. (p. 30, Rollo.) An identical letter-complaint was filed by Garing with the Provincial Governor of Oriental Mindoro (herein petitioner Governor Benjamin I. Espiritu) accusing Mayor Melgar of the same violations of law and requesting that the mayor be placed under preventive suspension pending investigation of the charges. A third complaint filed by Garing with the Presidential Action Center, Office of the President of the Philippines, was forwarded to Governor Espiritu with a request for prompt action (Annex "C", p. 36, Rollo). On April 22, 1991, the Sangguniang Panlalawigan of Oriental Mindoro required Mayor Melgar to answer the complaint, which was docketed as Adm. Case No. 91-01 (Annex "D", p. 37, Rollo).

On May 22, 1991, Mayor Melgar submitted his answer in which he recounted the events of March 26, 1991 that led to the filing of Garing's complaint against him: At around 6:30 in the evening of 26 March 1991, while I was in the middle of my speech at the Naujan Public Gymnasium, this Municipality, where the Jose L. Basa Memorial graduation ceremonies were then being held, a prolonged but nonetheless loud and intermittent clapping suddenly erupted from one of the numerous people then in attendance. I paused. The handclapping stopped. I resumed my speech. The fellow started all over again. The audience was visibly disturbed and I found myself unable to proceed not because I could not collect my thoughts but because I felt the solemnity of the occasion had irreversibly been shattered by a rudeness so totally unexpected. I ended my speech and instructed a policeman to investigate the culprit who turned out to be Ramir Garing. He was drunk. I did not hurt him as can be gathered from his medical certificate (Annex "B" to the complaint) which palpably contradicts his affidavit (Annex "A" to the complaint). I was informed that said Ramir Garing was momentarily placed in custody for his own protection because he was drunk. An open knife (balisong) was taken from him. I was likewise informed that after he had sobered up, he was told to go home, but he refused to go and only did so the following morning. Certainly under the circumstances, charges could have been filed against Ramir Garing under the provisions of Article 153 of the Revised Penal Code and also for possession and concealment of a deadly weapon. Still, as a local Chief Executive, who to most people represent (sic) a sovereign government, and who, at the cost of foregoing personal vindication must avoid any appearance of vindictiveness, I instructed my policemen not to file charges against him. Attached hereto for your further reference are the joint affidavit of teachers of the J.L. Basa Memorial School as Annex "A", the joint affidavit of the Municipal Jailer and the Police Investigator as Annex "B", the affidavit of Fireman 1st Class Roy Lomio as Annex "C", and a xerox copy of the pages in the Police Blotter where the incident in question was entered. (pp. 40-41, Rollo). After evaluating the complaint and its supporting documents, as well as the Mayor's answer and the affidavits of his witnesses, the Sangguniang Panlalawigan of Oriental Mindoro passed Resolution No. 55 on May 9, 1991, recommending to the Provincial Governor that respondent Mayor be preventively suspended for forty-five (45) days pending the investigation of the administrative complaint (Annex "H, p. 49, Rollo). On May 23, 1991, Mayor Melgar filed a motion to dismiss the administrative complaint (Annex "I", pp. 5155, Rollo). It was opposed by Garing. On June 6, 1991, the Sangguniang Panlalawigan denied the motion to dismiss (Res. No. 72, p. 62 Rollo; Annex "L" to the Petition). Meanwhile, pursuant to the recommendation of the Sangguniang Panlalawigan in its Resolution No. 55, Governor Espiritu placed Mayor Melgar under preventive suspension on May 28, 1991 on the ground that: . . . there is reasonable ground to believe that respondent Mayor Nelson B. Melgar of Naujan, Oriental Mindoro, has committed the acts stated in the complaint and affidavit of Ramir Garing and corroborated by the affidavits (Exhibits A, C & D) of his witnesses, namely: Lydia V. Garing, Nelson Tabor and Javier Dagdagan, all of Poblacion II, Naujan, Oriental Mindoro. (p. 63, Rollo)

On June 3, 1991, Mayor Melgar received the Order of Suspension (Annex "M", p. 63, Rollo). He forthwith filed a "Petition for Certiorari with Preliminary Injunction with prayer for Restraining Order" in the Regional Trial Court of Oriental Mindoro (Spl. Civil Action No. R-5003) alleging that "the order of suspension was an arrogant, despotic and arbitrary abuse of power" by the Governor (pp. 68-69, Rollo). On June 24, 1991, RTC Judge Virola issued a writ of preliminary injunction enjoining Governor Espiritu from implementing the Order of suspension against Mayor Melgar for: The Court is more inclined to believe the answer under oath of the respondent and the sworn statements of his witnesses attached to the Answer in the administrative case than the complaint under oath in the administrative case which are the evidence to be considered in determining whether or not the order of preventive suspension was issued in accordance with law. There is no reason to doubt the sworn statements of the numerous public school teachers and members of the PNP. Besides, the medical certificate issued in connection with the treatment of the complainant in the administrative case tends to corroborate the theory of the respondent and contradict that of the complaint in the administrative case. The abrasions on the right arm of the complainant in the administrative case tend to show that said complainant was held tightly by the hands by the PNP because he was then drunk, in possession of a balisong knife and causing serious disturbance and not because he was boxed and kicked by herein petitioner. (pp. 75-76, Rollo.) Governor Espiritu filed a motion to dismiss and/or for reconsideration which Judge Virola denied on July 16, 1991. Hence, this petition for certiorari and prohibition. Without giving due course to the petition, we required the private respondent to comment and we issued a Temporary Restraining Order commanding respondent Judge to cease and desist from further proceeding in Special Civil Action No. R-5003 (pp. 106-107, Rollo). On August 22, 1991, Mayor Melgar filed an "Urgent Motion to Lift Temporary Restraining Order" which the petitioner opposed and the Court denied (p. 127155, Rollo). Petitioner submits that respondent Judge Virola acted without jurisdiction or with grave abuse of discretion in issuing: (1) the writ of preliminary injunction restraining Governor Espiritu from implementing the order of preventive suspension, and (2) in denying petitioner's motion to dismiss Special Civil Action No. R-5003, for: a Petitioner, as Provincial Governor, is empowered by Section 63 of the Local Government Code to place an elective municipal official under preventive suspension pending decision of an administrative case against the elective municipal official: b) Petitioner did not commit a grave abuse of discretion in placing respondent mayor under preventive suspension; if at all, his error was an error of judgment which is not correctible bycertiorari; c) By express provision of Section 61 of the Local Government Code, the Sangguniang Panlalawigan has jurisdiction over complaints against any elective municipal official; on the other hand, Section 19(c) of the Judiciary Reorganization Act of 1980 withdraws from regional trial courts jurisdiction over cases within the exclusive jurisdiction of any person, tribunal or body exercising judicial or quasi-judicial functions. Thus, by practically deciding the administrative case on the merits, the respondent court acted without jurisdiction; and d) Respondent Mayor had a remedy of appeal under Section 66 of the Local Government Code. Section 63, Chapter IV of the Local Government Code provides: Sec. 63. Preventive Suspension. (1) Preventive suspension may be imposed by the Minister of Local Government if the respondent is a provincial or city official, by the provincial

governor if the respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an elective barangay official. (2) Preventive suspension may be imposed at anytime after the issues are joined, when there is reasonable ground to believe that the respondent has committed the act or acts complained of, when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension. (3) At the expiration of sixty-days, the suspended official shall be deemed reinstated in office without prejudice to the continuation of the proceedings against him until its termination. However, if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the delay shall not be counted in computing the time of the suspension. Clearly, the provincial governor of Oriental Mindoro is authorized by law to preventively suspend the municipal mayor of Naujan at anytime after the issues had been joined and any of the following grounds were shown to exist: 1. When there is reasonable ground to believe that the respondent has committed the act or acts complained of; 2. When the evidence of culpability is strong; 3. When the gravity of the offense so warrants; or 4. When the continuance in office of the respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other evidence. There is nothing improper in suspending an officer before the charges against him are heard and before he is given an opportunity to prove his innocence (Nera vs. Garcia and Elicao, 106 Phil. 1031). Preventive suspension is allowed so that the respondent may not hamper the normal course of the investigation through the use of his influence and authority over possible witnesses (Lacson vs. Roque, 92 Phil. 456). Since respondent mayor believed that his preventive suspension was unjustified and politically motivated, he should have sought relief first from the Secretary of Interior and Local Government, not from the courts. Mayor Melgar's direct recourse to the courts without exhausting administrative remedies was premature (Aboitiz & Co. Inc. vs. Collector of Customs, 83 SCRA 265; Garcia vs. Teehankee, 27 SCRA 937; Manuel vs. Jimenez, 17 SCRA 55; Bongcawil vs. Provincial Board of Lanao del Norte, 10 SCRA 327; The Phil Veterans Affairs Office vs. Farias, et al., AC-G.R. SP No. 05937, July 5, 1985; Bonafe vs. Zurbano, 131 SCRA 9). The regional trial court had no jurisdiction over Special Civil Action No. R-5003 and gravely abused its discretion in refusing to dismiss the case. There may exist honest differences of opinion with regard to the seriousness of the charges, or as to whether they warrant disciplinary action. However, as a general rule, the office or body that is invested with the power of removal or suspension should be the sole judge of the necessity and sufficiency of the cause ( 17 R.C.L. Sec. 233 cited in Attorney General vs. Doherty, 13 Am. Rep. 132). So, unless a flagrant abuse of the exercise of that power is shown, public policy and a becoming regard for the principle of separation of powers demand that the action of said officer or body should be left undisturbed. However, in this particular case, since the 60-day preventive suspension of Mayor Melgar was maintained by the Temporary Restraining Order which we issued on August 6, 1991, and therefore has already been served, he is deemed reinstated in office without prejudice to the continuation of the administrative investigation of the charges against him (Sec. 63, subpar. 3, Local Government Code).

WHEREFORE, the petition for certiorari and prohibition is granted. The writ of preliminary injunction dated June 24, 1991 in Special Civil Action No. R-5003 is hereby annulled and set aside. Said Special Civil Action No. R5003 is dismissed. SO ORDERED.