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[G.R. No. L-63558. May 19, 1987.

]
SPOUSES JOSE ABEJO AND AURORA ABEJO, TELECTRONIC SYSTEMS,
INC., petitioners, vs. HON. RAFAEL DE LA CRUZ, JUDGE OF THE REGIONAL TRIAL
COURT (NATIONAL CAPITAL JUDICIAL REGION, BRANCH CLX-PASIG), SPOUSES
AGAPITO BRAGA AND VIRGINIA BRAGA, VIRGILIO BRAGA AND NORBERTO
BRAGA, respondents.
[G.R. Nos. L-68450-51. May 19, 1987.]
POCKET BELL PHILIPPINES, INC., AGAPITO T. BRAGA, VIRGILIO T. BRAGA,
NORBERTO BRAGA, and VIRGINIA BRAGA, petitioners,vs. THE HONORABLE
SECURITIES AND EXCHANGE COMMISSION, TELECTRONIC SYSTEMS, INC., JOSE
ABEJO, JOSE LUIS SANTIAGO, SIMEON A. MIRAVITE, SR., ANDRES T. VELARDE
AND L. QUIDATO BANDOLINO, respondents.

DECISION

TEEHANKEE, C.J p:
These two cases, jointly heard, are jointly herein decided. They involve the question of who, between the
Regional Trial Court and the Securities and Exchange Commission (SEC), has original and exclusive
jurisdiction over the dispute between the principal stockholders of the corporation Pocket Bell Philippines,
Inc. (Pocket Bell), a "tone and voice paging corporation," namely, the spouses Jose Abejo and Aurora Abejo
(hereinafter referred to as the Abejos) and the purchaser, Telectronic Systems, Inc. (hereinafter referred to
as Telectronics) of their 133,000 minority shareholdings (for P5 million) and of 63,000 shares registered in the
name of Virginia Braga and covered by five stock certificates endorsed in blank by her (for P1,674,450.00),
and the spouses Agapito Braga and Virginia Braga (hereinafter referred to as the Bragas), erstwhile majority
stockholders. With the said purchases, Telectronics would become the majority stockholder, holding 56% of
the outstanding stock and voting power of the corporation Pocket Bell.
With the said purchases in 1982, Telectronics requested the corporate secretary of the corporation, Norberto
Braga, to register and transfer to its name, and those of its nominees the total 196,000 Pocket Bell shares in
the corporation's transfer book, cancel the surrendered certificates of stock and issue the corresponding new
certificates of stock in its name and those of its nominees.
Norberto Braga, the corporate secretary and son of the Bragas, refused to register the aforesaid transfer of
shares in the corporate books, asserting that the Bragas claim pre-emptive rights over the 133,000 Abejo
shares and that Virginia Braga never transferred her 63,000 shares to Telectronics but had lost the five stock
certificates representing those shares.
This triggered off the series of intertwined actions between the protagonists, all centered on the question of
jurisdiction over the dispute, which were to culminate in the filing of the two cases at bar.
The Bragas assert that the regular civil court has original and exclusive jurisdiction as against the Securities
and Exchange Commission, while the Abejos claim the contrary. A summary of the actions resorted to by the
parties follows:

A.ABEJOS' ACTIONS IN SEC


1.The Abejos and Telectronics and the latter's nominees, as new majority shareholders, filed SEC Cases Nos.
02379 and 02395 against the Bragas on December 17, 1982 and February 14, 1983, respectively.
2.In SEC Case No. 02379, they prayed for mandamus from the SEC ordering Norberto Braga, as corporate
secretary of Pocket Bell to register in their names the transfer and sale of the aforesaid 196,000 Pocket Bell
shares (of the Abejos 1 and Virginia Braga 2 , cancel the surrendered certificates as duly endorsed and to
issue new certificates in their names.
3.In SEC Case No. 02395, they prayed for injunction and a temporary restraining order that the SEC enjoin
the Bragas from disbursing or disposing funds and assets of Pocket Bell and from performing such other acts
pertaining to the functions of corporate officers.
4.Pocket Bell's corporate secretary, Norberto Braga, filed a Motion to Dismiss the mandamus case (SEC Case
No. 02379) contending that the SEC has no jurisdiction over the nature of the action since it does not involve
an intracorporate controversy between stockholders, the principal petitioners therein, Telectronics, not being
a stockholder of record of Pocket Bell.
5.On January 8, 1983, SEC Hearing Officer Joaquin Garaygay denied the motion. On January 14, 1983, the
corporate secretary filed a Motion for Reconsideration. On March 21, 1983, SEC Hearing Officer Joaquin
Garaygay issued an order granting Braga's motion for reconsideration and dismissed SEC Case No. 02379.
6.On February 11, 1983, the Bragas filed their Motion to Dismiss the injunction case, SEC Case No. 02395. On
April 8, 1985, the SEC Director, Eugenio Reyes, acting upon the Abejos' ex-parte motion, created a three-man
committee composed of Atty. Emmanuel Sison as Chairman and Attys. Alfredo Oca and Joaquin Garaygay as
members, to hear and decide the two SEC cases (Nos. 02379 and 02395).
7.On April 13, 1983, the SEC three-man committee issued an order reconsidering the aforesaid order of
March 21, 1983 of the SEC Hearing Officer Garaygay (dismissing the mandamus petition SEC Case No. 02379)
and directing corporate secretary Norberto Braga to file his answer to the petitioner therein.
B.BRAGAS' ACTION IN SEC
8.On December 12, 1983, the Bragas filed a petition for certiorari, prohibition and mandamus with the SEC en
banc, SEC Case No. EB #049, seeking the dismissal of SEC Cases Nos. 02379 and 02395 for lack of
jurisdiction of the Commission and the setting aside of the various orders issued by the SEC three-man
committee in the course of the proceedings in the two SEC cases.
9.On May 15, 1984, the SEC en banc issued an order dismissing the Bragas' petition in SEC Case No. EB #049
for lack of merit and at the same time ordering the SEC Hearing Committee to continue with the hearings of
the Abejos and Telectronics SEC Cases Nos. 02379 and 02395, ruling that the "issue is not the ownership of
shares but rather the non-performance by the Corporate Secretary of the ministerial duty of recording
transfers of shares of stock of the corporation of which he is secretary."
10.On May 15, 1984 the Bragas filed a motion for reconsideration but the SEC en banc denied the same on
August 9, 1984.
C.BRAGAS' ACTION IN CFI (NOW RTC)
11.On November 25, 1982, following the corporate secretary's refusal to register the transfer of the shares in
question, the Bragas filed a complaint against the Abejos and Telectronics in the Court of First Instance of

Pasig, Branch 21 (now the Regional Trial Court, Branch 160) docketed as Civil Case No. 48746 for: (a)
rescission and annulment of the sale of the shares of stock in Pocket Bell made by the Abejos in favor of
Telectronics on the ground that it violated the Bragas' alleged pre-emptive right over the Abejos'
shareholdings and an alleged perfected contract with the Abejos to sell the same shares in their (Bragas)
favor, (1st cause of action); plus damages for bad faith; and (b) declaration of nullity of any transfer,
assignment or endorsement of Virginia Bragas' stock certificates for 63,000 shares in Pocket Bell to
Telectronics for want of consent and consideration, alleging that said stock certificates, which were intended
as security for a loan application and were thus endorsed by her in blank, had been lost (2nd cause of
action).
12.On January 4, 1983, the Abejos filed a Motion to Dismiss the complaint on the ground that it is the SEC
that is vested under PD 902-A with original and exclusive jurisdiction to hear and decide cases involving,
among others, controversies "between and among stockholders" and that the Bragas' suit is such a
controversy as the issues involved therein are the stockholders" alleged pre-emptive rights, the validity of the
transfer and endorsement of certificates of stock, the election of corporate officers and the management and
control of the corporation's operations. The dismissal motion was granted by Presiding Judge G. Pineda on
January 14, 1983.
13.On January 24, 1983, the Bragas filed a motion for reconsideration. The Abejos opposed. Meanwhile,
respondent Judge Rafael de la Cruz was appointed presiding judge of the court (renamed Regional Trial
Court) in place of Judge G. Pineda.
14.On February 14, 1983, respondent Judge de la Cruz issued an order rescinding the January 14, 1983 order
and reviving the temporary restraining order previously issued on December 23, 1982 restraining Telectronics'
agents or representatives from enforcing their resolution constituting themselves as the new set of officers of
Pocket Bell and from assuming control of the corporation and discharging their functions.
15.On March 2, 1983, the Abejos filed a motion for reconsideration, which motion was duly opposed by the
Bragas. On March 11, 1983, respondent Judge denied the motion for reconsideration.
D.ABEJOS' PETITION AT BAR
16.On March 26, 1983, the Abejos, alleging that the acts of respondent Judge in refusing to dismiss the
complaint despite clear lack of jurisdiction over the action and in refusing to reconsider his erroneous position
were performed without jurisdiction and with grave abuse of discretion, filed their herein Petition for
Certiorari and Prohibition with Preliminary Injunction. They prayed that the challenged orders of respondent
Judge dated February 14, 1983 and March 11, 1983 be set aside for lack of jurisdiction and that he be
ordered to permanently desist from further proceedings in Civil Case No. 48746. Respondent judge desisted
from further proceedings in the case, dispensing with the need of issuing any restraining order.
E.BRAGAS' PETITION AT BAR
17.On August 29, 1984, the Bragas, alleging in turn that the SEC has no jurisdiction over SEC Cases Nos.
02379 and 02395 and that it acted arbitrarily, whimsically and capriciously in dismissing their petition (in SEC
Case No. EB #049) for dismissal of the said cases, filed their herein Petition for Certiorari and Prohibition with
Preliminary Injunction or TRO. The petitioner seeks the reversal and/or setting aside of the SEC Order dated
May 15, 1984 dismissing their petition in said SEC Case No. EB #049 and sustaining its jurisdiction over SEC
Cases Nos. 02379 and 02395, filed by the Abejos. On September 24, 1984, this Court issued a temporary
restraining order to maintain the status quo and restrained the SEC and/or any of its officers or hearing
committees from further proceeding with the hearings in SEC Cases Nos. 02379 and 02395 and from
enforcing any and all orders and or resolutions issued in connection with the said cases.

The cases, having been given due course, were jointly heard by the Court on March 27, 1985 and the parties
thereafter filed on April 16, 1985 their respective memoranda in amplification of oral argument on the points
of law that were crystallized during the hearing.
The Court rules that the SEC has original and exclusive jurisdiction over the dispute between the principal
stockholders of the corporation Pocket Bell, namely, the Abejos and Telectronics, the purchasers of the 56%
majority stock (supra, at page 2) on the one hand, and the Bragas, erstwhile majority stockholders, on the
other, and that the SEC, through its en banc Resolution of May 15, 1984 correctly ruled in dismissing the
Bragas' petition questioning its jurisdiction, that "the issue is not the ownership of shares but rather the nonperformance by the Corporate Secretary of the ministerial duty of recording transfers of shares of stock of the
Corporation of which he is secretary."
1.The SEC ruling upholding its primary and exclusive jurisdiction over the dispute is correctly premised on,
and fully supported by, the applicable provisions of P.D. No. 902-A which reorganized the SEC with additional
powers "in line with the government's policy of encouraging investments, both domestic and foreign, and
more active public participation in the affairs of private corporations and enterprises through which desirable
activities may be pursued for the promotion of economic development; and, to promote a wider and more
meaningful equitable distribution of wealth," and accordingly provided that:
"SEC. 3.The Commission shall have absolute jurisdiction, supervision and control over all corporations,
partnerships or associations, who are the grantees of primary franchise and/or a license or permit
issued by the government to operate in the Philippines; . . .
"SEC. 5.In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to
hear and decide cases involving:
a)Devices or schemes employed by or any acts, of the board of directors, business
associations, its officers or partners, amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the stockholder, partners, members of
associations or organizations registered with the Commission.
b)Controversies arising out of intracorporate or partnership relations, between and
among stockholders, members, or associates; between any and/or all of them and the
corporation, partnership or association of which they are stockholders, members or associates,
respectively; and between such corporation, partnership or association and the state insofar
as it concerns their individual franchise or right to exist as such entity;
c)Controversies in the election or appointments of directors, trustees, officers or
managers of such corporations, partnerships or associations." 3

Section 6 further grants the SEC "in order to effectively exercise such jurisdiction," the power, inter alia, "to
issue preliminary or permanent injunctions, whetherprohibitory or mandatory, in all cases in which it has
jurisdiction, and in which cases the pertinent provisions of the Rules of Court shall apply."
2.Basically and indubitably, the dispute at bar, as held by the SEC, is an intracorporate dispute that has arisen
between and among the principal stockholders of the corporation Pocket Bell due to the refusal of the
corporate secretary, backed up by his parents as erstwhile majority shareholders, to perform his "ministerial
duty" to record the transfers of the corporation's controlling (56%) shares of stock, covered by duly endorsed
certificates of stock, in favor of Telectronics as the purchaser thereof. Mandamus in the SEC to compel the
corporate secretary to register the transfers and issue new certificates in favor of Telectronics and its

nominees was properly resorted to under Rule XXI, Section 1 of the SEC's New Rules of Procedure, 4 which
provides for the filing of such petitions with the SEC. Section 3 of said Rules further authorizes the SEC to
"issue orders expediting the proceedings . . . and also [to] grant a preliminary injunction for the preservation
of the rights of the parties pending such proceedings."
The claims of the Bragas, which they assert in their complaint in the Regional Trial Court, praying for
rescission and annulment of the sale made by the Abejos in favor of Telectronics on the ground that they had
an alleged perfected pre-emptive right over the Abejos' shares as well as for annulment of sale to
Telectronics of Virginia Braga's shares covered by street certificates duly endorsed by her in blank, may in no
way deprive the SEC of its primary and exclusive jurisdiction to grant or not the writ of mandamus ordering
the registration of the shares so transferred. The Bragas' contention that the question of ordering the
recording of the transfers ultimately hinges on the question of ownership or right thereto over the shares
notwithstanding, the jurisdiction over the dispute is clearly vested in the SEC.
3.The very complaint of the Bragas for annulment of the sales and transfers as filed by them in the regular
court questions the validity of the transfer and endorsement of the certificates of stock, claiming alleged preemptive rights in the case of the Abejos' shares and alleged loss of the certificates and lack of consent and
consideration in the case of Virginia Braga's shares. Such dispute clearly involves controversies "between and
among stockholders," as to the Abejos' right to sell and dispose of their shares to Telectronics, the validity of
the latter's acquisition of Virginia Braga's shares, who between the Bragas and the Abejos' transferee should
be recognized as the controlling shareholders of the corporation, with the right to elect the corporate officers
and the management and control of its operations. Such a dispute and case clearly fall within the original and
exclusive jurisdiction of the SEC to decide, under Section 5 of P.D. 902-A, above-quoted. The restraining
order issued by the Regional Trial Court restraining Telectronics agents and representatives from enforcing
their resolution constituting themselves as the new set of officers of Pocket Bell and from assuming control of
the corporation and discharging their functions patently encroached upon the SEC's exclusive jurisdiction over
such specialized corporate controversies calling for its special competence. As stressed by the Solicitor
General on behalf of the SEC, the Court has held that "Nowhere does the law [PD 902-A] empower any Court
of First Instance [now Regional Trial Court] to interfere with the orders of the Commission," 5 and
consequently "any ruling by the trial court on the issue of ownership of the shares of stock is not binding on
the Commission" 6 for want of jurisdiction.
4.The dispute therefore clearly falls within the general classification of cases within the SEC's original and
exclusive jurisdiction to hear and decide, under the aforequoted governing section 5 of the law. Insofar as the
Bragas and their corporate secretary's refusal on behalf of the corporation Pocket Bell to record the transfer
of the 56% majority shares to Telectronics may be deemed a device or scheme amounting to fraud and
misrepresentation employed by them to keep themselves in control of the corporation to the detriment of
Telectronics (as buyer and substantial investor in the corporate stock) and the Abejos (as substantial
stockholders-sellers), the case falls under paragraph (a). The dispute is likewise an intra-corporate
controversy between and among the majority and minority stockholders as to the transfer and disposition of
the controlling shares of the corporation, falling under paragraph (b). As stressed by the Court in DMRC
Enterprises v. Este del Sol Mountain Reserve, Inc., 7 "Considering the announced policy of PD 902-A, the
expanded jurisdiction of the respondent Securities and Exchange Commission under said decree extends
exclusively to matters arising from contracts involving investments in private corporations, partnerships and
associations." The dispute also concerns the fundamental issue of whether the Bragas or Telectronics have
the right to elect the corporate directors and officers and manage its business and operations, which falls
under paragraph (c).
5.Most of the cases that have come to this Court involve those under paragraph (b), i e. whether the
controversy is an intra-corporate one, arising "between and among stockholders" or "between any or all of
them and the corporation." The parties have focused their arguments on this question. The Bragas'
contention in his field must likewise fail. In Philex Mining Corp. v. Reyes, 8 the Court spelled out that "an

intra-corporate controversy is one which arises between a stockholder and the corporation. There is no
distinction, qualification, nor any exemption whatsoever. The provision is broad and covers all kinds of
controversies between stockholders and corporations. The issue of whether or not a corporation is bound to
replace a stockholder's lost certificate of stock is a matter purely between a stockholder and the corporation.
It is a typical intra-corporate dispute. The question of damages raised is merely incidental to that main issue."
The Court rejected the stockholders' theory of excluding his complaint (for replacement of a lost stock
[dividend] certificate which he claimed to have never received) from the classification of intra-corporate
controversies as one that "does not square with the intent of the law, which is to segregate from the general
jurisdiction of regular Courts controversies involving corporations and their stockholders and to bring them to
the SEC for exclusive resolution, in much the same way that labor disputes are now brought to the Ministry of
Labor and Employment (MOLE) and the National Labor Relations Commission (NLRC), and not to the Courts."

(a)The Bragas contend that Telectronics, as buyer-transferee of the 56% majority shares is not a
registered stockholder, because they, through their son the corporate secretary, appear to have
refused to perform "the ministerial duty of recording transfers of shares of stock of the corporation of
which he is the secretary," and that the dispute is therefore, not an intracorporate one. This
contention begs the question which must properly be resolved by the SEC, but which they would
prevent by their own act, through their son, of blocking the due recording of the transfer and cannot
be sanctioned. It can be seen from their very complaint in the regular courts that they with their two
sons constituting the plaintiffs are all stockholders while the defendants are the Abejos who are also
stockholders whose sale of the shares to Telectronics they would annul.
(b)There can be no question that the dispute between the Abejos and the Bragas as to the sale and
transfer of the former's shares to Telectronics for P5 million is an intracorporate one under section 5
(b), prescinding from the applicability of section 5 (a) and (c), (supra, par. 4) It is the SEC which must
resolve the Bragas' claim in their own complaint in the court case filed by them of an alleged preemptive right to buy the Abejos' shares by virtue of "on-going negotiations," which they may submit
as their defense to the mandamus petition to register the sale of the shares to Telectronics. But
asserting such pre-emptive rights and asking that the same be enforced is a far cry from the Bragas'
claim that "the case relates to questions of ownership" over the shares in question. 9 (Not to mention,
as pointed out by the Abejos, that the corporation is not a close corporation, and no restriction over
the free transferability of the shares appears in the Articles of Incorporation, as well as in the bylaws 10 and the certificates of stock themselves, as required by law for the enforcement of such
restriction. See Go Soc & Sons, etc. v. IAC, G.R. No. 72342, Resolution of February 19, 1987.)
(c)The dispute between the Bragas and Telectronics as to the sale and transfer for P1,674,450.00 of
Virginia Braga's 63.000 shares covered by Street certificates duly endorsed in blank by her is within
the special competence and jurisdiction of the SEC, dealing as it does with the free transferability of
corporate shares, particularly street certificates, 11 as guaranteed by the Corporation Code and its
proclaimed policy of encouraging foreign and domestic investments in Philippine private corporations
and more active public participation therein for the promotion of economic development. Here again,
Virginia Braga's claim of loss of her street certificates or theft thereof (denounced by Telectronics as
"perjurious" 12 ) must be pleaded by her as a defense against Telectronics' petition for mandamus and
recognition now as the controlling stockholder of the corporation in the light of the joint affidavit of
General Cerefino S. Carreon of the National Telecommunications Commission and private respondent
Jose Luis Santiago of Telectronics narrating the facts and circumstances of how the former sold and
delivered to Telectronics on behalf of his compadres, the Bragas, Virginia Braga's street certificates for
63,000 shares equivalent to 18% of the corporation's outstanding stock and received the cash price
thereof. 13 But as to the sale and transfer of the Abejos' shares, the Bragas cannot oust the SEC of its
original and exclusive jurisdiction to hear and decide the case, by blocking through the corporate
secretary, their son, the due recording of the transfer and sale of the shares in question and claiming
that Telectronics is not a stockholder of the corporation which is the very issue that the SEC is
called upon to resolve. As the SEC maintains, "There is no requirement that a stockholder of a
corporation must be a registered one in order that the Securities and Exchange Commission may take

cognizance of a suit seeking to enforce his rights as such stockholder." 14 This is because the SEC by
express mandate has "absolute jurisdiction, supervision and control over all corporations" and is called
upon to enforce the provisions of the Corporation Code, among which is the stock purchaser's right to
secure the corresponding certificate in his name under the provisions of Section 63 of the Code.
Needless to say, any problem encountered in securing the certificates of stock representing the
investment made by the buyer must be expeditiously dealt with through administrative mandamus
proceedings with the SEC, rather than through the usual tedious regular court procedure.
Furthermore, as stated in the SEC order of April 13, 1983, notice given to the corporation of the sale
of the shares and presentation of the certificates for transfer is equivalent to registration: "Whether
the refusal of the (corporation) to effect the same is valid or not is still subject to the outcome of the
hearing on the merits of the case." 15

6.In the fifties, the Court taking cognizance of the move to vest jurisdiction in administrative commissions and
boards the power to resolve specialized disputes in the field of labor (as in corporations, public transportation
and public utilities) ruled that Congress in requiring the Industrial Court's intervention in the resolution of
labor-management controversies likely to cause strikes or lockouts meant such jurisdiction to be exclusive,
although it did not so expressly state in the law. The Court held that under the "sense-making and
expeditious doctrine of primary jurisdiction ..the courts cannot or will not determine a controversy involving a
question which is within the jurisdiction of an administrative tribunal, where the question demands the
exercise of sound administrative discretion requiring the special knowledge, experience, and services of the

administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is
essential to comply with the purposes of the regulatory statute administered." 16

In this era of clogged court dockets, the need for specialized administrative boards or commissions with the
special knowledge, experience and capability to hear and determine promptly disputes on technical matters or
essentially factual matters, subject to judicial review in case of grave abuse of discretion, has become well
nigh indispensable. Thus, in 1984, the Court noted that "between the power lodged in an administrative body
and a court, the unmistakable trend has been to refer it to the former. 'Increasingly, this Court has been
committed to the view that unless the law speaks clearly and unequivocably, the choice should fall on [an
administrative agency.]'" 17 The Court in the earlier case of Ebon vs. De Guzman, 18 noted that the lawmaking
authority, in restoring to the labor arbiters and the NLRC their jurisdiction to award all kinds of damages in
labor cases, as against the previous P.D. amendment splitting their jurisdiction with the regular courts,
"evidently, . . . had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to
award damages in labor cases because that setup would mean duplicity of suits, splitting the cause of action
and possible conflicting findings and conclusions by two tribunals on one and the same claim."
7.Thus, the Corporation Code (B.P. No. 178) enacted on May 1, 1980 specifically vests the SEC with the Rule
making power in the discharge of its task of implementing the provisions of the Code and particularly charges
it with the duty of preventing fraud and abuses on the part of controlling stockholders, directors and officers,
as follows:
"SEC. 143.Rule-making power of the Securities and Exchange Commission. The Securities and
Exchange Commission shall have the power and authority to implement the provisions of this Code,
and to promulgate rules and regulations reasonably necessary to enable it to perform its duties
hereunder, particularly in the prevention of fraud and abuses on the part of the controlling
stockholders, members, directors, trustees or officers." (Emphasis supplied)

The dispute between the contending parties for control of the corporation manifestly falls within the primary
and exclusive jurisdiction of the SEC in whom the law has reserved such jurisdiction as an administrative
agency of special competence to deal promptly and expeditiously therewith.
As the Court stressed in Union Glass & Container Corp. v. SEC, 19 "This grant of jurisdiction [in Section 5]
must be viewed in the light of the nature and functions of the SEC under the law. Section 3 of PD No. 902-A
confers upon the latter 'absolute jurisdiction, supervision, and control over all corporations, partnerships or

associations, who are grantees of primary franchise and/or license or permit issued by the government to
operate in the Philippines . . ..' The principal function of the SEC is the supervision and control over
corporations, partnerships and associations with the end in view that investment in these entities may be
encouraged and protected, and their activities pursued for the promotion of economic development.
"It is in aid of this office that the adjudicative power of the SEC must be exercised. Thus the law
explicitly specified and delimited its jurisdiction to matters intrinsically connected with the regulation of
corporations, partnerships and associations and those dealing with the internal affairs of such
corporations, partnerships or associations.
"Otherwise stated, in order that the SEC can take cognizance of a case, the controversy must pertain
to any of the following relationships: [a] between the corporation, partnership or association and the
public; [b] between the corporation, partnership or association and its stockholders, partners,
members, or officers; [c] between the corporation, partnership or association and the state in so far
as its franchise, permit or license to operate is concerned; and [d] among the stockholders, partners
or associates themselves." 20

Parenthetically, the cited case of Union Glass illustrates by way of contrast what disputes do not fall within
the special jurisdiction of the SEC. In this case, the SEC had properly assumed jurisdiction over the dissenting
stockholders' complaint against the corporation Pioneer Glass questioning its dacion en pago of its glass plant
and all its assets in favor of the DBP which was clearly an intra-corporate controversy dealing with its internal
affairs. But the Court held that the SEC had no jurisdiction over petitioner Union Glass Corp., impleaded as
third party purchaser of the plant from DBP in the action to annul the dacion en pago. The Court held that
such action for recovery of the glass plant could be brought by the dissenting stockholder to the regular
courts only if and when the SEC rendered final judgment annulling the dacion en pago and furthermore
subject to Union Glass' defenses as a third party buyer in good faith. Similarly, in the DMRC case, therein
petitioner's complaint for collection of the amounts due to it as payment of rentals for the lease of its heavy
equipment in the form mainly of cash and part in shares of stock of the debtor-defendant corporation was
held to be not covered by the SEC's exclusive jurisdiction over intracorporate disputes, since "to pass upon a
money claim under a lease contract would be beyond the competence of the Securities and Exchange
Commission and to separate the claim for money from the claim for shares of stock would be splitting a single
cause of action resulting in a multiplicity of suits." 21 Such an action for collection of a debt does not involve
enforcement of rights and obligations under the Corporation Code nor the internal or intracorporate affairs of
the debtor corporation. But in all disputes affecting and dealing with the interests of the corporation and its
stockholders, following the trend and clear legislative intent of entrusting all disputes of a specialized nature
to administrative agencies possessing the requisite competence, special knowledge, experience and services
and facilities to expeditiously resolve them and determine the essential facts including technical and intricate
matters, as in labor and public utilities rates disputes, the SEC has been given "the original and exclusive
jurisdiction to hear and decide" them (under Section 5 of P.D. 902-A) "in addition to [its] regulatory and
adjudicative functions" (under Section 3, vesting in it "absolute jurisdiction, supervision and control over all
corporations" and the Ruler-making power granted it in Section 143 of the Corporation Code, supra). As
stressed by the Court in thePhilex case, supra, "(T)here is no distinction, qualification, nor any exemption
whatsoever. The provision is broad and covers all kinds of controversies between stockholders and
corporations."
It only remains now to deal with the Order dated April 15, 1983 (Annex H, Petition) 22 of the SEC's threemember Hearing Committee granting Telectronics' motion for creation of a receivership or management
committee with the ample powers therein enumerated for the preservation pendente lite of the corporation's
assets and in discharge of its "power and duty to preserve the rights of the parties, the stockholders, the
public availing of the corporation's services and the rights of creditors," as well as 'for reasons of equity and
justice .. (and) to prevent possible paralization of corporate business." The said Order has not been

implemented notwithstanding its having been upheld per the SEC en banc's Order of May 15, 1984 (Annex
"V", Petition) dismissing for lack of merit the petition for certiorari, prohibition and mandamus with prayer for
restraining order or injunction filed by the Bragas seeking the disbandment of the Hearing Committee and the
setting aside of its Orders, and its Resolution of August 9, 1984, denying reconsideration (Annex "X",
Petition), due to the Bragas' filing of the petition at bar.
Prescinding from the great concern of damage and prejudice expressed by Telectronics due to the Bragas
having remained in control of the corporation and having allegedly committed acts of gross mismanagement
and misapplication of funds, the Court finds that under the facts and circumstances of record, it is but fair
and just that the SEC's order creating a receivership committee be implemented forthwith, in accordance with
its terms, as follows:
"The three-man receivership committee shall be composed of a representative from the commission,
in the person of the Director, Examiners and Appraisers Department or his designated representative,
and a representative from the petitioners and a representative of the respondent.
"The petitioners and respondent are therefore directed to submit to the Commission the name of their
designated representative within three (3) days from receipt of this order. The Commission shall
appoint the other representatives if either or both parties fail to comply with the requirement within
the stated time."

ACCORDINGLY, judgment is hereby rendered:


(a)Granting the petition in G.R. No. 63558, annulling the challenged Orders of respondent Judge dated
February 14, 1983 and March 11, 1983 (Annexes "L" and "P" of the Abejos' petition) and prohibiting
respondent Judge from further proceeding in Civil Case No. 48746 filed in his Court other than to
dismiss the same for lack or jurisdiction over the subject-matter;
(b)Dismissing the petition in G.R. Nos. 68450-51 and lifting the temporary restraining order issued on
September 24, 1984, effective immediately upon promulgation hereof;
(c)Directing the SEC through its Hearing Committee to proceed immediately with hearing and
resolving the pending mandamus petition for recording in the corporate books the transfer to
Telectronics and its nominees of the majority (56%) shares of stock of the corporation Pocket Bell
pertaining to the Abejos and Virginia Braga and all related issues, taking into consideration, without
need of resubmittal to it, the pleadings, annexes and exhibits filed by the contending parties in the
cases at bar; and
(d)Likewise directing the SEC through its Hearing Committee to proceed immediately with the
implementation of its receivership or management committee Order of April 15, 1983 in SEC Case No.
2379 and for the purpose, the contending parties are ordered to submit to said Hearing Committee
the name of their designated representatives in the receivership/management committee within three
(3) days from receipt of this decision, on pain of forfeiture of such right in case of failure to comply
herewith, as provided in the said Order; and ordering the Bragas to perform only caretaker acts in the
corporation pending the organization of such receivership/management committee and assumption of
its functions.

This decision shall be immediately executory upon its promulgation.


SO ORDERED.

Yap, Narvasa, Melencio-Herrera, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur.

[G.R. No. 137266. December 5, 2001.]


ANTONIO M. BERNARDO, ERNESTO A. DOMINGO, JR. and JESUS C.
CRUZ, petitioners, vs. BENJAMIN S. ABALOS, SR., BENJAMIN "BENHUR" D. ABALOS,
JR., DR. EDEN C. DIAZ, ROMEO F. ZAPANTA, ARCADIO S. DE VERA and THE
COMMISSION ON ELECTIONS,respondents.

Romulo C. Felizmea for petitioners.


Jaime C. Paz for B. Abalos, Sr. & B. Abalos, Jr.
Alberto Agra for other private respondents.
SYNOPSIS
Petitioners filed with the Commission on Elections (COMELEC) a criminal complaint against respondents for
vote buying in violation of Section 261, paragraphs (a), (b) and (j) of the Omnibus Election Code (OEC), in
relation to Section 28 of Republic Act No. 6646 and Section 68 of the OEC. However, the said complaint was
dismissed by the COMELEC En Banc for insufficiency of evidence to establish a prima facie case. Petitioners,
without first submitting a motion for reconsideration, filed the instant petition for certiorari with this Court.
The petition must fail. Petitioners did not exhaust all the remedies available to them at the COMELEC level.
Specifically, they did not seek a reconsideration of the assailed COMELEC En Banc Resolution as required by
Section 1, Rule 13 of the COMELEC Rules of Procedure. Petitioners' failure to file the required motion for
reconsideration utterly disregarded the COMELEC Rules intended "to achieve an orderly, just, expeditious and
inexpensive determination and disposition of every action and proceeding brought before the Commission."
Moreover, petitioners' complaint expressly stated that no supporting affidavits were submitted by the
complaining witnesses to sustain their charge of vote buying. Suffice it to state that the absence of such
supporting affidavits showed the frailty of petitioners' complaint. Indeed, it was vulnerable to dismissal.
SYLLABUS
1.POLITICAL LAW; ELECTION LAW; 1993 COMELEC RULES OF PROCEDURE; MOTION FOR
RECONSIDERATION FOR THE COMELEC EN BANC RESOLUTION IN ELECTION OFFENSE CASES IS
MANDATORY; NOT COMPLIED IN CASE AT BAR. Petitioners did not exhaust all the remedies available to
them at the COMELEC level. Specifically, they did not seek a reconsideration of the assailed COMELEC En
Banc Resolution as required by Section 1, Rule 13 of the 1993 COMELEC Rules of Procedure[.] . . . It is not
disputed that petitioners' complaint before the COMELEC involves an election offense. But in this petition,
they conveniently kept silent why they directly elevated to this Court the questioned Resolution without first
filing a motion for reconsideration with the COMELEC En Banc. It was only after the respondents had filed
their comment on the petition and called this Court's attention to petitioners' failure to comply with Section 1
of Rule 13 that they, in their Consolidated Reply, advanced the excuse that they "deemed it best not seek any
further dilatory 'motion for reconsideration'. . . , even if allowed by Sec. 1 (d) of COMELEC Rule 13."
Petitioners' failure to file the required motion for reconsideration utterly disregarded the COMELEC Rules
intended "to achieve an orderly, just, expeditious and inexpensive determination and disposition of every
action and proceeding brought before the Commission."

2.ID.; ID.; ID.; ID.; PURPOSE. Contrary to petitioners' statement that a resort to a motion for
reconsideration is "dilatory," it bears stressing that the purpose of the said motion is to give the COMELEC an
opportunity to correct the error imputed to it. If the error is immediately corrected by way of a motion for
reconsideration, then it is the most expeditious and inexpensive recourse. But if the COMELEC refuses to
correct a patently erroneous act, then it commits a grave abuse of discretion justifying a recourse by the
aggrieved party to a petition for certiorari.
3.ID.; ID.; REPUBLIC ACT NO. 6646; PROSECUTION OF VOTE-BUYING AND VOTE SELLING; ABSENCE OF
SUPPORTING AFFIDAVITS SHOWS THE FRAILTY OF PETITIONER'S COMPLAINT. Petitioners' complaint
expressly states that no supporting affidavits were submitted by the complaining witnesses to sustain their
charge of vote buying. Suffice it to state that the absence of such supporting affidavits shows the frailty of
petitioners' complaint. Indeed, it is vulnerable to dismissal.HCDAcE
4.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; PREMATURELY FILED FOR FAILURE TO COMPLY
WITH REQUIRED MOTION FOR RECONSIDERATION. A petition for certiorari under Rule 65 of the 1997
Rules of Civil Procedure, as amended, can only be resorted to if "there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law." Having failed to file the required motion for
reconsideration of the challenged Resolution, petitioners' instant petition is certainly premature. Significantly,
they have not raised any plausible reason for their direct recourse to this Court.

DECISION

SANDOVAL-GUTIERREZ, J p:
This is a petition for certiorari 1 seeking the nullification of Resolution No. 98-3208 of the Commission on
Elections (COMELEC) En Banc promulgated on December 1, 1998 dismissing the complaint for vote buying
filed by petitioners against respondents.
On April 21, 1998, petitioners Antonio M. Bernardo, Ernesto A. Domingo, Jr. and Jesus C. Cruz filed with the
COMELEC a criminal complaint against respondents Benjamin S. Abalos, Sr., Benjamin C. Abalos, Jr., Dr. Eden
C. Diaz, Romeo Zapanta and Arcadio de Vera for vote buying in violation of Section 261, paragraphs (a), (b)
and (j) of the Omnibus Election Code (OEC), in relation to Section 28 of Republic Act 6646 and Section 68 of
the OEC. The complaint, docketed as E.O. Case No. 98-110, 2 alleged that:
1.On April 14, 1998 (Tuesday), respondent Mandaluyong City Mayor Benjamin S. Abalos, Sr., and his
son respondent Benjamin "Benhur" C. Abalos, Jr., candidate for City Mayor of the same city in
the May 11, 1998 elections, conspiring with respondents Dr. Eden C. Diaz, Schools Division
Superintendent, Romeo F. Zapanta, Assistant Schools Division Superintendent, and Arcadio de
Vera, President, Mandaluyong Federation of Public School Teachers, sponsored, arranged and
conducted an all-expense-free transportation, food and drinks affair for the Mandaluyong City
public school teachers, registered voters of said city, at the Tayabas Bay Beach Resort,
Sariaya, Quezon Province.
2.Among the identified public school teachers present, brought in around twelve (12) buses,
were Corazon Mayoya, Principal of Highway Hills Elementary School, her Assistant Principal
and Mr. Dante del Remigio; Mrs. Diaz, Principal of Mandaluyong City High School and Mr.
Alvia; Mrs. Parillo, Andres Bonifacio Elementary School; Mrs. Gregoria Ignacio, Principal of
Doa Pilar Gonzaga Elementary School and Mrs. Bolantes; Mrs. Diaz, Principal, Nueve de
Febrero Elementary School; Ms. Magsalin, Principal of Mandaluyong Science High School and
Mrs. Rita Bondayril; Mrs. De Vera, Fabella Elementary School; Ms. Anselmo, Principal of Isaac
Lopez Elementary School and Mrs. Fayton; Mrs. Sylvia Liwanag, District Supervisor, District II,

Mrs. Nalaonan, Principal of Amado T. Reyes Elementary School; Mrs. Teresita Vicencio,
Mandaluyong City Elementary School; Officers of the Mandaluyong Federation of Public School
Teachers namely: Mrs. Erlinda llagan, Treasurer; Ms. Nancy de Leon, Auditor; Ms. Fortunata
Gondran, PRO; Mr. Nenito Pumariga, Business Manager; Mr. Jose Guerrero, Sgt.-at-arms; and
Board Members Ms. Virginia Carillo, Ms. Wilma Fernandez, Mr. Arturo Morales and Mr. Teddy
Angeles.
3.During the whole-day affair, the background music loudly and repeatedly played over the sound
system was the political jingle advertisement of Mandaluyong City candidate for Mayor,
Benjamin "Benhur" Abalos, Jr., sang to the tune of the song 'SHA LALA LALA'.
4.Some of the participants wore T-shirts with the name of candidate "Benhur" Abalos, Jr.," printed in
over-sized colored letters.
5.Mayor Benjamin Abalos, Sr. delivered a speech wherein he offered and promised the Mandaluyong
City public school teachers and employees a "hazard" pay of P1,000.00, and increasing their
allowances from P1,500.00 to P2,000.00 for food, or with a total of P3,000.00 which they will
get by the end of the month.
6.The offers and promises to said public school teachers, who are members of the Board of Election
Inspectors of Mandaluyong City and registered voters thereat, were made a few weeks before
the election to induce or unduly influence the said teachers and the public in general (the
other guests) to vote for the candidacy of Benjamin "Benhur" Abalos, Jr..
7.The offers and promises of Mayor Abalos, Sr., and the enthusiastic acceptance of said monetary
increase of allowances by the public school teachers and employees of Mandaluyong City, is a
violation of Section 261 pars. (a), (b) and (j) of the Omnibus Election Code against votebuying and vote-selling. 3

The Director 4 of the Law Department of the COMELEC conducted a preliminary investigation. All the private
respondents filed separate counter-affidavits 5 with prayer to dismiss the complaint.
On November 26, 1998, the Director of the Law Department submitted his findings to the COMELEC En
Banc recommending that the complaint be dismissed for insufficiency of evidence.
On December 1, 1998, the COMELEC En Banc issued the assailed Resolution No. 98-3208
complaint "for insufficiency of evidence to establish prima facie case,"

dismissing the

"Considering that this complaint, being criminal in nature, must have all its allegations supported by
direct, strong, convincing and indubitable evidence; and that the submitted evidence of the
complainant are mere self-serving statements and uncorroborated audio and visual recordings and a
photograph; and considering further that the evidence of the respondents have more probative value
and believable than the evidence of said complainants; and that the burden of proof lies with the
complainants and not with the respondents." 7

On February 09, 1999, petitioners, without first submitting a motion for reconsideration, filed the instant
petition with this Court.
They alleged therein that the COMELEC En Banc, in issuing Resolution No. 98-3208 dated December 1, 1998,
acted "with apparent grave abuse of discretion." 8
The petition must fail.

Petitioners did not exhaust all the remedies available to them at the COMELEC level. Specifically, they did not
seek a reconsideration of the assailed COMELEC En Banc Resolution as required by Section 1, Rule 13 of the
1993 COMELEC Rules of Procedure, thus:
"SECTION 1.What Pleadings are not Allowed. The following pleadings are not allowed:

DACTSH

xxx xxx xxx


d)motion for reconsideration of an en banc ruling, resolution, order or decision except in
election offense cases;
. . . ." (Italics ours)

It is not disputed that petitioners' complaint before the COMELEC involves an election offense. But in this
petition, they conveniently kept silent why they directly elevated to this Court the questioned Resolution
without first filing a motion for reconsideration with the COMELEC En Banc. It was only after the respondents
had filed their comment on the petition and called this Court's attention to petitioners' failure to comply with
Section 1 of Rule 13 that they, in their Consolidated Reply, advanced the excuse that they "deemed it best
not seek any further dilatory 'motion for reconsideration'. . . , even if allowed by Sec. 1 (d) of COMELEC Rule
13." 9
Petitioners' failure to file the required motion for reconsideration utterly disregarded the COMELEC Rules
intended "to achieve an orderly, just, expeditious andinexpensive determination and disposition of every
action and proceeding brought before the Commission." 10
Contrary to petitioners' statement that a resort to a motion for reconsideration is "dilatory," it bears stressing
that the purpose of the said motion is to give the COMELEC an opportunity to correct the error imputed to
it. 11 If the error is immediately corrected by way of a motion for reconsideration, then it is the most
expeditious and inexpensive recourse. But if the COMELEC refuses to correct a patently erroneous act, then it
commits a grave abuse of discretion justifying a recourse by the aggrieved party to a petition for certiorari.
A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, can only be resorted
to if "there is no appeal, or any plain, speedy, andadequate remedy in the ordinary course of law.'' 12 Having
failed to file the required motion for reconsideration of the challenged Resolution, petitioners' instant petition
is certainly premature. 13 Significantly, they have not raised any plausible reason for their direct recourse to
this Court.
In its assailed Resolution, the COMELEC cited a valid reason for dismissing petitioners' complaint against
private respondents for vote buying. The COMELEC found that the evidence of the respondents have "more
probative value and believable than the evidence of the complainants;" and that the evidence submitted by
petitioners are "mere self-serving statements and uncorroborated audio and visual recording and a
photograph."
Moreover, Section 28 of Republic Act 6646 provides:
"SEC. 28.Prosecution of Vote-buying and Vote-selling. The representation of a complaint for
violations of paragraph (a) or (b) of Section 261 of Batas Pambansa Blg. 881 supported by affidavits

of complaining witnesses attesting to the offer or promise by or of the voter's acceptance of money or
other consideration from the relatives, leaders or sympathizers of candidate, shall be sufficient basis
for an investigation to be immediately conducted by the Commission, directly or through its duly
authorized legal officers, under Section 68 or Section 265 of said Batas Pambansa Blg. 881.
. . . ." (Italics ours)

Petitioners' complaint expressly states that no supporting affidavits were submitted by the complaining
witnesses 14 to sustain their charge of vote buying. Suffice it to state that the absence of such supporting
affidavits shows the frailty of petitioners' complaint. Indeed, it is vulnerable to dismissal.
WHEREFORE, the instant petition is DISMISSED.

DIcSHE

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo, Buena,
Ynares-Santiago, De Leon, Jr. and Carpio, JJ., concur.

[G.R. No. 88550. April 18, 1990.]


INDUSTRIAL ENTERPRISES, INC., petitioner, vs. THE HON. COURT OF APPEALS,
MARINDUQUE MINING & INDUSTRIAL CORPORATION, THE HON. GERONIMO
VELASCO, in his capacity as Minister of Energy AND PHILIPPINE NATIONAL
BANK,respondents.

Manuel M. Antonio and Dante Cortez for petitioner.


Pelaez, Adriano & Gregorio for respondent MMIC.
The Chief Legal Counsel for respondent PNB.
SYLLABUS
1.ADMINISTRATIVE LAW; BUREAU OF ENERGY DEVELOPMENT (P.D. No. 1206); POWERS AND FUNCTIONS.
For the Bureau of Energy Development, (BED), as the successor to the Energy Development Board
(abolished by Sec. 11, P.D. No. 1206, dated 6 October 1977) is tasked with the function of establishing a
comprehensive and integrated national program for the exploration, exploitation, and development and
extraction of fossil fuels, such as the country's coal resources; adopting a coal development program;
regulating all activities relative thereto; and undertaking by itself or through service contracts such
exploitation and development, all in the interest of an effective and coordinated development of extracted
resources. P.D. No. 1206 further provides that the powers and functions of the defunct Energy Development
Board relative to the implementation of P.D. No. 972 on coal exploration and development have been
transferred to the BED, provided that coal operating contracts including the transfer or assignment of interest
in said contracts, shall require the approval of the Secretary (Minister) of Energy (Sec. 12, P.D. No. 1206).
2.ID.; DOCTRINE OF PRIMARY JURISDICTION; CONSTRUED. In recent years, it has been the
jurisprudential trend to apply the doctrine of primary jurisdiction in many cases involving matters that
demand the special competence of administrative agencies. It may occur that the Court has jurisdiction to
take cognizance of a particular case, which means that the matter involved is also judicial in character.
However, if the case is such that its determination requires the expertise, specialized skills and knowledge of
the proper administrative bodies because technical matters or intricate questions of facts are involved, then
relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts
even though the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction.
It applies "where a claim is originally cognizable in the courts, and comes into play whenever enforcement of
the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the

special competence of an administrative body; in such case the judicial process is suspended pending referral
of such issues to the administrative body for its view" (United States v. Western Pacific Railroad Co., 352 U.S.
59, emphasis supplied).
3.ID.; ID.; APPLICABLE IN CASE AT BAR. The doctrine of primary jurisdiction finds application in this case
since the question of what coal areas should be exploited and developed and which entity should be granted
coal operating contracts over said areas involves a technical determination by the BED as the administrative
agency in possession of the specialized expertise to act on the matter. The Trial Court does not have the
competence to decide matters concerning activities relative to the exploration, exploitation, development and
extraction of mineral resources like coal. These issues preclude an initial judicial determination. It behooves
the courts to stand aside even when apparently they have statutory power to proceed in recognition of the
primary jurisdiction of an administrative agency.
4.ID.; ID.; PURPOSE. The application of the doctrine of primary jurisdiction, however, does not call for the
dismissal of the case below. It need only be suspended until after the matters within the competence of the
BED are threshed out and determined. Thereby, the principal purpose behind the doctrine of primary
jurisdiction is salutarily served. "Uniformity and consistency in the regulation of business entrusted to an
administrative agency are secured, and the limited function of review by the judiciary are more rationally
exercised, by preliminary resort, for ascertaining and interpreting the circumstances underlying legal issues,
to agencies that are better equipped than courts by specialization, by insight gained through experience, and
by more flexible procedure" (Far East Conference v. United States, 342 U.S. 570).

DECISION

MELENCIO-HERRERA, J p:
This petition seeks the review and reversal of the Decision of respondent Court of Appeals in CA-G.R. CV No.
12660, 1 which ruled adversely against petitioner herein.LibLex
Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through
the Bureau of Energy Development (BED) for the exploration of two coal blocks in Eastern Samar.
Subsequently, IEI also applied with the then Ministry of Energy for another coal operating contract for the
exploration of three additional coal blocks which, together with the original two blocks, comprised the socalled "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's over-all coal supplydemand balance . . . the logical coal operator in the area should be the Marinduque Mining and Industrial
corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that
the Bagacay and Giporlos Areas should be awarded to MMIC (Rollo, p. 37). Thus, Agreement whereby IEI
assigned and transferred to MMIC all its rights and interests in the two coal blocks which are the subject of
IEI's coal operating contract.
Subsequently, however, IEI filed an action for rescission of the Memorandum of Agreement with damages
against MMIC and the then Minister of Energy Geronimo Velasco before the Regional Trial Court of Makati,
Branch 150, 2 alleging that MMIC took possession of the subject coal blocks even before the Memorandum of
Agreement was finalized and approved by the BED; that MMIC discontinued work thereon; that MMIC failed
to apply for a coal operating contract for the adjacent coal blocks; and that MMIC failed and refused to pay
the reimbursements agreed upon and to assume IEI's loan obligation as provided in the Memorandum of
Agreement (Rollo, p. 38). IEI also prayed that the Energy Minister be ordered to approve the return of the
coal operating contract from MMIC to petitioner, with a written confirmation that said contract is valid and

effective, and, in due course, to convert said contract from an exploration agreement to a
development/production or exploitation contract in IEI's favor.
Respondent, Philippine National Bank (PNB), was later impleaded as co-defendant in an Amended Complaint
when the latter with the Development Bank of the Philippines effected extra-judicial foreclosures on certain
mortgages, particularly the Mortgage Trust Agreement, dated 13 July 1981, constituted in its favor by MMIC
after the latter defaulted in its obligation totalling around P22 million as of 15 July 1984. The Court of Appeals
eventually dismissed the case against the PNB (Resolution, 21 September 1989). llcd
Strangely enough, Mr. Jesus S. Cabarrus is the President of both IEI and MMIC.
In a summary judgment, the Trial Court ordered the rescission of the Memorandum of Agreement, declared
the continued efficacy of the coal operating contract in favor of IEI; ordered the reversion of the two coal
blocks covered by the coal operating contract; ordered BED to issue its written affirmation of the coal
operating contract and to expeditiously cause the conversion thereof from exploration to development in
favor of IEI; directed BED to give due course to IEI's application for a coal operating contract; directed BED
to give due course to IEI's application for three more coal blocks; and ordered the payment of damages and
rehabilitation expenses (Rollo, pp. 9-10).
In reversing the Trial Court, the Court of Appeals held that the rendition of the summary judgment was not
proper since there were genuine issues in controversy between the parties, and more importantly, that the
Trial Court had no jurisdiction over the action considering that, under Presidential Decree No. 1206, it is the
BED that has the power to decide controversies relative to the exploration, exploitation and development of
coal blocks (Rollo, pp. 43-44).
Hence, this petition, to which we resolved to give due course and to decide.
Incidentally, the records disclose that during the pendency of the appeal before the Appellate Court, the suit
against the then Minister of Energy was dismissed and that, in the meantime, IEI had applied with the BED
for the development of certain coal blocks.
The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide the suit for
rescission of the Memorandum of Agreement concerning a coal operating contract over coal blocks. A
corollary question is whether or not respondent Court of Appeals erred in holding that it is the Bureau of
Energy Development (BED) which has jurisdiction over said action and not the civil court.
While the action filed by IEI sought the rescission of what appears to be an ordinary civil contract cognizable
by a civil court, the fact is that the Memorandum of Agreement sought to be rescinded is derived from a coaloperating contract and is inextricably tied up with the right to develop coal-bearing lands and the
determination of whether or not the reversion of the coal operating contract over the subject coal blocks to
IEI would be in line with the integrated national program for coal-development and with the objective of
rationalizing the country's over-all coal-supply-demand balance, IEI's cause of action was not merely the
rescission of a contract but the reversion or return to it of the operation of the coal blocks. Thus it was that in
its Decision ordering the rescission of the Agreement, the Trial Court, inter alia, declared the continued
efficacy of the coal-operating contract in IEI's favor and directed the BED to give due course to IEI's
application for three (3) more coal blocks. These are matters properly falling within the domain of the BED. llcd

For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated
6 October 1977) is tasked with the function of establishing a comprehensive and integrated national program
for the exploration, exploitation, and development and extraction of fossil fuels, such as the country's coal
resources; adopting a coal development program; regulating all activities relative thereto; and undertaking by

itself or through service contracts such exploitation and development, all in the interest of an effective and
coordinated development of extracted resources.
Thus, the pertinent sections of P.D. No. 1206 provide:
"Sec. 6.Bureau of Energy Development. There is created in the Department a Bureau of Energy
Development, hereinafter referred to in this Section as the Bureau, which shall have the following
powers and functions, among others:
"a.Administer a national program for the encouragement, guidance, and whenever
necessary, regulation of such business activity relative to theexploration, exploitation, development,
and extraction of fossil fuels such as petroleum, coal, . . .
"The decisions, orders, resolutions or actions of the Bureau may be appealed to the Secretary whose
decisions are final and executory unless appealed to the President. (Emphasis supplied.)

That law further provides that the powers and functions of the defunct Energy Development Board relative to
the implementation of P.D. No. 972 on coal exploration and development have been transferred to the BED,
provided that coal operating contracts including the transfer or assignment of interest in said contracts, shall
require the approval of the Secretary (Minister) of Energy (Sec. 12, P.D. No. 1206).
"Sec. 12.. . . the powers and functions transferred to the Bureau of Energy Development are:
xxx xxx xxx
"ii.The following powers and functions of the Energy Development Board under PD No. 910 . . .
"(1)Undertake by itself or through other arrangements, such as service contracts, the active
exploration, exploitation, development, and extraction of energy resources . . .
(2)Regulate all activities relative to the exploration, exploitation, development, and extraction of fossil
and nuclear fuels . . . (P.D. No. 1206) (Emphasis supplied.)

P.D. No. 972 also provides:


"Sec. 8.Each coal operating contract herein authorized shall . . . be executed by the Energy
Development Board.

Considering the foregoing statutory provisions, the jurisdiction of the BED, in the first instance, to pass upon
any question involving the Memorandum of Agreement between IEI and MMIC, revolving as its does around a
coal operating contract, should be sustained. Cdpr
In recent years, it has been the jurisprudential trend to apply the doctrine of primary jurisdiction in many
cases involving matters that demand the special competence of administrative agencies. It may occur that the
Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also
judicial in character. However, if the case is such that its determination requires the expertise, specialized
skills and knowledge of the proper administrative bodies because technical matters or intricate questions of
facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be
supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine
of primary jurisdiction. It applies "where a claim is originally cognizable in the courts, and comes into play
whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have
been placed within the special competence of an administrative body; in such case the judicial process is

suspended pending referral of such issues to the administrative body for its view" (United States v. Western
Pacific Railroad Co., 352 U.S. 59, emphasis supplied).

Clearly, the doctrine of primary jurisdiction finds application in this case since the question of what coal areas
should be exploited and developed and which entity should be granted coal operating contracts over said
areas involves a technical determination by the BED as the administrative agency in possession of the
specialized expertise to act on the matter. The Trial Court does not have the competence to decide matters
concerning activities relative to the exploration, exploitation, development and extraction of mineral resources
like coal. These issues preclude an initial judicial determination. It behooves the courts to stand aside even
when apparently they have statutory power to proceed in recognition of the primary jurisdiction of an
administrative agency. LLjur
"One thrust of the multiplication of administrative agencies is that the interpretation of contracts and
the determination of private rights thereunder is no longer a uniquely judicial function, exercisable
only by our regular courts" (Antipolo Realty Corp. vs. National Housing Authority, 153 SCRA 399, at
407).

The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of the case
below. It need only be suspended until after the matters within the competence of the BED are threshed out
and determined. Thereby, the principal purpose behind the doctrine of primary jurisdiction is salutarily served.
"Uniformity and consistency in the regulation of business entrusted to an administrative agency are
secured, and the limited function of review by the judiciary are more rationally exercised, by
preliminary resort, for ascertaining and interpreting the circumstances underlying legal issues, to
agencies that are better equipped than courts by specialization, by insight gained through experience,
and by more flexible procedure" (Far East Conference v. United States, 342 U.S. 570).

With the foregoing conclusion arrived at, the question as to the propriety of the summary judgment rendered
by the Trial Court becomes unnecessary to resolve.
WHEREFORE, the Court Resolved to DENY the petition. No costs.
SO ORDERED.

Paras, Padilla, Sarmiento and Regalado, JJ., concur.

[G.R. No. 87146. December 11, 1991.]


GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. HON. CIVIL
SERVICE COMMISSION AND MARIA ASUNCION SALAZAR, respondents.

Tanjuatco, Oreta, Tanjuatco, Berenguer and Sanvicente for private respondent.

DECISION

MEDIALDEA, J p:

This petition for certiorari assails Resolution No. 89-031 dated January 17, 1989, of the Civil Service
Commission (CSC) denying the appeal of the Government Service Insurance System (GSIS) from the order of
the Merit Systems Protection Board dated September 2, 1988.
As far as the service record of private respondent Salazar filed with the CSC National Capital Region (NCR)
revealed, she was employed by GSIS as a casual laborer on September 23, 1968. She became a permanent
employee in the same office on February 28, 1974 with a designation of stenographer. Thereafter, she was
promoted to Confidential Technical Assistant Aide also under permanent status on December 9, 1975 (p.
37, Rollo).
Salazar's GSIS Service Record however, revealed that also on December 9, 1975, she was appointed to the
position of Confidential Executive Assistant in the office of then GSIS President and General Manager Roman
A. Cruz, Jr. on a permanent status. On August 13, 1982, she was promoted to Technical Assistant III, (p. 58,
Rollo), the position she held when on May 16, 1986, her services were terminated by the newly appointed
President and General Manager of the GSIS for the reason that her position was co-terminous with the term
of the appointing authority, Roman A. Cruz, Jr.
Salazar filed a petition for reconsideration with the GSIS Board of Trustees, but reconsideration was denied.
Thereafter, she filed a petition for reconsideration of the denial with the Review Committee created under
Executive Order No. 17. The said Review Committee referred the petition both to the Merit Systems
Promotion Board and the Civil Service Commission, stating that Salazar's removal or separation from office
was not by virtue of the general reorganization program of the government for which the Review Committee
was created.
On July 22, 1987, the Civil Service Commission, issued Resolution No. 87-230 directing the reinstatement of
Salazar, the dispositive portion of the decision reads:
"WHEREFORE, the Commission directs the immediate reinstatement of Ms. Salazar with back salaries
and other benefits due her without prejudice to the final determination of the position, if any, to which
she may have been subsequently appointed. llcd
"xxx xxx xxx." (p. 38, Rollo)

GSIS, through the Office of the Government Corporate Counsel, filed a motion for reconsideration dated
September 14, 1987 (pp. 39-42).
On the other hand, the Board, acting on the same petition of Salazar referred to it by the Review Committee,
issued an Order on March 9, 1983, finding the petition of Salazar for reinstatement, without merit and
affirmed her termination. The dispositive portion of the decision is quoted as follows:
"This Board agrees with the contention of the GSIS President and General Manager that the petitioner
was not dismissed but that her employment ended with the termination of office of the previous GSIS
President, since her position as Technical Assistant III is confidential in nature, hence, belongs to the
non-career service . . .
"xxx xxx xxx.
"WHEREFORE, the Board finds the petition without merit. The termination of Ms. Ma. Asuncion S.
Salazar as Technical Assistant III is hereby affirmed.
"SO ORDERED." (pp. 45-46, Rollo)

On April 20, 1988, Salazar filed a motion for reconsideration of the Board's order and manifested that the
Commission already resolved her petition on July 22, 1987. On June 30, 1988, the Board set aside its
previous Order affirming Salazar's dismissal in view of the Commission's prior resolution of the case. The
order reads, in part:
"In a position paper dated April 20, 1988, of Ms. Salazar, addressed to the Commission and
transmitted to this Board on June 6, 1988, this Board was informed that the Commission has resolved
a similar petition in Resolution No. 87-230 dated July 22, 1987; and that the GSIS has filed a motion
for reconsideration of the Resolution of the Commission on September 14, 1987.
"WHEREFORE, considering that the Commission has already acted on the matter, this Board hereby
sets aside its Order dated March 9, 1988.
"xxx xxx xxx." (p. 62, Rollo)

On August 18, 1988, GSIS filed a motion for reconsideration of the June 30, 1988 Order of the Board. On
September 2, 1988, the Board denied the motion. The pertinent portion of the Order states:
"Records show that the Resolution dated April 22, 1987, of the Review Committee created under
Executive Order No. 17 relative to the petition for reconsideration of the termination of the services of
Ms. Salazar as Technical Assistant III in the GSIS, was forwarded to the Merit Systems Protection
Board. In an Order dated March 9, 1988, this Board affirmed the termination of the services of Ms.
Salazar. However, in a position paper dated April 20, 1988 of Ms. Salazar, this Board was informed
that the same petition had already been resolved by the Civil Service Commission in a Resolution
dated July 22, 1987, directing the GSIS to reinstate her in the service. So, this Board in an Order
dated June 30, 1988, set aside its previous Order dated March 9, 1988. LexLib
"It must be noted that under Section 2 and 8 of Presidential Decree No. 1409, which created the Merit
Systems Board (now Merit Systems Protection Board) state that:
'SECTION. 2.Composition. The Board shall be composed of a Commissioner (now
Chairman) and two Associate Commissioners (now Board Members) who shall be appointed by
the Civil Service Commission and who may be removed only for cause as provided by law.
'SECTION 8.Relationship with the Civil Service Commission. Decisions of the Merit Systems
Board (now Merit System Protection Board) involving the removal of officers and employees
from the service shall be subject to automatic review by the Civil Service Commission. The
Commission shall hear and decide appeals from other decisions of the Board, provided that
the decisions of the Commission shall be subject to review on Certiorari only by the Supreme
Court within thirty (30) days from receipt of a copy thereof by the aggrieved party.' (as
amended by D.O. 135 dated February 27, 1987).
"Based on the aforequoted provisions, it is clear that the Civil Service Commission is a higher
administrative appellate body on matters concerning the removal of officers and employees from the
service. Hence, the Board cannot in any manner modify or alter the determinations and actions of the
Civil Service Commission. (pp. 66-67, Rollo)

GSIS appealed (pp. 68-76, Rollo) this order of the Board to the Commission. However, before it acted on the
appeal, the Commission issued Resolution, No. 88-825 on November 16, 1988 denying the motion for
reconsideration filed by GSIS of the Commission's Resolution No. 88-230 ordering the reinstatement of
Salazar. The dispositive portion of the resolution reads:
"WHEREFORE, foregoing premises considered, and finding no cogent reason to reverse or modify the
CSC Resolution No. 87-230, this Commission resolved to deny, as it hereby denies the instant motion

for reconsideration. It is therefore directed that Ms. Ma. Asuncion Salazar be reinstated to her former
position of Technical Assistant or Aide or to any comparable position." (p. 79, Rollo)

On January 17, 1989, the Commission issued Resolution No. 89-031 denying the appeal of GSIS from the
order of the Board dated September 2, 1988. The dispositive portion of the decision states: prLL
"WHEREFORE, foregoing premises considered, and in the interest of justice and equity, this
Commission resolved to rule, as it hereby rules that its Resolution No. 88-825 dated November 16,
1988 has become final and executory upon receipt of notice thereof, by the GSIS. Accordingly, this
case is considered closed." (p. 35, Rollo)

GSIS filed the instant petition for certiorari, raising the following issues for resolution:
"1.Whether or not the respondent Civil Service Commission erred in not holding that it was the Merit
Systems Board, not said Commission, which had appellate jurisdiction over the subject personal action
of termination of services of private respondent;
"2.Whether or not the respondent Civil Service Commission erred in not holding that Resolutions Nos.
87-230 and 88-825, dated July 22, 1987 and November 6, 1988, respectively, were issued without
jurisdiction;
"3.Whether or not the respondent Civil Service Commission erred in not holding that resolutions Nos.
87-230 and 88-825 were void ab initio or legally inexistent;
"4.Whether or not the respondent Civil Service Commission erred in not holding that the Order of the
Merit Systems Board dated June 30, 1988 was, likewise, void and legally inexistent, and that the Order
dated March 9, 1988, which it set aside, had, accordingly, become final and executory;
"5.Whether or not the respondent Civil Service Commission erred in denying petitioner's appeal on the
basis of said void resolutions;
"6.Whether or not the respondent Civil Service Commission erred in not holding that private
respondent's position as Technical Assistant III was highly confidential and, therefore, belonged to the
non-career service or co-terminous with the tenure of the previous appointing authority (the former
President and General Manager of GSIS);
"7.Whether or not the respondent GSIS erred in not holding that the termination of private
respondent's services entailed no removal or dismissal but an expiration of term and, therefore, not
violative of the constitutional prohibition against suspension or dismissal without cause of civil service
officers or employees; and
"8.Whether or not the respondent Civil Service Commission erred in not affirming the subject personal
action of termination of services of private respondent." (pp. 219-220, Rollo)

The questions presented in this petition may be summarized into two: (1) which body has jurisdiction over
appeals from decisions of government officers on personnel matters?; and (2) was the position last held by
private respondent primarily confidential in nature?
It is the contention of GSIS that it is the Merit Systems Protection Board, not the respondent Civil Service
Commission that is vested with jurisdiction to hear and decide cases appealed to it by those aggrieved by
personnel actions of appointing authorities. It is not disputed that ". . ., the Civil Service Commission, under
the Constitution is the single arbiter of all contest relating to the Civil Service . . ." (Lopez vs. CSC, et al., G.R.
No. 87119, April 19, 1991, citing Dario vs. Mison, G.R. Nos. 81954, 81967, 82023, 88737, 85310, 85335 and

86241, August 8, 1989). There is however, a need to clarify the jurisdiction of the Commission in relation to
the Merit Systems Board. cdphil
One of the relevant laws issued during the past regime is Presidential Decree No. 1409, creating the Merit
Systems Board. Under Sec. 5 of P.D. 1409 the Merit Systems Board has, inter alia, the following powers and
functions:
"(1). . .
"(2)Hear and decide cases brought before it by officers and employees who feel aggrieved by the
determination of appointing authorities involving appointment, promotion, transfer, detail,
reassignment and other personnel actions, as well as complaints against any officers in the

government arising from abuses arising from personnel actions of these officers or from violations of
the merit system.
"(3). . ." (emphasis ours)

The public respondent Civil Service Commission had long recognized and implemented said provision of P.D.
1409. In 1978, it issued Memorandum Circular No. 6 where it expressly stated:
"As provided in Presidential Decree No. 1409, which amended Presidential Decree No. 807, the heads
of ministries and agencies, on the one hand, and the Merit Systems Board on the other, have
concurrent original jurisdiction over disciplinary and non-disciplinary cases and, where the heads of
ministries and agencies assume jurisdiction first, their decisions and determinations are appealable to
the Merit Systems Board. The Civil Service Commission, however, remains the final administrative
appellate body in these matters, as provided in Section 3 of Presidential Decree No. 1409 . . ."

When the law bestows upon a government body the jurisdiction to hear and decide cases involving specific
matters, it is to be presumed that such jurisdiction is exclusive unless it be proved that another body is
likewise vested with the same jurisdiction, in which case, both bodies have concurrent jurisdiction over the
matter. Presidential Decree No. 1409 clearly provides that the Merit Systems Board shall take cognizance of
appeals from parties aggrieved by decisions of appointing officers involving personnel action. The Commission
therefore cannot take original cognizance of the cases specified under Section 5 of P.D. 1409, except in the
case specified under Section 9 (j) of the Civil Service Decree which directly gives it such power, to wit:
SECTION 9.Powers and Functions of the Commission. The Commission shall administer the Civil
Service Commission and shall have the following powers and functions:
"xxx xxx xxx
"j)Hear and decide administrative disciplinary cases instituted directly with it in accordance with
Section 37 or brought to it on appeal; Cdpr
"xxx xxx xxx

If the Commission were vested with the authority to take original cognizance of all matters involving
government personnel, P.D. 1409 would appear to be a mere surplusage as the rationale for the existence of
the Merit Systems Protection Board would be rendered meaningless and inutile. This is not the intention of
the law creating the Board. In the "whereas" clauses of P.D. 1409, the need for the creation of the Board was
distinctly outlined, thus:
"WHEREAS, the need for a stable and responsive Civil Service has become especially critical with the
institution in the country of a Parliamentary form of government that stresses accountability to the
people;

"WHEREAS, while the present civil service system, by reason of its new structure, has shown itself to
have dynamic flexibility and adaptiveness, there remains the need to further promote a more positive
approach to personnel growth and development;
"WHEREAS, the two major functions of the Commission are the strengthening of the merit system and
the development of viable careers among civil service employees;
"WHEREAS, these two goals can be better achieved through a redefinition of the functions of the Civil

Service Commission so that its career development concerns may be separated from the protective
character of its responsibilities;
"xxx xxx xxx." (emphasis ours)

The Commission, however, is not without power. As the final arbiter on any matter concerning personnel
action in the government, the Commission is empowered by P.D. 1409, to review the decisions of the
Board, as follows:
"SECTION 8.Relationship with the Civil Service Commission. Decisions of the Board involving the
removal of officers and employees from the service shall be subject to automatic review by the
Commission. The Commission shall likewise hear and decide appeals from other decisions of the
Board, provided that the decisions of the Commission shall be subject to renew only by the Courts."

In the case at bar, We note that the appeal of Salazar was endorsed by the Review Committee created
under Executive Order No. 17 to both the Merit Systems Board and the Civil Service Commission. In the
absence of a decision from the Merit Systems Board, the Commission cannot legally assume jurisdiction over
the appeal. Hence, its decision (Resolution No. 87230) in favor of Salazar dated July 22, 1987 and all
subsequent resolutions of the Commission in this case are void. Likewise, the Order of the Board dated June
30, 1988, setting aside its previous order upholding the termination of Salazar in deference to the
Commission's final appellate jurisdiction over the matter, is null and void. Jurisdiction is vested by law and is
not lost nor be legally transferred by voluntary surrender in favor of a body not vested by law with such
jurisdiction.
There is a disparity between the service record of private respondent on file with the GSIS and that on file
with the CSC. In the latter, her last two promotional appointments in the GSIS were not reflected. The fact
remains however, and this is admitted by both the petitioner and private respondent Salazar, that before her
termination in May 1986, she was occupying the last higher position of Technical Assistant III and not of
Technical Assistant Aide as appears in the Commission's records.
The petitioner contends that the position of Technical Assistant III belongs to the non-career service category
and remains co-terminous. However, it also contends that even if the said position belongs to the career
service, the appointment of Salazar as Technical Assistant III is still not valid because it requires a first grade
civil service eligible of which Salazar was not at the time of her appointment. LibLex
The resolution of the nature of the appointment of Salazar as Technical Assistant III, i.e., whether or not the
position is primarily confidential is necessary in the resolution of the legality of her termination. Whether the
position of Technical Assistant III belongs to the career service where the incumbent enjoys a security of
tenure or primarily confidential where her tenure is co-terminous with that of the appointing authority or
endures only as long as confidence in her exists (See Pacete vs. Acting Chairman of COA, et al., G.R. No.
39456, 7 May 1990) depends upon the nature of the functions of the office (Borres vs. Court of Appeals, L36845, August 21, 1987). Not even the fact that the position had already been classified as one under the
career service and certified as permanent by the Civil Service Commission, can conceal or alter a position's
being confidential in nature (See Hon. Simplicio Grio, et al. vs. CSC, et al., G.R. No. 91602, February 26,
1991).

However, the records with the court are not sufficient for a substantial determination of the matter. There is
no copy of the job description of the position nor any showing by the parties as regards the nature of the
position. The Board initially ruled that the position is primarily confidential and upheld the legality of Salazar's
termination. Its decision however, is only a conclusion not supported by evidence. The respondent Civil
Service Commission, on the other hand, did not make any finding on this matter after concluding that based
on its records, Salazar's last position is only that of a Technical Aide, a permanent position and very much
lower than that of Technical Assistant III. For his part, the Solicitor General admits that the position is
confidential in nature but did not bother to explain why. The GSIS, on the other hand states that the position
is confidential but inconsistently contends also that Salazar had no first grade civil service eligibility required
of the position.
ACCORDINGLY, the petition is granted. The questioned Resolution of the Civil Service Commission is annulled.
The Order of the Merit Systems Board dated March 9, 1988 is reinstated subject to the right of Salazar to
appeal to the Civil Service Commission.
SO ORDERED.

Narvasa, C . J ., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Grio-Aquino,
Regalado, Davide, Jr. and Romero, JJ ., concur.
Nocon, J ., took no part.

[G.R. No. 111107. January 10, 1997.]


LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional
Executive Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as
Community Environment and Natural Resources Officer (CENRO), both of the
Department of Environment and Natural Resources (DENR), petitioners, vs. COURT
OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding Judge of
Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES
BIENVENIDO and VICTORIA DE GUZMAN, respondents.

The Solicitor General for petitioners.


Pedro R. Perez, Jr. for private respondents.
SYLLABUS
1.POLITICAL LAW; ADMINISTRATIVE LAW; DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES;
RULE; EXCEPTIONS. 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 court's judicial power can be sought.
The premature invocation of court's intervention is fatal to one's cause of action. Accordingly, absent any
finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. This doctrine of
exhaustion of administrative remedies was not without its practical and legal reasons, for one thing,
availment of administrative remedy entails lesser expenses and provides for a speedier disposition of

controversies. It is no less true to state that the courts of justice for reasons of comity and convenience will
shy away from a dispute until the system of administrative redress has been completed and complied with so
as to give the administrative agency concerned every opportunity to correct its error and to dispose of the
case. However, we are not amiss to reiterate that 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.
2.ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. The assumption by the trial court of the replevin suit
filed by private respondents constitutes an unjustified encroachment into the domain of the administrative
agency's 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. In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, which was reiterated in the
recent case of Concerned Officials of MWSS vs. Vasquez, this Court held: "Thus, while the administration
grapples with the complex and multifarious problems caused by unbriddled exploitation of these resources,
the judiciary will stand clear. A long line of cases establish the basic rule that the courts will not interfere in
matters which are addressed to the sound discretion of government agencies entrusted with the regulation of
activities coming under the special technical knowledge and training of such agencies." To sustain the claim
of private respondents would in effect bring the instant controversy beyond the pale of the principle of
exhaustion of administrative remedies and fall within the ambit of excepted cases heretofore stated.
3.ID.; ID.; RIGHT TO DUE PROCESS, AS APPLIED TO ADMINISTRATIVE PROCEEDINGS; CASE AT BAR.
Considering the circumstances prevailing in this case, we can not but rule out these assertions of private
respondents to be without merit. First, they argued that there was violation of due process because they did
not receive the May 23, 1989 order of the confiscation of petitioner Layugan. This contention has no leg to
stand on. Due process does not necessarily mean or require a hearing, but simply an opportunity or right to
be heard. One may be heard, not solely by verbal presentation but also, and perhaps many times more
creditably and practicable than oral argument, through pleadings. In administrative proceedings moreover,
technical rules of procedure and evidence are not strictly applied; administrative process cannot be fully
equated with due process in its strict judicial sense. Indeed, deprivation of due process cannot be successfully
invoked where a party was given the chance to be heard on his motion for reconsideration, as in the instant
case, when private respondents were undisputedly given the opportunity to present their side when they filed
a letter of reconsideration dated June 28, 1989 which was, however denied in an order of July 12, 1989 of
Executive Director Baggayan. In Navarro III vs. Damasco, we ruled that: "The essence due process is simply
an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side
or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial type
hearing is not at all times and in all instances essential. The requirements are satisfied when the parties are
afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned
upon is the absolute lack of notice or hearing.
4.ID.; ID.; P.D. 705, AS AMENDED BY E.O. 277; SECTION 68-A THEREOF; THE PHRASE "TO DISPOSE OF
THE SAME, CONSTRUED. It is clear from Section 68-A of P.D. 705, as amended by E.O. 277, that the
Secretary and his duly authorized that the courts representatives are given the authority to confiscate and
forfeit any conveyances utilized in violating the Code or other forest laws, rules and regulations. The phrase
"to dispose of the same" is broad enough to cover the act of forfeiting conveyances in favor of the
government. The only limitation is that it should be made "in accordance with pertinent laws, regulations or

policies on the matter." In the construction of statutes, it must be read in such a way as to give effect to the
purpose projected in the statute. Statutes should be construed in the light of the object to be achieved and
the evil or mischief to be suppressed, and they should be given such construction as will advance the object,
suppress the mischief, and secure the benefits intended.
5.ID.; ID.; ID.; EXECUTIVE ORDER NO. 277, CONSTRUED. With, the introduction of Executive Order No.
277, amending Section 68 of P.D. 705, the act of cutting, gathering, collecting, removing, or possessing forest
products without authority constitutes a distinct offense independent now from the crime of theft under
Articles 309 and 310 of the Revised Penal Code, but the penalty to be imposed is that provided for under
Articles 309 and 310 of the Revised Penal Code. This is clear from the language of Executive Order No. 277
when it eliminated the phrase "shall be guilty of qualified theft as defined and punished under Articles 309
and 310 of the Revised Penal Code" and inserted the words shall be punished with the penalties imposed
under Articles 309 and 310 of the Revised Penal Code." When the statute is clear and explicit, there is hardly
room for any extended court ratiocination or rationalization of the law.
6.ID.; ID.; ID.; SPECIAL CIVIL ACTION FOR CERTIORARI OR PROHIBITION; PROPER REMEDY TO QUESTION
ORDERS OF CONFISCATION AND FORFEITURE UNDER P.D. 705, AS AMENDED. 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 except through a special civil action
for certiorari or prohibition.

DECISION

TORRES, JR., J p:
Without violating the principle of exhaustion of administrative remedies, may an action for replevin prosper to
recover a movable property which is the subject matter of an administrative forfeiture proceeding in the
Department of Environment and Natural Resources pursuant to Section 68-A of P. D. 705, as amended,
entitled The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered to confiscate and forfeit conveyances used in
transporting illegal forest products in favor of the government?
These are two fundamental questions presented before us for our resolution.
The controversy on hand had its incipiency on May 19, 1989 when the truck of private respondent Victoria de
Guzman while on its way to Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of
Environment and Natural Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver
could not produce the required documents for the forest products found concealed in the truck. Petitioner
Jovito Layugan, the Community Environment and Natural Resources Officer (CENRO) in Aritao, Cagayan,
issued on May 23, 1989 an order of confiscation of the truck and gave the owner thereof fifteen (15) days
within which to submit an explanation why the truck should not be forfeited. Private respondents, however,
failed to submit the required explanation. On June 22, 1989, 1Regional Executive Director Rogelio Baggayan
of DENR sustained petitioner Layugan's action of confiscation and ordered the forfeiture of the truck invoking
Section 68-A of Presidential Decree No. 705 as amended by Executive Order No. 277. Private respondents
filed a letter of reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director
Baggayan, which was, however, denied in a subsequent order of July 12, 1989. 2 Subsequently, the case was
brought by the petitioners to the Secretary of DENR pursuant to private respondents' statement in their letter

dated June 28, 1989 that in case their letter for reconsideration would be denied then "this letter should be
considered as an appeal to the Secretary." 3 Pending resolution however of the appeal, a suit for replevin,
docketed as Civil Case 4031, was filed by the private respondents against petitioner Layugan and Executive
Director Baggayan 4 with the Regional Trial Court, Branch 2 of Cagayan, 5 which issued a writ ordering the
return of the truck to private respondents. 6 Petitioner Layugan and Executive Director Baggayan filed a
motion to dismiss with the trial court contending, inter alia, that private respondents had no cause of action
for their failure to exhaust administrative remedies. The trial court denied the motion to dismiss in an order
dated December 28, 1989. 7 Their motion for reconsideration having been likewise denied, a petition for
certiorari was filed by the petitioners with the respondent Court of Appeals which sustained the trial court's
order ruling that the question involved is purely a legal question. 8 Hence, this present petition, 9with prayer
for temporary restraining order and/or preliminary injunction, seeking to reverse the decision of the
respondent Court of Appeals was filed by the petitioners on September 9, 1993. By virtue of the Resolution
dated September 27, 1993, 10 the prayer for the issuance of temporary restraining order of petitioners was
granted by this Court.

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial court could not
legally entertain the suit for replevin because the truck was under administrative seizure proceedings
pursuant to Section 68-A of P.D. 705, as amended by E.O. 277. Private respondents, on the other hand,
would seek to avoid the operation of this principle asserting that the instant case falls within the exception of
the doctrine upon the justification that (1) due process was violated because they were not given the chance
to be heard, and (2) the seizure and forfeiture was unlawful on the grounds: (a) that the Secretary of DENR
and his representatives have no authority to confiscate and forfeit conveyances utilized in transporting illegal
forest products, and (b) that the truck as admitted by petitioners was not used in the commission of the
crime.
Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the matter, we are of the
opinion that the plea of petitioners for reversal is in order.
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 court's judicial power can be sought. The premature
invocation of court's intervention is fatal to one's cause of action. 11 Accordingly, absent any finding of waiver
or estoppel the case is susceptible of dismissal for lack of cause of action. 12 This doctrine of exhaustion of
administrative remedies was not without its practical and legal reasons, for one thing, availment of
administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. It is no
less true to state that the courts of justice for reasons of comity and convenience will shy away from a
dispute until the system of administrative redress has been completed and complied with so as to give the
administrative agency concerned every opportunity to correct its error and to dispose of the case. However,
we are not amiss to reiterate that 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, 13 (2) when the issue involved is purely a legal question, 14 (3) when
the administrative action is patently illegal amounting to lack or excess of jurisdiction, 15 (4) when there is
estoppel on the part of the administrative agency concerned, 16 (5) when there is irreparable injury, 17 (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, 18 (7) when to require exhaustion of administrative remedies would be
unreasonable, 19 (8) when it would amount to a nullification of a claim, 20 (9) when the subject matter is a

private land in land case proceedings, 21 (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. 22
In the case at bar, there is no question that the controversy was pending before the Secretary of DENR when
it was forwarded to him following the denial by the petitioners of the motion for reconsideration of private
respondents through the order of July 12, 1989. In their letter of reconsideration dated June 28,
1989, 23private respondents clearly recognize the presence of an administrative forum to which they seek to
avail, as they did avail, in the resolution of their case. The letter, reads, thus: cdtai
". . . If this motion for reconsideration does not merit your favorable action, then this letter should be
considered as an appeal to the Secretary." 24

It was easy to perceive then that the private respondents looked up to the Secretary for the review and
disposition of their case. By appealing to him, they acknowledged the existence of an adequate and plain
remedy still available and open to them in the ordinary course of the law. Thus, they cannot now, without
violating the principle of exhaustion of administrative remedies, seek court's intervention by filing an action
for replevin for the grant of their relief during the pendency of an administrative proceedings.
Moreover, it is important to point out that the 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 agency's 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. 25 In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, 26 which was reiterated in the
recent case of Concerned Officials of MWSS vs. Vasquez, 27 this Court held:
"Thus, while the administration grapples with the complex and multifarious problems caused by
unbridled exploitation of these resources, the judiciary will stand clear. A long line of cases establish
the basic rule that the courts will not interfere in matters which are addressed to the sound discretion
of government agencies entrusted with the regulation of activities coming under the special technical
knowledge and training of such agencies."

To sustain the claim of private respondents would in effect bring the instant controversy beyond the pale of
the principle of exhaustion of administrative remedies and fall within the ambit of excepted cases heretofore
stated. However, considering the circumstances prevailing in this case, we can not but rule out these
assertions of private respondents to be without merit. First, they argued that there was violation of due
process because they did not receive the May 23, 1989 order of confiscation of petitioner Layugan. This
contention has no leg to stand on. Due process does not necessarily mean or require a hearing, but simply an
opportunity or right to be heard. 28 One may be heard, not solely by verbal presentation but also, and
perhaps many times more creditably and practicable than oral argument, through pleadings. 29 In
administrative proceedings moreover, technical rules of procedure and evidence are not strictly applied;
administrative process cannot be fully equated with due process in its strict judicial sense. 30 Indeed,
deprivation of due process cannot be successfully invoked where a party was given the chance to be heard on
his motion for reconsideration, 31 as in the instant case, when private respondents were undisputedly given
the opportunity to present their side when they filed a letter of reconsideration dated June 28, 1989 which
was, however, denied in an order of July 12, 1989 of Executive Director Baggayan. In Navarro III vs.
Damasco, 32 we ruled that:
"The essence of due process is simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the

action or ruling complained of. A formal or trial type hearing is not at all times and in all instances
essential. The requirements are satisfied when the parties are afforded fair and reasonable
opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack
of notice or hearing."

Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck because the
administrative officers of the DENR allegedly have no power to perform these acts under the law. They
insisted that only the court is authorized to confiscate and forfeit conveyances used in transporting illegal
forest products as can be gleaned from the second paragraph of Section 68 of P.D. 705, as amended by E.O.
277. The pertinent provision reads as follows:
"SEC. 68.. . .
xxx xxx xxx
The court shall further order the confiscation in favor of the government of the timber or any forest
products cut, gathered, collected, removed, or possessed, as well as the machinery, equipments,
implements and tools illegally [sic] used in the area where the timber or forest products are found."
(Emphasis ours)

A reading, however, of the law persuades us not to go along with private respondents' thinking not only
because the aforequoted provision apparently does not mention nor include "conveyances" that can be the
subject of confiscation by the courts, but to a large extent, due to the fact that private respondents'
interpretation of the subject provision unduly restricts the clear intention of the law and inevitably reduces the
other provision of Section 68-A, which is quoted herein below:
"SEC. 68-A.Administrative Authority of the Department or His Duly Authorized Representative To Order
Confiscation. In all cases of violation of this Code or other forest laws, rules and regulations,
the Department Head or his duly authorized representative , may order the confiscation of any forest
products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used
either by land, water or air in the commission of the offense and to dispose of the same in accordance
with pertinent laws, regulations and policies on the matter." (Emphasis ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized representatives are
given the authority to confiscate and forfeit any conveyances utilized in violating the Code or other forest
laws, rules and regulations. The phrase "to dispose of the same" is broad enough to cover the act of forfeiting
conveyances in favor of the government. The only limitation is that it should be made "in accordance with
pertinent laws, regulations or policies on the matter." In the construction of statutes, it must be read in such
a way as to give effect to the purpose projected in the statute. 33 Statutes should be construed in the light of
the object to be achieved and the evil or mischief to be suppressed, and they should be given such
construction as will advance the object, suppress the mischief, and secure the benefits intended. 34 In this
wise, the observation of the Solicitor General is significant, thus:
"But precisely because of the need to make forestry laws 'more responsive to present situations and
realities' and in view of the 'urgency to conserve the remaining resources of the country,' that the
government opted to add Section 68-A. This amendatory provision is an administrative remedy totally
separate and distinct from criminal proceedings. More than anything else, it is intended to supplant
the inadequacies that characterize enforcement of forestry laws through criminal actions. The
preamble of EO 277 the law that added Section 68-A to PD 705 is most revealing:
'WHEREAS, there is an urgency to conserve the remaining forest resources of the country for
the benefit and welfare of the present and future generations of Filipinos;

WHEREAS, our forest resources may be effectively conserved and protected through
the vigilant enforcement and implementation of our forestry laws, rules and regulations;
WHEREAS, the implementation of our forestry laws suffers from technical difficulties.
due to certain inadequacies in the penal provisions of the Revised Forestry Code of the
Philippines: and
WHEREAS, to overcome this difficulties, there is a need to penalize certain acts more
responsive to present situations and realities;'
It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not
only 'conveyances,' but forest products as well. On the other hand, confiscation of forest products by
the 'court' in a criminal action has long been provided for in Section 68. If as private respondents
insist. the power on confiscation cannot be exercised except only through the court under Section 68,
then Section 68-A would have no purpose at all. Simply put, Section 68-A would not have provided
any solution to the problem perceived in EO 277, supra." 35

Private respondents, likewise, contend that the seizure was illegal because the petitioners themselves
admitted in the Order dated July 12, 1989 of Executive Director Baggayan that the truck of private
respondents was not used in the commission of the crime. This order, a copy of which was given to and
received by the counsel of private respondents, reads in part, viz.:
". . . while it is true that the truck of your client was not used by her in the commission of the crime,
we uphold your claim that the truck owner is not liable for the crime and in no case could a criminal
case be filed against her as provided under Article 309 and 310 of the Revised Penal Code. . . ." 36

We observed that private respondents misread the content of the aforestated order and obviously
misinterpreted the intention of petitioners. What is contemplated by the petitioners when they stated that the
truck "was not used in the commission of the crime" is that it was not used in the commission of the crime of
theft, hence, in no case can a criminal action be filed against the owner thereof for violation of Article 309
and 310 of the Revised Penal Code. Petitioners did not eliminate the possibility that the truck was being used
in the commission of another crime, that is, the breach of Section 68 of P.D. 705 as amended by E.O. 277. In
the same order of July 12, 1989, petitioners pointed out:
". . . However, under Section 68 of P.D. 705 as amended and further amended by Executive Order No.
277 specifically provides for the confiscation of the conveyance used in the transport of forest
products not covered by the required legal documents. She may not have been involved in the cutting
and gathering of the product in question but the fact that she accepted the goods for a fee or fare the
same is therefor liable. . . ." 37

Private respondents, however, contended that there is no crime defined and punishable under Section 68
other than qualified theft, so that, when petitioners admitted in the July 12, 1989 order that private
respondents could not be charged for theft as provided for under Articles 309 and 310 of the Revised Penal
Code, then necessarily private respondents could not have committed an act constituting a crime under
Section 68. We disagree. For clarity, the provision of Section 68 of P.D. 705 before its amendment by E.O.
277 and the provision of Section 1 of E.O. No. 277 amending the aforementioned Section 68 are reproduced
herein, thus:
"SEC. 68.Cutting, gathering and/or collecting timber or other products without license . Any person
who shall cut, gather, collect, or remove timber or other forest products from any forest land, or
timber from alienable and disposable public lands, or from private lands, without any authority under a
license agreement, lease, license or permit, shall be guilty of qualified theft as defined and punished
under Articles 309 and 310 of the Revised Penal Code . . ." (Emphasis; Section 68, P.D. 705 before its
amendment by E.O. 277)

"SEC. 1.Section 68 of Presidential Decree No. 705, as amended, is hereby amended to read as follows:
'Section 68.Cutting, gathering and/or collecting timber or other forest products without
license. Any person who shall cut, gather, collect, remove timber or other forest products
from any forest land, or timber from alienable or disposable public land, or from private land,
without any authority, or possess timber or other forest products without the legal documents
as required under existing forest laws and regulations, shall bepunished with the penalties
imposed under Articles 309 and 310 of the Revised Penal Code . . ." (Emphasis; Section 1, E.O
No. 277 amending Section 68, P.D. 705 as amended)

With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the act of cutting,
gathering, collecting, removing, or possessing forest products without authority constitutes a distinct offense
independent now from the crime of theft under Articles 309 and 310 of the Revised Penal Code, but the
penalty to be imposed is that provided for under Article 309 and 310 of the Revised Penal Code. This is clear
from the language of Executive Order No. 277 when it eliminated the phrase "shall be guilty of qualified theft
as defined and punished under Articles 309 and 310 of the Revised Penal Code " and inserted the words "
shall be punished with the penalties imposed under Article 309 and 310 of the Revised Penal Code". When
the statute is clear and explicit, there is hardly room for any extended court ratiocination or rationalization of
the law. 38
From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the petitioners
for the subject truck taken and retained by them for administrative forfeiture proceedings in pursuant to
Section 68-A of the P. D. 705, as amended. 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
ordering the return of the truck. Exhaustion of the remedies in the administrative forum, being a condition
precedent prior to one's 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.
It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the defendant
wrongfully withholds the property sought to be recovered. It lies to recover possession of personal chattels
that are unlawfully detained. 39 "To detain" is defined as to mean "to hold or keep in custody," 40 and it has
been held that there is tortious taking whenever there is an unlawful meddling with the property, or an
exercise or claim of dominion over it, without any pretense of authority or right; this, without manual seizing
of the property is sufficient. 41 Under the Rules of Court, it is indispensable in. replevin proceeding that the
plaintiff must show by his own affidavit that he is entitled to the possession of property, that the property is
wrongfully detained by the defendant, alleging the cause of detention, that the same has not been taken for
tax assessment, or seized under execution, or attachment, or if so seized, that it is exempt from such seizure,
and the actual value of the property. 42 Private respondents miserably failed to convince this Court that a
wrongful detention of the subject truck obtains in the instant case. It should be noted that the truck was
seized by the petitioners because it was transporting forest products without the required permit of the DENR
in manifest contravention of Section 68 of P.D. 705 as amended by E.O. 277. Section 68-A of P.D. 705, as
amended, unquestionably warrants the confiscation as well as the disposition by the Secretary of DENR or his
duly authorized representatives of the conveyances used in violating the provision of forestry laws. Evidently,
the continued possession or detention of the truck by the petitioners for administrative forfeiture proceeding
is legally permissible, hence, no wrongful detention exists in the case at bar. aisadc

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. It reads:
SEC. 8.REVIEW . All actions and decisions of the Director are subject to review, motu propio or
upon appeal of any person aggrieved thereby, by the Department Head whose decision shall be final
and executory after the lapse of thirty (30) days from the receipt of the aggrieved party of said
decision, unless appealed to the President in accordance with Executive Order No. 19, Series of 1966.
The Decision of the Department Head may not be reviewed by the courts except through a special
civil action for certiorari or prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals dated October 16,
1991 and its Resolution dated July 14, 1992 are hereby SET ASIDE AND REVERSED; the Restraining Order
promulgated on September 27, 1993 is hereby made permanent; and the Secretary of DENR is directed to
resolve the controversy with utmost dispatch.
SO ORDERED.

Regalado, Romero, Puno and Mendoza, JJ., concur.

[G.R. No. 74930. February 13, 1989.]


RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO, ROLANDO
BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO BAGATSING, JUN
"NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and ROLANDO
FADUL, petitioners, vs. FELICIANO BELMONTE, JR., respondent.

Ricardo C. Valmonte for and in his own behalf and his co-petitioners.
The Solicitor General for respondent.
SYLLABUS
1.ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES BEFORE RESORT TO COURTS OF
LAW MAY BE ALLOWED; EXCEPTIONS. A settled principles in administrative law is that before a party can
be allowed to resort to the courts, he is expected to have exhausted all means of administrative redress
available under the law. The courts for reasons of law, comity and convenience will not entertain a case
unless the available administrative remedies have been resorted to and the appropriate authorities have been
given opportunity to act and correct the errors committed in the administrative forum. However, the principle
of exhaustion of administrative remedies is subject to settled exceptions, among which is when only a
question of law is involved.
2.CONSTITUTIONAL LAW; RIGHT OF ACCESS TO INFORMATION; EFFECT OF DENIAL THEREOF. The
cornerstone of this republican system of government is delegation of power by the people to the State. In this
system, governmental agencies and institutions operate within the limits of the authority conferred by the
people. Denied access to information on the inner workings of government, the citizenry can become prey to
the whims and caprices of those to whom the power had been delegated. The postulate of public office as a
public trust, institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the people from abuse of
governmental power, would certainly be mere empty words if access to such information of public concern is
denied, except under limitations prescribed by implementing legislation adopted pursuant to the Constitution.

3.ID.; ID.; NOT RESTRICTED BY THE EXERCISE OF THE FREEDOM OF SPEECH AND OF THE PRESS. The
right to information is an essential premise of a meaningful right to speech and expression. But this is not to
say that the right to information is merely an adjunct of and therefore restricted in application by the exercise
of the freedoms of speech and of the press. Far from it. The right to information goes hand-in-hand with the
constitutional policies of full public disclosure and honesty in the public service. It is meant to enhance the
widening role of the citizenry in governmental decision-making as well in checking abuse in government.
4.ID.; ID.; NOT ABSOLUTE. Like all the constitutional guarantees, the right to information is not absolute.
The people's right to information is limited to "matters of public concern", and is further "subject to such
limitations as may be provided by law." Similarly, the State's policy of full disclosure is limited to "transactions
involving public interest", and is "subject to reasonable conditions prescribed by law."
5.ID.; RIGHT OF PRIVACY; CANNOT BE INVOKED BY A JURIDICAL ENTITY; RIGHT IS PURELY PERSONAL IN
NATURE. When the information requested from the government intrudes into the privacy of a citizen, a
potential conflict between the rights to information and to privacy may arise. The right to privacy belongs to
the individual in his private capacity, and not to public and governmental agencies like the GSIS. A
corporation has no right to privacy since the entire basis of the right to privacy is injury to the feelings and
sensibilities of the party and a corporation would have no such ground for relief. Neither can the GSIS
through its General Manager, the respondent, invoke the right to privacy of its borrowers. The right is purely
personal in nature.
6.ID.; RIGHT OF ACCESS TO INFORMATION; GOVERNMENT AGENCY PERFORMING PROPRIETARY
FUNCTIONS, NOT EXCLUDED FROM THE COVERAGE. The government, whether carrying out its sovereign
attributes or running some business, discharges the same function of service to the people. Consequently,
that the GSIS, in granting the loans, was exercising a proprietary function would not justify the exclusion of
the transactions from the coverage and scope of the right to information.
7.ID.; ID.; LIMITATION. The consideration in guaranting access to information on matters of public
concern does not however, accord to citizen the right to compel custodian of public records to prepare lists,
abstracts, summaries and the like in their desire to acquire such information.
8.REMEDIAL LAW; SPECIAL CIVIL ACTION; MANDAMUS; REQUISITES FOR ISSUANCE OF WRIT. It must
be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-defined, clear and
certain legal right to the thing demanded and that it is the imperative duty of defendant to perform the act
required. The corresponding duty of the respondent to perform the required act must be clear and specific.

DECISION

CORTES, J p:
Petitioners in this special civil action for mandamus with preliminary injunction invoke their right to
information and pray that respondent be directed:
(a)to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the
UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7
election thru the intercession/marginal note of the then First Lady Imelda Marcos; and/or
(b)to furnish petitioners with certified true copies of the documents evidencing their respective loans;
and/or

(c)to allow petitioners access to the public records for the subject information. [Petition, pp. 4-5;
paragraphing supplied.]

The controversy arose when petitioner Valmonte wrote respondent Belmonte the following letter:
June 4, 1986
Hon. Feliciano Belmonte
GSIS General Manager
Arroceros, Manila.
Sir:
As a lawyer, member of the media and plain citizen of our Republic, I am requesting that I be
furnished with the list of names of the opposition members of (the) Batasang Pambansa who were
able to secure a clean loan of P2 million each on guaranty (sic) of Mrs. Imelda Marcos. We understand
that OIC Mel Lopez of Manila was one of those aforesaid MPs. Likewise, may we be furnished with the
certified true copies of the documents evidencing their loan. Expenses in connection herewith shall be
borne by us.
If we could not secure the above documents could we have access to them?
We are premising the above request on the following provision of the Freedom Constitution of the
present regime.
The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents and papers pertaining to official acts, transactions
or decisions, shall be afforded the citizen subject to such limitation as may be provided by law.
(Art. IV, Sec. 6).
We trust that within five (5) days from receipt hereof we will receive your favorable response on the
matter.
Very truly yours,
(Sgd.) RICARDO C. VALMONTE
[Rollo, p. 7.]

To the aforesaid letter, the Deputy General Counsel of the GSIS replied:
June 17, 1986
Atty. Ricardo C. Valmonte
108 E. Benin Street
Caloocan City
Dear Companero:

Possibly because he must have thought that it contained serious legal implications, President &
General Manager Feliciano Belmonte, Jr. referred to me for study and reply your letter to him of June
4, 1986 requesting a list of "the opposition members of Batasang Pambansa who were able to secure
a clean loan of P2 million each on guaranty of Mrs. Imelda Marcos."
My opinion in this regard is that a confidential relationship exists between the GSIS and all those who
borrow from it, whoever they may be; that the GSIS has a duty to its customers to preserve this
confidentiality; and that it would not be proper for the GSIS to breach this confidentiality unless so
ordered by the courts.
As a violation of this confidentiality may mar the image of the GSIS as a reputable financial institution,
I regret very much that at this time we cannot respond positively to your request.
Very truly yours,
(Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]

On June 20, 1986, apparently not having yet received the reply of the Government Service and
Insurance System (GSIS) Deputy General Counsel, petitioner Valmonte wrote respondent another letter,
saying that for failure to receive a reply "(W)e are now considering ourselves free to do whatever action
necessary within the premises to pursue our desired objective in pursuance of public interest." [Rollo, p.
8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant suit.
On July 19, 1986, the Daily Express carried a news item reporting that 137 former members of the
defunct interim and regular Batasang Pambansa, including ten (10) opposition members, were granted
housing loans by the GSIS [Rollo, p. 41.].
Separate comments were filed by respondent Belmonte and the Solicitor General. After petitioners
filed a consolidated reply, the petition was given due course and the parties were required to file their
memoranda. The parties having complied, the case was deemed submitted for decision.
In his comment respondent raises procedural objections to the issuance of a writ of mandamus,
among which is that petitioners have failed to exhaust administrative remedies.
Respondent claims that actions of the GSIS General Manager are reviewable by the Board of
Trustees of the GSIS. Petitioners, however did not seek relief from the GSIS Board of Trustees. It is
therefore asserted that since administrative remedies were not exhausted, then petitioners have no cause
of action.
To this objection, petitioners claim that they have raised a purely legal issue, viz., whether or not
they are entitled to the documents sought, by virtue of their constitutional right to information. Hence, it
is argued that this case falls under one of the exceptions to the principle of exhaustion of administrative
remedies.
Among the settled principles in administrative law is that before a party can be allowed to resort
to the courts, he is expected to have exhausted all means of administrative redress available under the
law. The courts for reasons of law, comity and convenience will not entertain a case unless the available
administrative remedies have been resorted to and the appropriate authorities have been given
opportunity to act and correct the errors committed in the administrative forum. However, the principle of
exhaustion of administrative remedies is subject to settled exceptions, among which is when only a
question of law is involved [Pascual v. Provincial Board, 106 Phil. 466 (1959); Aguilar v. Valencia, et al.,

G.R. No. L-30396, July 30, 1971, 40 SCRA 210; Malabanan v. Ramento, G.R. No. L-2270, May 21, 1984,
129 SCRA 359.] The issue raised by petitioners, which requires the interpretation of the scope of the
constitutional right to information, is one which can be passed upon by the regular courts more
competently than the GSIS or its Board of Trustees, involving as it does a purely legal question. Thus, the
exception of this case from the application of the general rule on exhaustion of administrative remedies is
warranted. Having disposed of this procedural issue, We now address ourselves to the issue of whether
or not mandamus lies to compel respondent to perform the acts sought by petitioners to be done, in
pursuance of their right to information.
We shall deal first with the second and third alternative acts sought to be done, both of which
involve the issue of whether or not petitioners are entitled to access to the documents evidencing loans
granted by the GSIS.
This is not the first time that the Court is confronted with a controversy directly involving the
constitutional right to information. In Tanada v. Tuvera, G.R. No. 63915, April 24, 1985, 136 SCRA 27 and
in the recent case of Legaspi v. Civil Service Commission, G.R. No. 72119, May 29, 1987, 150 SCRA 530,
the Court upheld the people's constitutional right to be informed of matters of public interest and ordered
the government agencies concerned to act as prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which states:
The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as
well as to government research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law.

The right of access to information was also recognized in the 1973 Constitution, Art. IV Sec. 6 of
which provided:
The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents and papers pertaining to official acts, transactions, or decisions,
shall be afforded the citizen subject to such limitations as may be provided by law.

An informed citizenry with access to the diverse currents in political, moral and artistic thought
and data relative to them, and the free exchange of ideas and discussion of issues thereon, is vital to the
democratic government envisioned under our Constitution. The cornerstone of this republican system of
government is delegation of power by the people to the State. In this system, governmental agencies and
institutions operate within the limits of the authority conferred by the people. Denied access to
information on the inner workings of government, the citizenry can become prey to the whims and
caprices of those to whom the power had been delegated. The postulate of public office as a public trust,
institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the people from abuse of governmental
power, would certainly be mere empty words if access to such information of public concern is denied,
except under limitations prescribed by implementing legislation adopted pursuant to the Constitution.
Petitioners are practitioners in media. As such, they have both the right to gather and the
obligation to check the accuracy of information they disseminate. For them, the freedom of the press and
of speech is not only critical, but vital to the exercise of their professions. The right of access to
information ensures that these freedoms are not rendered nugatory by the government's monopolizing
pertinent information. For an essential element of these freedoms is to keep open a continuing dialogue
or process of communication between the government and the people. It is in the interest of the State
that the channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent that the
citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the
discussion are aware of the issues and have access to information relating thereto can such bear fruit.

The right to information is an essential premise of a meaningful right to speech and expression.
But this is not to say that the right to information is merely an adjunct of and therefore restricted in
application by the exercise of the freedoms of speech and of the press. Far from it. The right to
information goes hand-in-hand with the constitutional policies of full public disclosure ** and honesty in the
public service. *** It is meant to enhance the widening role of the citizenry in governmental decisionmaking as well in checking abuse in government.
Yet, like all the constitutional guarantees, the right to information is not absolute. As stated
in Legaspi, The people's right to information is limited to "matters of public concern", and is further
"subject to such limitations as may be provided by law." Similarly, the State's policy of full disclosure is
limited to "transactions involving public interest", and is "subject to reasonable conditions prescribed by
law."
Hence, before mandamus may issue, it must be clear that the information sought is of "public
interest" or "public concern", and is not exempted by law from the operation of the constitutional
guarantee [Legaspi v. Civil Service Commission, supra, at p. 542.].
The Court has always grappled with the meanings of the terms "public interest" and "public
concern". As observed in Legaspi: prcd
In determining whether or not a particular information is of public concern there is no rigid test which
can be applied. "Public concern" like "public interest" is a term that eludes exact definition. Both terms
embrace a broad spectrum of subjects which the public may want to know, either because these
directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary
citizen. In the final analysis, it is for the courts to determine on a case by case basis whether the
matter at issue is of interest or importance, as it relates to or affects the public. [ Ibid. at p. 541.]

In the Taada case the public concern deemed covered by the constitutional right to information
was the need for adequate notice to the public of the various laws which are to regulate the actions and
conduct of citizens. In Legaspi, it was the "legitimate concern of citizens to ensure that government
positions requiring civil service eligibility are occupied only by persons who are eligibles" [Supra at p.
539.].
The information sought by petitioners in this case is the truth of reports that certain Members of
the Batasang Pambansa belonging to the opposition were able to secure "clean" loans from the GSIS
immediately before the February 7, 1986 election through the intercession of the former First Lady, Mrs.
Imelda R. Marcos.
The GSIS is a trustee of contributions from the government and its employees and the
administrator of various insurance programs for the benefit of the latter. Undeniably, its funds assume a
public character. More particularly, Secs. 5(b) and 46 of P.D. 1146, as amended (the Revised Government
Service Insurance Act of 1977), provide for annual appropriations to pay the contributions, premiums,
interest and other amounts payable to GSIS by the government, as employer, as well as the obligations
which the Republic of the Philippines assumes or guarantees to pay. Considering the nature of its funds,
the GSIS is expected to manage its resources with utmost prudence and in strict compliance with the
pertinent laws or rules and regulations. Thus, one of the reasons that prompted the revision of the old
GSIS law (C.A No. 186, as amended) was the necessity "to preserve at all times the actuarial solvency of
the funds administered by the Systems [Second Whereas Clause, P.D. No. 1146.] Consequently, as
respondent himself admits, the GSIS "is not supposed to grant `clean loans'." [Comment, p. 8.] It is
therefore the legitimate concern of the public to ensure that these funds are managed properly with the
end in view of maximizing the benefits that accrue to the insured government employees. Moreover, the
supposed borrowers were Members of the defunct Batasang Pambansa who themselves appropriated
funds for the GSIS and were therefore expected to be the first to see to it that the GSIS performed its
tasks with the greatest degree of fidelity and that all its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the public office held by the
alleged borrowers make the information sought clearly a matter of public interest and concern.

A second requisite must be met before the right to information may be enforced through
mandamus proceedings, viz., that the information sought must not be among those excluded by law.
Respondent maintains that a confidential relationship exists between the GSIS and its borrowers.
It is argued that a policy of confidentiality restricts the indiscriminate dissemination of information.
Yet, respondent has failed to cite any law granting the GSIS the privilege of confidentiality as
regards the documents subject of this petition. His position is apparently based merely on considerations
of policy. The judiciary does not settle policy issues. The Court can only declare what the law is, and not
what the law should be. Under our system of government, policy issues are within the domain of the
political branches of the government, and of the people themselves as the repository of all State power.
Respondent however contends that in view of the right to privacy which is equally protected by
the Constitution and by existing laws, the documents evidencing loan transactions of the GSIS must be
deemed outside the ambit of the right to information. llcd
There can be no doubt that right to privacy is constitutionally protected. In the landmark case of Morfe v.
Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this Court, speaking through then Mr. Justice Fernando,
stated:
. . . The right to privacy as such is accorded recognition independently of its identification with liberty;
in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is particularly
apt: "The concept of limited government has always included the idea that governmental powers stop
short of certain intrusions into the personal life of the citizen. This is indeed one of the basic
distinctions between absolute and limited government. Ultimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a system of
limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it
from the public sector, which the state can control. Protection of this private sector protection, in
other words, of the dignity and integrity of the individual has become increasingly important as
modern society has developed. All the forces of technological age industrialization, urbanization, and
organization operate to narrow the area of privacy and facilitate intrusion into it. In modern terms,
the capacity to maintain and support this enclave of private life marks the difference between a
democratic and a totalitarian society." [at pp. 444-445.]

When the information requested from the government intrudes into the privacy of a citizen, a
potential conflict between the rights to information and to privacy may arise. However, the competing
interests of these rights need not be resolved in this case. Apparent from the above-quoted statement of
the Court inMorfe is that the right to privacy belongs to the individual in his private capacity, and not to
public and governmental agencies like the GSIS. Moreover, the right cannot be invoked by juridical
entities like the GSIS. As held in the case of Vassar College v. Loose Wills Biscuit Co. [197 F. 982 (1912)],
a corporation has no right of privacy in its name since the entire basis of the right to privacy is an injury
to the feelings and sensibilities of the party and a corporation would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the right to privacy of
its borrowers. The right is purely personal in nature [Cf.Atkinson v. John Doherty & Co., 121 Mich 372, 80
N.W. 285, 46 L.R.A. 219 (1899); Schuyler v. Curtis, 147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286 (1895)], and
hence may be invoked only by the person whose privacy is claimed to be violated.
It may be observed, however, that in the instant case, the concerned borrowers themselves may
not succeed if they choose to invoke their right to privacy, considering the public offices they were
holding at the time the loans were alleged to have been granted. It cannot be denied that because of the
interest they generate and their newsworthiness, public figures, most especially those holding responsible
positions in government, enjoy a more limited right to privacy as compared to ordinary individuals, their
actions being subject to closer public scrutiny [Cf. Ayer Productions Pty. Ltd. v. Capulong, G.R. Nos.
82380 and 82398, April 29, 1988; See also Cohen v. Marx, 211 P. 2d 321 (1949).].

Respondent next asserts that the documents evidencing the loan transactions of the GSIS
are private in nature and hence, are not covered by the Constitutional right to information on matters of
public concern which guarantees "(a)ccess to official records, and to documents, and papers pertaining
to officialacts, transactions, or decisions" only.
It is argued that the records of the GSIS, a government corporation performing proprietary
functions, are outside the coverage of the people's right of access to official records. llcd
It is further contended that since the loan function of the GSIS is merely incidental to its insurance
function, then its loan transactions are not covered by the constitutional policy of full public disclosure
and the right to information which is applicable only to "official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing government function has long
been repudiated. In ACCFA v. Confederation of Unions and Government Corporations and Offices [G.R.
Nos. L-21484 and L-23605, November 29, 1969, 30 SCRA 644], the Court said that the government,
whether carrying out its sovereign attributes or running some business, discharges the same function of
service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a proprietary function would
not justify the exclusion of the transactions from the coverage and scope of the right to information.
Moreover, the intent of the members of the Constitutional Commission of 1986, to include
government-owned and controlled corporations and transactions entered into by them within the
coverage of the State policy of full public disclosure is manifest from the records of the proceedings:
xxx xxx xxx
THE PRESIDING OFFICER (Mr. Colayco).
Commissioner Suarez is recognized.
MR. SUAREZ.Thank you. May I ask the Gentleman a few question?
MR. OPLE.Very gladly.
MR. SUAREZ.Thank you.
When we declare "a policy of full public disclosure of all its transactions" referring to the transactions
of the State and when we say the "State" which I suppose would include all of the various
agencies, departments, ministries and instrumentalities of the government. . . .
MR. OPLE.Yes, and individual public officers, Mr. Presiding Officer.
MR. SUAREZ.Including government-owned and controlled corporations.
MR. OPLE.That is correct, Mr. Presiding Officer.
MR. SUAREZ.And when we say "transactions which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
MR. OPLE.The "transactions" used here, I suppose, is generic and, therefore, it can cover both steps
leading to a contract, and already a consummated contract, Mr. Presiding Officer .
MR. SUAREZ.This contemplates inclusion of negotiations leading to the consummation of the
transaction.

MR. OPLE.Yes, subject only to reasonable safeguards on the national interest.


MR. SUAREZ.Thank you. [V Record of the Constitutional Commission 24-25.] (Emphasis supplied.)

Considering the intent of the framers of the Constitution which, though not binding upon the
Court, are nevertheless persuasive, and considering further that government-owned and controlled
corporations, whether performing proprietary or governmental functions are accountable to the people,
the Court is convinced that transactions entered into by the GSIS, a government-controlled corporation
created by special legislation are within the ambit of the people's right to be informed pursuant to the
constitutional policy of transparency in government dealings.
In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS,
subject to reasonable regulations that the latter may promulgate relating to the manner and hours of
examination, to the end that damage to or loss of the records may be avoided, that undue interference
with the duties of the custodian of the records may be prevented and that the right of other persons
entitled to inspect the records may be insured [Legaspi v. Civil Service Commission, supra at p. 538,
quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second and third alternative acts
sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to
furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and
PDP-Laban who were able to secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
Although citizens are afforded the right to information and, pursuant thereto, are entitled to
"access to official records," the constitution does not accord them a right to compel custodians of official
records to prepare lists, abstracts, summaries and the like in their desire to acquire information or matters
of public concern. cdrep
It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a
well-defined, clear and certain legal right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of the respondent to perform the required
act must be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November 29, 1968, 126 SCRA 203;
Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request of the petitioners fails
to meet this standard, there being no duty on the part of respondent to prepare the list requested.
WHEREFORE, the instant petition is hereby granted and respondent General Manager of the
Government Service Insurance System is ORDERED to allow petitioners access to documents and records
evidencing loans granted to Members of the former Batasang Pambansa, as petitioners may specify,
inspection, not incompatible with this decision, as the GSIS may deem necessary.
SO ORDERED.

Fernan C .J ., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,
Grio-Aquino, Medialdea and Regalado, JJ ., concur.

MANGUBAT VS OSMENA

[A.M. No. RTJ-01-1651. September 4, 2001.]

PROSECUTOR LEO C. TABAO, Regional Chairman, Special Task Force on


Environment and Natural Resources (STF-ENR) of Region 8, Tacloban
City, complainant, vs. JUDGE FRISCO T. LILAGAN, Presiding Judge, Regional Trial
Court, Leyte, Branch 34, and SHERIFF IV LEONARDO V. AGUILAR, Office of the
Clerk of Court, Regional Trial Court, Tacloban City,respondents.
SYNOPSIS
A shipment of tanbark was seized and impounded by the National Bureau of Investigation (NBI)
and turned over to the Department of Environment and Natural Resources (DENR). Thereafter, two (2)
criminal complaints were filed for violation of Section 68 (now Section 78) of P.D. No. 705 (Forestry
Reform Code of the Philippines), as amended, and violation of Section 3 (e) of R.A. No 3019 (Anti-Graft
and Corrupt Practices Act). Meanwhile, Hernandez, the consignee of the tanbark, filed a replevin case
against the concerned DENR officers to recover the same. The case was raffled to respondent's sala. The
complaint alleged, among others, the seizure by the NBI of the shipment and its turn over to the DENR.
Respondent judge issued the writ, a copy of which was served by respondent sheriff to the Philippine
Coast Guard. Thus, the present administrative complaint against respondent judge for gross ignorance of
the law, gross abuse of judicial authority and willful disobedience to settled jurisprudence, and against
respondent sheriff for gross irregularity in the performance of official duties, among others, when he
delivered the seized tanbark to the consignee. Respondent denied the charges and presented an order
signed by the Regional Director of the DENR stating that the subject tanbark had been found to come
from a legitimate source, and that on November 27, 1998 it has dismissed the replevin case and directed
respondent sheriff to return to the DENR all the items confiscated, to which the latter complied.
It has been held that the DENR has the primary jurisdiction over issues involving forest products
and that courts cannot take cognizance of cases pending before administrative agencies of special
competence. The allegations in the complaint would have been sufficient to alert respondent judge who
should not have taken cognizance of the subject replevin. Failure to follow basic legal commands
constitutes ignorance of the law. CSAaDE
The charges against respondent sheriff who merely complied with the ministerial duty to serve the
writ should be dismissed. Respondent judge was fined P10,000.00.
SYLLABUS
1.ADMINISTRATIVE LAW; DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR); WITH
PRIMARY JURISDICTION OVER FOREST PRODUCTS, INCLUDING TANBARK, ILLEGALLY CUT. 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, including the
conveyances used in the commission of the offense. cCAIES
2.JUDICIAL ETHICS; JUDGES; TAKING COGNIZANCE OF REPLEVIN COVERING ILLEGALLY CUT FOREST
PRODUCT CONSTITUTES IGNORANCE OF THE LAW. The complaint for replevin itself states that the
shipment of tanbark as well as the vessel on which it was loaded were 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." A copy of the document evidencing the turnover to DENR was attached to
the complaint as Annex "D". To our mind, these allegations would 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. Note, too, that the
plaintiff in the replevin suit who seeks 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. Respondent judge's act of taking cognizance of the subject replevin suit
clearly demonstrates ignorance of the law. He has fallen short of the standard set forth in Canon 1, Rule 1.01
of the Code of Judicial Conduct, that a judge must be the embodiment of competence, integrity, and
independence. To measure up to this standard, judges 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. CSEHIa
3.ADMINISTRATIVE LAW; JUDICIARY; SHERIFF; NO ADMINISTRATIVE LIABILITY FOR COMPLIANCE WITH
MINISTERIAL DUTY TO SERVE WRIT OF SEIZURE. Regarding the charges against respondent sheriff, we
agree with the OCA that they should be dismissed. Respondent sheriff merely complied with his ministerial
duty to serve the writ with reasonable celerity and to execute it promptly in accordance with its mandates.

DECISION

QUISUMBING, J p:
This is an administrative complaint filed by Atty. Leo C. Tabao, Assistant City Prosecutor of Tacloban, in his
capacity as Regional Chairman of the Region 8 Special Task Force on Environment and Natural Resources,
against (1) Judge Frisco T. Lilagan, presiding judge of the Leyte Regional Trial Court, Branch 34, for gross
ignorance of the law, gross abuse of judicial authority, and willful disobedience to settled jurisprudence; and
(2) Sheriff IV Leonardo V. Aguilar of the Leyte RTC, Office of the Clerk of Court, for gross irregularity in the
performance of official duties, giving unwarranted benefits to a private individual, violation of Section 1(b)
and (c) of P.D. No. 1829, and conduct prejudicial to the best interest of the service.
The records of this case reveal the following facts.
On February 24, 1998, a water craft registered under the name M/L Hadija, from Bongao, Tawi-tawi, was
docked at the port area of Tacloban City with a load of around 100 tons of tanbark. Due to previous irregular
and illegal shipments of tanbark from Bongao, agents of the National Bureau of Investigation in Region 8
(NBI-EVRO #8) decided to verify the shipment's accompanying documents as the M/L Hadija was unloading
its cargo to its consignee, a certain Robert Hernandez.
The NBI agents found the documents irregular and incomplete, and consequently they ordered the unloading
of the cargo stopped. The tanbark, the boat M/L Hadija, and three cargo trucks were seized and impounded.
On March 5, 1998, NBI-EVRO #8 Regional Director Carlos S. Caabay filed a criminal complaint for violation
of Section 68 (now Section 78) of P.D. No. 705, 1 the Forestry Reform Code of the Philippines (as amended),
against the captain and crew of the M/L Hadija, Robert Hernandez, Tandico Chion, Alejandro K Bautista, and
Marcial A. Dalimot. Bautista was a forester while Dalimot was a Community Environment and Natural
Resources Officer (CENRO) of the Department of Environment and Natural Resources (DENR) office in
Tacloban City. Bautista and Dalimot were, thus, also charged with violation of Section 3(e) of R.A. No. 3019
of the Anti-Graft and Corrupt Practices Act, 2 along with Habi A. Alih and Khonrad V. Mohammad of the
CENRO-Bongao, Tawi-tawi. The complaint was docketed as I.S. No. 98-296 at the Prosecutor's Office of
Tacloban City.
In an order dated March 6, 1998, 3 complainant directed the seizure by the DENR of the M/L Hadija, its cargo,
and the three trucks pending preliminary investigation of the case. DENR thus took possession of the
aforesaid items on March 10, 1998, with notice to the consignee Robert Hernandez and the NBI Regional
Director.

On March 11, 1998, Hernandez filed in the Regional Trial Court of Leyte a case for replevin to recover the
items seized by the DENR. The case was raffled off to Branch 34 of said court and docketed as Civil Case No
98-03-42.
On March 16, 1998, subpoenas were issued to the respondents in I.S. No. 98-296. On March 17, 1998,
confiscation proceedings were conducted by the Provincial Environment and Natural Resources Office
(PENRO)-Leyte, with both Hernandez and his counsel present.
On March 19, 1998, herein respondent Judge Frisco T. Lilagan issued a writ of replevin and directed
respondent sheriff IV Leonardo V. Aguilar to take possession of the items seized by the DENR and to deliver
them to Hernandez after the exploration of five days. 4 Respondent sheriff served a copy of the writ to the
Philippine Coast Guard station in Tacloban City at around 5:45 p.m. of March 19, 1998.
Thus, the filing of this administrative complaint against respondents via a letter addressed to the Chief Justice
and dated April 13, 1998, by Atty. Tabao.
Complainant avers that replevin is not available where the properties sought to be recovered are involved in
criminal proceedings for illegal logging. He points out that this is a well-settled issue and cites several
decisions 5 of this Court and the Court of Appeals on the matter. He argues that respondent judge should
have known of the existing jurisprudence on this issue, particularly since they are subject to mandatory
judicial notice per Section 1, Rule 129 of the Revised Rules of Court.
Complainant submits that respondent judge is either grossly ignorant of the law and jurisprudence or
purposely disregarded them. But he avers that it is respondent judge's duty to keep abreast of developments
in law and jurisprudence.
Complainant claims that respondent judge cannot claim ignorance of the proceedings in I.S. No. 98-296 for
the following reasons: (1) the defendants in the replevin case were all DENR officers, which should have
alerted respondent judge to the possibility that the items sought to be recovered were being held by the
defendants in their official capacities; and (2) the complaint for replevin itself states that the items were
intercepted by the NBI for verification of supporting documents, which should have made respondent judge
suspect that the same were being held by authority of law.

As regards respondent sheriff Leonardo V. Aguilar, complainant states that it was incumbent upon Aguilar to
safeguard the M/L Hadija and prevent it from leaving the port of Tacloban City, after he had served a writ of
seizure therefor on the Philippine Coast Guard. However, on March 19, 1998, the vessel left the port of
Tacloban City, either through respondent sheriff's gross negligence or his direct connivance with interested
parties, according to complainant. As of the time of the filing of the complaint, according to complainant, the
whereabouts of the vessel and its crew were unknown.
Moreover, complainant points out that respondent sheriff released the seized tanbark to Hernandez on March
20 and 21, 1998, or within the five-day period that he was supposed to keep it under the terms of the writ.
Complainant argues that the tanbark formed part of the people's evidence in the criminal complaint against
Hernandez and the others. By his act, respondent sheriff effectively altered, suppressed, concealed, or
destroyed the integrity of said evidence. For this act, complainant contends that respondent sheriff may be
held liable under Section 1(b) of P.D. 1829, Penalizing Obstruction of Apprehension and Prosecution of
Criminal Offenders 6 Respondent sheriff's acts also constitute gross irregularity in the performance of his duty
as a court employee.

Complainant notes that respondent sheriff was absent from his office from March 20 to March 24, 1998. This
period included the dates he was supposed to have released the tanbark to Hernandez. Complainant
contends that respondent sheriff not only unlawfully released the tanbark, he also made it appear that he was
not physically present when such act was done.
In separate endorsements dated September 9, 1998, then Court Administrator Alfredo L. Benipayo referred
this administrative matter to both respondents for comment.
In his comment dated October 12, 1998, 7 respondent judge calls the attention of the Office of the Court
Administrator to a pending motion to dismiss filed by the defendants in the replevin case that effectively
prevented him from commenting on the issue. The discussions that would have to be included in the
comment, he says, would also resolve the pending motion to dismiss. Respondent judge contends that
complainant should have been prudent enough to wait for the resolution of the motion to dismiss before filing
the instant administrative case. ITAaCc
Respondent judge claims that he was unaware of the existence of I.S. No. 98-296. He only learned of the
criminal case from an urgent manifestation dated March 20, 1998, filed by complainant. He argues that he
issued an order dated March 25, 1998, suspending the transfer to Hernandez of possession of the subject
items, pending resolution of the urgent manifestation.
Respondent judge stresses that the writ of replevin was issued in strict compliance with the requirements laid
down in Rule 60 of the Revised Rules of Court. He also points out that said writ was issued provisionally and
was not intended to be the final disposition of the replevin case.
Respondent judge avers that the charge of gross ignorance of the law is premature since he has not made a
ruling yet on the motion to dismiss filed in the replevin case. He contends that it was too much to ask from
him to take note of the fact that the defendants in said case were officials of DENR and make assumptions
based on such fact. Moreover, respondent judge submits that while the complaint alleged that the cargo of
tanbark was intercepted by the NBI, it also alleged that the consignee thereof produced documents to prove
that the shipment was legal.
In conclusion, respondent judge points out that no apprehension report was issued by the NBI regarding the
shipment. Neither did the DENR issue a seizure report. Respondent judge contends that the validity of the
seizure of the subject items by the DENR is a matter that will have to be resolved in relation to the motion to
dismiss.
For his part, respondent sheriff submits 8 that he served the writ of replevin on the Coast Guard precisely to
prevent the departure of the subject vessel, since he does not have the means to physically prevent said
vessel from sailing. The Coast Guard commander should have examined the vessel and its crew after being
served the writ, to determine whether or not they were engaged in any illegal activity.
Respondent sheriff narrates that no cargo was on board the vessel when he served the writ on the Coast
Guard. He verified the cargo's status with DENR, which furnished him a copy of a fax transmission stating
that the tanbark came from legitimate sources except that the shipment documents were not in order. 9
Respondent sheriff contends that it was his ministerial duty to serve the writ of replevin, absent any
instruction to the contrary. He argues further that since the items subject of the writ are in the custody of the
court and could be disposed of only through court order, there could not be any unwarranted benefit to a
private individual as claimed by complainant.
Noting that the questioned shipment of tanbark was not covered by either an NBI apprehension report or a
DENR seizure report, respondent sheriff contends that complainant should have taken steps to protect the

integrity of the shipment instead of heaping blame upon others for his own negligence. Respondent sheriff
avers that it was not his intention to obstruct the apprehension and prosecution of criminal offenders,
contrary to complainant's claim.
Respondent sheriff refutes complainant's claim that he was absent from his office from March 20 to March 24,
1998, and alleges that it was complainant who was absent from court hearings on several occasions, in
violation of his duty as a prosecutor.
Respondent submitted two supplemental comments dated October 30, 1998, 10 and May 3, 1999, 11 (1)
reiterating his contention that the tanbark seized by the DENR and subject of the replevin case had been
found to come from a legitimate source, per an order signed by the Regional Director (Region 8) of the
DENR, 12 and (2) informing the OCA that the main replevin case was dismissed per an order of respondent
judge dated November 27, 1998. 13
As required by resolution of the Court dated January 24, 2001, the parties herein separately manifested that
they are willing to have the present case resolved based on the record on hand.
We note that in its report dated April 8, 1999, the OCA, after reviewing the case, recommended that
respondent judge be fined in the amount of P15,000.00 for the gross ignorance of the law. At the same time,
the OCA recommended that the charges against respondent sheriff be dismissed for lack of merit.
The recommendation of the OCA is well taken, except for the amount of the fine to be imposed on said
respondent judge.
The complaint for replevin itself states that the shipment of tanbark as well as the vessel on which it was
loaded were seized by the NBI for verification of supporting documents. 14 It also states that the NBI turned
over the seized items to the DENR "for official disposition and appropriate action.'' 15 A copy of the document
evidencing the turnover to DENR was attached to the complaint as Annex ''D''. 16 To our mind, these
allegations would 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. 17 Note, too, that the plaintiff in the replevin suit who seeks to
recover the shipment from the DENR had not exhausted the administrative remedies available to him. 18 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,
including the conveyances used in the commission of the offense.
In this regard, we declared in Paat v. Court of Appeals:
". . .the 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 administrative agency's
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. . . .'' 19

Respondent judge's act of taking cognizance of the subject replevin suit clearly demonstrates ignorance of the
law. He has fallen short of the standard set forth in Canon 1, Rule 1.01 of the Code of Judicial Conduct, that a

judge must be the embodiment of competence, integrity, and independence. To measure up to this standard,
judges are expected to keep abreast of all laws and prevailing jurisprudence. 20 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. 21
We find, however, that respondent judge had already vacated the Writ of Seizure he issued on March 19,
1998, in a subsequent Order dated November 27, 1998, dismissing the Civil Complaint for replevin filed by
Robert Hernandez against the Regional Director of the DENR and other officers. He also directed in said order
the sheriff to return to CENRO, Tacloban City, all the chattels confiscated by virtue of the Writ of Seizure. 22

Further, we find that Sheriff Aguilar in his Final Return of the Writ, dated December 15, 1998, had already
delivered to CENRO the 102 tons and 120 kilos of tanbark duly receipted by CENRO representative Marcial A.
Dalimot on the same date. 23
The OCA recommends that respondent judge be fined in the amount of P15,000.00. Under the circumstances,
considering that this is the first complaint against him, we deem a fine of P10,000.00 to be sufficient.
Regarding the charges against respondent sheriff, we agree with the OCA that they should be dismissed.
Respondent sheriff merely complied with his ministerial duty to serve the writ with reasonable celerity and to
execute it promptly in accordance with its mandates. 24
WHEREFORE, respondent Judge Frisco T. Lilagan is hereby found liable for gross ignorance of the law and is
accordingly ordered to pay a FINE of P10,000.00, with a WARNING that a repetition of the same or a similar
offense will be dealt with more severely. The complaint against respondent Sheriff IV Leonardo V. Aguilar is
DISMISSED for lack of merit.
SO ORDERED.

Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur.

[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.


Solicitor General Estelito P. Mendoza and Assistant Solicitor General Reynato S. Puno for respondent Board.
Pastor C. Bacani and Ernesto Ganiban for private respondent.
SYNOPSIS
Private respondent was issued a provincial permit to operate a public utility bus without any publication.
Pending a motion for reconsideration filed by petitioner, the latter filed this certiorari petition on ground that

there having been no publication the Board did not acquire jurisdiction and therefore the issuance of the
order is illegal or was performed without jurisdiction.
The Supreme Court dismissed the petition holding that the procedure set forth in Presidential Decree 101
having been followed and the provisional authority to operate being based on the urgent public need, the
contention of petitioner is untenable.
SYLLABUS
1.CONSTITUTIONAL LAW; DUE PROCESS; EX PARTE HEARING SUFFICES FOR ISSUANCE OF PROVISIONAL
PERMIT. It is a well settled doctrine that for a provisional permit an ex parte hearing suffices. The decisive
consideration is the existence of the public need.
2.ID.; ID.; ID.; PURPOSE OF PROCEDURE UNDER EXECUTIVE ORDER 101. Under Executive Order 101
which prescribes the procedure to be followed by the Board of Transportation, 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 standards 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."
3.ADMINISTRATIVE LAW; JUDICIAL REVIEW; RIPENESS CONCEPT, EXCEPTIONS. Where a motion for
reconsideration is pending with the court or administrative agency whose decision or order is assailed in a
petition for certiorari, the resolution of said motion should ordinarily be awaited, and prior thereto an
objection grounded on prematurity or ripeness of the certiorari petition can be raised. However, the Supreme
Court would minimize the technical aspect of the ripeness concept where the issue raised is important and
the matter to be resolved is impressed with strong public interest; in which event the Court would be impelled
to go into the merits of the controversy and resolve what could be a debilitating uncertainty by working out a
solution to the problem posed.

DECISION

FERNANDO, J p:
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, much 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. 7 There 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. 12 The 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 petitioners'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. 17That 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." 19 Further: "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 standards 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.

Makalintal, C.J., Barredo, Antonio and Fernandez, JJ., concur.


Aquino, J., is on sick leave.

[G.R. No. 85439. January 13, 1992.]

KILUSANG BAYAN SA PAGLILINGKOD NG MGA MAGTITINDA NG BAGONG


PAMILIHANG BAYAN NG MUNTINLUPA, INC., (KBMBPM), TERESITA A. FAJARDO,
NADYESDA B. PONSONES, MA. FE V. BOMBASE, LOIDA D. LUCES, MARIO S.
FRANCISCO, AMADO V. MANUEL, and ROLANDO G. GARCIA, incumbent members
of the Board; AMADO G. PEREZ and MA. FE V. BOMBASE, incumbent General
Manager and Secretary-Treasurer, respectively, petitioners, vs. HON. CARLOS G.
DOMINGUEZ, Secretary of Agriculture, Regional Director of Region IV of the
Department of Agriculture, ROGELIO P. MADRIAGA, RECTO CORONADO and
Municipal Mayor IGNACIO R. BUNYE, both in his capacity as Municipal Mayor of
Muntinlupa, Metro Manila and as Presiding Officer of Sangguniang Bayan ng
Muntinlupa and John Does, respondents.
[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.
SYLLABUS
1.THE PRINCIPLE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY TO ACTS OF THE
DEPARTMENT SECRETARY. 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. 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.
2.THE AUTHORITY OF THE SECRETARY OF AGRICULTURE UNDER P.D. NO. 175 TO SUPERVISE AND
REGULATE COOPERATIVES DOES NOT INCLUDE THE POWER TO REMOVE THE DIRECTORS AND OFFICERS
OFF COOPERATIVES. 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. These powers should not be
extended by implication beyond what may be necessary for their just and reasonable execution.
3.ADMINISTRATIVE SUPERVISION AND CONTROL, WHAT IT INCLUDES. 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.
4.PROCEDURAL DUE PROCESS IN ADMINISTRATIVE PROCEEDINGS INCLUDES RIGHT TO A HEARING.
Due process is guaranteed by the Constitution and extends to administrative proceedings. In the landmark
case of Ang Tibay vs. Court of Industrial Relations, 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.
5.DENIAL OF PROCEDURAL DUE PROCESS IS CURED BY THE OPPORTUNITY TO BE HEARD ON A
SUBSEQUENT MOTION FOR RECONSIDERATION. 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.
6.LACK OF PRELIMINARY INVESTIGATION NOT A GROUND TO QUASH COMPLAINT OR INFORMATION. If
not waived, absence thereof may amount to a denial of due process. 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, 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
defendant-appellee 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."
7.THE INFORMATION MAY BE AMENDED WITHOUT LEAVE OF COURT BEFORE ARRAIGNMENT; RELIANCE
ON DOROMAL V. SANDIGANBAYAN (177 SCRA 354) IN THIS CASE IS MISPLACED. The prosecution may
amend the information without leave of court before arraignment, and such does not prejudice the accused.
Reliance on the pronouncements in Doromal vs. Sandiganbayan 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.

DECISION

DAVIDE, JR., J p:
These cases have been consolidated because they are closely linked with each other as to factual antecedents
and issues. LexLib
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 Muntinlupa, 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 to 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/rescission 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
thenceforth 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, Banjamin 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 talking 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
"O R D E R
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
P.D. 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. Nadjaida 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 stationery 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 allegedly 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 of 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 26praying 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. 88-0119 before the Tanodbayan, and (e) 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. 30Thereupon, 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 in 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,
their respective Memoranda.

33

We gave the petition due course and required the parties to submit

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 the
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 least 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. 42 Petitioners 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 ordered 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:
"SECTION 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 be
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 maladministration; (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, 76this 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. cdll
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 defendant-appellee 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 cases.

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
counter-affidavits 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
counter-affidavits 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 re-investigation 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. cdrep
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.

Narvasa, C .J ., Melencio-Herrera, Cruz, Paras, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea,


Regalado and Romero, JJ ., concur.
Gutierrez, Jr., J ., took no part as son represented a party in a related case.
Nocon, J ., took no part.

[G.R. No. L-65718. June 30, 1987.]


NATIONAL DEVELOPMENT COMPANY AND DOLE PHILIPPINES,
INC., petitioners, vs. WILFREDO HERVILLA, respondent.

DECISION

PADILLA, J p:

Assailed in this petition for review on certiorari is the decision 1 dated 10 November 1983 of the Intermediate
Appellate Court (now Court of Appeals) in AC-G.R. No. CV-66215 entitled, "Wilfredo Hervilla, PlaintiffAppellant, versus Dole Philippines, Inc., Candido de Pedro, and National Development Co., DefendantsAppellees," which reversed the decision of the Court of First Instance of South Cotabato, General Santos City,
as well as its resolution dated 9 August 1985 denying the motion for reconsideration of said decision.
The facts of the case, as gathered from the decision under review, are as follows:
"An action for Recovery of Possession and Damages filed on December 20, 1973 by Wilfredo Hervilla
against Dole Philippines, a duly registered corporation doing business in Polomolok, South Cotabato,
involving Lots Nos. 3284, and 3288, GSS-269-D, each containing four (4) hectares, more or less,
situated at Sitio Balisong, Palkan, Polomolok, South Cotabato, now in the possession of defendant
corporation as Administrator of the properties of National Development Corporation (NDC) impleaded
as party defendant (Records, p. 48).
"On December 28, 1958, claimant Rolando Gabales, for a consideration of P450.00, sold to Hernane
Hervilla all his rights and interest over a four-hectare land located in Palkan, Polomolok, South
Cotabato but identified only by its boundaries:
'. . . On the North, by the property of Teopisto Espaola; on the south, by Mr.
Macarandan; on the east by Francisco Macarandan and on the west by Regina Fabrea . . .'
(Exh. 'h').
"It was apparently on the strength of the Tax Declaration No. 1376 that Hernane Hervilla was induced
to acquire it (Exh. 'L').
"On August 1, 1959, its adjoining occupant-claimant, Fernando Jabagat, for a consideration of
P270.00, also sold his interest and rights to Hernane Hervilla over another four (4) hectares of land,
situated at Balisong, Bo. Kablon, Tupi [later plotted in Palkan, Polomolok] South Cotabato, identified
by its boundaries:
'. . . On the North by the property of Candido de Pedro; on the south by the property
of Santiago Macarandan; on the East by creek and on the West by the property of Hernane
Hervilla . . .' (Exh. 'H').
"Undoubtedly, while adjoining each other, one of these is situated on Polomolok, South Cotabato,
while the other is in Tupi, South Cotabato [the two lots were later plotted to be in Palkan, Polomolok].
For, at the time of these transfers, the boundary between these places had not definitely been settled.
Hence, the discrepancy.
"On June 1, 1961, Wilfredo Hervilla, claiming to be the successor-in-interest of his brother, Hernane
Hervilla who vacated these properties, [in favor of the former], filed with the District Land Office of
the Bureau of Lands in General Santos City Free Patent Application Nos. 2054 and 2054-A,
respectively, over the lots, after the same were surveyed and designated as Lot Nos. 3264, GSS-269-D
and 3166 (Exhs. 'A', 'A-7', 'B', 'B-4', tsn, p. 249).
"On April 1, 1963, as claimant and occupant of Lots 3283 and 3284, GSS-269-D, situated at Balisong,
Kablon, Tupi, South Cotabato since 1945, Candido de Pedro filed with the Bureau of Lands, Manila, his
Free Patent Application, having planted it to abaca, coffee, banana, corn and other seasonal crops,
erecting therein a farm house (Exhs. 'E', '2', '2-A', '2-B'). Land taxes from 1945 until 1963 were paid
per Official Receipts Nos. B-9134501 and B-913492 (Record, pp. 126, 131). Then, exactly four months
after filing his application, Candido de Pedro ceded all his rights to the National Development
Corporation, represented by Pedro Changco, Jr. (Exhs. 'J', 'J-1').
"On April 27, 1968, Wilfredo Hervilla who was then in Palawan, thru his wife, Emma V. Hervilla, filed
an ejectment suit against Dole before the Municipal Court of Tupi, South Cotabato (then Cotabato)

alleging that 'sometime in the early part of March 1968 defendant by means of threats, of force,
intimidation, strategy and stealth and against the will of the plaintiffs, entered and occupied the entire
parcels (lots Nos. 3264 and 3265, GSS-269-D) . . . constructing . . .' (Exh. 'F', Record, p. 109). This
was dismissed, however, on September 30, 1970 for failure to state a cause of action and without the
benefit of trying it upon the merits (Exh. 'H', Record, p. 195).
"On July 28, 1972, as Lots 3264 and 3265 applied by plaintiff on June 1, 1961, had obviously been
designated as Lots 3283 and 3284 initially applied on August 1, 1963 by Candido de Pedro,
predecessor-in -interest of Dole, counsel for plaintiff's Wilfredo Hervilla wrote the District Land Officer
of the Bureau of Lands, stationed in Koronadal, South Cotabato, requesting for an Investigation of
these Lots (Exh. 'G').
"On January 30, 1975, Jesus Ma. Baltazar, supplied with verbal information by Wilfredo Hervilla in his
occular inspection about the facts surrounding the claim of plaintiff, [in an investigation duly
conducted with the aid of the map of the Bureau and in the presence of Candido de Pedro] submitted
his report to the District Land Officer, recommending:
'. . . that PPa, Nos. (VIII-4)-40 54 and (VII-4) 2054-A be amended accordingly such
that it shall cover Lot No. 3284 and 3283, respectively both of GSS-269-D, Palkan, Polomolok,
South Cotabato, instead of Lot Nos. 3264 and 3265, respectively, both of GSS-269-D, and
Kablon, Tupi, South Cotabato (Exh. 'H', 'H1').
"On June 15, 1973, Hernando Jereos, Provincial Officer of Koronadal, South Cotabato, pursuant to the
report of the Land Investigator, Jesus Ma. Baltazar, issued an order:
'That the Free Patent Application No. (VIII-4) 2054 and Free Patent Application No.
(VIII-4) 2054-A of Wilfredo D. Hervilla for Lots Nos. 3264 and 3265, GSS-269-D, respectively,
be, as hereby they are, modified in the sense that the disposition therein contained shall in
the order named refer to Lots Nos. 3284 and 3283, GSS-269-D and, as thus modified, further
action on the herein mentioned application held in abeyance pending the final determination
of the adverse claim of Dolefil thereto' (Exh. 'D').
"So, on September 20, 1973, armed with that recommendation, counsel for plaintiff wrote Dolefil
demanding the immediate return of Lots 3284 and 3283 to Wilfredo Hervilla as well as payment of
actual and moral damages since the former's occupation and fencing of the land in March 1968, with a
warning of a court suit if it failed (Exh. 'I', Record, p. 125). Falling on deaf ears, plaintiff instituted the
present suit, engaged the services of a counsel in the sum of P2,000.00 (tsn, p. 115).' 2

On the basis of the foregoing facts, the court a quo rendered a decision in favor of the National Development
Company (NDC, for short) and Dole Philippines, Inc., (Dolephil, for short), petitioners herein, by dismissing
the herein private respondent's complaint against them. On 30 March 1979, private respondent (plaintiff in
the trial court) appealed to the Intermediate Appellate Court which, on 10 November 1983, rendered the
herein assailed decision, thus:
"WHEREFORE, in view of all the foregoing considerations, the decision appealed from is hereby
REVERSED and set aside and another one entered herein;
1.Declaring that plaintiff-appellant, Wilfredo Hervilla, the rightful possessor of the subject lots or lots
designated as Lots Nos. 3283 and 3284, GSS-269-D, situated at Palkan, Polomolok, South Cotabato;
2.Ordering the NDC and DOLE to vacate the said lots and deliver possession thereof to the said
plaintiff-appellant;
3.Ordering the defendants-appellees: Dole (Philippines, Inc.); Candido de Pedro and National
Development Co. (NDC), jointly and severally to pay Wilfredo Hervilla P700.00 per annum,

representing the value of the yearly harvest of the land at the time it was taken, with legal interest
from the time of judicial demand until fully paid; and
4.Ordering the said defendants-appellees jointly and severally to pay P5,000.00 in the concept of
attorney's fees and to pay the costs. 3

A motion for reconsideration was timely filed by herein petitioners and on 9 January 1984, a Supplement to
the Motion for Reconsideration with Motion for New Trial was filed praying that the case be reopened and a
new trial conducted for the purpose of submitting original certificate of Title Nos. 26651 and 26653.
Petitioners alleged therein that, on 5 December 1980, or while the case was pending with respondent Court,
the Bureau of Lands issued the free patents in favor of Petitioners' predecessor-in-interest.
On 9 August 1985, respondent Court issued a resolution denying the Motion for Reconsideration and
Supplement to the Motion for Reconsideration with Motion for New Trial, stating thus:
"Finding that all the grounds and arguments raised in the Motion for Reconsideration are practically
the same or at least included, considered and passed upon adversely against movant by this Court in
its decision now sought to be reconsidered, the Court RESOLVED to DENY the Motion for
Reconsideration.
Regarding the Supplement to the Motion for Reconsideration with Motion for New Trial, in which
defendants-appellees now claim that the "issue of possession and ownership have been conclusively
determined in favor of defendant-appellee National Development Co. "per patents OCTs Nos. p-26651
and p-26653 both recently dated December 5, 1980, as Annexes "1" & "2", We do not think the
Bureau of Lands could validly make a pronouncement on the issue of possession over the subject land
upon which rested the issuance of the patents in favor of defendants-appellee, as against the prior
finding of this Court that the plaintiff-appellant had the prior, superior and physical possession thereof,
since said issue is the very same issue litigated in this case submitted by the parties to the court of
justice. In other words, when the Bureau of Lands issued the patents and OCT's in question, the case
was already pending in court; hence, subjudice. The issuance of the patents and Original Certificates
of Title over the subject land, therefore, is null and void, the same having been issued, while the case
is still pending in court.

In view thereof, this Court likewise hereby RESOLVES to DENY the Supplement to the Motion for
Reconsideration with Motion for New Trial, for being unmeritorious. 4

Hence, the present petition interposed by the National Development Company (NDC).
There is no question that the authority given to the Lands Department over the disposition of public
lands 5 does not exclude the courts from their jurisdiction over possessory actions, the public character of the
land notwithstanding 6 and that the exercise by the courts of such jurisdiction is not an interference with the
alienation, disposition and control of public lands. 7 The question that is raised by petitioner NDC before this
Court is: "May the Court in deciding a case involving recovery of possession declare null and void title issued
by an administrative body or office during the pendency of such case? Specifically, is the Bureau of Lands
precluded, on the ground that the matter is subjudice, from issuing a free patent during the pendency of a
case in court for recovery of possession?"
The questions are answered in the negative. It is now well settled that the administration and disposition of
public lands are committed by law to the Director of Lands primarily, and, ultimately, to the Secretary of
Agriculture and Natural Resources. 8 The jurisdiction of the Bureau of Lands is confined to the determination
of the respective rights of rival claimants to public lands 9 or to cases which involve disposition and alienation
of public lands. 10 The jurisdiction of courts in possessory actions involving public lands is limited to the

determination of who has the actual, physical possession or occupation of the land in question (in forcible
entry cases, before municipal courts) or, the better right of possession (in accion publiciana in cases before
Courts of First Instance, now Regional Trial Courts). 11
In forcible entry cases, moreover, title is not in issue; as a matter of fact, evidence thereof is expressly
barred, except to prove the nature of the possession. 12
In any event, petitioners' possession of the lands in question has been confirmed by the issuance of Free
Patents in favor of their predecessor-in-interest. By this act, nothing more is left for the courts to pursue.
Thus, the private respondent's cause of action has been rendered moot and academic by the decision of the
Director of Lands. In Rallon vs. Ruiz, 13 this Court said:
"The reason then for possessory actions in court, namely, to "facilitate adjudication" by the Lands
Department of a dispute over public land no longer exists. For, defendants' applications are no longer
pending investigation. Defendants' possession of the lands disputed, for purposes of the free patents,
has been confirmed in the administrative case. The administrative branch of the government has thus
already spoken. Its action has lapsed into finality. Accordingly, plaintiffs' claim of possession is lost.
Since plaintiffs' protests, in reference to possession, has already been resolved adversely against them
by the Lands Department, nothing more is left for the courts to pursue."

In Realiza vs. Duarte,

14

this Court stated:

"The land on which Duarte settled may be initially presumed as public land, his homestead application
over it having been approved by the Director of Lands. It is our considered opinion that the approval
of his homestead application legalized his possession, and such approval constitutes a justifiable
defense against the action for revival of judgment as it necessarily affects the appellee's right of
possession of the land from which Duarte was ordered ejected."

The principle was reiterated in De los Santos vs. Rodriguez

15

thus:

"At the time of the rendition of the decision in CA-G.R. No. 18912-R, the question of whether or not
said portion was to be part of her homestead had not as yet been definitely settled. Accordingly, it
became necessary to determine in that case who shall meanwhile be in possession. The
aforementioned question was finally decided in favor of Rodriguez, in the order of the Director of
Fisheries, dated February 27, 1959. Thereafter he is, therefore, the party entitled to said possession.
In other words, the decision in CA-G.R. 18912-R may no longer he executed, not because the decision
in CA-G.R. 32970-R has annulled it, but because of events subsequent to the first decision, which
events have changed materially the situation between the parties. Thus, in Hernandez vs. Clapis, this
Court, speaking through then Chief Justice Paras, said:
"In our opinion the present appeal is meritorious. While the decision in the forcible entry and detainer
case is final, it can no longer be executed at least in so far as the possession of the land in question is
concerned, because, under section 4 of Commonwealth Act No. 141, the Director of Lands has direct
executive control of the survey, classification, lease, sale or any other form of concession of
disposition and management of the lands of the public domain, and his decisions as to questions of
fact are conclusive when approved by the Secretary of Agriculture; and because the latter had already
cancelled the right of plaintiff Maria L. Hernandez to administer the land in question and rejected both
her sales application and that of her husband, plaintiff Antonio Hernandez, at the same time giving the
defendants the preferential right to apply for said land in virtue of the provisions of Republic Act No.
65. The correctness of the final decision of the Secretary of Agriculture is not herein involved, but it is
valid and binding until reversed in a proper proceeding by the court. The situation is not that the
judgment in the forcible entry and detainer case has lost its virtuality. but that the plaintiffs had
subsequently ceased to be entitled to the relief awarded by said judgment." (Emphasis supplied.)

Moreover, records do not show that private respondent Wilfredo Hervilla ever filed a motion for
reconsideration of the decision of the Director of Lands issuing free patent over the lands in dispute in favor
of petitioners' predecessor-in-interest. Neither did he appeal said decision to the Secretary of Agriculture and
Natural Resources, nor did he appeal to the office of the President of the Philippines. In short, Hervilla failed
to exhaust administrative remedies, a flaw which, to our mind, is fatal to a court review. The decision of the
Director of Lands has now become final. The Courts may no longer interfere with such decision. 16
WHEREFORE, the decision dated 10 November 1983 and the resolution dated 9 August 1985 of the
respondent Appellate Court are hereby reversed and set aside. The decision of the court a quo dated 28
February 1979 is hereby ordered reinstated. No costs.
SO ORDERED.
Fernan, Gutierrez, Jr., Paras, Bidin and Cortes, JJ., concur.

[G.R. No. L-75501. September 15, 1987.]


ATLAS CONSOLIDATED MINING AND DEVELOPMENT
CORPORATION, petitioner, vs. Hon. FULGENCIO S. FACTORAN, JR., in his capacity
as Deputy Executive Secretary, and ASTERIO BUQUERON, respondents.

DECISION

PARAS, J p :
This is a petition for review on certiorari, seeking to set aside the decision rendered by public respondent
Deputy Executive Secretary Fulgencio S. Factoran, Jr., by authority of the President, reinstating and
confirming the decision dated April 17, 1978 of the Director of Mines and Geo Sciences, and setting aside the
decision of the Minister of Natural Resources. Cdpr
The undisputed facts of this case are as follows:
On February 9, 1972, Atlas Consolidated Mining and Development Corporation registered the location of its
"Master VII Fr." mining claim with the Mining Recorder of Toledo City. On September 10, 1973, private
respondent Asterio Buqueron registered the declarations of location of his "St. Mary Fr." and "St. Joseph Fr."
mining claims with the same Mining Recorder. On October 15, 1973, Atlas registered the declarations of
location of its "Carmen I Fr." to "Carmen V. Fr." with the same Mining Recorder. cdrep
Buqueron's "St. Mary Fr." and "St. Joseph Fr." were surveyed and the survey plans thereof were duly
approved by the Director of Mines and Geo Sciences. Notice of Buqueron's lease application was published in
the February 22 and 28, 1977 issues of the Evening Post. cdll
During the said period of publication, petitioner filed an adverse claim against private respondent's mining
claims on the ground that they allegedly overlapped its own mining claims.
After hearing, the Director of Mines rendered a decision, dated April 17, 1978, the dispositive portion of which
reads:

"VIEWED IN THE LIGHT OF THE FOREGOING, respondent (Buqueron) is hereby given the preferential
right to possess, lease, explore, exploit and operate the areas covered by his "St. Mary Fr." and "St.
Joseph Fr." mining claims, except the area covered thereby which is in conflict with adverse claimant's
(Atlas) "Master VII Fr." Adverse claimant (Atlas) on the other hand, is given the preferential right to
possess, lease, explore, exploit and operate the area covered by its "Master VII Fr." claim."

Atlas appealed to the Minister of Natural Resources who rendered a decision dated November 10, 1978, the
dispositive portion of which reads as follows:
"PREMISES CONSIDERED, the decision of the Director of Mines dated April 17, 1978, should be, as
hereby it is, set aside. In lieu thereof, it is hereby declared that the "St. Mary Fr." and "St. Joseph Fr."
mining claims of Asterio Buqueron are null and void, that the "Carmen I Fr." to "Carmen V. Fr." mining
claims of Atlas Consolidated Mining and Development Corporation are valid, and that it be given the
preferential right to possess, explore, exploit, lease and operate the areas covered thereby."
(Decision, Office of the President; Rollo, pp. 52-57; Decision of the Minister of Natural Resources,
Rollo, pp. 47-51; Comment of Public Respondent, Rollo, pp. 88-90: Decision, Director of Mines, Rollo,
pp. 157-160).

As aforestated, on further appeal, the Deputy Executive Secretary, Office of the President, reversed the
decision of the Minister of Natural Resources and reinstated the decision of the Director of Mines and Geo
Sciences.
Hence, this petition.
Briefly stated, petitioner's assignment of errors may be combined into the following issues:
(1) Whether or not private respondent's appeal to the Office of the President was time-barred;
(2) Whether or not there was a valid location and discovery of the disputed mining claims.

The Second Division of this Court without giving due course to the petition, required respondents to comment
in the resolution of October 6, 1986 (Rollo, p. 76). Both private respondent and public respondent filed their
respective comments on November 17, 1986 (Rollo, pp. 81-86; pp. 88-95).
On December 8, 1986 (Rollo, p. 104) this Court required the respondents to file a rejoinder to the
consolidated reply filed by counsel for petitioner dated November 4, 1986 (Rollo, pp. 97-102). Said rejoinder
was filed on February 6, 1987 (Rollo, pp. 108-111), by the Solicitor General for public respondent, after which
petitioner filed a sur-rejoinder thereto on March 13, 1987 (Rollo, pp. 113-116). Thereafter the Court in the
resolution of March 30, 1987 gave due course to the petition and required both parties to file their respective
memoranda. llcd
Counsel for public respondent filed a Manifestation/Motion praying to be allowed to adopt its comment dated
November 2, 1986 and Rejoinder dated February 4, 1987 as the memorandum for public respondent.
Petitioner filed its memorandum on May 25, 1987 (Rollo, p. 136).
The petition is devoid of merit.
I.
It is not disputed that private respondent received a copy of the decision of the Minister of Natural Resources
dated November 10, 1978 on November 27, 1978 and that under Section 50 of Presidential Decree No. 463,
the decision of the Minister is appealable to the Office of the President within five (5) days from receipt

thereof. In the case at bar, the 5-day period expired on December 2, 1978, a Saturday, private respondent
filed his appeal on December 4, 1978, a Monday. LexLib
Petitioner contends that the appeal was filed out of time and therefore, the Office of the President did not
acquire jurisdiction over the case and should have dismissed the same outright (Rollo, pp. 20-21).
This contention is untenable.
Petitioner and private respondent are in accord on the fact that at the time of the filing of the questioned
appeal, Saturday was observed as a legal holiday in the Office of the President pursuant to Section 29 of the
Revised Administrative Code as amended.
The same law provides:
"Section 31. Pretermission of holiday. Where the day, or the last day, for doing any act required or
permitted by law falls on a holiday, the act may be done on the next succeeding business day."

Apart from the fact that the law is clear and needs no interpretation, this Court in accordance therewith has
invariably held that in case the last day for doing an act is a legal holiday, it does not have the effect of
making the preceding day, the last day for doing the same; the act may be done on the next succeeding
business day (Gonzaga v. Ce David, 110 Phil. 463464 [1960]; Calano v. Cruz, 91 Phil. 247 [1952]; Austria, et
al. v. The Solicitor General, et al., 71 Phil. 288 [1941]). prLL
Coming back to the case at bar, as the next working day after December 2, 1978 was December 4, 1978 a
Monday, it is evident that private respondent's appeal was filed on time.
II.
It is apparent that the second issue as to whether or not there was a valid location and discovery of the
disputed mining claims is a question of fact best left to the determination of the administrative bodies
charged with the implementation of the law they are entrusted to enforce. As uniformly held by the Court, it
is sufficient that administrative findings of fact are supported by evidence, or negatively stated, it is sufficient
that findings of fact are not shown to be unsupported by evidence. Substantial evidence is all that is needed
to support an administrative finding of fact, and substantial evidence is "such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion." (Ang Tibay v. Court of Industrial
Relations, 69 Phil. 635, 642; Police Commission v. Lood, 127 SCRA 762 [1984]). prcd
In the case at bar, the record amply shows that the Director of Mines' decision was supported by substantial
evidence.
Petitioner claimed that it is a registered surface land owner and locator of six (6) lode claims duly registered
with the Office of the Mining Recorder as above stated and that in derogation of its established possessory
rights, private respondent Asterio Buqueron, without its written permission, caused the "table" location and
survey and applied for the lease of his alleged mining claims known as "St. Mary Fr." and "St. Joseph Fr." lode
claims.
In his answer, private respondent denied the material allegations of the adverse claim and by way of
affirmative defense alleged that all of petitioner's claims including a portion of Master VII Fr. are null and void
for having been located in areas which were closed to mining location in open and gross violation of
paragraph 1 (d) of Section 28 and of Section 60 of the Mining Act as amended. prcd

The main thrust of petitioner's claim is that all of the mining claims of both petitioner and private respondent
are located inside the premises or properties of the former, so that it is hardly possible for private respondent
to have conducted the requisite location and survey without having been seen or noticed by petitioner and its
personnel. LexLib
The Director of Mines established that there is in fact an overlapping of mining claims of petitioner and
private respondent and that as a matter of record petitioner's mining claims were registered subsequent to
those of private respondent with the exception of Master VII Fr. which was registered on February 9, 1972 or
prior to the registration of the mining claims of private respondent.
In ruling as to who, between the parties shall be given preferential right to lease the area in question, the
Director of Mines' findings are as follows:
"Adverse claimant in its attempt to impugn the validity of the mining claims of respondent alleged that
said mining claims were the result of table locations and survey and in support thereof submitted the
sworn statements of its Chief Geologist and Chief Security.
On the other hand, respondent asserted that he, through his authorized representative actually and
validly performed all the acts of discovery and location required by law and the field survey of his
mining claims was actually conducted by Geodetic Engineer Salvador Aligaen from December 16 to 18,
1974. In support of this assertion, respondent submitted in evidence affidavit of the authorized agent
(Annex "D" of the answer) and another affidavit of Geodetic Engineer Salvador Aligaen (Annex "F" of
the answer). Respondent also submitted in evidence Bureau of Forestry map and Bureau of Coast and
Geodetic Survey map of the total area (Exhs. "9" to "10") which embraces the area in question. These
maps tend to prove that the Atlas main gate is not the only point of ingress and egress such that one
can enter the area in question for the purpose of mining location and survey without being noticed by
any of the personnel of Atlas.

After a careful appraisal of the evidence submitted, and cognizant as we are of the provisions of
Presidential Decree No. 99-A, we are of the view that adverse claimant failed to adduce sufficient
evidence to nullify the prior claims of respondent. Stated differently, the evidence submitted are not
sufficient to destroy the prima facie character of the sworn declarations of location of respondent's
mining claims which were duly registered on the date herein before stated. Thus "A location notice
certificate or statement when recorded is prima facie evidence of all the facts the statute requires it to
contain and which were sufficiently set forth" (40 C.J. pp. 811-812) and constitute notice to all
persons and to the whole world of the contents of the same (Sec. 56 of the Mining Act, as amended).
It is, therefore, pertinent to quote hereunder Sections 28(d) and 60 of the Mining Act, as amended, as
well as Section 1 of Presidential Decree No. 99-A:
"SEC. 28 No Prospecting shall be Allowed:
(d) In lands which have been located for mining leases by other prospectors under
the provisions of this Act."
"SEC. 60. No valid mining claim or any part thereof, may be located by others until
the original locator or his successors in interest abandons the claim or forfeits his rights on the
same under the provisions of this Act."
SEC. 1. Whenever there is any conflict between claim owners over any mining claims
whether mineral or non-mineral, the locator of the claim who first registered his claim with the
proper mining registrar, notwithstanding any defect in form or technicality, shall have the
exclusive right to possess, exploit, explore, develop and operate such mining claims. . . ."

In the light of the aforequoted provisions of law applicable on the matter, and in view of our findings,
earlier discussed, the subsequent mining claims of adverse claimant insofar as they conflict the prior
claims of respondent are hereby declared null and void.
On the other hand, it is also our view that respondent failed to adduce sufficient evidence to prove
that the prior claim of adverse claimant (Master VII Fr.) is null and void. Considering that this mining
claim is prior in point of location and registration, it follows that this claim will have to prevail over that
of respondent. For the same reason, therefore, that the subsequent claims of adverse claimant were
declared null and void insofar as they conflict with the prior claims of respondent, the mining claims of
respondent insofar as they conflict with "Master VII Fr." claim of adverse claimant are likewise
declared null and void." (Decision, Director of Mines; rollo, pp. 157-160).

As earlier stated the above findings, although reversed by the Minister of Natural Resources, were affirmed by
the Office of the President.
However, petitioner would have this Court look into the said findings because of the open divergence of views
and findings by the adjudicating authorities in this mining conflict involving highly contentious issues which
warrant appellate review (Rollo, p. 18).
This Court has repeatedly ruled that judicial review of the decision of an administrative official is of course
subject to certain guideposts laid down in many decided cases. Thus, for instance, findings of fact in such
decision should not be disturbed if supported by substantial evidence, but review is justified when there has
been a denial of due process, or mistake of law or fraud, collusion or arbitrary action in the administrative
proceeding (L-21588 Atlas Development and Acceptance Corp. v. Gozon, etc. et al., 64 O.G. 11511
(1967]), where the procedure which led to factual findings is irregular; when palpable errors are committed;
or when a grave abuse of discretion, arbitrariness, or capriciousness is manifest (Ateneo de Manila University
v. CA, 145 SCRA 100-101 [1986]; International Hardwood and Veneer Co., of the Philippines v. Leogardo, 117
SCRA 967; Baguio Country Club Corporation v. National Labor Relations Commission, 118 SCRA 557;
Sichangco v. Commissioner of Immigration, 94 SCRA 61; and Eusebio v. Sociedad Agricola de Balarin, 16
SCRA 569). prcd
A careful study of the records shows that none of the above circumstances is present in the case at bar,
which would justify the overturning of the findings of fact of the Director of Mines which were affirmed by the
Office of the President. On the contrary, in accordance with the prevailing principle that "in reviewing
administrative decisions, the reviewing Court cannot reexamine the sufficiency of the evidence as if originally
instituted therein, and receive additional evidence, that was not submitted to the administrative agency
concerned," the findings of fact in this case must be respected. As ruled by the Court, they will not be
disturbed so long as they are supported by substantial evidence, even if not overwhelming or preponderant
(Police Commission v. Lood, supra).
PREMISES CONSIDERED, this petition is hereby DENIED and the assailed decision of the Office of the
President, is hereby AFFIRMED.
SO ORDERED.

Teehankee, C.J., Narvasa and Cruz, JJ., concur.


Gancayco, J., is on leave.

[G.R. No. 96409. February 14, 1992.]

CITIZEN J. ANTONIO M. CARPIO, petitioner, vs. THE EXECUTIVE SECRETARY, THE


SECRETARY OF LOCAL GOVERNMENTS, THE SECRETARY OF NATIONAL DEFENSE,
and THE NATIONAL TREASURER, respondents.
SYLLABUS
1.POLITICAL LAW; STATUTES; REPUBLIC ACT NO. 6975; DATE OF EFFECTIVITY. With the aforequoted
provision in mind, Congress passed Republic Act No. 6975 entitled "AN ACT ESTABLISHING THE PHILIPPINE
NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT,
AND FOR OTHER PURPOSES" as the consolidated version of House Bill No. 23614 and Senate Bill No. 463.
The Act took effect after fifteen days following its publication, or on January 1, 1991.
2.CONSTITUTIONAL LAW; THE PRESIDENT HAS CONTROL POWERS OVER THE EXECUTIVE BRANCH OF THE
GOVERNMENT; DOCTRINE OF QUALIFIED POLITICAL AGENCY AS COROLLARY RULE THERETO. It is a
fundamentally accepted principle in Constitutional Law that the President has control of all executive
departments, bureaus, and offices. Equally well accepted, as a corollary rule to the control powers of the
President, is the "Doctrine of Qualified Political Agency". As the President cannot be expected to exercise his
control powers all at the same time and in person, he will have to delegate some of them to his Cabinet
members, who in turn and by his authority, control the bureaus and other offices under their respective
jurisdictions in the executive department.
3.ID.; ID.; THE PRESIDENT, AS COMMANDER-IN-CHIEF, IS NOT A MEMBER OF THE ARMED FORCES. The
President, as Commander-in-Chief, is not a member of the Armed Forces. He remains a civilian whose duties
under the Commander-in-Chief provision "represent only a part of the organic duties imposed upon him. All
his other functions are clearly civil in nature." His position as a civilian Commander-in-Chief is consistent with,
and a testament to, the constitutional principle that "civilian authority is, at all times, supreme over the
military." (Article II, Section 3, 1987 Constitution.)
4.POLITICAL LAW; PLACEMENT OF NAPOLCOM AND PHILIPPINE NATIONAL POLICE (PNP) UNDER THE
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, MERELY AN ADMINISTRATIVE REALIGNMENT.
The circumstance that the NAPOLCOM and the PNP are placed under the reorganized Department of the
Interior and Local Government is merely an administrative realignment that would bolster a system of
coordination and cooperation among the citizenry, local executives and the integrated law enforcement
agencies and public safety agencies created under the assailed Act, the funding of the PNP being in large part
subsidized by the national government.
5.ID.; NATIONAL POLICE FORCE; ADMINISTERED AND CONTROLLED BY NATIONAL POLICE COMMISSION;
LOCAL EXECUTIVES ACT ONLY AS REPRESENTATIVES OF NAPOLCOM. The national police force shall be
administered and controlled by a national police commission as at any rate, and in fact, the Act in question
adequately provides for administration and control at the commission level. We agree, that "there is no
usurpation of the power of control of the NAPOLCOM under Section 51 because under this very same
provision, it is clear that the local executives are only acting as representatives of the NAPOLCOM. As such
deputies, they are answerable to the NAPOLCOM for their actions in the exercise of their functions under that
section. Thus, unless countermanded by the NAPOLCOM, their acts are valid and binding as acts of the
NAPOLCOM." It is significant to note that the local officials, as NAPOLCOM representatives, will choose the
officers concerned from a list of eligibles (those who meet the general qualifications for appointment to the
PNP) to be recommended by PNP officials. The same holding is true with respect to the contention on the
operational supervision and control exercised by the local officials. These officials would simply be acting as
representatives of the Commission.

6.ID.; ID.; INVOLVEMENT OF CIVIL SERVICE COMMISSION UNDERSCORES ITS CIVILIAN CHARACTER. As
regards the assertion involving the Civil Service Commission, suffice it to say that the questioned provisions,
which read: "Sec. 31. Appointment of PNP Officers and Members. The Appointment of the officers and
members of the PNP shall be effected in the following manner: a.) Police Officer I to Senior Police Officer IV.
Appointed by the PNP regional director for regional personnel or by the Chief of the PNP for national
headquarters personnel and attested by the Civil Service Commission; b.) Inspector to Superintendent
Appointed by the Chief of the PNP, as recommended by their immediate superiors, and attested by the Civil
Service Commission; c.) Senior Superintendent to Deputy Director-General Appointed by the President
upon recommendation of the Chief of the PNP, with proper endorsement by the Chairman of the Civil Service
Commission . . . . Sec. 32. Examinations for Policemen. The Civil Service Commission shall administer the
qualifying entrance examinations for policemen on the basis of the standards set by the NAPOLCOM."
precisely underscore the civilian character of the national police force, and will undoubtedly professionalize
the same.
7.ID.; ID.; DOES NOT FALL UNDER THE COMMANDER-IN-CHIEF POWERS OF THE PRESIDENT; REASON AND
CONSEQUENCE THEREOF. It thus becomes all too apparent then that the provision herein assailed
precisely gives muscle to and enforces the proposition that the national police force does not fall under the
Commander-in-Chief powers of the President. This is necessarily so since the police force, not being
integrated with the military, is not a part of the Armed Forces of the Philippines. As a civilian agency of the
government, it properly comes within, and is subject to, the exercise by the President of the power of
executive control. Consequently, Section 12 does not constitute abdication of commander-in-chief powers. It
simply provides for the transition period or process during which the national police would gradually assume
the civilian function of safeguarding the internal security of the State. Under this instance, the President, to
repeat, abdicates nothing of his war powers.
8.ID.; NATIONAL POLICE COMMISSION (NAPOLCOM); EXERCISES APPELLATE JURISDICTION THRU
REGIONAL APPELLATE BOARDS. Pursuant to the Act, the Commission exercises appellate jurisdiction, thru
the regional appellate boards, over decisions of both the PLEB and the said mayors. This is so under Section
20(c). Furthermore, it is the Commission which shall issue the implementing guidelines and procedures to be
adopted by the PLEB for the conduct of its hearings, and it may assign NAPOLCOM hearing officers to act as
legal consultants of the PLEBs (Section 43-d4, d5).
9.ID.; CONSTITUTIONAL CONSTRUCTION; EVERY PRESUMPTION INDULGED IN FAVOR OF
CONSTITUTIONALITY. We find light in the principle of constitutional construction that every presumption
should be indulged in favor of constitutionality and the court in considering the validity of the statute in
question should give it such reasonable construction as can be reached to bring it within the fundamental
law."
10.ID.; PEOPLE'S LAW ENFORCEMENT BOARDS (PLEB); PURPOSE FOR ITS CREATION. As a disciplinary
board primarily created to hear and decide citizen's complaints against erring officers and members of the
PNP, the establishment of PLEBs in every city and municipality would all the more help professionalize the
police force.
11.ID.; SPECIAL OVERSIGHT COMMITTEE; SOLE FUNCTION THEREOF. The Special Oversight Committee
is simply an ad hoc or transitory body, established and tasked solely with planning and overseeing the
immediate "transfer, merger and/or absorption" into the Department of the Interior and Local Governments
of the "involved agencies." This it will undertake in accordance with the phases of implementation already laid
down in Section 85 of the Act and once this is carried out, its functions as well as the committee itself would
cease altogether. As an ad hoc body, its creation and the functions it exercises, decidedly do not constitute an
encroachment and in diminution of the power of control which properly belongs to the President. What is
more, no executive department, bureau or office is placed under the control or authority of the committee.

12.CONSTITUTIONAL LAW; INDEPENDENT CONSTITUTIONAL COMMISSIONS; NOT UNDER THE CONTROL


OF THE CHIEF EXECUTIVE. Under the Constitution, there are the so-called independent Constitutional
Commissions, namely: The Civil Service Commission, Commission on Audit, and the Commission on Elections.
(Article IX-A, Section 1). As these Commissions perform vital governmental functions, they have to be
protected from external influences and political pressures. Hence, they were made constitutional bodies,
independent of and not under any department of the government. Certainly, they are not under the control of
the President. The Constitution also created an independent office called the "Commission on Human Rights."
(Article XIII, Section 17[1]). However, this Commission is not on the same level as the Constitutional
Commissions under Article IX, although it is independent like the latter Commissions. It still had to be
constituted thru Executive Order No. 163 (dated May 5, 1987). In contrast, Article XVI, Section 6 thereof,
merely mandates the statutory creation of a national police commission that will administer and control the
national police force to be established thereunder. This commission is, for obvious reasons, not in the same
category as theindependent Constitutional Commissions of Article IX and the other constitutionally
created independent Office, namely, the Commission on Human Rights.

DECISION

PARAS, J p:
At the very outset, it should be well to set forth the constitutional provision that is at the core of the
controversy now confronting us, thus:
Article XVI, Section 6:
"The State shall establish and maintain one police force, which shall be national in scope and civilian in
character, to be administered and controlled by a national police commission. The authority of local
executives over the police units in their jurisdiction shall be provided by law." 1

With the aforequoted provision in mind, Congress passed Republic Act No. 6975 entitled "AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE
INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES" as the consolidated version of House Bill
No. 23614 and Senate Bill No. 463. LibLex
Following the said Act's approval by President Corazon C. Aquino on December 13, 1990, it was published on
December 17, 1990. 2
Presently, however, petitioner as citizen, taxpayer and member of the Philippine Bar sworn to defend the
Constitution, filed the petition now at bar on December 20, 1990, seeking this Court's declaration of
unconstitutionality of RA 6975 with prayer for temporary restraining order. Cdpr
But in an en banc resolution dated December 27, 1990, We simply required the public respondents to file
their Comment, without however giving due course to the petition and the prayer therein. Hence, the Act
took effect after fifteen days following its publication, or on January 1, 1991. 3
Before we settle down on the merits of the petition, it would likewise be well to discuss albeit briefly the
history of our police force and the reasons for the ordination of Section 6, Article XVI in our present
Constitution.

During the Commonwealth period, we had the Philippine Constabulary as the nucleus of the Philippine Ground
Force (PGF), now the Armed Forces of the Philippines (AFP). The PC was made part of the PGF but its
administrative, supervisory and directional control was handled by the then Department of the Interior. After
the war, it remained as the "National Police" under the Department of National Defense, as a major service
component of the AFP. 4
Later, the Integration Act of 1975 5 created the Integrated National Police (INP) under the Office of the
President, with the PC as the nucleus, and the local police forces as the civilian components. The PC-INP was
headed by the PC Chief who, as concurrent Director-General of the INP, exercised command functions over
the INP. 6
The National Police Commission 7 (NAPOLCOM) exercised administrative control and supervision while the
local executives exercised operational supervision and direction over the INP units assigned within their
respective localities. 8
The set-up whereby the INP was placed under the command of the military component, which is the PC,
severely eroded the INP's civilian character and the multiplicity in the governance of the PC-INP resulted in
inefficient police service. 9 Moreover, the integration of the national police forces with the PC also resulted in
inequities since the military component had superior benefits and privileges. 10
The Constitutional Commission of 1986 was fully aware of the structural errors that beset the system. Thus,
Com. Teodulo C. Natividad explained that:
xxx xxx xxx
"MR. NATIVIDAD. x x x The basic tenet of a modern police organization is to remove it from the
military. 11
xxx xxx xxx
Here in our draft Constitution, we have already made a constitutional postulate that the military
cannot occupy any civil service position [in Section 6 of the Article on the Civil Service 12 ]. Therefore,
in keeping with this and because of the universal acceptance that a police force is a civilian function, a
public service, and should not be performed by military force, one of the basic reforms we are
presenting here is that it should be separated from the military force which is the PC. 13
xxx xxx xxx
Furthermore:
xxx xxx xxx
. . . the civilian police cannot blossom into full profession because most of the key positions are
being occupied by the military. So, it is up to this Commission to remove the police from such a
situation so that it can develop into a truly professional civilian police . . . ." 14

Hence, the "one police force, national in scope, and civilian in character" provision that is now Article XVI,
Section 6 of the 1987 Constitution.
And so we now come to the merits of the petition at hand.
In the main, petitioner herein respectfully advances the view that RA 6975 emasculated the National Police
Commission by limiting its power "to administrativecontrol" over the Philippine National Police (PNP), thus,

"control" remained with the Department Secretary under whom both the National Police Commission and the
PNP were placed. 15
We do not share this view.
To begin with, one need only refer to the fundamentally accepted principle in Constitutional Law that the
President has control of all executive departments, bureaus, and offices 16 to lay at rest petitioner's
contention on the matter.
This presidential power of control over the executive branch of government extends over all executive officers
from Cabinet Secretary to the lowliest clerk 17 and has been held by us, in the landmark case of Mondano vs.
Silvosa, 18 to mean "the power of [the President] to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the judgment of the former with that of
the latter." It is said to be at the very "heart of the meaning of Chief Executive." 19
Equally well accepted, as a corollary rule to the control powers of the President, is the "Doctrine of Qualified
Political Agency". As the President cannot be expected to exercise his control powers all at the same time and
in person, 20 he will have to delegate some of them to his Cabinet members.
Under this doctrine, which recognizes the establishment of a single executive, 21 "all executive and
administrative organizations are adjuncts of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive
is required by the Constitution or law to act in person on the exigencies of the situation demand that he act
personally, the multifarious executive and administrative functions of the Chief Executive are performed by
and through the executive departments, and the acts of the Secretaries of such departments, performed and

promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive
presumptively the acts of the Chief Executive." 22(emphasis ours).
Thus, and in short, "the President's power of control is directly exercised by him over the members of the
Cabinet who, in turn, and by his authority, control the bureaus and other offices under their respective
jurisdictions in the executive department." 23

Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the reorganized Department
of the Interior and Local Government is merely an administrative realignment that would bolster a system of
coordination and cooperation among the citizenry, local executives and the integrated law enforcement
agencies and public safety agencies created under the assailed Act, 24 the funding of the PNP being in large
part subsidized by the national government. LLjur
Such organizational set-up does not detract from the mandate of the Constitution that the national police
force shall be administered and controlled by a national police commission as at any rate, and in fact, the Act
in question adequately provides for administration and control at the commission level, as shown in the
following provisions, to wit:
"Sec. 14.Powers and Functions of the Commission. The Commission shall exercise the following
powers and functions:
xxx xxx xxx
(i)Approve or modify plans and programs on education and training, logistical requirements,
communications, records, information systems, crime laboratory, crime prevention and crime
reporting;

(j)Affirm, reverse or modify, through the National Appellate Board, personnel disciplinary actions
involving demotion or dismissal from the service imposed upon members of the Philippine National
Police by the Chief of the PNP;
(k)Exercise appellate jurisdiction through the regional appellate boards over administrative cases
against policemen and over decisions on claims for police benefits; LibLex
xxx xxx xxx
Sec. 26.The Command and direction of the PNP shall be vested in the Chief of the PNP. . . . Such
command and direction of the Chief of the PNP may be delegated to subordinate officials with respect
to the units under their respective commands, in accordance with the rules and regulations prescribed
by the Commission. x x x
xxx xxx xxx
Sec. 35.. . . To enhance police operational efficiency and effectiveness, the Chief of the PNP may
constitute such other support units as may be necessary subject to the approval of the Commission. . .
.
xxx xxx xxx
Sec. 37.. . . There shall be established a performance evaluation system which shall be administered
in accordance with the rules, regulations and standards, and a code of conduct promulgated by the
Commission for members of the PNP. . . .
xxx xxx xxx

Petitioner further asserts that in manifest derogation of the power of control of the NAPOLCOM over the PNP,
RA 6975 vested the power to choose the PNP Provincial Director and the Chiefs of Police in the Governors and
Mayors, respectively; the power of "operational supervision and control" over police units in city and
municipal mayors; in the Civil Service Commission, participation in appointments to the positions of Senior
Superintendent to Deputy Director-General as well as the administration of qualifying entrance examinations;
disciplinary powers over PNP members in the "People's Law Enforcement Boards" and in city and municipal
mayors. 25
Once more, we find no real controversy upon the foregoing assertions.

It is true that when the Constitutional Commissioners of 1986 provided that the authority of local executives
over the police units in their jurisdiction shall be provided by law, they intended that the day-to-day functions
of police work like crime investigation, crime prevention activities, traffic control, etc., would be under the
operational control of the local executives as it would not be advisable to give full control of the police to the
local executives. 26
They reasoned that in the past, this gave rise to warlordism, bossism, and sanctuaries for vices and
abuses. 27
It would appear then that by vesting in the local executives the power to choose the officers in question, the
Act went beyond the bounds of the Constitution's intent.

Not so. We find light in the principle of constitutional construction that every presumption should be indulged
in favor of constitutionality and the court in considering the validity of the statute in question should give it
such reasonable construction as can be reached to bring it within the fundamental law." 28
Under the questioned provisions, which read as follows:
"D.PARTICIPATION OF LOCAL EXECUTIVES IN THE ADMINISTRATION OF THE PNP.
Sec. 51.Powers of Local Government Officials over the PNP Units or Forces.
Governors and mayors shall be deputized as representatives of the Commission in their respective
territorial jurisdictions. As such, the local executives shall discharge the following functions:
a.)Provincial Governor (1) . . .
The provincial governor shall choose the provincial director from a list of three (3) eligibles
recommended by the PNP Regional Director.
4). . . City and municipal mayors shall have the following authority over the PNP units in their
respective jurisdictions:
i.)Authority to choose the chief of police from a list of five (5) eligibles recommended by the Provincial
Police Director. . . . (Underscoring ours).

full control remains with the National Police Commission.


We agree, and so hold, with the view of the Solicitor General that "there is no usurpation of the power of
control of the NAPOLCOM under Section 51 because under this very same provision, it is clear that the local
executives are only acting as representatives of the NAPOLCOM. x x x As such deputies, they are answerable
to the NAPOLCOM for their actions in the exercise of their functions under that section. Thus, unless
countermanded by the NAPOLCOM, their acts are valid and binding as acts of the NAPOLCOM." 29 It is
significant to note that the local officials, as NAPOLCOM representatives, will choose the officers concerned
from a list of eligibles (those who meet the general qualifications for appointment to the PNP) 30 to be
recommended by PNP officials.
The same holding is true with respect to the contention on the operational supervision and control exercised
by the local officials. These officials would simply be acting as representatives of the Commission.
As regards the assertion involving the Civil Service Commission, suffice it to say that the questioned
provisions, which read:
"Sec. 31.Appointment of PNP Officers and Members. The Appointment of the officers and members
of the PNP shall be effected in the following manner:
a.)Police Officer I to Senior Police Officer IV. Appointed by the PNP regional director for regional
personnel or by the Chief of the PNP for national headquarters personnel and attested by the Civil
Service Commission;
b.)Inspector to Superintendent Appointed by the Chief of the PNP, as recommended by their
immediate superiors, and attested by the Civil Service Commission;
c.)Senior Superintendent to Deputy Director-General Appointed by the President upon
recommendation of the Chief of the PNP, with proper endorsement by the Chairman of the Civil
Service Commission. . . .

Sec. 32.Examinations for Policemen. The Civil Service Commission shall administer the qualifying
entrance examinations for policemen on the basis of the standards set by the NAPOLCOM."

precisely underscore the civilian character of the national police force, and will undoubtedly
professionalize the same. cdrep
The grant of disciplinary powers over PNP members to the "People's Law Enforcement Boards" (or the PLEB)
and city and municipal mayors is also not in derogation of the Commission's power of control over the PNP.
Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the regional appellate boards, over
decisions of both the PLEB and the said mayors. This is so under Section 20(c). Furthermore, it is the
Commission which shall issue the implementing guidelines and procedures to be adopted by the PLEB for the
conduct of its hearings, and it may assign NAPOLCOM hearing officers to act as legal consultants of the PLEBs
(Section 43-d4, d5).
As a disciplinary board primarily created to hear and decide citizen's complaints against erring officers and
members of the PNP, the establishment of PLEBs in every city and municipality would all the more help
professionalize the police force.
Petitioner would likewise have this Court imagine that Section 12 of the questioned Act, the pertinent portion
of which reads:
"Section 12.Relationship of the Department with the Department of National Defense . During a
period of twenty-four (24) months from the effectivity of this Act, the Armed Forces of the Philippines
(AFP) shall continue its present role of preserving the internal and external security of the State:
Provided, that said period may be extended by the President, if he finds it justifiable, for another
period not exceeding twenty-four (24) months, after which, the Department shall automatically take
over from the AFP the primary role of preserving internal security, leaving to the AFP its primary role
of preserving external security."
xxx xxx xxx

constitutes an "encroachment upon, interference with, and an abdication by the President of, executive
control and commander-in-chief powers."
That We are not disposed to do for such is not the case at all here. A rejection thus of petitioner's submission
anent Section 12 of the Act should be in order in the light of the following exchanges during the CONCOM
deliberations of Wednesday, October 1, 1986:
xxx xxx xxx
"MR. RODRIGO.
Just a few questions. The President of the Philippines is the Commander-in-Chief of all the armed
forces.
MR. NATIVIDAD.
Yes, Madam President.
MR. RODRIGO.
Since the national police is not integrated with the armed forces, I do not suppose they come under
the Commander-in-Chief powers of the President of the Philippines. cdtai

MR. NATIVIDAD.
They do, Madam President. By law they are under the supervision and control of the President of the
Philippines.
MR. RODRIGO.
Yes, but the President is not the Commander-in-Chief of the national police.
MR. NATIVIDAD.
He is the President.
MR. RODRIGO.
Yes, the Executive. But they do not come under that specific provision that the President is
Commander-in-Chief of all the armed forces.
MR. NATIVIDAD.
No, not under the Commander-in-Chief provision.
MR. RODRIGO.
There are two other powers of the President. The President has control over departments, bureaus
and offices, and supervision over local governments. Under which does the police fall, under
control or under supervision?
MR. NATIVIDAD.
Both, Madam President.
MR. RODRIGO.
Control and Supervision.
MR. NATIVIDAD.
Yes, in fact, the National Police Commission is under the Office of the President." (CONCOM
RECORDS, Vol. 5, p. 296).

It thus becomes all too apparent then that the provision herein assailed precisely gives muscle to and
enforces the proposition that the national police force does not fall under the Commander-in-Chief powers of
the President. This is necessarily so since the police force, not being integrated with the military, is not a part
of the Armed Forces of the Philippines. As a civilian agency of the government, it properly comes within, and
is subject to, the exercise by the President of the power of executive control. cdrep
Consequently, Section 12 does not constitute abdication of commander-in-chief powers. It simply provides for
the transition period or process during which the national police would gradually assume the civilian function
of safeguarding the internal security of the State. Under this instance, the President, to repeat, abdicates
nothing of his war powers. It would bear to here state, in reiteration of the preponderant view, that the
President, as Commander-in-Chief, is not a member of the Armed Forces. He remains a civilian whose duties
under the Commander-in-Chief provision "represent only a part of the organic duties imposed upon him. All
his other functions are clearly civil in nature." 31 His position as a civilian Commander-in-Chief is consistent

with, and a testament to, the constitutional principle that "civilian authority is, at all times, supreme over the
military." (Article II, Section 3, 1987 Constitution.).
Finally, petitioner submits that the creation of a "Special Oversight Committee" under Section 84 of the Act,
especially the inclusion therein of some legislators as members (namely: the respective Chairmen of the
Committee on Local Government and the Committee on National Defense and Security in the Senate, and the
respective Chairmen of the Committee on Public Order and Security and the Committee on National Defense
in the House of Representatives) is an "unconstitutional encroachment upon and a diminution of, the
President's power of control over all executive departments, bureaus and offices."
But there is not the least interference with the President's power of control under Section 84. The Special
Oversight Committee is simply an ad hoc or transitory body, established and tasked solely with planning and
overseeing the immediate "transfer, merger and/or absorption" into the Department of the Interior and Local
Governments of the "involved agencies." This it will undertake in accordance with the phases of
implementation already laid down in Section 85 of the Act and once this is carried out, its functions as well as
the committee itself would cease altogether. 32 As an ad hoc body, its creation and the functions it exercises,
decidedly do not constitute an encroachment and in diminution of the power of control which properly
belongs to the President. What is more, no executive department, bureau or office is placed under the control
or authority of the committee. 33

As a last word, it would not be amiss to point out here that under the Constitution, there are the socalled independent Constitutional Commissions, namely: The Civil Service Commission, Commission on Audit,
and the Commission on Elections. (Article IX-A, Section 1).
As These Commissions perform vital governmental functions, they have to be protected from external
influences and political pressures. Hence, they were made constitutional bodies, independent of and not
under any department of the government. 34 Certainly, they are not under the control of the President.
The Constitution also created an independent office called the "Commission on Human Rights." (Article XIII,
Section 17[1]). However, this Commission is not on the same level as the Constitutional Commissions under
Article IX, although it is independent like the latter Commissions. 35 It still had to be constituted thru
Executive Order No. 163 (dated May 5, 1987).
In contrast, Article XVI, Section 6 thereof, merely mandates the statutory creation of a national police
commission that will administer and control the national police force to be established thereunder.
This commission is, for obvious reasons, not in the same category as the independent Constitutional
Commissions of Article IX and the other constitutionally createdindependent Office, namely, the Commission
on Human Rights. LLpr
By way of resume, the three Constitutional Commissions (Civil Service, Audit, Elections) and the additional
commission created by the Constitution (Human Rights) are all independent of the Executive; but the National
Police Commission is not. 36 In fact, it was stressed during the CONCOM deliberations that this commission
would be under the President, and hence may be controlled by the President, thru his or her alter ego, the
Secretary of the Interior and Local Government.
WHEREFORE, having in view all of the foregoing holdings, the instant petition is hereby DISMISSED for lack
of merit.
SO ORDERED.

Narvasa, C .J ., Melencio-Herrera, Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Grio-Aquino, Medialdea,
Regalado, Davide, Jr., Romero and Nocon, JJ ., concur.

[G.R. No. 67195. May 29, 1989.]


HEIRS OF EUGENIA V. ROXAS, INC., BENIGNA V. ROXAS, JULITA N. ROXAS,
VICTORIA R. VALLARTA, JUANITA ROXAS, and MARGARITA R.
TIOSECO, petitioners, vs. INTERMEDIATE APPELLATE COURT, REBECCA BOYERROXAS, GUILLERMO LUIS ROXAS, JUDITH ROXAS and MARIA PILAR
ROXAS, respondents.
[G.R. No. 78618. May 29, 1989.]
HEIRS OF EUGENIA V. ROXAS, INC., petitioners, vs. HON. JOSE ANTONIO U.
GONZALES, in his capacity as Secretary of Tourism, SOSTENES L. CAMPILLO, JR.,
in his capacity as Undersecretary of Tourism Services, both of the Department of
Tourism and GUILLERMO ROXAS, doing business under the name and style "MJB
Food and Services", respondents.
[G.R. Nos. 78619-20. May 29, 1989.]
HEIRS OF EUGENIA V. ROXAS, INC., petitioners, vs. HON. ODILON I. BAUTISTA,
Judge Presiding over Branch 37 of the Regional Trial Court of Calamba, Laguna,
HON. JAIME GASAPOS, in his capacity as OIC Calauan, Laguna, and GUILLERMO
ROXAS, doing business under the name and style MJB FOOD and
SERVICES, respondents.

Benito P. Fabie for petitioners.


Conrado L. Manicad for respondents.
Ramon C. Fernandez for private respondents.
SYLLABUS
1.REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION; DEFINED. At times referred to
as the "Strong Arm of Equity," the writ of preliminary injunction, whether prohibitory or mandatory, is sought
for the protection of the rights of a party before the final determination of his rights vis-a-vis others' in a
pending case before the court.
2.ID.; ID.; ID.; GROUNDS FOR ISSUANCE. It will issue only upon a showing that there exists a clear and
present right to be protected and that the facts upon which the writ is to be directed are violative of said right
[Angela Estate Inc., et al. v. CFI of Negros Occidental, et al., G.R. No. L-27084, July 31, 1968, 24 SCRA 500;
Locsin v. Climaco G.R. No. L-27319, January 31, 1969, 26 SCRA 816; Buayan Cattle Co., Inc. v. Quintillan,
G.R. No. L-26970, March 19, 1984, 128 SCRA 276.] It cannot be over-emphasized that the mere prayer for
the preservation of the status quo pending the appellate court's adjudication of the issues is not sufficient to

warrant the issuance of this writ. "The possibility of irreparable damage, without proof of violation of an
actually existing right, is no ground for an injunction, being a meredamnum obsque injuria".
3.ID.; SPECIAL CIVIL ACTION; CERTIORARI; ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION IN THE
ABSENCE OF A CLEAR AND PRESENT RIGHT, AN ABUSE OF DISCRETION; CASE AT BAR. After a careful
consideration of the undisputed facts and the arguments of the parties, the Court finds that the IAC acted
without or in excess of jurisdiction and/or with grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the writ of preliminary injunction. Private respondents failed to establish a clear and
present right to continue operating the restaurant and liquor concession at the resort considering that they,
who were then incorporated and doing business under HVABR, had NO license or authorization from the MOT
to operate the restaurant and liquor concession in the resort. Without a license private respondents cannot
legally continue to operate the restaurant, and therefore they cannot claim a right which could be protected
by a writ of preliminary injunction.
4.ID.; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION; WRIT ISSUED ALLOWING CONTINUANCE OF
OPERATION OF RESTAURANT AND LIQUOR CONCESSION WITHOUT THE REQUIRED MOT LICENSE,
DECLARED NULL AND VOID. The Court is compelled to declare null and void the writ issued by the IAC
which allowed private respondents to continue their operation of the restaurant and liquor concession despite
absence of the requisite MOT license permitting them to do so, thereby sanctioning their illegal operation.
5.ID.; ACTIONS, MOOT AND ACADEMIC; CONSTRUED. A case is considered moot and academic when a
determination is sought on a matter which, when rendered, cannot have any practical effect on the existing
controversy, or where no practical relief can be granted.
6.ID.; SPECIAL CIVIL ACTION; PROHIBITION; FUNCTION OF THE WRIT. The function of the writ of
prohibition is to prevent the doing of some act which is about to be done. It is not intended to provide a
remedy for acts already accomplished.
7.ID.; ACTIONS; CAUSE OF ACTION; DETERMINED BY SUBSTANCE AND AVERMENTS, NOT THE TITLE OR
CAPTION, OF PLEADINGS. It is not the title or caption of a pleading, but the substance and averments
thereof that is controlling; so that, in the interest of justice, although a petition is styled "Prohibition", it may
be considered a petition for certiorari if the facts alleged make out a case for the issuance of the latter writ.
8.ID.; EVIDENCE; FINDINGS OF FACT OF EXECUTIVE AGENCIES AND ADMINISTRATIVE BODIES,
GENERALLY NOT INTERFERED WITH BY THE COURTS; EXCEPTIONS. Courts of justice will generally not
interfere in executive and administrative matters which are addressed to the sound discretion of government
agencies, such as, the grant of licenses, permits, leases, or the approval, rejection or revocation of
applications therefor. However, there is a limit to the deference accorded by the courts to the actions of such
agencies. Jurisprudence is replete with cases wherein the Supreme Court expounded on the exception to the
general rule as there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the government. [Article VIII, Sec. 1, par. 2.]
9.ID.; ID.; ID.; ID.; CASE AT BAR. The Court holds that it was an arbitrary and capricious exercise of
discretion on the part of public respondents to have issued, and thereafter to have refused to revoke, the
restaurant license in favor of Guillermo Roxas and or MJBFS knowing that: (1) the latter was not the owner of
the restaurant for which the license was sought; (2) the latter's right to possess the same was being disputed
by no less than petitioner as restaurant owner; and, (3) the subject restaurant was already leased to Valley
Resort Corporation pursuant to a contract of lease approved by the department.
10.ID.; PROVISIONAL REMEDIES; INJUNCTION; GRANT THEREOF LIES WITHIN THE SOUND DISCRETION
OF THE COURT. Whether or not a writ of injunction will issue lies exclusively within the discretion of

respondent judge, and this Court will not interfere with the exercise of respondent judge's discretion unless
there is a showing of grave abuse.
11.ID.; SPECIAL CIVIL ACTION; CONTEMPT; AN ACT TO BE CONTUMACIOUS MUST BE CLEARLY CONTRARY
OR PROHIBITED BY THE COURT. "Well-settled is the rule that an act to be considered contemptuous must
be clearly contrary or prohibited by the order of the Court. 'A person cannot, for disobedience, be punished
for contempt unless the act which is forbidden or required to be done is clearly and exactly defined, so that
there can be no reasonable doubt or uncertainty as to what specific act or thing is forbidden or required'".

DECISION

CORTES, J p:
These consolidated cases relate to various incidents in the long running dispute between the heirs of
Eufrocino and Eugenia Roxas regarding the operation of a restaurant within the Hidden Valley Springs Resort
in Calauan, Laguna.
All of the instant petitions filed by the petitioners arise from the same factual antecedents and are bound by
petitioners' singular intent of enjoining private respondents from operating the restaurant at the Hidden
Valley Springs Resort. It must be clear, however, that the issue as to who has the legal right to operate the
subject restaurant is not for this Court to decide in these petitions, for such issue is the crux of the appeal
pending before the Court of Appeals. For the present, the Court is only called upon to determine whether or
not grave abuse of discretion as would vitiate the jurisdiction of the public respondents and would warrant
the annulment of their assailed resolutions and or orders, was committed.
FACTS OF THE CASE
Petitioner corporation, Heirs of Eugenia V. Roxas, Inc. (hereinafter referred to as HEVR), was incorporated on
December 4, 1962 by the late Eufrocino Roxas and his seven children (Pedro, Benigna, Julita, Antonio,
Ramon, Victoria and Eriberto), with the primary purpose of owning and developing the properties of Eufrocino
Roxas and the estate of his late wife, Doa Eugenia V. Roxas, located in the Province of Laguna. Petitioners
Benigna V. Roxas, Julita N. Roxas, Victoria R. Vallarta, Juanita Roxas and Margarita R. Tioseco are some of
the surviving heirs of Eufrocino and Eugenia Roxas.
In 1971, its articles of incorporation were amended to include the operation of a resort among its purposes.
In early 1972, it opened to the public the Hidden Valley Springs Resort, situated in Calauan, Laguna.
Eufrocino Roxas was Chairman of the Board of Directors and President of HEVR until the time of his death on
August 28, 1979. One of his sons, Eriberto, a director, was manager of the resort until his death in 1980. He
also succeeded his father as President upon the latter's demise.
Private respondents are the heirs of Eriberto Roxas: Rebecca Boyer-Roxas, his wife; Guillermo Luis and Maria
Pilar, his children: and Judith Roxas, his daughter-in-law.
Eriberto Roxas and his family had been exclusively operating the restaurant and liquor concession at the
resort under an "Agreement" dated May 27, 1975 executed between Eufrocino Roxas, as President of HEVR,
and Eriberto Roxas, in his behalf and that of his family.

When Eriberto Roxas was taken ill a few months before his death, Guillermo Roxas took it upon himself to
take over all the corporate duties and assume the authority of his father pertaining to the resort.
After Eriberto Roxas' death on December 4, 1980, private respondents continued the operations of the
restaurant and liquor concession. In 1981, they incorporated under the name "Hidden Valley Agri-Business
and Restaurant, Inc." (hereinafter referred to as HVABR), and through this entity they continued to carry on
the concession.

The HEVR held a stockholders' and Board of Directors' meeting on January 31, 1981, elected members of the
Board and appointed officers of the corporation. The Board then set up a management committee and
commenced an inquiry into the financial status of the resort, requiring Guillermo Roxas to submit documents
relative to its earnings and expenditures. Steps were subsequently taken to restrict private respondents'
previously unlimited access to the corporate funds. Not surprisingly, private respondents were defiant.
In the Board meeting of July 30, 1981, the treasurer of HEVR reported that the income of the resort could not
satisfy its payroll requirements and loan amortizations. It appeared that the resort's financial difficulty was
due to the fact that the biggest profit center, the restaurant therein, was not managed and operated by HEVR
itself and that the concession fee paid by private respondents was not even enough to pay for the interest
and amortizations on the loan secured by HEVR to upgrade the restaurant and kitchen facilities. It was
suggested that HEVR should take over the operation of the restaurant. Hence, the Board of Directors adopted
Resolution No. 3-81 authorizing the President to notify HVABR of its intent to take over the operation of the
restaurant, and in the event the latter refuses or fails to peaceably vacate the premises within thirty (30) days
from notice, to close the resort for an indefinite period of time to prevent further losses to the corporation,
and finally to order a financial, legal and management audit of the operations of the resort [Rollo, G.R.
No. 67195, p. 99]. The President then sent a letter dated August 13, 1981 to private respondents informing
them of the above resolution, and asking them to vacate the restaurant premises and to turn over possession
thereof to HEVR. cdrep
Private respondents consequently filed on September 18, 1981 an action for injunction with a prayer for
preliminary injunction and or restraining order against HEVR and the other petitioners, including Rafael J.
Roxas, in the Regional Trial Court (RTC) of San Pablo, Laguna, docketed as Civil Case No. SP-1920, to
prevent the closure of the resort and the unilateral termination by HEVR of the concession agreement.
The petitioners, in their answer, prayed for the dismissal of the complaint, the declaration of the nullity of the
concession agreement, and for an order requiring private respondents to vacate and surrender the restaurant
premises.
In the meantime, HVABR filed with the Bureau of Tourism Services of the Ministry of Tourism (MOT) a
petition to increase the food and beverage prices at the resort restaurant. HEVR, being the holder of a license
to operate the resort, contested this petition by impugning the authority of HVABR to file the petition and to
continue operating the restaurant.
Pending resolution of HVABR's petition in the MOT, the RTC, on June 13, 1983, dismissed private
respondent's complaint. The concession agreement between Eriberto and Eufrocino Roxas was declared null
and void for being ultra vires since it was neither authorized nor ratified by the Board of HEVR, and for being
violative of the doctrine of corporate opportunity as embodied in Section 34 of the Corporation Code. 1 The
trial court also upheld Resolution No. 3-81 as a valid and reasonable exercise of corporate power by the
Board of Directors of HEVR [Id. at pp. 88-113].

With the decision of the trial court to support them, HEVR immediately caused the temporary closure of the
resort.
Private respondents, on the other hand, appealed to the Intermediate Appellate Court (IAC) on June 27, 1983
(AC-G.R. CV No. 00764), and in an "Urgent Omnibus Motion" 2 prayed for the issuance of a writ of
preliminary injunction to prohibit petitioners from closing the resort [Id. at pp. 114-126.].
On July 22, 1983, the IAC granted a temporary restraining order (TRO) which not only directed petitioners to
refrain from further commission of "acts that will tend to interfere, impede, frustrate and obstruct the
operation by plaintiffs-appellants [private respondents herein] of the restaurant and liquor concession at the
Hidden Valley Springs Resort," but also "to undo such acts" if already done [Id. at p. 131.].
Immediately thereafter, petitioners filed a Comment to the appellants' "Urgent Omnibus Motion", praying for
the lifting of the TRO [Id. at pp. 134-143.].
Meanwhile, the MOT promulgated on July 28, 1983 its resolution dismissing HVABR's petition, finding inter
alia that HVABR was operating the restaurant and liquor facilities of the resort without the requisite MOT
license. The dispositive portion of the resolution provides in part:
WHEREFORE, in view of the foregoing considerations, we hereby resolved to:

xxx xxx xxx


2.The Heirs of Eugenia V. Roxas, Inc. (HEVR) is hereby ORDERED TO TAKE OVER IMMEDIATELY the active management
and operation of the RESTAURANT and WINE outlets of the Hidden Valley Springs Resort from the Hidden Valley AgriBusiness & Restaurant, Inc. (HVABR).
3.The Hidden Valley Agri-Business & Restaurant Inc. (HVABR) and/or any person claiming under it the management and
operation of the RESTAURANT and WINE outlets of the Hidden Valley Springs Resort, Inc. is hereby ORDERED to CEASE
and DESIST from and to TURN OVER IMMEDIATELY to the Heirs of Eugenia V. Roxas, Inc. (HEVR), the MANAGEMENT
and OPERATION of the RESTAURANT and WINE outlets of the Hidden Valley Springs Resort;
4.The Director of the Bureau of Tourism Services is hereby ORDERED NOT TO ISSUE in favor of the Hidden Valley AgriBusiness Inc. (HVABR) a Provisional Authority to operate the restaurant outlet of the Hidden Valley Springs Resort;

xxx xxx xxx


9.Considering that the rightful owner/operator of the Hidden Valley Springs Resort, the Heirs of Eugenia V. Roxas, Inc.
(HEVR), has been deprived of its right to operate and or manage the restaurant and wine outlets of the resort for a
considerable length of time already and the added fact that the present operator of said outlets of the resort has been
operating the same illegally for quite a long period of time already notwithstanding the mandate of the Rules of this
Ministry that only licensed operators may operate the same, to immediately stop such illegal act, this Resolution is
hereby declared IMMEDIATELY EXECUTORY.
SO ORDERED.
[Id. at pp. 153-155.]

Private respondents filed a Manifestation (actually a motion for reconsideration) seeking to hold in abeyance
the execution of the aforementioned judgment. However, the MOT subsequently issued its Order dated
August 3, 1983 reiterating its findings and emphasizing the final and executory nature of its directive [Id. at
pp. 202-205.]

Petitioners then filed on August 31, 1983 with the IAC a Manifestation inviting the attention of the appellate
court to the above MOT resolution and Order [Id. at pp. 199-201.]
In the following month, petitioners filed a motion to dismiss the appeal and an application for a writ of
preliminary injunction alleging that private respondents had no right to operate the restaurant per the August
3, 1983 MOT Order, and that in fact they had ceased operating the same since September 8, 1983, thereby
rendering the appealed injunction case moot and academic [Id. at pp. 206-212.]
However, on October 3, 1983, the IAC promulgated a resolution whereby petitioners were enjoined from
disturbing the status quo or from doing acts that tend to frustrate, impede, obstruct, disturb or interfere with
the operation by private respondents of the restaurant and liquor concession. The IAC opined:
Since, the complaint filed by the plaintiffs-appellants was for the purpose of seeking to enjoin and restrain the
defendant-appellees from closing the subject resort, the issue is thus the object of the appeal which is perfected and
now pending before us.
To allow defendants-appellees to close the resort in question would thus amount to execution of the decision pending
appeal, and,
"Execution pending appeal, being an exception to the general rule that execution may issue only after
the decision in any case has become executory, may issue only upon allegation and proof of the
existence of a special reason therefor." (De la Rea v. Subido, G.R. No. L-26082, March 1, 1968, 22
SCRA 953).
The decision in the main case was rendered on June 13, 1983 and plaintiffs-appellants filed their Notice of Appeal on
June 18, 1983. The appeal was given due course on July 6, 1983 and is now before this Court. No special reason is cited
for immediate execution pending appeal nor is such execution pending appeal properly applied for. [ Id.at p. 78.] llcd

Then Associate Appellate Justice Bidin 3 dissented, stressing the failure of private respondents to establish a
clear right to continue operating the restaurant in view of the dismissal of their action in the lower court and
the MOT resolution of July 28, 1983.
Petitioners filed a motion for reconsideration with the IAC on October 13, 1983.
On November 3, 1983, the MOT denied private respondents' motion for reconsideration [Id. at pp. 277-300.]
Thus, petitioners once again filed a Manifestation dated November 5, 1983 with the IAC, informing it of this
denial [Id. at pp. 275-276.]
On November 17, 1983, petitioners filed another Manifestation and Motion with the IAC, bringing to said
court's attention an October 27, 1983 decision of the Bureau of Domestic Trade rendered in C.A.D. Case No.
343, wherein the Bureau found that HVABR was operating the restaurant in violation of the Retail Trade
Nationalization Law (Republic Act No. 1180, as amended) because one of its stockholders, Rebecca BoyerRoxas, was a foreigner actually participating in the operation and management of the restaurant [Id. at pp.
301-303.]
This notwithstanding, the IAC promulgated its April 4, 1984 resolution denying petitioner's motion for
reconsideration and motion to dismiss the appeal, with Justice Bidin dissenting once again [Id. at pp. 82-87.]
Aggrieved by the IAC resolutions, petitioners, with the exception of Rafael J. Roxas, brought a petition for
certiorari, prohibition and mandamus with preliminary injunction in this Court docketed as G.R. No. 67195.

On May 16, 1984, the Court issued a temporary restraining order to stop the IAC from enforcing and or
carrying out the resolutions dated October 3, 1983 and April 4, 1984 and its writ of preliminary injunction
[Id. at pp. 350-351.]
On September 2, 1985, HEVR entered into a contract of lease with Valley Resort Corporation, whereby the
latter leased the Hidden Valley Springs Resort, with all the equipment, vehicles, facilities and structures used
in the resort operation, including the subject restaurant premises, for a term of ten (10) years. After the
contract was approved by the MOT on September 4, 1985, a MOT license to operate the Hidden Valley
Springs Resort was issued to Valley Resort Corporation effective until July 31, 1987 [Rollo, G.R. No. 78618,
pp. 92-104.]
On the other hand, during the pendency of G.R. No. 67195, respondent Guillermo Roxas doing, business
under the name and style "MJB Food and Services" (hereinafter referred to as MJBFS), obtained on March 23,
1987 a license dated March 3, 1987 from the Department of Tourism (DOT) to operate the restaurant at the
Hidden Valley Springs Resort as a "Class A-De Luxe" restaurant [Id. at p. 110.] Various letters were sent by
HEVR to the DOT contesting the issuance of the license alleging, inter alia, that Guillermo Roxas was not
authorized to possess and operate the restaurant [Id. at pp. 105-121.]
No response was heard from the DOT until the Secretary of Tourism sent a letter to HEVR dated June 1, 1987
refusing to reconsider the issuance of the license to MJBFS. Hence, HEVR filed the herein second petition
docketed as G.R. No. 78618, on June 11, 1987, seeking the nullification of the license issued to MJBFS.
A temporary restraining order was issued by the Court on June 22, 1987. The order restrained the Secretary
of Tourism from "allowing respondent Guillermo Roxas from utilizing the license in question to operate the
restaurant inside the Hidden Valley Springs Resort and in the restaurant building/premises owned by
petitioner, and from further granting license to said respondent Roxas under any business name he may use
to apply therefor" [Id. at pp. 124-125.]
Prior to the filing of the second petition, a mayor's permit to engage in the restaurant business was issued by
Hon. Jaime Gasapos, the Officer-in-Charge (OIC) of Calauan, Laguna, to Guillermo Roxas/MJBFS on March
30, 1987, despite protests by HEVR. Thus, HEVR filed a complaint for injunction on April 6, 1987 in the
Regional Trial Court (RTC) of Calamba, Laguna, docketed as Civil Case No. 1086-87-C, against the OIC and
Guillermo Roxas from utilizing the mayor's permit in order to operate the resort restaurant. In its Order dated
April 29, 1987, the trial court denied HEVR's prayer for the issuance of a writ of preliminary injunction. HEVR's
subsequent motion for reconsideration was likewise denied.
Consequently, HERV filed a third petition in this Court, docketed as G.R. Nos. 78619-78620, assailing the RTC
Orders in Civil Case No. 1086-87-C. LibLex
The Court issued a temporary restraining order on June 23, 1987 restraining respondent Guillermo Roxas
and/or MJBFS from utilizing the Mayor's permit to operate the subject restaurant [Rollo, G.R. Nos. 7861978620, pp. 183-184.]
Incidentally, on March 31, 1987 a motion to declare Guillermo Roxas in contempt of court in G.R.
No. 67195 was filed by petitioners therein, on the ground that he violated the Court's temporary restraining
order dated May 16, 1984 when he obtained the DOT license to operate the resort restaurant [Rollo, G.R.
No. 67195, pp. 510-525.]
On June 22, 1987, G.R. Nos. 78619-78620 were ordered consolidated with G.R. No. 67195 [Rollo, G.R. Nos.
78619-78620, p. 182.] On July 27, 1987, G.R. No. 78618 was ordered consolidated with G.R. No. 61795 and
G.R. Nos. 78619-78620 [Rollo, G.R. No. 78618, p. 157.]

G.R. No. 67195


In this petition for certiorari, prohibition and mandamus with preliminary injunction, petitioners pray for the
nullification of the October 3, 1983 and the April 4, 1984 Resolutions of the IAC.
The issues raised in this petition may be paraphrased as follows:
I.Whether or not Respondent IAC gravely abused its discretion tantamount to lack of or excess of jurisdiction in granting
the writ of preliminary injunction; and
II.Whether or not Respondent IAC gravely abused its discretion tantamount to lack of or excess of jurisdiction in denying
the petitioner's Motion to Dismiss the Appeal.

I
At times referred to as the "Strong Arm of Equity," the writ of preliminary injunction, whether prohibitory or
mandatory, is sought for the protection of the rights of a party before the final determination of his rights visa-vis others' in a pending case before the court. It will issue only upon a showing that there exists a clear and
present right to be protected and that the facts upon which the writ is to be directed are violative of said right
[Angela Estate Inc., et al. v. CFI of Negros Occidental, et al., G.R. No. L-27084, July 31, 1968, 24 SCRA 500;
Locsin v. Climaco G.R. No. L-27319, January 31, 1969, 26 SCRA 816; Buayan Cattle Co., Inc. v. Quintillan,
G.R. No. L-26970, March 19, 1984, 128 SCRA 276.] It cannot be over-emphasized that the mere prayer for
the preservation of the status quo pending the appellate court's adjudication of the issues is not sufficient to
warrant the issuance of this writ. "The possibility of irreparable damage, without proof of violation of an
actually existing right, is no ground for an injunction, being a mere damnum obsque injuria" [Bacolod-Murcia
Milling Co., Inc., et al. v. Capitol Subdivision, Inc., et al., G.R. No. L-25887, July 26, 1966, 17 SCRA 731, 737.]
With these principles in mind, and after a careful consideration of the undisputed facts and the arguments of
the parties, the Court finds that the IAC acted without or in excess of jurisdiction and/or with grave abuse of
discretion amounting to lack or excess of jurisdiction in issuing the writ of preliminary injunction.
Private respondents failed to establish a clear and present right to continue operating the restaurant and
liquor concession at the resort considering that they, who were then incorporated and doing business under
HVABR, had NO license or authorization from the MOT to operate the restaurant and liquor concession in the
resort. Without a license private respondents cannot legally continue to operate the restaurant, therefore they
cannot claim a right which could be protected by a writ of preliminary injunction.
Petitioners invited the attention of the IAC to the July 28, 1983 MOT Resolution finding that HVABR lacked the
requisite license to operate the restaurant and liquor facilities in the resort, and the August 3, 1983 MOT
Order directing HVABR to desist from operating the restaurant and to effect its closure [See Petitioners'
Manifestation, Rollo, G.R. No. 67195, pp. 199-201.] The IAC nevertheless promulgated its October 3, 1983
Resolution granting private respondents' prayer for a writ of preliminary injunction.
Subsequently, petitioners brought to the attention of the IAC the MOT resolution denying HVABR's motion for
reconsideration as well as the Bureau of Domestic Trade decision finding that HVABR's restaurant business
violated the Retail Trade Nationalization Law [See Petitioners' Manifestation and Motions, Id. at pp. 275-276;
301-304.] Once again, the IAC denied petitioners' motions in its April 4, 1984 Resolution. LLjur
Contrary to the IAC's opinion, the July 28, 1983 MOT Resolution was not based on the trial court's conclusion
that the disputed concession agreement was invalid. As correctly pointed out by the petitioners, the MOT
Resolution and Order were based on the undisputed fact that HVABR was operating the restaurant and liquor
facilities of the resort without the requisite license.

More importantly, the IAC ignored the basic implication of these circumstances that HVABR's unlicensed
restaurant business was in gross violation of the Rules of the MOT and tantamount to a criminal offense
punishable under Sec. 19 (b) and (c) of PD 1463. 4
In fact, the MOT, in its August 3, 1983 Order denying private respondent's manifestation (motion for
reconsideration), opined that:
. . . to grant the prayer contained in the Manifestation (actually motion) under consideration
would sweep away the barrier erected by the law against unlicensed operators of tourism-oriented
establishment [sic]. Indeed, even by the greatest violence of construction of our powers and
extravagant exercise of our discretion, we cannot, without being prodigal in our actuation, grant the
said prayer of the movant; which could be dangerous influence with respect to subsequent cases that
may come before us for resolution.
Again, to grant the prayer contained in the Manifestation under consideration would amount to a condonnation [sic] of
the illegal act that has been and still is, being committed by the management of the HIDDEN VALLEY AGRI-BUSINESS &
RESTAURANT INC. (HVABR) and thus give a premium to a violation of the law. Precisely we declared our resolution
"IMMEDIATELY EXECUTORY' so as to put an immediate stop to its illegal act. Movant is thus plainly in error in claiming
that "the same is not yet final and executory." [Id. at p. 204.]

Consequently, the Court is compelled to declare null and void the writ issued by the IAC which allowed
private respondents to continue their operation of the restaurant and liquor concession despite absence of the
requisite MOT license permitting them to do so, thereby sanctioning their illegal operation [See Suarez v.
Reyes, G.R. No. L-19828, February 28, 1963, 7 SCRA 461 ; Utleg v. Arca, G.R. No. L-25026, August 31, 1971,
40 SCRA 597.]
II
Petitioners allege that the aforementioned MOT resolutions as well as the decision of the Bureau of Domestic
Trade which declared private respondents' restaurant business violative of the Retail Trade Nationalization
Law, rendered the main issue in the injunction case on appeal before the IAC moot and academic.

The above contention springs from an erroneous analysis of the issues and must be rejected.
A case is considered moot and academic when a determination is sought on a matter which, when rendered,
cannot have any practical effect on the existing controversy, or where no practical relief can be granted
[Meralco Workers Union v. Yatco, G.R. No. L-19785, January 30, 1967, 19 SCRA 177; Bongat v. BLR, G.R. No.
L-41039, April 30, 1985, 136 SCRA 225.]
The issue in the injunction case, which is now raised on appeal before the IAC, hinges on a determination of
the contractual relationship between the petitioners and private respondents as heirs of Eufrocino and
Eugenia Roxas vis-a-vis the operation and management of the restaurant and liquor concession in the resort.
Its resolution rests on a judicial declaration of the validity or nullity of the disputed concession agreement
between the parties. This issue is unaffected by the fact that private respondents have no license to operate
the restaurant, or that the participation of Rebecca Boyer-Roxas in HVABR's activities was violative of the
Retail Trade Nationalization Law, for the rights between the parties remain largely unsettled.
G.R. No. 78618

In this petition for prohibition with preliminary injunction, petitioner HEVR seeks to nullify MJBFS' license to
operate the restaurant in the Hidden Valley Springs Resort and to prohibit the DOT from issuing any other
license to respondent Guillermo Roxas.
The function of the writ of prohibition is to prevent the doing of some act which is about to be done. It is not
intended to provide a remedy for acts already accomplished [Cabanero v. Torres, 61 Phil. 522 (1935);
Agustin, et al. v. de la Fuente, 84 Phil. 515 (1949); Navarro v. Lardizabal, G.R. No. L-25361, September 28,
1968, 25 SCRA 370.] Cdpr
As a license to operate the restaurant had already been issued to private respondents, a writ of prohibition
cannot issue.
Nevertheless, it does not mean that no other affirmative relief may be given to petitioner if found to be
deserving. For it is not the title or caption of a pleading, but the substance and averments thereof that is
controlling; so that, in the interest of justice, although a petition is styled "Prohibition", it may be considered a
petition for certiorari if the facts alleged make out a case for the issuance of the latter writ [Cajefe, et al. v.
Fernandez, et al., 109 Phil. 743 (1960); See also Concepcion v. Vera, et al., 67 Phil. 122 (1939); Tambunting
de Tengco v. San Jose, et al., 97 Phil. 491 (1955).]
The Court will treat the instant petition as if it were a special civil action for certiorari.
It is a recognized principle that courts of justice will generally not interfere in executive and administrative
matters which are addressed to the sound discretion of government agencies, such as, the grant of licenses,
permits, leases, or the approval, rejection or revocation of applications therefor [Manuel v. Villena, G.R. No.
L-28218, February 27, 1971, 37 SCRA 745.] However, there is a limit to the deference accorded by the courts
to the actions of such agencies. Jurisprudence is replete with cases wherein the Supreme Court expounded
on the exception to the general rule. 5
In laying down the guidelines for the review of decisions of administrative agencies in the exercise of their
quasi-judicial powers, the Supreme Court, in the oft-cited case of Pajo, et al. v. Ago, et al., 108 Phil. 905
(1960), stated that: cdll
In general, courts have no supervising power over the proceedings and actions of the administrative departments of the
government. This is generally true with respect to acts involving the exercise of judgment or discretion, and findings of
fact. Findings of fact by an administrative board or officials, following a hearing, are binding upon the courts and will not
be disturbed except where the board or official has gone beyond his statutory authority, exercised unconstitutional
powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion. And we have
repeatedly held that there is grave abuse of discretion justifying the issuance of the writ of certiorari only when there is
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction . . . as where the power is exercised
in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility amounting to an evasion of
positive duty, or to a virtual refusal to perform the duty enjoined, or to act at all in contemplation of law . . . [ Id. at pp.
915-916.]

This standard has been unequivocally embraced in the 1987 Constitution, which affirms the power of the
judiciary to determine whether or not there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the government. [Article VIII, Sec. 1, par. 2.]
In the instant case, petitioner contends that public respondents acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the contested restaurant license despite the failure of
Guillermo Roxas and or MJBFS to satisfy the conditions mandated by the "Rules and Regulations governing
the Business and Operations of All Resorts in the Philippines," such as, the submission of a contract of lease
or written permit from the petitioner as resort and restaurant owner allowing MJBFS to operate the subject
restaurant. Petitioner further contends that pursuant to Section 21, Chapter IV of the rules and regulations on

resorts, 6 Valley Resort Corporation as lessee and holder of the license to operate the resort must be deemed
licensed to operate the subject restaurant [Rollo, G.R. No. 78615, pp. 11-14.]
Public respondents, on the other hand, argue that no grave abuse of discretion was committed by them
because under the "Rules and Regulations Governing the Business and Operation of all restaurants in the
Philippines," MJBFS was not required to submit a contract of lease or written permit from petitioner, the
restaurant owner, allowing the former to operate the latter's restaurant. Moreover, they contend that the
issuance of the license in favor of MJBFS was predicated on the favorable recommendation of a DOT Team of
Inspectors 7 that evaluated MJBFS' application and inspected the premises of the subject restaurant in
accordance with Section 8, Chapter IV of the rules and regulations on restaurants. Public respondents
likewise contend that Section 21, Chapter IV of the rules and regulations on resorts was inapplicable because
Valley Resort Corporation does not "own and operate" the subject restaurant, therefore it cannot be deemed
licensed to operate the same by virtue of its resort license alone. And inasmuch as no previous license had
been issued to petitioner or Valley Resort Corporation to operate the subject restaurant, and in fact no party
was operating the restaurant pending the approval of the application of Guillermo Roxas and/or MJBFS, no
grave abuse of discretion attended the issuance of a restaurant license in favor of the latter [Id. at pp. 248258.]
The Court, after a careful study of the various pleadings submitted by the parties, and the DOT rules and
regulations governing the operation of restaurants and resorts in the country, holds that public respondents
acted arbitrarily and capriciously and, therefore, with grave abuse of discretion amounting to lack or excess of
jurisdiction in the issuance of the restaurant license in favor of MJBFS.
Although the premises of public respondents' arguments cannot be disputed, the conclusion drawn therefrom
is misplaced in view of the fact that public respondents undeniably had knowledge prior to the issuance of the
license to Guillermo Roxas and or MJBFS that the subject restaurant was owned by petitioner and presently
leased to Valley Resort Corporation, and that Guillermo Roxas and/or MJBFS' right to possess and operate the
restaurant was the subject of a pending litigation. prcd
As far back as 1983, the MOT records show that the department was aware of the controversy between
petitioner and Guillermo Roxas, et al., who were then doing business under the name HVABR, regarding the
restaurant and liquor concession at the resort. In fact, the MOT resolutions promulgated on July 28, 1983 and
November 3, 1983 in MOT Appealed Case #83-1 precisely addressed petitioner's charge impugning the
alleged right of Guillermo Roxas, et al. to operate its resort restaurant, the subject restaurant in this case.
The judgment rendered by the RTC in Civil Case No. SP-1920 finding that Guillermo Roxas, et al. had no
contractual right to operate the restaurant and liquor concession in the resort was noted by the department in
that MOT case. Moreover, the Director of the Bureau of Tourism Services was ordered not to issue in favor of
HVABR a provisional authority to operate the subject restaurant on the finding that it had no contractual right
to manage and/or operate the same [See MOT Resolution and MOT Order promulgated on July 28, 1983 and
August 3, 1983, respectively, in MOT Appealed Case No. 83-1, Rollo, G.R. No. 67195, pp. 144-155, 202-205;
MOT Resolution on the Motion for Reconsideration promulgated on November 3, 1983, Id. at pp. 277-300.].
On September 4, 1985, the MOT, after appropriate proceedings, duly approved the ten-year contract of lease
between petitioner and Valley Resort Corporation, whereby the latter, as LESSEE, was granted not only the
exclusive right to possess, enjoy and use the Hidden Valley Springs resort, and all its equipment, vehicles,
facilities and structures, including the subject restaurant, but also "the right and privilege to make use of the
license and registration rights of the LESSOR over the resort . . . and, in addition, the LESSEE shall have the
exclusive right, during the period that the lease is in full force and effect, to make use of the tradename and
tradestyle `HIDDEN VALLEY SPRINGS RESORT' . . . [Rollo, G.R. No. 78618, p. 95.] Subsequently, Valley
Resort Corporation was issued a license to operate the Hidden Valley Springs resort by the MOT effective until
July 31, 1987. Incidentally, in that same contract was included a provision regarding the civil cases between
petitioner and Guillermo Roxas, et al., pending before the IAC and Supreme Court concerning the rights of

the parties to operate the subject restaurant covered by the lease, to the effect that petitioner warranted that
it would continue to pursue with vigor the pending cases and other cases relative thereto, and that for the
duration in which Valley Resort Corporation would be unable to utilize the restaurant, rental payment would
be reduced by 50% [Id. at pp. 96-97.]

Then, even prior to the release of MJBFS' license to operate the restaurant on March 26, 1987, the DOT
received petitioner's letter dated March 9, 1987 opposing the issuance of that license and reminded the DOT
that, inter alia, the issue of whether or not Guillermo Roxas, et al., had the right to operate petitioner's
restaurant was still pending resolution before the courts and that the subject restaurant was covered by the
MOT-approved contract of lease between petitioner and Valley Resort Corporation.
Petitioner reiterated its grounds for opposition in its letters dated March 27, 1987, April 28, 1987 and May 28,
1987 to public respondent Secretary.
Public respondents make much of the fact that petitioner's letters objecting to the application for a MJBFS
restaurant license were not under oath as required under Section 17 of Chapter IV of the rules and
regulations on restaurants. 8 The Court holds that this defect was not fatal to the cause of petitioner for the
simple reason that the essential facts upon which petitioner's opposition was based were readily apparent
from DOT registration and licensing department records.
Moreover, by virtue of the approval by the MOT of the abovementioned contract of lease and the subsequent
issuance of a resort license in favor of Valley Resort Corporation, the department had acknowledged the right
of Valley Resort Corporation to operate the resort business and to possess, use and enjoy all the resort
facilities, including the subject restaurant, which under department records has always been considered a
facility of the Hidden Valley Springs Resort and a part of the resort business [Rollo, G.R. No. 67195, p. 152;
Rollo, G.R. No. 78618, pp. 93-103.] Under the above circumstances, the party entitled to a DOT license to
operate the subject restaurant is either Valley Resort Corporation, as lessee, or any other party clearly
authorized by petitioner, as restaurant owner, to possess and use the same. cdphil
In fine, the Court holds that it was an arbitrary and capricious exercise of discretion on the part of public
respondents to have issued, and thereafter to have refused to revoke, the restaurant license in favor of
Guillermo Roxas and or MJBFS knowing that: (1) the latter was not the owner of the restaurant for which the
license was sought; (2) the latter's right to possess the same was being disputed by no less than petitioner as
restaurant owner; and, (3) the subject restaurant was already leased to Valley Resort Corporation pursuant to
a contract of lease approved by the department.
Public respondents' action, which contravenes the acceptable standards of justice and reason, is indicative of
grave abuse of discretion amounting to lack or excess of jurisdiction.
G.R. Nos. 78619-78620
Petitioner HEVR prays for the nullification of the RTC Orders of April 29, 1987 and May 8, 1987 denying its
prayer for the issuance of a writ of preliminary injunction against Guillermo Roxas, enjoining the latter from
using and enjoying the mayor's permit to operate the restaurant of the Hidden Valley Springs Resort.
Petitioner alleges grave abuse of discretion amounting to lack of jurisdiction on the part of respondent judge,
on the main premise that his Orders allowed private respondent to operate the subject restaurant in violation
of the restraining order issued by this Court on May 16, 1984 in G.R. No. 67195.
The denial of petitioner's prayer for the issuance of the writ was predicated on the failure of petitioner to
establish a present and clear right to operate the subject restaurant, since the issue as to who among the

parties had a better right to operate the restaurant is still being litigated in the IAC [RTC Order of April 29,
1987; Rollo, G.R. No. 78619-78620, pp. 29-31.] Furthermore, the denial was held not to be in violation of the
Supreme Court's restraining order issued in G.R. No. 67195, since such order neither expressly prohibited
Guillermo Roxas from operating the restaurant nor gave the petitioner a right to operate the restaurant [RTC
Order of May 8, 1987, Id. at pp. 32-34.]
The Court does not find merit in the instant petition.
Whether or not a writ of injunction will issue lies exclusively within the discretion of respondent judge, and
this Court will not interfere with the exercise of respondent judge's discretion unless there is a showing of
grave abuse [North Negros Sugar Co. v. Hidalgo, 63 Phil. 664 (1936); Rodulfa v. Alfonsol, 76 Phil. 225
(1946); Yaptinchay v. Torres, G.R. No. L-26462, June 9, 1969, 28 SCRA 489.]
In the instant case, there is no indication that respondent judge acted with manifest abuse of his discretion in
denying the issuance of the writ that would compel this Court to set aside his orders. Firstly, petitioner herein
failed to establish a clear and present right justifying the issuance of a writ of preliminary injunction
considering that its right to operate the subject restaurant to the exclusion of private respondent is still under
litigation in AC-G.R. CV No. 00764. Secondly, at the inception of the action below, private respondent was a
holder of a DOT license and a mayor's permit to operate the restaurant which were regular on their face. LLpr
The Court's conclusion is not necessarily in conflict with that in G.R. No. 67195. Although both cases involve
the issuance of a writ of preliminary injunction, in G.R. No. 67195 the Court declared that the writ of
preliminary injunction cannot issue to protect the illegal restaurant business of private respondents in view of
the fact that the latter was not then licensed by the MOT to operate the subject restaurant. The Court did not
in any way attempt to resolve the issue of who among the parties had the right to operate the subject
restaurant.
Furthermore, this Court finds that the assailed RTC Orders did not violate its May 16, 1984 restraining order
enjoining the IAC from enforcing and carrying out the October 3, 1984 and April 4, 1984 resolutions and its
writ of preliminary injunction.
Petitioner claims that the implication of this restraining order was to prohibit private respondent from
operating the subject restaurant and to affirm the right of petitioner to operate the restaurant, pending
resolution of G.R. No. 67195.
This contention is unsound.
The October 3, 1984 and April 4, 1984 IAC resolutions and its writ of preliminary injunction responded to
private respondents' prayer to enjoin petitioner from closing the restaurant, disturbing the status quo and
frustrating, impeding, obstructing, disturbing or interfering with private respondent's right to operate the
restaurant and liquor concession. LLphil
Consequently, this Court's restraining order had the effect of staying the writ of preliminary injunction and
permitting petitioner to close the resort over and above the protests of private respondent. It did not ipso
facto create and affirm a right on the part of petitioner to operate the restaurant.
In addition, considering the thrust of the above holding, it is appropriate at this point to declare petitioner's
motion to cite private respondent in contempt filed in G.R. No. 67195, charging as contumacious the act of
private respondent in applying for a restaurant license with the DOT under the business name MJBFS (in
order to operate the subject resort restaurant as MJB Restaurant), without merit.

"Well-settled is the rule that an act to be considered contemptuous must be clearly contrary or prohibited by
the order of the Court. `A person cannot, for disobedience, be punished for contempt unless the act which is
forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable doubt or
uncertainty as to what specific act or thing is forbidden or required'" [Cua v. Lecaros, G.R. No. 71909, May
24, 1988, citing Anglo-Fil Trading Corporation v. Lazaro, G.R. No. L-54958, September 2, 1983, 124 SCRA
494, 525.] Once again it must be noted that this Court's restraining order of May 16, 1984 was addressed to
the IAC and had the effect of staying the writ of preliminary injunction issued by the latter. The only clear
import of the restraining order was to allow petitioner as resort owner to close the resort. It did not prohibit
private respondent from applying for a restaurant license with the DOT.
However, the Court, in upholding the assailed orders of respondent judge herein, does not in any way purport
to declare that private respondent has a clear and established right to operate the subject restaurant, and
that he can, in fact, operate the same to the exclusion of the petitioner. It must be stressed that the issue of
who among the parties has the right to operate the restaurant is still pending resolution before the Court of
Appeals in the Civil Case AC-G.R. CV No. 00764. LibLex
WHEREFORE, the Court rules:
(1)In G.R. No. 67195, the October 3, 1983 Resolution of the IAC is SET ASIDE. The April 4, 1984 Resolution
of the IAC is AFFIRMED insofar as it denies petitioners' motion to dismiss the appeal; but REVERSED insofar
as it denies petitioners' motion for reconsideration of the October 3, 1983 Resolution seeking to set aside the
writ of preliminary injunction issued by the IAC.
In view of the Court's decision in G.R. Nos. 78619-78620, the motion to cite Guillermo Roxas in contempt of
court is DENIED.
The temporary restraining order issued by this Court on May 16, 1984, whereby the IAC was restrained from
enforcing and or carrying out its resolutions dated October 3, 1983 and April 4, 1984, and its writ of
preliminary injunction, shall remain in force and effect pending the resolution of Civil Case AC-G.R. CV No.
00764.
(2)The petition in G.R. No. 78618 is GRANTED. The license to operate the subject restaurant in the Hidden
Valley Springs Resort issued by the DOT in favor of MJB Food and Services (or Guillermo Roxas) is
NULLIFIED.
The temporary restraining order issued by this Court on June 22, 1987, whereby public respondents were
restrained from further granting a similar license to respondent Guillermo Roxas under any business name he
may use to apply therefor, shall remain in force and effect pending the final resolution of Civil Case AC-G.R.
CV No. 00764.

(3)The petition for certiorari and prohibition in G.R. Nos. 78619-78620 is DISMISSED for lack of merit.
The temporary restraining order issued by this Court on June 23, 1987 is hereby SET ASIDE.
SO ORDERED.
Fernan (C.J.), Gutierrez, Jr., and Feliciano, JJ., concur.
Bidin, J., No part, having participated in the assailed resolutions as a member of respondent court.

[G.R. No. L-29171. April 15, 1988.]


INDUSTRIAL POWER SALES, INC., petitioner-appellant, vs. HON. DUMA SINSUAT, etc., et
al., respondents-appellees.

Norberto J. Quisumbing for petitioner-appellant.


Emerito M. Salva Law Offices and Juan B. Diaz for private respondents-appellees.
The Solicitor General for public respondent.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI AND PROHIBITION; ACTS OF ADMINISTRATIVE
OFFICERS OR AGENCIES. The rules in international jurisprudence governing review, thru certiorari or
prohibition, of the acts of administrative officer are the following: (a) that before said actions may be
entertained in the courts of justice, it must be shown that all the administrative remedies prescribed by law or
ordinance have been exhausted; and (b) that the administrative decision may properly be annulled or set
aside only upon a clear showing that the administrative official or tribunal has acted without or in excess of
jurisdiction, or with grave abuse of discretion. (Jao Igco v. Shuster, 10 Phil. 448; and other cases cited.)
2.ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES; EXCEPTIONS. There are
exceptions to the principle known as exhaustion of administrative remedies, these being: (1) where the issue
is purely a legal one, (2) where the controverted act is patently illegal or was done without jurisdiction or in
excess of jurisdiction; (3) where the respondent is a department secretary whose acts as an alter ego of the
President bear the latter's implied or assumed approval, unless actually disapproved; or (4) where there are
circumstances indicating the urgency of judicial intervention.

DECISION

NARVASA, J p:
Certain universally accepted axioms govern judicial review through the extraordinary actions of certiorari or
prohibition of determinations of administrative officers or agencies: first, that before said actions may be
entertained in the courts of justice, it must be shown that all the administrative remedies prescribed by law or
ordinance have been exhausted; and second, that the administrative decision may properly be annulled or set
aside only upon a clear showing that the administrative official or tribunal has acted without or in excess of
jurisdiction, or with grave abuse of discretion. 1 There are however exceptions to the principle known as
exhaustion of administrative remedies, these being: (1) where the issue is purely a legal one, (2) where the
controverted act is patently illegal or was done without jurisdiction or in excess of jurisdiction; (3) where the
respondent is a department secretary whose acts as an alter ego of the President bear the latter's implied or
assumed approval, unless actually disapproved; or (4) where there are circumstances indicating the urgency
of judicial intervention. 2

Application of these established precepts to the undisputed facts, hereunder briefly set out, 3 impels the grant
of the writ of certiorari to annul the administrative decision complained of in the proceedings at bar.
In April of 1965 two (2) Invitations To Bid were advertised by the Bureau of Supply Coordination of the
Department of General Services.
The first, dated April 6, 1965, called for "eight (8) units TRUCKS, Line Construction, left-hand drive, complete
and special factory built, series of 1965, brand new, for the use of the Bureau of Telecommunications
pursuant to Requisition No. 18792 dated March 9, 1965." The Invitation to Bid as well as the requisition itself
contained a proviso limiting the offers to foreign made products on a CIF basis, Port of Manila.
The second, dated April 29, 1965, amended the first notice on the basis of suggestions contained in letters of
Industrial Power Sales, Inc. sent on April 7 and 13, 1965, which were evidently found worth considering.
Those letters proposed that the invitation include not only foreign made products on a CIF-Manila basis but
alsothose of local manufacture on an FOB-Manila basis. Concerning this, Acting Undersecretary of Public
Works & Communications Lachica addressed a 3rd Indorsement to the Director of Supply Coordination, dated
April 22, 1965. 4
" . . . advising that this Office would not have any objection to locally manufactured utility truck
bodies provided they conform to the approved technical specification of this Office as well as to the
manufacturer's standard product specification, since this type of body manufacture has been
acceptable in most government vehicles . . (and in view thereof) it may therefore be necessary
that both CIF and FOB Manila quotations be considered."

The second Invitation to Bid thus announced that both CIF Port of Manila and FOB Manila quotations would
be accepted and made part of bid requirements.
The bidding took place on May 11, 1965, as scheduled. Among the bidders were Industrial Power Sales, Inc.
and Delta Motor Corporation, hereafter respectively referred to simply as IPSI and DELTA.
The bids were deliberated on by the Committee on Awards. In attendance at the deliberations, at the
Chairman's explicit request, were two (2) authorized representatives of the Bureau of Telecommunications,
the requisitioner of the vehicles. 5 The Committee thereafter recommended.
"Award to Industrial Power Sales at P52,500 each, FOB Manila as the same is the lowest complying;
the offer in dollars is higher. The lowest offer at $10,688.77 is non-complying."

On the strength thereof, Letter-Order No. B-207495 was drawn up in IPSI's favor, dated June 10, 1965 and
signed by the acting Director of Supply, Conrado L. Ledda. cdll
DELTA protested the award to IPSI, by telegram sent to the Bureau of Telecommunications on June 11, 1965.
It claimed that the trucks offered by IPSI were not factory built, as stipulated in the specifications contained
in the requisition itself and in the Invitation to Bid. The telegraphic protest of DELTA was considered and
adjudicated adversely to it by the Acting Director of Supply Coordination. In his decision dated June 23, 1965,
the Director ruled that the bidding had been made in strict compliance with the technical specifications and
requirements stated by the Bureau of Telecommunications as modified by the Chairman, Committee on
Specifications Review of Equipment, Plant and Machinery of the Department of Public Works and
Communications; and that after due deliberation on the different bids received, the Committee on Awards,
with the concurrence of the requisitioner's duly authorized representatives, had resolved to award the
contract in IPSI's favor. On the same date, the Acting Director of Supply informed the Acting Director of the
Bureau of Telecommunications of the Letter-Order dated June 10, 1965 in IPSI's favor, and that delivery of
the units was to be made within sixty (60) working days from date of receipt of that order. 6

On July 16, 1965, however, Acting Undersecretary Lachica tried to reverse himself. He wrote to the Director
of Bureau of Supply Coordination recalling his 3rd indorsement of April 22, in which he had expressed his
office's absence of objection to offers of trucks with locally manufactured utility bodies, it having been "found
out that the requisition as approved by the Secretary calls for special factory built, Line Construction Trucks,
and not merely utility trucks." 7 The reply of the Acting Director of Supply dated July 27, 1965 8 however
reiterated and reaffirmed the conclusions in his Decision of June 23, 1965 just mentioned, i.e., that IPSI's bid
conformed strictly to all declared requirements and specifications and had thus been correctly accepted. The
director further made the point 9 that
"The term 'special' as stated in the . . . (Undersecretary's) basic letter, which qualified the
(description) factory built line construction trucks was not originally required in the specifications and
requirements submitted by the Bureau of Telecommunications, which specifications and requirement
were approved by that Department, hence, not included in the bid advertisement. Requirements that

are not contained in the advertisement for bids could not be entertained as they violate Rule 46 (7) of
the Department of General Services Order No. 32, Series of 1963.
"It may not be amiss to inform in this connection that based on the results of public bidding the offer
of Industrial Power Sales for eight (8) Utility Construction trucks at P52,000.00 each net all taxes
included, delivered at site, conforms to the specifications and requirements and the price is the lowest
as against Delta Motor Corporation's $14,000.00 each, CIF Port of Manila,
(which) excludes government taxes, banking charges, local arrastre and wharfage fees."

This letter of the Director of Supply was forwarded by the Undersecretary to the Director of
Telecommunications. The latter wrote back to the Undersecretary on August 18, 1965, 10 expressing his
concurrence with the views set forth in said letter of the Director of Supply. He also stressed his Bureau's
"dire need" for the vehicles; "further postponement" of their acquisition "will contribute greatly to the delay in
the early completion of our projects to be derived from expected income." Obviously satisfied, the
Undersecretary transmitted the Telecommunications Director's letter to the Acting Director of Supply (by 4th
Indorsement dated August 20, 1965), making no reference to his recall of his 3rd Indorsement of April 22,
1965. 11
DELTA's next move was to file with the Office of the Secretary of General Services a letter of protest against
the proposed award to IPSI, accompanied by a protest bond in the amount of P44,000.00 executed by the
Meridian Assurance Corporation. DELTA's position was that IPSI's offer of locally assembled trucks was not in
accordance with the bid specification for brand new, complete and factory-built trucks. 12 Acting thereon,
Secretary Duma Sinsuat, in his 1st Indorsement dated September 3, 1965 addressed to the Director of the
Bureau of Supply, opined that

" . . . only Delta Motor Corporation has complied with the technical specifications originally called for in
Requisition No. 198792 dated March 9, 1965, duly approved by Secretary Abad. The award of the
eight (8) line construction trucks called for . . . should, therefore, be made to Delta . . . at a price
equal to that offered by the Industrial Power Sales, Inc., as manifested by the protestant in its letterprotest and as provided for in Rule 45 of Department Order No. 32, Series of 1963."

In Secretary Sinsuat's view, when Acting Director Lachica agreed to announce and advertise a supplemental
or amended Invitation to Bid, which would admit offers of trucks with locally manufactured utility bodies," the
latter had violated a department rule 13 that
"Any subsequent alteration or modification made separately or on the requisition itself by any
subordinate official should bear the approval of the Department Head concerned, pursuant to Section
2048 of the Revised Administrative Code, or of the Undersecretary if so delegated."

Sinsuat asserted that as there was no showing that Undersecretary Lachica had been authorized to approve
any modifications of the requisition, the modification sanctioned by him in his aforesaid 3rd Indorsement of
April 22, 1965 was null and void; besides, Lachica had afterwards withdrawn his approval thereof in his letter
of July 16, 1965. llcd
Replying to Secretary Sinsuat, the Acting Director of Supply, by 2nd Indorsement dated September 7, 1965,
drew attention to the fact that DELTA's quoted price of U.S. $13,425.00 per unit, CIF-Manila computed on
the basis of FOB Manila, to place it on a parity with IPSI's bid and would then like IPSI's have to include
banking charges, duties and taxes, etc. would in Philippine Currency amount to P65,467.88 and, therefore,
would not be equal to IPSI's tendered price of P52,500.00. Secretary Sinsuat however wrote back the
following day, September 8, 1965 (3rd Indorsement), and told the Acting Director that the Department had
already approved DELTA's price of $13,425.00, CIF-Manila, per unit of Toyota Line Construction Trucks and
categorically directed him to award to DELTA the purchase order for the eight Line Construction Trucks with
the least possible delay. In view thereof, Letter-Order No. B-210230 was forthwith made by Acting Supply
Director Ledda, and approved and signed by Secretary of General Services Duma Sinsuat. Even at this time,
one other dissenting voice still made itself heard. The Senior Buyer of the Committee on Awards wrote to the
Committee Chairman on September 9, 1965, confessing himself "at a loss in framing out the legend of the
order (in DELTA's favor) and also the minutes of the Committee's deliberation," and stating that he would
"refrain in the award in favor of the Delta Motor Corporation." 14
IPSI lost no time in appealing from Secretary Sinsuat's decision to award the purchase contract to DELTA. It
appealed on September 9, 1965 to the Office of the President 15 as well as to the Office of the Auditor
General. 16 The latter acted just as promptly. By 1st Indorsement dated September 10, 1965 of the Deputy
Auditor General, the Secretary of General Services was required to comment on IPSI's letter-appeal and to
forward the pertinent papers to the General Auditing Office for final consideration. 17 The appeal
notwithstanding, the Letter-Order in favor of DELTA was released to it on September 17, 1965. 18
IPSI then filed with the Quezon City Court of First Instance on September 21, 1965, a petition
for certiorari, prohibition and mandamus, with application for preliminary prohibitory and mandatory
injunction, which was docketed as Case No. Q-9477. 19 The injunction prayed for issued upon a bond in the
amount of P100,000.00 given by Capitol Insurance & Surety Co., Inc. The verdict went against IPSI, however.
After trial, the Court rendered judgment dismissing IPSI's petition and sentencing it and its surety, on the
counterclaim, to pay damages to DELTA. The dispositive portion of that judgment reads:
"WHEREFORE, judgment is hereby rendered in favor of respondent Delta Motors Corporation and its
co-respondents and against the petitioner Industrial Power Sales, Inc., dismissing the latter's petition
for certiorari, prohibition and mandamus, dated September 20, 1965, and dissolving the preliminary
injunction issued in this case, and ordering petitioner Industrial Power Sales;
"1.To pay P400,000.00, jointly and severally with the Capital Insurance and Surety Co., Inc., the
latter, to the extent of P100,000.00 only, as damages to respondent Delta Motors Corporation by
reason of the writ of preliminary injunction issued in this case;
"2.To pay attorney's fees in the sum of P20,000.00, and
"3.To pay the costs of this suit."

From this judgment IPSI has appealed to this Court, contending that the Trial Court erred
1)in not holding that regardless of the validity of the modification approved by Undersecretary Lachica,
local manufacturers cannot be lawfully excluded from the bidding even under the original invitation to
bid because mandatorily required by law;

2)in holding that IPSI is not a local manufacturer or domestic entity entitled to 15% preference over
DELTA;
3)in not holding that Secretary Sinsuat exceeded his jurisdiction in giving due course to DELTA's
appeal although filed beyond the reglementary period therefor;
4)in not holding that even if DELTA's appeal were timely perfected, Secretary Sinsuat gravely abused
his discretion or exceeded his jurisdiction in not affording IPSI a right to be heard on that appeal;
5)in not holding that Secretary Sinsuat had gravely abused his discretion in reversing the decision to
award the contract to IPSI and ruling that Undersecretary's approval of the modification of the bidding
terms was unauthorized;
6)in not holding that Secretary Sinsuat gravely abused his discretion in permitting DELTA to reduce its
price to equal that of IPSI, the latter's bid not being defective, and in insisting on approval of DELTA's
reduced price although higher than IPSI's;
7)in not holding that the award in DELTA's favor violated the Retail Trade Nationalization Law;
8)in denying IPSI's claim for damages; and
9)in awarding excessive damages to DELTA, the evidence to justify the same being insufficient and
said award being, in any case, against the law.

It appears that respondent Secretary of General Services disregarded certain material facts, or considered
them as of no consequence, these being:
1)the amended notice to bidders or Invitation to Bid was duly advertised;
2)it was clear from that advertised, modified Invitation to Bid that offers not only of foreign made or factorybuilt trucks but also of trucks with bodies of local manufacture, or offers of trucks either CIF-Manila, or FOBManila, would be acceptable;
3)the modification had been favorably considered by the Bureau of Supply Coordination and approved by the
Undersecretary of Public Works & Communications, who had observed on that occasion that "this type of
body manufacture (i.e., "locally manufactured utility truck bodies") has been acceptable in most government
vehicles;"
4)no protest whatever had been made by DELTA to the terms set forth in that second Invitation to Bid, prior
to the scheduled bidding on May 11, 1965;
5)all bids submitted were studied and weighed by the Committee on Awards, with the participation of two (2)
representatives of the requisitioning agency; and thereafter, the Committee, in a reasoned report,
unanimously declared IPSI's bid as the winning bid and recommended award to it of the contract;
6)the recommendation of the Awards Committee was approved by the Director of Supply;
7)that approval was reaffirmed by the Director of Supply in his decision on the protest of DELTA, which it
filed after learning that it had lost in the bidding asserting that the bidding had been done in strict
compliance with all relevant requisites, and the award given not only after due deliberations, but also with the
concurrence of the representatives of the requisitioning bureau;

8)although the Undersecretary of Public Works & Communications had subsequently tried to recall his
approval of the modification (for acceptance of bids, FOB-Manila, or of trucks with locally manufactured
bodies), supra, he had abandoned that attempt after receiving communications from
a)the Director of Supply, reiterating his stand on the propriety of the bidding and the award
to IPSI; and
b)the Director of the requisitioning agency, the Bureau of Telecommunications, concurring
with the position of the Director of Supply, and requesting quick action on the award
in view of the Bureau's "dire need" therefor;
9)the Senior Buyer of the Committee on Awards refused to go along with the award to DELTA;
10)in fine, all the Government agencies concerned were agreed on the correctness of the award to IPSI: the
requisitioner, the Bureau of Telecommunications, the Department of Public Works & Communications to
which said Bureau of Telecommunications pertains, the Bureau of Supply, which had direct supervision and
control of the bidding, and of course, the Committee on Awards.
These material circumstances were, to repeat, considered of no moment by respondent Secretary of General
Services. He ignored, too, the additional circumstance ofestoppel as regards DELTA.. For DELTA, with full
knowledge of the amendment of the notice to bidders (making acceptable bids for trucks with locally
manufactured bodies, or FOB-Manila) made no protest at all but, on the contrary, participated in the bidding
under said advertised terms, objecting thereto only after its bid had been rejected by the Committee on
Awards and the other Government offices concerned. LibLex
Respondent Secretary's justification for doing so is that (1) the modification had not been validly approved by
the Undersecretary of Public Works & Communications, because there was "no showing that the latter . . .
(had been) authorized by (the) Secretary . . . to make the modifications;" and (2) said Undersecretary had
subsequently withdrawn "his approval to the modification."

It should at once be apparent that the second ground of justification is not borne out by the facts. As already
above stated, the Undersecretary did not persist in but implicitly abandoned his attempt to withdraw his
approval of the modification. As to the first ground, it being a legal presumption that official duty has been
regularly performed, 20 it must be assumed, no evidence having been adduced to destroy the presumption,
that Undersecretary Lachica indeed possessed the requisite authority to approve the modifications in
question. In any event, his possession of that authority may be demonstrated by Department Order No. 82
dated November 30, 1964 by which the Secretary of Public Works & Communications delineated the powers
of his two undersecretaries and the chiefs of offices in relation to his own.21
Apart from material facts, also ignored were applicable provisions of law conferring preferential status to
locally manufactured equipment and supplies, etc., and to domestic, as distinguished from foreign,
entities. Republic Act No. 4164, the Appropriations Act relevant to the time in question, provided 22 that all
appropriations for the purchase of equipment, supplies and materials authorized thereunder shall be available
only for locally manufactured equipment, parts, accessories, supplies and materials, unless none be available
in the market, or the price of the locally manufactured article exceed those determined by the Flag Law by
10%. The applicability of the provision in IPSI's favor seems indisputable. The Flag Law, 23 on the other hand,
provides that whenever several bidders participate in a bidding for supplying articles, materials, and
equipment for any office of the government for public use . . . or public works, the award shall be made to
the domestic entity making the lowest bid, provided it is not more than 15% in excess of the lowest bid made
by a bidder other than a domestic entity. While DELTA was organized under Philippine laws, it was acting in

this case merely as agent of a foreign company; it was the latter which to all intents and purposes was the
bidder; hence, as between it and IPSI, IPSI should be considered the preferred bidder.
The plea made in behalf of respondent Secretary that IPSI had gone to Court without first exhausting all
administrative remedies cannot be sustained in view of the doctrines set out in the opening paragraph of this
opinion. LLphil
There is merit in IPSI's appeal, therefore. The respondent Secretary had indeed acted with grave abuse of
discretion amounting to lack or excess of jurisdiction. His acts must be nullified, and the Trial Court's
judgment upholding those acts must be set aside.
WHEREFORE, the decision of the Trial Court subject of the appeal is REVERSED AND SET ASIDE and another
entered NULLIFYING the orders of respondent Secretary of General Services embodied in his 1st Indorsement
dated September 8, 1965 and those in affirmance and implementation thereof, and SENTENCING defendantappellee Delta Motor Corporation to pay the sum of P20,000.00 to plaintiff-appellant Industrial Power Sales,
Inc. as and for attorney's fees, and the costs of the suit.

Teehankee, C.J., Cruz, Gancayco and Grio-Aquino, JJ., concur.

[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 & Carrascoso for petitioners-appellees.


Solicitor General for respondent-appellant.
SYLLABUS
1.CONSTITUTIONAL LAW; RIGHT TO PROCESS; APPLIES TO ADMINISTRATIVE PROCEEDINGS. Even in
administrative proceedings, due process should be observed because that is a right enshrined in our
Constitution.
2.COURTS; JURISDICTION; COURT OF FIRST INSTANCE, NOT COURT OF TAX APPEALS, HAS JURISDICTION
OVER QUESTION OF DUE PROCESS IN IMPOSITION OF FINE UNDER TARIFF AND CUSTOMS CODE.
Where the question 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, it is heldthat the Court of First Instance acted correctly in assuming
jurisdiction over the case.
3.TARIFF AND CUSTOMS CODE; UNMANIFESTED CARGO UNDER SECTION 2521, TARIFF AND CUSTOMS
CODE; NECESSITY OF OPPORTUNITY FOR HEARING BEFORE IMPOSITION OF FINE. Where the customs
authorities found that the vessel carried on board an unmanifested cargo consisting of one television set, and
respondent Collector of Customs sent, a written notice to the operator of the vessel, and the latter answered
that the television set was not cargo and so was not required to be manifested and requesting investigation
and hearing but respondent finding this explanation not satisfactory imposed on the vessel a fine of
P5,000.00, ordering said fine to 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, it is held that the
respondent Collector committed a grave abuse of discretion because the petitioner was not given an
opportunity to prove that the television set involved is not a cargo that needs to be manifested.
4.ADMINISTRATIVE LAW; EXHAUSTION OF ADMINISTRATIVE REMEDIES; EXCEPTION, DISREGARD OF DUE
PROCESS. Exhaustion of administrative remedies is not required where the appeal to the administrative
superior is not a plain, speedy or adequate remedy in the ordinary course of law, as where it is undisputed
that respondent officer has acted in utter disregard of the principle of due process.

DECISION

BAUTISTA ANGELO, J p:
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 and 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 satisfactorily 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 P5,000.00.
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 and 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 constitutes 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 the latter referred the notice to A. V. Rocha, the real operator of the vessel, for such step as he
may deem necessary to take, 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
P5,000.00. 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 epitomizes 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 justifiable cases 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. Not 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 reasons for the decisions rendered. The performance of this
duty is inseparable from the authority conferred upon it." (Ang Tibay, et al. vs. The Court of Industrial
Relations, et al., 40 O.G., No. 11, 7th 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.

Bengzon, C . J ., Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal,
JJ ., concur.