G.R. No.

179844 March 23, 2011

EMERSON B. BAGONGAHASA, GIRLIE B. BAGONGAHASA, DEPARTMENT OF AGRARIAN REFORM - PROVINCIAL AGRARIAN

REFORM OFFICER OF LAGUNA, and REGISTER OF DEEDS OF SINOLOAN, LAGUNA, Petitioners,
vs.
JOHANNA L. ROMUALDEZ, Respondent.

SPOUSES CESAR M. CAGUIN and GERTRUDES CAGUIN, SPOUSES TEODORO MADRIDEJOS and ANICETA IBANEZ
MADRIDEJOS, DEPARTMENT OF AGRARIAN REFORM - PROVINCIAL AGRARIAN REFORM OFFICER OF LAGUNA, and
REGISTER OF DEEDS OF SINOLOAN, LAGUNA, Petitioners,
vs.
DIETMAR L. ROMUALDEZ, Respondent.

SOTELA D. ADEA, SPOUSES ESPERANZA and LEONCIO MARIO, SPOUSES DELIA and DANILO CACHOLA, SPOUSES MA.
ALICIA and REYMUNDO CAINTO, EDUARDO B. DALAY, SPOUSES JOSE LEVITICO and EPIFANIA DALAY, SPOUSES JIFFY
and FAUSTINO DALAY, SPOUSES MA. RUTH and MELCHOR PACURIB, MA. JERIMA B. DALAY, SPOUSES CLEOFAS and
TERESITA VITOR, SPOUSES CELESTINA and ALEJANDRO COSICO, SPOUSES AUREA and ANTONIO HERNANDEZ, SPOUSES
JULIA and RAFAEL DELA CRUZ, SPOUSES RAQUEL and SEBASTIAN SAN JUAN, SPOUSES MARGARITA and PABLITO
LLANES, SR., FIDEL M. DALAY, SPOUSES JAIME and MELVITA DALAY, SPOUSES EMILY and FLORENCIO PANGAN,
SPOUSES FELIPE and ROSALIE DALAY, SPOUSES MARCELO and CATALINA B. DALAY, and SPOUSES RENATO and
ELIZABETH DALAY, DEPARTMENT OF AGRARIAN REFORM - PROVINCIAL AGRARIAN REFORM OFFICER OF LAGUNA, and
REGISTER OF DEEDS OF SINOLOAN, LAGUNA, Petitioners,
vs.
SPOUSES DANIEL and ANA ROMUALDEZ, and JACQUELINE L. ROMUALDEZ, Respondents.

DECISION

NACHURA, J.:

Before this Court is a Consolidated Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure,
seeking the reversal of the Court of Appeals (CA) Decision 2 dated May 31, 2007 and its Amended Decision (Partial) 3 dated
September 25, 2007.

The facts, as summarized by the Department of Agrarian Reform Adjudication Board (DARAB) and as quoted by the CA, are
as follows:

It appears that Complainants Johanna L. Romualdez; Dietmar L. Romualdez; Sps. Daniel and [Ana] Romualdez and
Jacquelin[e] C. (sic) Romualdez are absolute and lawful owners of separate parcels of lands, each parcel with an area of
36,670 square meters, 47,187.50 square meters and 55,453 square meters, respectively, all situated [in] Sitio Papatahan,
Paete, Laguna. Johanna and Dietmar purchased their properties from Roberto Manalo on January 6, 1994; while Sps.
Daniel and [Ana], as well as Jacqueline bought their landholdings from Leonisa A. Zarraga on August 5, 1998. They allege
that the said properties are planted [with] different fruit-bearing trees. They and their predecessors-in-interest have been
paying realty taxes due on the properties up to the present. However, sometime in 1994 and 1995, the then Secretary of
Agrarian Reform declared the property to be part of the public domain, awarded the same to the Defendants and
forthwith issued Certificates of Land Ownership Award (CLOAs) to the respective defendants as follows:

CLOA NO. BENEFICIARIES Date of Registration

In Registry of Deeds of Laguna

1. 00155653 Emerson Bagongahasa, April 10, 1995 et al.

2. 00155652 Cesar Caguin, et al. April 10, 1995

3. 00119810 Sotela Adea, et al. June 30, 1994

It was only in 1998 when the complainants learned of the issuance of said CLOAs by the Register of Deeds of Siniloan,
Laguna.
The Complainants pointed out that while the Defendants respective CLOAs describe a property purportedly located in
Sitio Lamao, San Antonio, Municipality of Kalayaan, Province of Laguna, each of the Complainants tax declaration
describes a property located [in] Sitio Papatahan, Municipality of Paete, Province of Laguna. Inspite of the discrepancy in
the municipality and sitio of the respective documents, the lots described in the CLOAs and in the Tax Declarations are
almost identical, except that the property described in Defendants title covers a larger area, but the title and the tax
declaration refer to the same lot; that they and their predecessors-in-interest have been in possession of the properties
for more than thirty years; that the Defendants have never been in possession of the same; that they have not paid any
real estate taxes and have not caused the issuance of a tax declaration over the property in their names; that there is no
basis for the award of certificates of land ownership to the Defendants by the Secretary of Agrarian Reform, for the lands
have already become private properties by virtue of the open, continuous, exclusive and notorious possession of the
property by the Complainants and/or their predecessors-in-interest which possession was in the concept of an owner. As
absolute and lawful owners thereof, the complainants also maintain that they have not been notified of any intended
coverage thereof by the DAR; that to the best of their knowledge, there is no valuation being conducted by the Land Bank
of the Philippines and the DAR involving the property; that there was no compensation paid and that the DAR-CENRO
Certification shows that the landholdings have 24-32% slopes and therefore exempt from CARP coverage.

The complainants[,] thus, pray for the reconveyance of their respective landholdings; cancellation of the CLOAs and
payment of litigation fee.

On the other hand, the Defendants specifically denied the allegations of the Plaintiff, maintaining in their Affirmative
Defenses that they are farmer beneficiaries of the subject properties, covered by Proclamation No. 2280 (sic) which
reclassifies certain portion of the public domain as agricultural land and declares the same alienable and disposable for
agricultural and resettlement purposes of the Kilusang Kabuhayan at Kaunlaran Land Resource Management Program of the
KKK, Ministry of Human Settlements and the area covered is Barangay Papatahan, Paete; that the Plaintiffs act of
questioning the issuance of title is an exercise in futility because Defendants were already in possession of the properties
prior to said Proclamation; that upon the issuance of the CLOAs, they became the owners of the landholdings and that the
complainants claim for damages has no basis.

On the part of public Respondent PARO, he invoked the doctrine of regularity in the performance of their official functions
and their adherence in pursuing the implementation of CARP. He claims that DAR received from the National Livelihood
Support Fund (NLSF) portions of the public domain covered by Presidential Proclamation No. 2282, Series of 1983 and has
been mandated to implement the agrarian reform laws by distributing alienable and disposable portions of the public
domain, to which the subject lands fall; that actual investigation, proper screening of applicants-beneficiaries, survey and
proper evaluation were conducted, warranting the generation of the CLOAs and that the registration of the CLOAs with
the Registry of Deed brought the same under the coverage of the Torrens System of land registration and have already
become indefeasible or uncontestable.4

On December 28, 2000, the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna rendered his decision,5finding that
the Department of Agrarian Reform (DAR) Secretary committed a mistake in placing the subject properties under the
Comprehensive Agrarian Reform Program (CARP). Moreover, the PARAD found that no notice of coverage was sent to
respondents and that they were also not paid any just compensation. The dispositive portion of the said decision reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Ordering the cancellation of Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and
00119810 issued to herein private respondents; [and]

2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of the Certificate of Land
Ownership Award (CLOA) to herein named defendants.

SO ORDERED.6

Aggrieved, petitioners appealed to the DARAB.

In its decision7 dated May 3, 2005, the DARAB held that the complaints filed were virtual protests against the CARP
coverage, to which it has no jurisdiction. The DARAB further held that, while it has jurisdiction to cancel the Certificate of
Land Ownership Awards (CLOAs), which had been registered with the Register of Deeds (RD) of Laguna, it cannot pass
upon matters exclusively vested in the DAR Secretary. Moreover, the DARAB ruled that the assailed CLOAs having been
registered in 1994 and 1995 became incontestable and indefeasible. Thus:
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and/or SET ASIDE. A new judgment is hereby
entered:

1. Sustaining the validity of the subject Certificates of Land Ownership Award (CLOAs) Nos. 00155653, 00155652
and 00119810 issued to the herein Defendants-Appellants: and

2. Dismissing the instant complaints for lack of merit.

No costs. SO ORDERED.8

Respondents filed a Motion for Reconsideration, which the DARAB, however, denied for lack of merit. 9 Thus, respondents
sought recourse from the CA.

On May 31, 2007, the CA, invoking Section 1 (1.6), Rule II of the 2003 DARAB Rules of Procedure, 10 held that the DARAB has
the exclusive original jurisdiction to determine and adjudicate cases involving correction, partition, and cancellation of
Emancipation Patents and CLOAs which are registered with the Land Registration Authority (LRA), as in this case. The CA
ratiocinated that other than the registration of the assailed CLOAs, the RD already issued Original Certificate of Title No.
OCL-474 in favor of respondents. Moreover, the CA relied on the PARADs finding that respondents were deprived of due
process when no notice of coverage was ever furnished and no just compensation was paid to them. The CA disposed of
the case in this wise:

WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision dated May 3, 2005 and the Resolution
dated October 10, 2006 are hereby REVERSED and SET ASIDE. The Joint Decision of the Provincial Adjudicator dated
December 28, 2000 is hereby REINSTATED with MODIFICATION as follows:

"WHEREFORE, premises considered, judgment is hereby rendered:

1. Ordering the cancellation of the Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and
00119810 issued to herein private respondents [petitioners in the instant case];

2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-474 to herein
named private respondents [petitioners in the instant case].

SO ORDERED." SO ORDERED.11

Both parties filed their respective Motions for Reconsideration. The CA held, to wit:

Finding petitioners arguments meritorious, We PARTIALLY AMEND our previous decision in this case by ordering the
Register of Deeds of Siniloan, Laguna to cancel OCT No. OCL-475 and OCT No. OCL-395 and to issue new certificates of
title deducting the area of 47,187.50 square meters claimed by petitioner Dietmar L. Romualdez and 55,453.50 square
meters claimed by Spouses Daniel and Ana Romualdez and Jacqueline [L.] Romualdez, respectively.

WHEREFORE, premises considered, private respondents Motion for Reconsideration is hereby DENIED. Petitioners Motion
for Partial Reconsideration is hereby GRANTED. The Decision dated May 31, 2007 is hereby PARTIALLY AMENDED to read as
follows:

"WHEREFORE, premises considered, judgment is hereby rendered:

1. Ordering the cancellation of the Certificate of Land Ownership Award (CLOA) NOS. 00155653, 00155652 and
00119810 issued to herein private respondents.

2. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-474 to herein
named private respondents.

3. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-475 and to issue a
new one deducting the area of 47,187.50 square meters claimed by petitioner Dietmar L. Romualdez.
 4. Ordering the Register of Deeds of Siniloan, Laguna to cause the cancellation of OCT No. OCL-395 and to issue a
new one deducting the area of 55,453.50 square meters claimed by petitioners Spouses Daniel and Ana Romualdez
and Jacqueline L. Romualdez.

SO ORDERED." SO ORDERED.12

Hence, this Petition, assigning the following as errors:

I. The Honorable Court of Appeals has no basis in REVERSING the DECISION of the Department of Agrarian Reform
Adjudication Board in upholding the validity of Certificate of Land Ownership Award Nos. 00155653, 00155652 and
00119810 issued to herein petitioners; [and]

II. The Honorable Court of Appeals erred in undermining [the] ISSUE OF JURISDICTION as this is cognizable by the
Regional Director and not by the PARAD and/or the DARAB.13

Petitioners Cesar Caguin, Cleofas Vitor, Teresita Vitor, Jose Levitico Dalay, Marcelo Dalay, Esperanza Mario, Celestina
Cosico, Ma. Ruth Pacurib, and Raquel San Juan, through the Legal Assistance Division of the DAR, claim that findings of
fact of the DARAB should have been respected by the CA; that the CLOAs covering the subject properties were registered
in 1994 and 1995 but respondents only assailed the validity of the same in 2000; and that the said CLOAs are already
incontestable and indefeasible. Moreover, petitioners highlight the fact that the parties in this case are not partners to
any tenancy venture. Invoking this Courts ruling in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz, 14 petitioners submit
that the DAR Secretary has jurisdiction in this case, not the DARAB.15

On the other hand, respondents prefatorily manifest that out of the 44 respondents before the CA, only 9 signed the
petition filed before this Court, and that petitioners counsel failed to indicate the full names of petitioners in the
petition. Respondents argue that the errors assigned by petitioners are matters not pertaining to questions of law but
rather to the CAs factual findings. Respondents rely on the CAs findings that their constitutional right to due process was
violated because no notice of coverage was sent to them and that they were deprived of payment of just compensation.
Moreover, respondents claim that they are not barred by prescription and petitioners cannot raise this issue for the first
time on appeal; that they have been paying the real property taxes and are actually in possession of the subject
properties; and that documents, which petitioners failed to refute, show that the said properties are private lands owned
by respondents and their predecessors-in-interest. Respondents stress that the action initially filed before the PARAD was
not a protest considered as an Agrarian Law Implementation (ALI) case, but for quieting and cancellation of title,
reconveyance, and damages; that the 2003 DARAB Rules of Procedure clearly states that the DARAB has jurisdiction to
cancel CLOAs registered with the LRA; and that the assailed CLOAs were already registered with the RD of Laguna. 16

The petition is impressed with merit.

Verily, our ruling in Heirs of Julian dela Cruz v. Heirs of Alberto Cruz 17 is instructive:

The Court agrees with the petitioners contention that, under Section 2(f), Rule II of the DARAB Rules of Procedure, the
DARAB has jurisdiction over cases involving the issuance, correction and cancellation of CLOAs which were registered with
the LRA. However, for the DARAB to have jurisdiction in such cases, they must relate to an agrarian dispute between
landowner and tenants to whom CLOAs have been issued by the DAR Secretary. The cases involving the issuance,
correction and cancellation of the CLOAs by the DAR in the administrative implementation of agrarian reform laws, rules
and regulations to parties who are not agricultural tenants or lessees are within the jurisdiction of the DAR and not of the
DARAB.18

It is established and uncontroverted that the parties herein do not have any tenancy relationship. In one case, this Court
held that even if the parties therein did not have tenancy relations, the DARAB still has jurisdiction. However, the said
case must be viewed with particularity because, based on the material allegations of the complaint therein, the incident
involved the implementation of the CARP, as it was founded on the question of who was the actual tenant and eventual
beneficiary of the subject land. Hence, this Court held therein that jurisdiction should remain with the DARAB and not
with the regular courts.19

However, this case is different. Respondents complaint was bereft of any allegation of tenancy and/or any matter that
would place it within the ambit of DARABs jurisdiction.

While it is true that the PARAD and the DARAB lack jurisdiction in this case due to the absence of any tenancy relations
between the parties, lingering essential issues are yet to be resolved as to the alleged lack of notice of coverage to
respondents as landowners and their deprivation of just compensation. Let it be stressed that while these issues were
discussed by the PARAD in his decision, the latter was precisely bereft of any jurisdiction to rule particularly in the
absence of any notice of coverage for being an ALI case. 20 Let it also be stressed that these issues were not met head-on
by petitioners. At this juncture, the issues should not be left hanging at the expense and to the prejudice of respondents.

However, this Court refuses to rule on the validity of the CARP coverage of the subject properties and the issuance of the
assailed CLOAs. The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction was initially lodged with an administrative body of special competence. 21 The doctrine of primary jurisdiction
does not allow a court to arrogate unto itself authority to resolve a controversy, the jurisdiction over which is initially
lodged with an administrative body of special competence.22 The Office of the DAR Secretary is in a better position to
resolve the particular issue of non-issuance of a notice of coverage an ALI case being primarily the agency possessing
the necessary expertise on the matter.23 The power to determine such issue lies with the DAR, not with this Court.

A final note.

It must be borne in mind that this Court is not merely a Court of law but of equity as well.1avvphil Justice dictates that
the DAR Secretary must determine with deliberate dispatch whether indeed no notice of coverage was furnished to
respondents and payment of just compensation was unduly withheld from them despite the fact that the assailed CLOAs
were already registered, on the premise that respondents were unaware of the CARP coverage of their properties; hence,
their right to protest the same under the law was defeated. Respondents right to due process must be equally respected.
Apropos is our ruling in Heir of Nicolas Jugalbot v. Court of Appeals:24

[I]t may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice
are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding
their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license
to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being
committed against them.

As the court of last resort, our bounden duty to protect the less privileged should not be carried out to such an extent as
to deny justice to landowners whenever truth and justice happen to be on their side. For in the eyes of the Constitution
and the statutes, EQUAL JUSTICE UNDER THE LAW remains the bedrock principle by which our Republic abides.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated May 31, 2007 and Amended Decision (Partial)
dated September 25, 2007 of the Court of Appeals in CA-G.R. SP No. 97768 are hereby REVERSED and SET ASIDE. The case
is DISMISSED for lack of jurisdiction of the Department of Agrarian Reform Adjudication Board. This decision is without
prejudice to the rights of respondents Johanna L. Romualdez, Dietmar L. Romualdez, Jacqueline L. Romualdez, and
Spouses Daniel and Ana Romualdez to seek recourse from the Office of the Department of Agrarian Reform Secretary. No
costs.

SO ORDERED.
G.R. No. 174674 October 20, 2010

NESTLE PHILIPPINES, INC. and NESTLE WATERS PHILIPPINES, INC. (formerly HIDDEN SPRINGS & PERRIER,
INC.), Petitioners,
vs.
UNIWIDE SALES, INC., UNIWIDE HOLDINGS, INC., NAIC RESOURCES AND DEVELOPMENT CORPORATION, UNIWIDE SALES
REALTY AND RESOURCES CLUB, INC., FIRST PARAGON CORPORATION, and UNIWIDE SALES WAREHOUSE CLUB,
INC., Respondents.

RESOLUTION

CARPIO, J.:

The Case

This is a petition for review1 of the 10 January 2006 Decision2 and the 13 September 2006 Resolution3 of the Court of
Appeals in CA-G.R. SP No. 82184. The 10 January 2006 Decision denied for lack of merit the petition for review filed by
petitioners. The 13 September 2006 Resolution denied petitioners' motion for reconsideration and referred to the
Securities and Exchange Commission petitioners' supplemental motion for reconsideration.

The Facts

The petitioners in this case are Nestle Philippines, Inc. and Nestle Waters Philippines, Inc., formerly Hidden Springs &
Perrier Inc. The respondents are Uniwide Sales, Inc., Uniwide Holdings, Inc., Naic Resources and Development
Corporation, Uniwide Sales Realty and Resources Club, Inc., First Paragon Corporation, and Uniwide Sales Warehouse Club,
Inc.

On 25 June 1999, respondents filed in the Securities and Exchange Commission (SEC) a petition for declaration of
suspension of payment, formation and appointment of rehabilitation receiver, and approval of rehabilitation plan. The
petition was docketed as SEC Case No. 06-99-6340.4 The SEC approved the petition on 29 June 1999.

On 18 October 1999, the newly appointed Interim Receivership Committee filed a rehabilitation plan in the SEC. The plan
was anchored on return to core business of retailing; debt reduction via cash settlement and dacion en pago; loan
restructuring; waiver of penalties and charges; freezing of interest payments; and restructuring of credit of suppliers,
contractors, and private lenders.

On 14 February 2000, the Interim Receivership Committee filed in the SEC an Amended Rehabilitation Plan (ARP). The ARP
took into account the planned entry of Casino Guichard Perrachon, envisioned to infuse P3.57 billion in fresh capital. On
11 April 2001, the SEC approved the ARP.

On 11 October 2001, the Interim Receivership Committee filed in the SEC a Second Amendment to the Rehabilitation Plan
(SARP) in view of Casino Guichard Perrachon's withdrawal. In its Order dated 23 December 2002, the SEC approved the
SARP.

Petitioners, as unsecured creditors of respondents, appealed to the SEC praying that the 23 December 2002 Order
approving the SARP be set aside and a new one be issued directing the Interim Receivership Committee, in consultation
with all the unsecured creditors, to improve the terms and conditions of the SARP.

The Ruling of the SEC

In its 13 January 2004 Order, the SEC denied petitioners' appeal for lack of merit. Petitioners then filed in the Court of
Appeals a petition for review of the 13 January 2004 Order of the SEC.

The Ruling of the Court of Appeals

In its assailed 10 January 2006 Decision, the Court of Appeals denied for lack of merit the petition for review filed by
petitioners, thus:

In reviewing administrative decisions, the findings of fact made therein must be respected as long as they are supported
by substantial evidence, even if not overwhelming or preponderant; that it is not for the reviewing court to weigh the
conflicting evidence, determine the credibility of the witnesses, or otherwise substitute its own judgment for that of the
administrative agency on the sufficiency of the evidence; that the administrative decision in matters within the executive
jurisdiction can only be set aside on proof of grave abuse of discretion, fraud, or error of law.

WHEREFORE, the petition for review is DENIED for lack of merit.

SO ORDERED.5

Petitioners moved for reconsideration. They also filed a supplemental motion for reconsideration alleging that they
received a letter on 25 January 2006, from the president of the Uniwide Sales Group of Companies, informing them of the
decision to transfer, by way of full concession, the operation of respondents' supermarkets to Suy Sing Commercial
Corporation starting 1 March 2006.

In its questioned 13 September 2006 Resolution, the Court of Appeals denied for lack of merit petitioners' motion for
reconsideration and referred to the SEC petitioners' supplemental motion for reconsideration.

Dissatisfied, petitioners filed in this Court on 3 November 2006 the present petition for review.

The Issue

Before us, petitioners raise the issue of whether the SARP should be revoked and the rehabilitation proceedings
terminated.1avvphi1

The Court's Ruling

The petition lacks merit.

Petitioners contend that the transfer of respondents' supermarket operations to Suy Sing Commercial Corporation has
made the SARP incapable of implementation. Petitioners point out that since the SARP may no longer be implemented,
the rehabilitation case should be terminated pursuant to Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate
Recovery. Petitioners claim that the terms and conditions of the SARP are unreasonable, biased in favor of respondents,
prejudicial to the interests of petitioners, and incapable of a determination of feasibility.

Respondents maintain that the SARP is feasible and that the SEC Hearing Panel did not violate any rule or law in approving
it. Respondents stress that the lack of majority objection to the SARP bolsters the SEC's findings that the SARP is feasible.
Respondents insist that the terms and conditions of the SARP are in accord with the Constitution and the law.

The Court takes judicial notice of the fact that from the time of the filing in this Court of the instant petition, supervening
events have unfolded substantially changing the factual backdrop of this rehabilitation case.

As found by the SEC, several factors prevented the realization of the desired goals of the SARP, to wit: (1) unexpected
refusal of some creditors to comply with all the terms of the SARP; (2) unexpected closure of Uniwide EDSA due to the
renovation of EDSA Central Mall; (3) closure of Uniwide Cabuyao and Uniwide Baclaran; (4) lack of supplier support for
supermarket operations; and (5) increased expenses. 6

On 11 July 2007, the rehabilitation receiver filed in the SEC a Third Amendment to the Rehabilitation Plan (TARP). But
before the SEC could act on the TARP, the rehabilitation receiver filed on 29 September 2008 a Revised Third Amendment
to the Rehabilitation Plan (revised TARP).

A majority of the secured creditors strongly opposed the revised TARP, which focused on the immediate settlement of all
the obligations accruing to the unsecured creditors through a dacion of part of respondents' Metro Mall property.7 Since
some creditors claimed that the value of the Metro Mall property had gone down since 1999, the Hearing Panel issued its
30 July 2009 Order directing the reappraisal of the Metro Mall property.8

In its 17 September 2009 Order, the Hearing Panel directed respondents to show cause why the rehabilitation case should
not be terminated considering that the rehabilitation plan had undergone several revisions. The Hearing Panel also
directed the creditors to manifest whether they still wanted the rehabilitation proceedings to continue.

Respondents moved for reconsideration of the 30 July 2009 and the 17 September 2009 Orders. The Hearing Panel, in its 6
November 2009 Order, denied the motion for reconsideration for being a prohibited pleading.

Respondents then filed in the SEC a petition for certiorari assailing the 30 July 2009, the 17 September 2009, and the 6
November 2009 Orders of the Hearing Panel. The petition was docketed as SEC En Banc Case No. 12-09-183.

Meanwhile, in its 13 January 2010 Resolution, the Hearing Panel disapproved the revised TARP and terminated the
rehabilitation case as a consequence. The dispositive portion of the Resolution reads:

WHEREFORE, premises considered:

1. Petitioners' Motion to Approve Revised Third Amendment to the Group Rehabilitation Plan (Revised TARP) is DENIED.
2. The motions to declare petitioners' rehabilitation plan "not feasible" are GRANTED. Consequently, the instant
rehabilitation case is TERMINATED and the stay order is lifted and dissolved. This case is deemed finally disposed of
pursuant to Section 5.2 of Republic Act No. 8799.9

On 22 January 2010, respondents filed another petition appealing the Hearing Panel's 13 January 2010 Resolution. The
petition was docketed as SEC En Banc Case No. 01-10-193. In order to preserve the parties' rights during the pendency of
the appeal, the SEC en banc in its Order dated 18 March 2010 directed the parties to observe the status quo prevailing
before the issuance of the 13 January 2010 Resolution of the Hearing Panel.

Meanwhile, on 27 April 2010, the SEC en banc issued an Order directing the rehabilitation receiver, Atty. Julio C.
Elamparo, to submit a comprehensive report on the progress of the implementation of the SARP.

Finally, in its 30 September 2010 Order, the SEC consolidated SEC En Banc Case No. 01-10-193 with SEC En Banc Case No.
12-09-183, the parties being identical and the issues in both petitions being in reference to the same rehabilitation case.

Considering the pendency of SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193, recently filed in the
SEC, involving the very same rehabilitation case subject of this petition, the present petition has been rendered
premature.

SEC En Banc Case No. 12-09-183 deals with the Order of the Hearing Panel directing respondents to show cause why the
rehabilitation case should not be terminated and the creditors to manifest whether they still want the rehabilitation
proceedings to continue. On the other hand, SEC En Banc Case No. 01-10-193 is an appeal of the Hearing Panel's Resolution
disapproving the revised TARP and terminating the rehabilitation proceedings.

In light of supervening events that have emerged from the time the SEC approved the SARP on 23 December 2002 and from
the time the present petition was filed on 3 November 2006, any determination by this Court as to whether the SARP
should be revoked and the rehabilitation proceedings terminated, would be premature.

Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the
competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no
longer capable of implementation and whether the rehabilitation case should be terminated as a consequence.

Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for
resolution demand 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. 10

In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an
administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if
the matter may well be within the latter's proper jurisdiction.11

The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from
exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some
question arising in the proceeding before the court.12

It is not for this Court to intrude, at this stage of the rehabilitation proceedings, into the primary administrative
jurisdiction of the SEC on a matter requiring its technical expertise. Pending a decision of the SEC on SEC En Banc Case
No. 12-09-183 and SEC En Banc Case No. 01-10-193, which both seek to resolve the issue of whether the rehabilitation
proceedings in this case should be terminated, we are constrained to dismiss this petition for prematurity.

WHEREFORE, we DISMISS the instant petition for having been rendered premature pending a decision of the Securities
and Exchange Commission (SEC) in SEC En Banc Case No. 12-09-183 and SEC En Banc Case No. 01-10-193.

No pronouncement as to costs.

SO ORDERED.
G.R. No. 138381. November 10, 2004

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. COMMISSION ON AUDIT, respondent.

G.R. No. 141625. November 10, 2004

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. ALFREDO D. PINEDA, DANIEL GO, FELINO BULANDUS,
FELICIMO J. FERRARIS, JR., BEN HUR PORLUCAS, LUIS HIPONIA, MARIA LUISA A. FERNANDEZ, VICTORINA JOVEN,
CORAZON S. ALIWANAG, SILVER L. MARTINES, SR., RENATO PEREZ, LOLITA CAYLAN, DOUGLAS VALLEJO and LETICIA
ALMAZAN, on their own behalf and on behalf of all GSIS retirees with all of whom they share a common and general
interest, respondents.

RESOLUTION

YNARES-SANTIAGO, J.:

On April 16, 2002, the Court promulgated a decision on these two consolidated cases partially granting the petition in G.R.
No. 138381 (first petition) thereby reversing the Commission on Audits (COA) disallowance of certain fringe benefits
granted to GSIS employees. As a result, the Court ordered the refund of amounts representing fringe benefits
corresponding to those allowed in the first petition in favor of the respondents in G.R. No. 141625 (second petition).

The benefits which the Court ordered to be refunded included increases in longevity pay, childrens allowance and
management contribution to the Provident Fund as well as premiums for group personal accident insurance. On the other
hand, the Court affirmed the COA disallowance of loyalty and service cash award as well as housing allowance in excess of
that approved by the COA. Amounts corresponding to these benefits were previously deducted by GSIS from respondents
retirement benefits in view of the COA disallowance in the first petition. COA did not seek reconsideration of the
judgment ordering said refund, which thus became final and executory.

On August 7, 2002, the respondents in the second petition, all GSIS retirees, filed a motion for amendatory and
clarificatory judgment (amendatory motion).[1] They averred that we did not categorically resolve the issue raised in the
second petition, namely: whether or not the GSIS may lawfully deduct any amount from their retirement benefits in light
of Section 39 of Republic Act No. 8291.

According to respondents, said provision of law clearly states that no amount whatsoever could be legally deducted from
retirement benefits, even those amounts representing COA disallowances. They posit that we should have ordered refund
not only of benefits allowed in the first petition, but all amounts claimed, regardless of whether or not these were
allowed by the COA. These include items which were correctly disallowed by the COA in the first petition, as well as
disallowed benefits under the second petition. The latter consists of initial payment of productivity bonus, accelerated
implementation of the new salary schedule effective August 1, 1995, 1995 mid-year financial assistance and increase in
clothing, rice and meal allowances. Respondents further insist that we should have awarded damages in their favor, citing
the GSIS alleged bad faith in making the deductions.

GSIS filed a comment[2] to respondents amendatory motion, as directed by the Court in a resolution dated September 3,
2002. GSIS posited that the other benefits not passed upon in the main judgment should be understood by respondents as
having been impliedly denied by this Court. It also sought clarification of our decision insofar as it declared that there was
no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents
claim under the second petition, which emanated from an order of the GSIS Board of Trustees (Board). As for the damages
claimed by respondents, GSIS insists that it made the deductions in good faith for these were done in accordance with COA
directives.

Respondents filed a reply[3] to the comment of GSIS on September 9, 2002.

Meanwhile, respondents filed a second motion, this time for leave to file a motion for discretionary and partial
execution[4] (motion for execution). They prayed that GSIS be ordered to effect the refund, as finally adjudged in our
decision, pending resolution of their amendatory motion as to the other deducted amounts. We granted the motion for
execution on September 3, 2002.

Subsequently, on December 26, 2002, counsel for respondents, Atty. Agustin Sundiam, filed a motion for entry and
enforcement of attorneys lien[5] (motion for charging lien) and a supplement[6] to this motion on January 10, 2003. He
sought entry of a charging lien in the records of this case pursuant to Section 37 of Rule 138. He prayed for an order
directing the GSIS to deduct, as his professional fees, 15% from respondents refund vouchers since the GSIS was already in
the process of releasing his clients checks in compliance with our judgment in the first petition. The payment scheme was
allegedly authorized by the Board of Directors of his clients, the GSIS Retirees Association, Inc. (GRIA), through a board
resolution[7] that he has attached to the motion.
Atty. Sundiams motion for charging lien was opposed by petitioner GSIS on the ground that it was through its efforts, and
not Atty. Sundiams, that the retirees were able to obtain a refund. [8] Meanwhile, the GRIA confirmed the payment scheme
it adopted with Atty. Sundiam and prayed for its approval.[9]

Thereafter, on January 10, 2003, respondents filed another manifestation and motion as well as supplement thereto,
claiming that GSIS was deducting new and unspecified sums from the amount it was refunding to respondents. These new
deductions purportedly pertain to another set of COA disallowances. [10]

On January 21, 2003, respondents again filed a motion [11] praying for the inclusion in the refundable amount of dividends
on the management contribution to the Provident Fund (motion for payment of dividends). Respondents claimed that the
contribution, which amounted to Fifty Million Pesos (P50M), was retained by GSIS for more than five years and thus earned
a considerable sum of income while under its control. GSIS declared and paid dividends on said contribution to incumbent
officials and employees, but refused to extend the same benefits to respondents/retirees.

On March 6, 2003, GSIS filed a joint comment[12] to respondents two foregoing motions contending that the new deductions
are legitimate. The deductions pertain to car loan arrearages, disallowed employees compensation claims and the like. As
for the dividends on the Provident Fund contributions, respondents are not entitled to the same because while the first
petition was pending, the contributions were not actually remitted to the fund but were withheld by COA pursuant to its
earlier disallowance.

On October 2, 2003, respondents filed another motion [13] for an order to compel the GSIS to pay dividends on the
Provident Fund contributions pending resolution of their other motions. They also sought refund of Permanent Partial
Disability (PPD) benefits that GSIS supposedly paid to some of the respondents, but once again arbitrarily deducted from
the amount which the Court ordered to be refunded.

In a minute resolution[14] dated November 11, 2003, we denied the last motion for lack of merit. We likewise denied with
finality respondents motion for reconsideration from the denial of said motion. [15]

We now resolve the matters raised by the parties.

On the amendatory motion, it must be clarified that the question raised before this Court in the second petition was the
issue of the Boards jurisdiction to resolve respondents claim for refund of amounts representing deductions from their
retirement benefits. What was assailed in the second petition was the appellate courts ruling that the Board had
jurisdiction over respondents claim since there was no identity of subject matter between the proceedings then pending
before the COA and the petition brought by respondents before the Board. The Court of Appeals did not rule on the main
controversy of whether COA disallowances could be deducted from retirement benefits because the Board ordered the
dismissal of respondents claim for alleged lack of jurisdiction, before it could even decide on the principal issue.

Consequently, the only matter that was properly elevated to this Court was the issue of whether or not the Board had
jurisdiction over respondents demands. We did not resolve the issue of whether or not the deductions were valid under
Section 39 of RA 8291, for the simple reason that the Board, as well as the appellate court, did not tackle the issue. The
doctrine of primary jurisdiction[16] would ordinarily preclude us from resolving the matter, which calls for a ruling to be
first made by the Board. It is the latter that is vested by law with exclusive and original jurisdiction to settle any dispute
arising under RA 8291, as well as other matters related thereto. [17]

However, both the GSIS and respondents have extensively discussed the merits of the case in their respective pleadings
and did not confine their arguments to the issue of jurisdiction.Respondents, in fact, submit that we should resolve the
main issue on the ground that it is a purely legal question. Respondents further state that a remand of the case to the
Board would merely result in unnecessary delay and needless expense for the parties. They thus urge the Court to decide
the main question in order to finally put an end to the controversy.

Indeed, the principal issue pending before the Board does not involve any factual question, as it concerns only the correct
application of the last paragraph of Section 39, RA 8291. The parties agreed that the lone issue is whether COA
disallowances could be legally deducted from retirement benefits on the ground that these were respondents monetary
liabilities to the GSIS under the said provision. There is no dispute that the amounts deducted by GSIS represented COA
disallowances. Thus, the only question left for the Board to decide is whether the deductions are allowed under RA 8291.

Under certain exceptional circumstances, we have taken cognizance of questions of law even in the absence of an initial
determination by a lower court or administrative body. In China Banking Corporation v. Court of Appeals,[18] the Court
held:

At the outset, the Courts attention is drawn to the fact that since the filing of this suit before the trial court, none of t he
substantial issues have been resolved. To avoid and gloss over the issues raised by the parties, as what the trial court and
respondent Court of Appeals did, would unduly prolong this litigation involving a rather simple case of foreclosure of
mortgage. Undoubtedly, this will run counter to the avowed purpose of the rules, i.e., to assist the parties in obtaining
just, speedy and inexpensive determination of every action or proceeding. The Court, therefore, feels that the central
issues of the case, albeit unresolved by the courts below, should now be settled specially as they involved pure questions
of law. Furthermore, the pleadings of the respective parties on file have amply ventilated their various positions and
arguments on the matter necessitating prompt adjudication.

In Roman Catholic Archbishop of Manila v. Court of Appeals,[19] the Court likewise held that the remand of a case is not
necessary where the court is in a position to resolve the dispute based on the records before it. The Court will decide
actions on the merits in order to expedite the settlement of a controversy and if the ends of justice would not be
subserved by a remand of the case.

Here, the primary issue calls for an application of a specific provision of RA 8291 as well as relevant jurisprudence on the
matter. No useful purpose will indeed be served if we remand the matter to the Board, only for its decision to be elevated
again to the Court of Appeals and subsequently to this Court. Hence, we deem it sound to rule on the merits of the
controversy rather than to remand the case for further proceedings.

The last paragraph of Section 39, RA 8291 specifically provides:

SEC. 39. Exemption from Tax, Legal Process and Lien.-

xxxxxxxxx

The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits
under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts,
quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all
financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his
exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or
work except when his monetary liability, contractual or otherwise, is in favor of the GSIS.

It is clear from the above provision that COA disallowances cannot be deducted from benefits under RA 8291, as the same
are explicitly made exempt by law from such deductions. Retirement benefits cannot be diminished by COA disallowances
in view of the clear mandate of the foregoing provision. It is a basic rule in statutory construction that if a statute is clear,
plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. This is what is
known as plain-meaning rule or verba legis.[20]

Accordingly, the GSIS interpretation of Section 39 that COA disallowances have become monetary liabilities of respondents
to the GSIS and therefore fall under the exception stated in the law is wrong. No interpretation of the said provision is
necessary given the clear language of the statute. A meaning that does not appear nor is intended or reflected in the very
language of the statute cannot be placed therein by construction.[21]

Moreover, if we are to accept the GSIS interpretation, then it would be unnecessary to single out COA disallowances as
among those from which benefits under RA 8291 are exempt. In such a case, the inclusion of COA disallowances in the
enumeration of exemptions would be a mere surplusage since the GSIS could simply consider COA disallowances as
monetary liabilities in its favor. Such a construction would empower the GSIS to withdraw, at its option, an exemption
expressly granted by law. This could not have been the intention of the statute.

That retirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the government
has been settled in several cases. In Cruz v. Tantuico, Jr.,[22] the Court, citing Hunt v. Hernandez,[23] explained the reason
for such policy thus:

x x x we are of the opinion that the exemption should be liberally construed in favor of the pensioner. Pension in this case
is a bounty flowing from the graciousness of the Government intended to reward past services and, at the same time, to
provide the pensioner with the means with which to support himself and his family. Unless otherwise clearly provided, the
pension should inure wholly to the benefit of the pensioner. It is true that the withholding and application of the amount
involved was had under section 624 of the Administrative Code and not by any judicial process, but if the gratuity could
not be attached or levied upon execution in view of the prohibition of section 3 of Act No. 4051, the appropriation thereof
by administrative action, if allowed, would lead to the same prohibited result and enable the respondents to do indirectly
what they can not do directly under section 3 of Act No. 4051. Act No. 4051 is a later statute having been approved
on February 21, 1933, whereas the Administrative Code of 1917 which embodies section 624 relied upon by the
respondents was approved on March 10 of that year. Considering section 3 of Act No. 4051 as an exception to the general
authority granted in section 624 of the Administrative Code, antagonism between the two provisions is avoided.
(Underscoring supplied)
The above ruling was reiterated in Tantuico, Jr. v. Domingo,[24] where the Court similarly declared that benefits under
retirement laws cannot be withheld regardless of the petitioners monetary liability to the government.

The policy of exempting retirement benefits from attachment, levy and execution, as well as unwarranted deductions, has
been embodied in a long line of retirement statutes. Act No. 4051, [25] which provides for the payment of gratuity to
officers and employees of the Insular Government upon retirement due to reorganization, expressly provides in its Section
3 that (t)he gratuity provided for in this Act shall not be attached or levied upon execution.

The law which established the GSIS, Commonwealth Act No. 186 (CA No. 186), [26] went further by providing as follows:

SEC. 23. Exemptions from legal process and liens. No policy of life insurance issued under this Act, or the proceeds
thereof, except those corresponding to the annual premium thereon in excess of five hundred pesos per annum, when
paid to any member thereunder, shall be liable to attachment, garnishment, or other process, or to be seized, taken,
appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of such member,
or his beneficiary, or any other person who may have a right thereunder, either before or after payment; nor shall the
proceeds thereof, when not made payable to a named beneficiary, constitute a part of the estate of the member for
payment of his debt.

Presidential Decree No. 1146,[27] which amended CA No. 186, likewise contained a provision exempting benefits from
attachment, garnishment, levy or other processes. However, the exemption was expressly made inapplicable to
obligations of the member to the System, or to the employer, or when the benefits granted are assigned by the member
with the authority of the System.[28]

The latest GSIS enactment, RA 8291,[29] provides for a more detailed and wider range of exemptions under Section
39. Aside from exempting benefits from judicial processes, it likewise unconditionally exempts benefits from quasi-judicial
and administrative processes, including COA disallowances, as well as all financial obligations of the member. The latter
includes any pecuniary accountability of the member which arose out of the exercise or performance of his official
functions or duties or incurred relative to his position or work. The only exception to such pecuniary accountability is
when the same is in favor of the GSIS.

Thus, monetary liability in favor of GSIS refers to indebtedness of the member to the System other than those which fall
under the categories of pecuniary accountabilities exempted under the law. Such liability may include unpaid social
insurance premiums and balances on loans obtained by the retiree from the System, which do not arise in the performance
of his duties and are not incurred relative to his work. The general policy, as reflected in our retirement laws and
jurisprudence, is to exempt benefits from all legal processes or liens, but not from outstanding obligations of the member
to the System. This is to ensure maintenance of the GSIS fund reserves in order to guarantee fulfillment of all its
obligations under RA 8291.

Notwithstanding the foregoing, however, we find it necessary to nonetheless differentiate between those benefits which
were properly disallowed by the COA and those which were not.

Anent the benefits which were improperly disallowed, the same rightfully belong to respondents without qualification. As
for benefits which were justifiably disallowed by the COA, the same were erroneously granted to and received by
respondents who now have the obligation to return the same to the System.

It cannot be denied that respondents were recipients of benefits that were properly disallowed by the COA. These COA
disallowances would otherwise have been deducted from their salaries, were it not for the fact that respondents retired
before such deductions could be effected. The GSIS can no longer recover these amounts by any administrative means due
to the specific exemption of retirement benefits from COA disallowances. Respondents resultantly retained benefits to
which they were not legally entitled which, in turn, gave rise to an obligation on their part to return the amounts under
the principle of solutio indebiti.

Under Article 2154 of the Civil Code,[30] if something is received and unduly delivered through mistake when there is no
right to demand it, the obligation to return the thing arises.Payment by reason of mistake in the construction or
application of a doubtful or difficult question of law also comes within the scope of solutio indebiti.[31]

In the instant case, the confusion about the increase and payment of benefits to GSIS employees and executives, as well
as its subsequent disallowance by the COA, arose on account of the application of RA 6758 or the Salary Standardization
Law and its implementing rules, CCC No. 10. The complexity in the application of these laws is manifested by the several
cases that have reached the Court since its passage in 1989. [32] The application of RA 6758 was made even more difficult
when its implementing rules were nullified for non-publication.[33]Consequently, the delivery of benefits to respondents
under an erroneous interpretation of RA 6758 gave rise to an actionable obligation for them to return the same.
While the GSIS cannot directly proceed against respondents retirement benefits, it can nonetheless seek restoration of the
amounts by means of a proper court action for its recovery.Respondents themselves submit that this should be the
case,[34] although any judgment rendered therein cannot be enforced against retirement benefits due to the exemption
provided in Section 39 of RA 8291. However, there is no prohibition against enforcing a final monetary judgment against
respondents other assets and properties. This is only fair and consistent with basic principles of due process.

As such, a proper accounting of the amounts due and refundable is in order. In rendering such accounting, the parties
must observe the following guidelines:

(1) All deductions from respondents retirement benefits should be refunded except those amounts which may properly be
defined as monetary liability to the GSIS;

(2) Any other amount to be deducted from retirement benefits must be agreed upon by and between the parties; and

(3) Refusal on the part of respondents to return disallowed benefits shall give rise to a right of action in favor of GSIS
before the courts of law.

Conformably, any fees due to Atty. Sundiam for his professional services may be charged against respondents retirement
benefits. The arrangement, however, must be covered by a proper agreement between him and his clients under (2)
above.

As to whether respondents are entitled to dividends on the provident fund contributions, the same is not within the issues
raised before the Court. The second petition refers only to the legality of the deductions made by GSIS from respondents
retirement benefits. There are factual matters that need to be threshed out in determining respondents right to the
payment of dividends, in view of the GSIS assertion that the management contributions were not actually remitted to the
fund. Thus, the payment of dividends should be the subject of a separate claim where the parties can present evidence to
prove their respective assertions. The Court is in no position to resolve the matter since the material facts that would
prove or disprove the claim are not on record.

In the interest of clarity, we reiterate herein our ruling that there is no identity of subject matter between the COA
proceedings, from which the first petition stemmed, and respondents claim of refund before the Board. While the first
petition referred to the propriety of the COA disallowances per se, respondents claim before the Board pertained to the
legality of deducting the COA disallowances from retirement benefits under Section 39 of RA 8291.

Finally, on respondents claim that the GSIS acted in bad faith when it deducted the COA disallowances from their
retirement benefits, except for bare allegations, there is no proof or evidence of the alleged bad faith and partiality of
the GSIS. Moreover, the latter cannot be faulted for taking measures to ensure recovery of the COA disallowances since
respondents have already retired and would be beyond its administrative reach. The GSIS merely acted upon its best
judgment and chose to err in the side of prudence rather than suffer the consequence of not being able to account for the
COA disallowances. It concededly erred in taking this recourse but it can hardly be accused of malice or bad faith in doing
so.

WHEREFORE, in view of the foregoing, the April 16, 2002 Decision in G.R. Nos. 138381 and 141625 is AMENDED. In addition
to the refund of amounts corresponding to benefits allowed in G.R. No. 138381, the GSIS is ordered to REFUND all
deductions from retirement benefits EXCEPT amounts representing monetary liability of the respondents to the GSIS as
well as all other amounts mutually agreed upon by the parties.

SO ORDERED.
G.R. No. 180388 January 18, 2011

GREGORIO R. VIGILAR, SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), DPWH
UNDERSECRETARIES TEODORO E. ENCARNACION AND EDMUNDO E. ENCARNACION AND EDMUNDO V. MIR, DPWH
ASSISTANT SECRETARY JOEL L. ALTEA, DPWH REGIONAL DIRECTOR VICENTE B. LOPEZ, DPWH DISTRICT ENGINEER
ANGELITO M. TWAO, FELIX A. DESIERTO OF THE TECHNICAL WORKING GROUP VALIDATION AND AUDITING TEAM, AND
LEONARDO ALVARO, ROMEO N. SUPAN, VICTORINO C. SANTOS OF THE DPWH PAMPANGA 2ND ENGINEERING
DISTRICT, Petitioners,
vs.
ARNULFO D. AQUINO, Respondent.

DECISION

SERENO, J.:

Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court, assailing the Decision 2of the
Court of Appeals in C.A.-G.R. CV No. 82268, dated 25 September 2006.

The antecedent facts are as follows:

On 19 June 1992, petitioner Angelito M. Twao, then Officer-in-Charge (OIC)-District Engineer of the Department of Public
Works and Highways (DPWH) 2nd Engineering District of Pampanga sent an Invitation to Bid to respondent Arnulfo D.
Aquino, the owner of A.D. Aquino Construction and Supplies. The bidding was for the construction of a dike by bulldozing
a part of the Porac River at Barangay Ascomo-Pulungmasle, Guagua, Pampanga.

Subsequently, on 7 July 1992, the project was awarded to respondent, and a "Contract of Agreement" was thereafter
executed between him and concerned petitioners for the amount of PhP1,873,790.69, to cover the project cost.

By 9 July 1992, the project was duly completed by respondent, who was then issued a Certificate of Project Completion
dated 16 July 1992. The certificate was signed by Romeo M. Yumul, the Project Engineer; as well as petitioner Romeo N.
Supan, Chief of the Construction Section, and by petitioner Twao.

Respondent Aquino, however, claimed that PhP1,262,696.20 was still due him, but petitioners refused to pay the amount.
He thus filed a Complaint3 for the collection of sum of money with damages before the Regional Trial Court of Guagua,
Pampanga. The complaint was docketed as Civil Case No. 3137.

Petitioners, for their part, set up the defense4 that the Complaint was a suit against the state; that respondent failed to
exhaust administrative remedies; and that the "Contract of Agreement" covering the project was void for violating
Presidential Decree No. 1445, absent the proper appropriation and the Certificate of Availability of Funds. 5

On 28 November 2003, the lower court ruled in favor of respondent, to wit:

WHEREFORE, premises considered, defendant Department of Public Works and Highways is hereby ordered to pay the
plaintiff Arnulfo D. Aquino the following:

1. PhP1,873,790.69, Philippine Currency, representing actual amount for the completion of the project done by the
plaintiff;

2. PhP50,000.00 as attorneys fee and

3. Cost of this suit.

6
SO ORDERED.

It is to be noted that respondent was only asking for PhP1,262,696.20; the award in paragraph 1 above, however,
conforms to the entire contract amount.

On appeal, the Court of Appeals reversed and set aside the Decision of the lower court and disposed as follows:

WHEREFORE, premises considered, the appeal is GRANTED. The "CONTRACT AGREEMENT" entered into between the
plaintiff-appellees construction company, which he represented, and the government, through the Department of Public
Works and Highway (DPWH) Pampanga 2nd Engineering District, is declared null and void ab initio.

The assailed decision of the court a quo is hereby REVERSED AND SET ASIDE.
In line with the pronouncement in Department of Health vs. C.V. Canchela & Associates, Architects, 7 the Commission on
Audit (COA) is hereby ordered to determine and ascertain with dispatch, on a quantum meruit basis, the total obligation
due to the plaintiff-appellee for his undertaking in implementing the subject contract of public works, and to allow
payment thereof, subject to COA Rules and Regulations, upon the completion of the said determination.

No pronouncement as to costs.

SO ORDERED.8

Dissatisfied with the Decision of the Court of Appeals, petitioners are now before this Court, seeking a reversal of the
appellate courts Decision and a dismissal of the Complaint in Civil Case No. G-3137. The Petition raises the following
issues:

1. WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE DOCTRINE OF NON-SUABILITY OF THE STATE
HAS NO APPLICATION IN THIS CASE.

2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING THE COMPLAINT FOR FAILURE OF RESPONDENT TO
EXHAUST ALL ADMINISTRATIVE REMEDIES.

3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN ORDERING THE COA TO ALLOW PAYMENT TO RESPONDENT ON A
QUANTUM MERUIT BASIS DESPITE THE LATTERS FAILURE TO COMPLY WITH THE REQUIREMENTS OF PRESIDENTIAL DECREE
NO. 1445.

After a judicious review of the case, the Court finds the Petition to be without merit.

Firstly, petitioners claim that the Complaint filed by respondent before the Regional Trial Court was done without
exhausting administrative remedies. Petitioners aver that respondent should have first filed a claim before the
Commission on Audit (COA) before going to the courts. However, it has been established that the doctrine of exhaustion of
administrative remedies and the doctrine of primary jurisdiction are not ironclad rules. In Republic of the Philippines v.
Lacap,9 this Court enumerated the numerous exceptions to these rules, namely: (a) where there is estoppel on the part of
the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of
jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant;
(d) where the amount involved is relatively so small as to make the rule impractical and oppressive; (e) where the
question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial
intervention is urgent; (g) where the application of the doctrine may cause great and irreparable damage; (h) where the
controverted acts violate due process; (i) where the issue of non-exhaustion of administrative remedies has been rendered
moot; (j) where there is no other plain, speedy and adequate remedy; (k) where strong public interest is involved; and (l)
in quo warranto proceedings. In the present case, conditions (c) and (e) are present.

The government project contracted out to respondent was completed almost two decades ago. To delay the proceedings
by remanding the case to the relevant government office or agency will definitely prejudice respondent. More
importantly, the issues in the present case involve the validity and the enforceability of the "Contract of Agreement"
entered into by the parties. These are questions purely of law and clearly beyond the expertise of the Commission on
Audit or the DPWH. In Lacap, this Court said:

... It does not involve an examination of the probative value of the evidence presented by the parties. There is a question
of law when the doubt or difference arises as to what the law is on a certain state of facts, and not as to the truth or the
falsehood of alleged facts. Said question at best could be resolved only tentatively by the administrative authorities. The
final decision on the matter rests not with them but with the courts of justice. Exhaustion of administrative remedies does
not apply, because nothing of an administrative nature is to be or can be done. The issue does not require technical
knowledge and experience but one that would involve the interpretation and application of law. (Emphasis supplied.)

Secondly, in ordering the payment of the obligation due respondent on a quantum meruit basis, the Court of Appeals
correctly relied on Royal Trust Corporation v. COA, 10 Eslao v. COA,11 Melchor v. COA,12 EPG Construction Company v.
Vigilar,13 and Department of Health v. C.V. Canchela & Associates, Architects. 14 All these cases involved government
projects undertaken in violation of the relevant laws, rules and regulations covering public bidding, budget appropriations,
and release of funds for the projects. Consistently in these cases, this Court has held that the contracts were void for
failing to meet the requirements mandated by law; public interest and equity, however, dictate that the contractor
should be compensated for services rendered and work done.

Specifically, C.V. Canchela & Associates is similar to the case at bar, in that the contracts involved in both cases failed to
comply with the relevant provisions of Presidential Decree No. 1445 and the Revised Administrative Code of 1987.
Nevertheless, "(t)he illegality of the subject Agreements proceeds, it bears emphasis, from an express declaration or
prohibition by law, not from any intrinsic illegality. As such, the Agreements are not illegal per se, and the party claiming
thereunder may recover what had been paid or delivered." 15

The government project involved in this case, the construction of a dike, was completed way back on 9 July 1992. For
almost two decades, the public and the government benefitted from the work done by respondent. Thus, the Court of
Appeals was correct in applying Eslao to the present case. In Eslao, this Court stated:

...the Court finds that the contractor should be duly compensated for services rendered, which were for the benefit of the
general public. To deny the payment to the contractor of the two buildings which are almost fully completed and
presently occupied by the university would be to allow the government to unjustly enrich itself at the expense of another.
Justice and equity demand compensation on the basis of quantum meruit. (Emphasis supplied.)

Neither can petitioners escape the obligation to compensate respondent for services rendered and work done by invoking
the states immunity from suit. This Court has long established in Ministerio v. CFI of Cebu, 16 and recently reiterated in
Heirs of Pidacan v. ATO,17 that the doctrine of governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice to a citizen. As this Court enunciated in EPG Construction: 181avvphi1

To our mind, it would be the apex of injustice and highly inequitable to defeat respondents right to be duly
compensated for actual work performed and services rendered, where both the government and the public have for
years received and accepted benefits from the project and reaped the fruits of respondents honest toil and labor.

xxx xxx xxx

Under these circumstances, respondent may not validly invoke the Royal Prerogative of Dishonesty and conveniently hide
under the State's cloak of invincibility against suit, considering that this principle yields to certain settled
exceptions. True enough, the rule, in any case, is not absolute for it does not say that the state may not be sued
under any circumstance.

xxx xxx xxx

Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity from suit vis a vis the
payment of just compensation for expropriated property, this Court nonetheless finds the doctrine enunciated in the
aforementioned cases applicable to the instant controversy, considering that the ends of justice would be subverted if
we were to uphold, in this particular instance, the State's immunity from suit.

To be sure, this Court as the staunch guardian of the citizens' rights and welfare cannot sanction an injustice so
patent on its face, and allow itself to be an instrument in the perpetration thereof. Justice and equity sternly
demand that the State's cloak of invincibility against suit be shred in this particular instance, and that petitioners-
contractors be duly compensated on the basis of quantum meruit for construction done on the public works
housing project. (Emphasis supplied.)

WHEREFORE, in view of the foregoing, the Petition is DENIED for lack of merit. The assailed Decision of the Court of
Appeals in CA-G.R. No. 82268 dated 25 September 2006 is AFFIRMED.

SO ORDERED.
G.R. No. 167824 July 2, 2010

GERALDINE GAW GUY and GRACE GUY CHEU, Petitioners,

vs.
ALVIN AGUSTIN T. IGNACIO, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 168622

GERALDINE GAW GUY and GRACE GUY CHEU, Petitioners,

vs.
THE BOARD OF COMMISSIONERS OF THE BUREAU OF IMMIGRATION, HON. MARICEL U. SALCEDO, MAYNARDO MARINAS,
RICARDO CABOCHAN and ELISEO EXCONDE, Respondents.

DECISION

PERALTA, J.:

This is a petition for review on certiorari 1 under Rule 45 of the 1997 Rules of Civil Procedure seeking, among others, to
annul and set aside the Decisions dated January 6, 20052 and April 20, 20053 and Resolutions dated March 10, 20054 and
June 29, 20055 rendered by the Court of Appeals (CA), reversing and setting aside the Writ of Preliminary Injunction issued
by the Regional Trial Court6 (RTC), Branch 37, Manila.

The antecedent facts follow.

The father of petitioners Geraldine Gaw Guy and Grace Guy Cheu became a naturalized 7 Filipino citizen sometime in 1959.
The said petitioners, being minors at that time, were also recognized 8 as Filipino citizens.

Respondent Atty. Alvin Agustin T. Ignacio, filed a Complaint 9 dated March 5, 2004 for blacklisting and deportation against
petitioners Geraldine and Grace before the Bureau of Immigration (BI) on the basis that the latter two are Canadian
citizens who are illegally working in the Philippines, petitioners having been issued Canadian passports.

Acting upon the Complaint, respondent Maricel U. Salcedo, Special Prosecutor, Special Task Force of the BI Commissioner,
directed the petitioners, through the issuance of a subpoenae,10 to appear before her and to bring pertinent documents
relative to their current immigration status, to which the petitioners objected by filing with the Special Task Force of the
BI Commissioner a Comment/Opposition with Motion Ad Cautelam to Quash Re: Subpoena 11 dated 30 April 2004 (Duces
Tecum/Ad Testificandum), which was eventually denied by respondent Salcedo in an Order 12 dated May 14, 2004.

Respondent Board of Commissioners (BOC) filed a Charge Sheet 13 dated June 1, 2004 for Violation of Sections 37 (a) 7, 45
(e) and 45-A of the Philippine Immigration Act of 1940, as amended, which reads as follows:

The undersigned Special Prosecutor charges GRACE GUY CHEU and GERALDINE GAW GUY, both Canadian citizens, for
working without permit, for fraudulently representing themselves as Philippine citizens in order to evade immigration laws
and for failure to comply with the subpoena duces tecum/ad testificandum, in violation of the Philippine Immigration Act
of 1940, as amended, committed as follows:

That respondents GRACE GUY CHEU and GERALDINE GAW GUY, knowingly, willfully and unlawfully engage in gainful
activities in the Philippines without appropriate permit by working as the Vice-President for Finance & Treasurer and
General Manager, respectively, of Northern Islands Company, Inc., with office address at No. 3 Mercury Avenue, Libis,
Quezon City;

That both respondents, knowingly, willfully and fraudulently misrepresent themselves as Philippine citizens as reflected in
the general Information Sheet of Northern Islands Company, Inc., for 2004, in order to evade any requirement of the
Philippine Immigration Laws;

That both respondents, duly served with subpoenas duces tecum/ad testificandum, dated April 20, 2004, knowingly,
willfully and unlawfully failed to comply with requirements thereof.1avvphi1

CONTRARY TO LAW.

As a remedy, petitioners filed a Petition for Certiorari with Damages and a Prayer for Issuance of a Temporary Restraining
Order and Preliminary Injunction14 dated May 31, 2004 before the RTC of Manila, Branch 37.15
The trial court, after hearing petitioner's application for issuance of a temporary restraining order (TRO) and writ of
preliminary injunction, issued an Order16 dated June 28, 2004, the dispositive portion of which reads:

WHEREFORE, premises considered, the application for temporary restraining order is hereby GRANTED. The respondents
and all persons acting in their behalf and those under their instructions are directed to cease and desist from continuing
with the deportation proceedings involving the petitioners. In the meantime set the case for hearing on preliminary
injunction on July 5 and 6, 2004, both at 2:00 o'clock in the afternoon and the respondents are directed to show cause
why writ of preliminary injunction should not issue.

SO ORDERED.

On July 5, 2004, public respondents filed their Answer17 and on July 13, 2004, filed a Supplement (To the Special and
Affirmative Defenses/Opposition to the Issuance of a Writ of Preliminary Injunction). 18 The parties were then directed to
file their respective memoranda as to the application for issuance of a writ of preliminary injunction and public
respondents' special and affirmative defenses. On July 16, 2004, public respondents as well as the petitioners, 19 filed their
respective Memoranda.20 On the same day, respondent Atty. Ignacio filed his Answer21 to the petition.

In an Order22 dated July 19, 2004, the trial court granted the application for preliminary injunction enjoining public
respondents from further continuing with the deportation proceedings. The Order reads, in part:

In view of the foregoing, the Court finds that, indeed, there exists a pressing reason to issue a writ of preliminary
injunction to protect the rights of the petitioners pending hearing of the main case on the merits and unless this Court
issues a writ, grave irreparable injury would be caused against the petitioners.

WHEREFORE, premises considered, the application for the Writ of Preliminary Injunction is hereby GRANTED. The
respondents and all persons acting on their behalf and those under their instructions are directed to cease and desist from
continuing with the deportation proceedings involving the petitioners during the pendency of the instant case. The
petitioners are directed to post a bond in the amount of P50,000.00 to answer for whatever damages that may be
sustained by the respondent should the court finally resolve that the petitioners are not entitled thereto.

SO ORDERED.

As a consequence, public respondents, on September 10, 2004, filed a Petition for Certiorari with Prayer for Issuance of
Temporary Restraining Order and Writ of Preliminary Injunction 23 before the CA24 and, on September 17, 2004, respondent
Atty. Ignacio filed a Petition for Certiorari,25 also with the CA.26 Both petitions prayed for the nullification of the Orders
dated June 28, 2004 and July 19, 2004 issued by the RTC in Civil Case No. 04-110179 and for the dismissal of the petition
therein. Later on, petitioner Geraldine filed a Motion to Consolidate both petitions.

On January 6, 2005, the Ninth Division of the CA granted the petition filed by respondent Atty. Ignacio and annulled the
writ of preliminary injunction issued by the trial court, the dispositive portion of the Decision 27 reads:

WHEREFORE, the instant petition is GRANTED and the Order of the Regional Trial Court, Branch 37, Manila, dated July 19,
2004, is hereby ANNULLED and SET ASIDE.

SO ORDERED.

On January 21, 2005, petitioners filed a Motion for Reconsideration. 28

On March 1, 2005, petitioners reiterated29 their prayer for the consolidation of the petitions in the Eighth and Ninth
Divisions. In its Resolution30 dated March 10, 2005, the CA Ninth Division denied petitioners' Motion for Reconsideration.

Hence, petitioners filed before this Court a Petition for Review on Certiorari 31 dated March 31, 2005 praying for the
reversal of the Decision rendered by the CA's Ninth Division, which is now docketed as G.R. No. 167824.

Thereafter, the CA's Eighth Division rendered its own Decision 32 dated April 29, 2005 granting the petition therein and
nullifying the Orders dated June 28 and July 19, 2004 in Civil Case No. 04-110179, the dispositive portion of which reads as
follows:

WHEREFORE, finding the instant petition impressed with merit and in accordance with our decision in CA-G.R. SP No.
86432, the same is GIVEN DUE COURSE and is GRANTED. The assailed Orders of the respondent court dated 28 June and 19
July 2004 are hereby NULLIFIED and SET ASIDE.

SO ORDERED.
Petitioners filed their Motion for Reconsideration33 from the said Decision, which the CA denied in its Resolution 34dated
June 21, 2005.

Thus, petitioners filed before this Court a Petition for Review on Certiorari 35 dated July 12, 2005 seeking to reverse and
set aside the said Decision and Resolution rendered by the Eighth Division of the CA and is now docketed as G.R. No.
168622. In its Resolution36 dated August 10, 2005, the Court dismissed the said petition and said dismissal, despite
petitioners' motion for reconsideration,37 was affirmed in a Resolution38 dated October 17, 2005. This Court, however,
upon another motion for reconsideration39 filed by the petitioners, reinstated the petition and ordered its consolidation
with G.R. No. 167824.40

On September 7, 2007, a Manifestation41 was filed informing this Court that petitioner Grace Guy Cheu died intestate on
August 12, 2007 in the United States of America.

Petitioners raised the following grounds in their Consolidated Memorandum 42 dated March 27, 2007:

I.

THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND ERRED IN HOLDING THAT THE LOWER COURT HAS NO
JURISDICTION OVER CIVIL CASE NO. 04-110179 AND ISSUE A WRIT OF PRELIMINARY INJUNCTION THEREIN CONSIDERING
THAT THE INSTANT CASE IS AN EXCEPTION TO THE RULE ON PRIMARY JURISDICTION DOCTRINE AND WARRANTS
PETITIONERS' IMMEDIATE RESORT TO JUDICIAL INTERVENTION.

A.

CONSIDERING THAT PROOF OF PETITIONERS' PHILIPPINE CITIZENSHIP IS SUBSTANTIAL, PETITIONERS ARE ALLOWED UNDER
THIS HONORABLE COURT'S RULING IN BID V. DELA ROSA, SUPRA, TO SEEK INJUNCTIVE RELIEF FROM THE REGIONAL TRIAL
COURT TO ENJOIN THE DEPORTATION PROCEEDINGS CONDUCTED AGAINST THEM.

B.

LIKEWISE, CONSIDERING THAT PETITIONERS STAND TO SUFFER GRAVE AND IRREPARABLE INJURIES SHOULD THE
DEPORTATION PROCEEDINGS AGAINST THEM BE ALLOWED TO CONTINUE, PETITIONERS ARE ALLOWED UNDER TE LAW TO
IMMEDIATELY SEEK JUDICIAL RELIEF DESPITE THE PENDENCY OF THE ADMINISTRATIVE PROCEEDINGS.

II.

FURTHER, IT IS RESPECTFULLY SUBMITTED THAT THE RULING OF THIS HONORABLE COURT IN DWIKARNA V. DOMINGO, 433
SCRA 748 (2004) DID NOT STRIP THE LOWER COURT OF ITS AUTHORITY TO ENTERTAIN THE PETITION IN CIVIL CASE NO. 04-
110179 AND TO ISSUE A WRIT OF PRELIMINARY INJUNCTION IN THE AFORESAID CASE.

III.

EVEN IF THE RULING OF THIS HONORABLE COURT IN DWIKARNA V. DOMINGO, SUPRA, DID STRIP THE LOWER COURT OF ITS
JURISDICTION IN BID V. DELA ROSA, SUPRA, TO ENJOIN DEPORTATION PROCEEDINGS, THE RULING CAN ONLY HAVE
PROSPECTIVE EFFECT.

Basically, petitioners argue that the doctrine of primary jurisdiction, relied upon by the CA in its decision, does not apply
in the present case because it falls under an exception. Citing Board of Commissioners (CID) v. Dela Rosa,43petitioners
assert that immediate judicial intervention in deportation proceedings is allowed where the claim of citizenship is so
substantial that there are reasonable grounds to believe that the claim is correct. In connection therewith, petitioners
assail the applicability of Dwikarna v. Domingo in the present case, which the CA relied upon in ruling against the same
petitioners.

After a careful study of the arguments presented by the parties, this Court finds the petition meritorious.

Petitioners rely on Board of Commissioners (CID) v. Dela Rosa,44 wherein this Court ruled that when the claim of
citizenship is so substantial as to reasonably believe it to be true, a respondent in a deportation proceeding can seek
judicial relief to enjoin respondent BOC from proceeding with the deportation case. In particular, petitioners cited the
following portions in this Court's decision:

True, it is beyond cavil that the Bureau of Immigration has the exclusive authority and jurisdiction to try and hear cases
against an alleged alien, and in the process, determine also their citizenship (Lao vs. Court of Appeals, 180 SCRA 756
[1089]. And a mere claim of citizenship cannot operate to divest the Board of Commissioners of its jurisdiction in
deportation proceedings (Miranda vs. Deportation Board, 94 Phil. 531 [1951]).
However, the rule enunciated in the above-cases admits of an exception, at least insofar as deportation proceedings
are concerned. Thus, what if the claim to citizenship of the alleged deportee is satisfactory? Should the deportation
proceedings be allowed to continue or should the question of citizenship be ventilated in a judicial proceeding? In Chua
Hiong vs. Deportation Board (96 Phil. 665 [1955]), this Court answered the question in the affirmative, and We quote:

When the evidence submitted by a respondent is conclusive of his citizenship, the right to immediate review should
also be recognized and the courts should promptly enjoin the deportation proceedings. A citizen is entitled to live in
peace, without molestation from any official or authority, and if he is disturbed by a deportation proceeding, he has
the unquestionable right to resort to the courts for his protection, either by a writ of habeas corpus or of prohibition,
on the legal ground that the Board lacks jurisdiction. If he is a citizen and evidence thereof is satisfactory, there is no
sense nor justice in allowing the deportation proceedings to continue, granting him the remedy only after the Board has
finished its investigation of his undesirability.

x x x And if the right (to peace) is precious and valuable at all, it must also be protected on time, to prevent undue
harassment at the hands of ill-meaning or misinformed administrative officials. Of what use is this much boasted right
to peace and liberty if it can be availed of only after the Deportation Board has unjustly trampled upon it,
besmirching the citizen's name before the bar of public opinion?

The doctrine of primary jurisdiction of petitioners Board of Commissioners over deportation proceedings is,
therefore, not without exception (Calayday vs. Vivo, 33 SCRA 413 [1970]; Vivo vs. Montesa, 24 SCRA 155
[1967]). Judicial intervention, however, should be granted in cases where the claim of citizenship is so substantial that
there are reasonable grounds to believe that the claim is correct. In other words, the remedy should be allowed only on
sound discretion of a competent court in a proper proceeding (Chua Hiong v. Deportation Board, supra; Co vs.
Deportation Board, 78 SCRA 107 [1977]). It appearing from the records that respondent's claim of citizenship is
substantial, as We shall show later, judicial intervention should be allowed. 45

The present case, as correctly pointed out by petitioners and wrongfully found by the CA, falls within the above-cited
exception considering that proof of their Philippine citizenship had been adduced, such as, the identification
numbers46 issued by the Bureau of Immigration confirming their Philippine citizenship, they have duly exercised and
enjoyed all the rights and privileges exclusively accorded to Filipino citizens, i.e., their Philippine passports47 issued by
the Department of Foreign Affairs.

In BOC v. Dela Rosa, it is required that before judicial intervention is sought, the claim of citizenship of a respondent in a
deportation proceeding must be so substantial that there are reasonable grounds to believe that such claim is correct. In
the said case, the proof adduced by the respondent therein was so substantial and conclusive as to his citizenship that it
warranted a judicial intervention. In the present case, there is a substantial or conclusive evidence that petitioners are
Filipino citizens. Without necessarily judging the case on its merits, as to whether petitioners had lost their Filipino
citizenship by having a Canadian passport, the fact still remains, through the evidence adduced and undisputed by the
respondents, that they are naturalized Filipinos, unless proven otherwise.

However, this Court cannot pass upon the issue of petitioners' citizenship as this was not raised as an issue. The issue in
this petition is on the matter of jurisdiction, and as discussed above, the trial court has jurisdiction to pass upon the issue
whether petitioners have abandoned their Filipino citizenship or have acquired dual citizenship within the confines of the
law.

In this regard, it must be remembered though that this Court's ruling in Dwikarna v. Domingo did not abandon the doctrine
laid down in BOC v. Dela Rosa. The exception remains. Dwikarna merely reiterated the doctrine of primary jurisdiction
when this Court ruled that if the petitioner is dissatisfied with the decision of the Board of Commissioners of the
Bureau of Immigration, he can move for its reconsideration and if his motion is denied, then he can elevate his case
by way of a petition for review before the Court of Appeals, pursuant to Section 1, Rule 43 of the Rules of Civil
Procedure. However, utmost caution must be exercised in availing of the exception laid down in BOC v. Dela Rosa in
order to avoid trampling on the time-honored doctrine of primary jurisdiction. The court cannot or will not determine a
controversy involving a question which is within the jurisdiction of the administrative tribunal prior to resolving the same,
where the question demands the exercise of sound administrative discretion requiring special knowledge, experience and
services in determining technical and intricate matters of fact. 48 In cases where the doctrine of primary jurisdiction is
clearly applicable, the court cannot arrogate unto itself the authority to resolve a controversy, the jurisdiction over which
is initially lodged with an administrative body of special competence.49

Above all else, this Court still upholds the doctrine of primary jurisdiction. As enunciated in Republic v. Lacap: 50

The general rule is that before a party may seek the intervention of the court, he should first avail of all the means
afforded him by administrative processes.51 The issues which administrative agencies are authorized to decide should not
be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to
dispose of the same after due deliberation.52
Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts
cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative
tribunal prior to the resolution of that question by the 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. 53

Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction,
which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted
exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged
administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official
inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make
the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided
by the courts of justice;54 (f) where judicial intervention is urgent; (g) when its application may cause great and
irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of
administrative remedies has been rendered moot; 55 (j) when there is no other plain, speedy and adequate remedy; (k)
when strong public interest is involved; and, (l) in quo warranto proceedings. x x x 56

WHEREFORE, the petition is GRANTED. Consequently, the Decisions dated January 6, 2005 and April 20, 2005, and the
Resolutions dated March 10, 2005 and June 29, 2005 of the Court of Appeals, nullifying and setting aside the Writ of
Preliminary Injunction issued by the Regional Trial Court (RTC), Branch 37, Manila, are hereby NULLIFIED and SET ASIDE.
The case is hereby remanded to the trial court for further proceedings, with dispatch.

SO ORDERED.