Nature of Quasi-Legislative Power

EASTERN SHIPPING LINES, INC., petitioner, vs. COURT OF APPEALS and DAVAO PILOTS
ASSOCIATION, respondents. G.R. No. 116356 June 29, 1998
Facts: On September 25, 1989, private respondent elevated a complaint against petitioner for sum of
money and attorney's fees alleging that private respondent had rendered pilotage services to petitioner
between with total unpaid fees of P703,290.18. Despite repeated demands, petitioner failed to pay and
prays that the latter be directed to pay P703,290.18 with legal rate of interest from the filing of the
complaint.
On November 18, 1989 petitioner disputed the claims of private respondent assailing the
constitutionality of EO 1088 upon which it bases its claims; that the subject of the complaint falls within
the scope and authority of the Philippine Ports Authority by virtue of PD No. 857 ; that Executive Order
No. 1088 is an unwarranted repeal or modification of the Philippine Ports Authority Charter, among
others.
Petitioner argues that EO 1088 is not constitutional, because its interpretation and application
are left to private respondent, a private person, and it constitutes an undue delegation of power.
Petitioner insists that it should pay pilotage fees in accordance with and on the basis of the memorandum
circulars issued by the PPA, the administrative body vested under PD 857 with the power to regulate and
prescribe pilotage fees. It on paying pilotage fees prescribed under PPA circulars because EO 1088 sets
a higher rate.
Issues: Whether Executive Order 1088 is unconstitutional.
Whether there is undue delegation of legislative power on private respondent.
Held: Petition DENIED.
Reiterating the pronouncement of the Court in Philippine Interisland Shipping Association of the
Philippines vs. Court of Appeals, the Court held that EO 1088 is valid. E.O. NO. 1088 provides for
adjusted pilotage service rates without withdrawing the power of the PPA to impose, prescribe, increase
or decrease rates, charges or fees. The reason is because E.O. No. 1088 is not meant simply to fix new
pilotage rates. Its legislative purpose is the "rationalization of pilotage service charges, through the
imposition of uniform and adjusted rates for foreign and coastwise vessels in all Philippine ports.”
Petitioner cannot insist on paying pilotage fees based on the PPA circulars because the PPA
circulars are inconsistent with EO 1088, they are void and ineffective. "Administrative or executive acts,
orders and regulations shall be valid only when they are not contrary to the laws or the Constitution." As
stated by the Court in Land Bank of the Philippines vs. Court of Appeals, "the conclusive effect of
administrative construction is not absolute. Action of an administrative agency may be disturbed or set
aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction,
or grave abuse of discretion clearly conflicting with either the letter or spirit of the law." It is axiomatic that
an administrative agency, like the PPA, has no discretion whether to implement the law or not. Its duty is
to enforce it. Therefore, if there is any conflict between the PPA circular and a law, such as EO 1088, the
latter prevails.
In conclusion, the Court made it clear that E.O. No. 1088 is a valid statute and that the PPA is
duty bound to comply with its provisions. The PPA may increase the rates but it may not decrease them
below those mandated by E.O. No. 1088.

Res Judicata

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU) vs. LAGUESMA and PEPSI-COLA

PRODUCTS, PHILIPPINES, INC. G.R. No. 122226 March 25, 1998
Facts: United Pepsi-Cola Supervisory Union, UPSU, is a union consisting of supervisory employees. On
March 20, 1995, UPSU filed a petition for certification election on behalf of the route managers at Pepsi-
Cola Products Philippines, Inc. Said petition was however denied by the med-arbiter and on appeal to the
Secretary of Labor. The ground was that the route managers were managerial employees and therefore
not eligible for union membership under Art. 245 of the Labor Code.
Petitioner challenged the questioned orders but was dismissed by the Third Division of the Court
for lack of showing that respondent committed grave abuse of discretion. Petitioner filed a motion for
reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of the Labor Code,
so far as it declares managerial employees to be ineligible to form, assist or join unions, contravenes Art.
III, §8 of the Constitution which provides: “The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be
abridged.”
For this reason, the petition was referred to the Court en banc.
 It appears, however, that the subject of the case at bar was the same subject of two previous
determinations by the Secretary of Labor and Employment. The first was in Worker's Alliance Trade
Union (WATU) v. Pepsi-Cola Products Philippines, Inc., where the Secretary of Labor found that only
those employees occupying the position of route manager and accounting manager are managerial
employees. The findings were reiterated in In Re: Petition for Direct Certification and/or Certification
Election-Route Managers/Supervisory Employees of Pepsi-Cola Products Phils. Inc.
Issue: Whether or not previous administrative determinations on the question whether route managers
are managerial employees constitute res judicata over the case at bar.
Held: Petition is DISMISSED.
Petitioner relies in the Court’s ruling in Nasipit Lumber Co. v. National Labor Relations
Commission in submitting its argument that these previous administrative determinations do not have the
effect of res judicata in this case, because "labor relations proceedings" are "non-litigious and summary in
nature without regard to legal technicalities."
The said case involved a clearance to dismiss an employee issued by the Department of Labor.
The requirement of a clearance to terminate employment was a creation of the Department of labor to
carry out the Labor Code provisions on security of tenure and termination of employment.
The question in that case was whether in a subsequent proceeding for illegal dismissal,
the clearance was res judicata. In holding it was not, the Court made it clear that it was referring to labor
relations proceedings of a non-adversary character. The Court clarified at the end of its opinion that "the
doctrine of res judicata applies . . . to judicial or quasi judicial proceedings and not to the exercise of
administrative powers."

QUASI-JUDICIAL POWER: Notice & Hearing

BAUTISTA vs. BOE & MERALCO. G.R. No. 75016 January 13, 1989
Facts: On May 30, 1986, MERALCO filed with the BOE a verified application for an upward revision of
its rates alleging that the company has suffered net losses in 1984 and 1985, a drop in kilowatt sales and
the deterioration of system loss, among others. The proposed rate increase is 9.5 centavos per kilowatt
hour. However, consumptions up to 130 kilowatt hours per month of residential customers, and up to 70
kilowatt hours of small commercial customers, and consumptions of government-owned hospitals and
public street lighting services are not affected by the increase.
On June 9, 1986, the petitioners filed for an opposition and prayed that no provisional approval should be
granted by the BOE. They alleged that they, together with others similarly situated, are adversely affected
by the increase in rates of MERALCO and that the increase in rates is exorbitant and unreasonable as the
prices of petroleum products had already gone down.
On June 11, 1986, the BOE provisionally approved MERALCO's revised rate schedules without hearing.
Alleging that they were not afforded the opportunity to be heard, the petitioners moved for a
reconsideration of the BOE’s order. The motion was denied by the Board without setting it for hearing,
contending that it has the power to grant provisional relief on motion of a party in a case or even on its
own initiative under Section 12 of Republic Act No. 6173, as amended by Presidential Decree No. 1128,
in relation to Section 9(e) of Presidential Decree No. 1206 .
Petitioners argue that the authority of the BOE to grant provisional approval without hearing is not
absolute, but is subject to the due process clause of the constitution and that their opposition to the grant
of provisional approval — should have been set for hearing for MERALCO to present a prima facie case
on the issue of urgent public need.
Hence, the instant petition.
Issue: Whether or not the Board of Energy acted with grave abuse of discretion amounting to lack of
jurisdiction when it provisionally approved the application for increase in rates of MERALCO without
hearing.
Held: Petition DISMISSED.
The records show that the issue has become moot and academic as MERALCO decreased its
rate by 12.6 centavos per kilowatt hour in its electric, bills for August 1986, apart from a 4.2 centavo cut
per kilowatt-hour for September 1986. Where during the pendency of the case, certain events or
circumstances have taken place which would render the case moot and academic, the petition for
certiorari will be dismissed. Hence, the Court will neither determine an abstract proposition nor express
an opinion in a case in which no practical relief may be granted in view of supervening events.
Assuming that the case has not yet become moot, it is beyond dispute that when BOE
provisionally authorized private respondent's application without hearing, it merely exercised a
prerogative granted to it by law.
This Court has upheld the authority of regulatory boards like the Energy Regulatory Board to
grant provisional relief upon the filing of an application, petition or complaint or at any stage thereafter,
and without the need of prior hearing, but it shall call a hearing thereon within thirty days thereafter for the
determination of its final decision. The order granting such provisional relief, however, must be based
upon substantial evidence — supporting papers duly verified or authenticated, and is without prejudice to
rendition of a final decision after hearing.

Fourth requisite: Administrative Regulation must be reasonable

Araneta vs. Gatmaitan, GR Nos. L-8895 and L- 9191, Apr. 30,1957

Facts: An authorization granted by the congress in favor of the Secretary of Agriculture and Natural
Resources to promulgate rules and regulations concerning trawl fishing which power was directly
exercised by the President Ramon Magsaysay. A group of Otter trawl operators took the matter to the
court by filing a complaint for injunction and/or declaratory relief with preliminary injunction with the Court
of First Instance of Manila, praying that a writ of preliminary injunction be issued to restrain the Secretary
of Agriculture and Natural Resources and the Director of Fisheries from enforcing said executive order; to
declare the same null and void, and for such other relief as may be just and equitable in the premises.
Issue: Whether or not the regulation promulgated by the Secretary of Agriculture and Natural Resources
is unreasonable?
Held: The court ruled in negative. The promulgation made by the Secretary of Agriculture and Natural
Resources satisfies all the requisite of a valid administrative regulation. The primary purpose of the rule
was that trawl fishing caused the depletion of the marine resources. Also in the Fisheries Act it provided
that the Secretary of Agriculture and Natural Resources has the power to promulgate such regulations as
would protect the aquatic resources of the land.

Quasi-Judicial Power: Administrative Appeal and Review

Araneta vs. Gatmaitan, 101 Phil 328

Facts: Then President Magsaysay issued Executive Orders prohibiting trawl fishing in San Miguel Bay,
located between the provinces of Camarines Norte and Camarines Sur.
A group of trawl operators took the matter to court by filing a complaint for injunction to restrain
the Secretary of Agriculture and the Director of Fisheries from enforcing the said executive order.
The lower court granted injunction an nullified the assailed executive orders saying that the
matter of allowing or prohibiting trawl fishing is within the power of the legislature and not with the
executive.
Issue: Whether or not the President of the Philippines has the power to issue executive orders banning
trawl fishing in San Miguel Bay.
Held: The executive orders restricting and banning trawl fishing from San Miguel Bay are valid and
issued by authority of law.
Under the Fisheries law, the restriction and banning of trawl fishing from all Philippine waters
come within the powers of the Secretary of Agriculture and Natural Resources. However, since the
Secretary of Agriculture exercise its functions subject to the general supervision and control of the
President, the President can exercise the same power and authority through executive orders, regulations
and decrees upon the recommendation of the Secretary concerned.

Powers of Administrative Agencies: Tests of Delegation

YNOT vs. IAC, G.R. No. 74457, March 20, 1987

Facts: The six carabaos transported by petitioner, Restituto Ynot, in a pump boat from Masbate to Iloilo
was confiscated by the police station commander of Barotac Nuevo, Iloilo, for violation of Executive Order
No. 626-A. The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of
replevin upon his filing of a supersedeas bond of P12,000.00. After considering the merits of the case, the
court sustained the confiscation of the carabaos and, since they could no longer be produced, ordered the
confiscation of the bond. The court also declined to rule on the constitutionality of the executive order, as
raise by the petitioner, for lack of authority and also for its presumed validity.
The petitioner appealed the decision to the Intermediate Appellate Court, which upheld the trial
court, and he has now come before this Court in this petition for review on certiorari.
The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes
outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim
is that the penalty is invalid because it is imposed without according the owner a right to be heard before
a competent and impartial court as guaranteed by due process. He complains that the measure should
not have been presumed, and so sustained, as constitutional. There is also a challenge to the improper
exercise of the legislative power by the former President under Amendment No. 6 of the 1973
Constitution.
Issue: Whether or not Executive Order No. 626-A is unconstitutional due to invalid delegation of
legislative powers.
Held: Executive Order No. 626-A is hereby declared unconstitutional.
This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving the same
whenever warranted, subject only to review by the highest tribunal. We have jurisdiction under the
Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court
may provide," final judgments and orders of lower courts in, among others, all cases involving the
constitutionality of certain measures.
We also mark, on top of all this, the questionable manner of the disposition of the confiscated
property as prescribed in the questioned executive order. It is there authorized that the seized property
shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National
Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of carabaos." (Emphasis supplied.)
The phrase "may see fit" is an extremely generous and dangerous condition, if condition it is. It is laden
with perilous opportunities for partiality and abuse, and even corruption. One searches in vain for the
usual standard and the reasonable guidelines, or better still, the limitations that the said officers must
observe when they make their distribution. There is none. Their options are apparently boundless. Who
shall be the fortunate beneficiaries of their generosity and by what criteria shall they be chosen? Only the
officers named can supply the answer, they and they alone may choose the grantee as they see fit, and in
their own exclusive discretion. Definitely, there is here a "roving commission," a wide and sweeping
authority that is not "canalized within banks that keep it from overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers.
There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein
who are granted unlimited discretion in the distribution of the properties arbitrarily taken. For these
reasons, we hereby declare Executive Order No. 626-A unconstitutional.

The Quasi-Legislative Power: Third Requisite (Publication); Fourth Requisite (Due-Process)

TAÑADA vs. TUVERA, G.R. No. L-63915, April 24, 1985

Facts: Invoking the people's right to be informed on matters of public concern, a right recognized in
Section 6, Article IV of the 1973 Philippine Constitution, as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners,
Lorenzo M. Taňada et. al., seek a writ of mandamus to compel respondent public officials to publish,
and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions,
general orders, proclamations, executive orders, letter of implementation and administrative orders.
The respondents, through the Solicitor General, would have this case dismissed outright on the
ground that petitioners have no legal personality or standing to bring the instant petition.
Upon the other hand, petitioners maintain that since the subject of the petition concerns a public
right and its object is to compel the performance of a public duty, they need not show any specific interest
for their petition to be given due course.
Issue: Whether or not the said presidential issuances are in violation of the due process law for not
being published in the official gazette.
Held: The Court hereby orders respondents to publish in the Official Gazette all unpublished
presidential issuances which are of general application, and unless so published, they shall have no
binding force and effect.
The Court hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless
a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the President
in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at
present, directly conferred by the Constitution, Administrative rules and regulations must also be
published if their purpose is to enforce or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is publication
required of the so-called letters of instructions issued by administrative superiors concerning the
guidelines to be followed by their subordinates in the performance of their duty.
It is needless to add that the publication of presidential issuances "of a public nature" or "of
general applicability" is a requirement of due process. It is a rule of law that before a person may be
bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio
Teehankee said in Peralta vs. COMELEC :
In a time of proliferating decrees, orders and letters of instructions which all form
part of the law of the land, the requirement of due process and the Rule of Law demand
that the Official Gazette as the official government repository promulgate and publish the
texts of all such decrees, orders and instructions so that the people may know where to
obtain their official and specific contents.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

GONZALES vs. CA, G.R. No. 106028, May 9, 2001

Facts: Petitioner, Petitioner Lilia Y. Gonzales, received two orders from the Regional Office of the
Department of Agrarian Reform (DAR), signed by the respondent DAR Regional Director Antonio S.
Maraya, and issued pursuant to the operation land transfer program of the government under Presidential
Decree (PD) No. 27 directing her to surrender the titles to her land and to submit the other requirements
of the respondent Land Bank of the Philippines, while the said bank was ordered to pay the petitioner an
aggregate amount of P55,690.74 as compensation for the two parcels of land.
The petitioner filed a Petition for Certiorari and Prohibition with Temporary Restraining Order with
the Court of Appeals to restrain the enforcement and to annul the said two Orders of the DAR Regional
Director on the ground of lack or excess of jurisdiction, alleging that the petitioner never filed a land
transfer claim and was not notified of nor heard in the execution of the final survey plans and the valuation
of her land.
After requiring the respondents to file their Comment, the Court of Appeals rendered a Decision
dismissing the petition for failure of the petitioners to exhaust administrative remedies. The Court of
Appeals also held that Certiorari cannot be used by the petitioners as a substitute for appeal of the
assailed issuances. Hence this petition.
Issue: Whether or not the court of appeals committed a reversible error of law in dismissing the petition
for failing to exhaust administrative remedies.
Held: The petition is denied, and the assailed Decision of the Court of Appeals is affirmed.
The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the
administrative agencies to carry out their functions and discharge their responsibilities within the
specialized areas of their respective competence. It is presumed that an administrative agency, if afforded
an opportunity to pass upon a matter, will decide the same correctly, or correct any previous error
committed in its forum.9 Furthermore, reasons of law, comity and convenience prevent the courts from
entertaining cases proper for determination by administrative agencies. Hence, premature resort to the
courts necessarily becomes fatal to the cause of action of the petitioner.
After a careful perusal of the records, we find the doctrine of exhaustion of administrative
remedies to be applicable in this case.
The petitioner raises the following exceptions to the doctrine of Exhaustion of Administrative
Remedies as applicable to the case at bar: (1) where the questioned order is a patent nullity; (2) where
there is a deprivation of the petitioner's fundamental right to due process; and (3) where the question
involved is a purely legal one. We are not convinced that any of the exceptions obtains here. As above
stated, the Orders issued by the Regional Director pursuant to law are not patent nullities, and the alleged
denial of the petitioner's right to due process is intertwined with the question of notice upon the petitioner
which raises basically a factual matter, i.e., whether three notices were properly served upon petitioner.
This issue is not to be resolved by the Court of Appeals in the first instance on certiorari. This Court do
not see how the controversy raises a purely legal question.

Completeness Test

Beltran vs. Sec. of Health

Facts: Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law on April
2, 1994. The Act seeks to provide an adequate supply of safe blood by promoting voluntary blood
donation and by regulating blood banks in the country. It was approved by then President Fidel V. Ramos
on May 15, 1994 and was subsequently published in the Official Gazette on August 18, 1994. The law
took effect on August 23, 1994. On April 28, 1995, Administrative Order No. 9, Series of 1995,
constituting the Implementing Rules and Regulations of said law was promulgated by respondent
Secretary of the Department of Health Years prior to the passage of the National Blood Services Act of
1994, petitioners have already been operating commercial blood banks. Petitioners were granted by the
Secretary of Health their licenses to open and operate a blood bank only until May 27, 1998. On May 20,
1998, prior to the expiration of the licenses granted to petitioners, they filed a petition for certiorari with
application for the issuance of a writ of preliminary injunction or temporary restraining order under Rule 65
of the Rules of Court assailing the constitutionality and validity of the aforementioned Act and its
Implementing Rules and Regulations.
Issue: WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES UNDUE DELEGATION OF
LEGISLATIVE POWER
Held: In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual
to inquire whether the statute was complete in all its terms and provisions when it left the hands of the
Legislature so that nothing was left to the judgment of the administrative body or any other appointee or
delegate of the Legislature. Except as to matters of detail that may be left to be filled in by rules and
regulations to be adopted or promulgated by executive officers and administrative boards, an act of the
Legislature, as a general rule, is incomplete and hence invalid if it does not lay down any rule or definite
standard by which the administrative board may be guided in the exercise of the discretionary powers
delegated to it
Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in itself. It is clear
from the provisions of the Act that the Legislature intended primarily to safeguard the health of the people
and has mandated several measures to attain this objective. One of these is the phase out of commercial
blood banks in the country. The law has sufficiently provided a definite standard for the guidance of the
Secretary of Health in carrying out its provisions, that is, the promotion of public health by providing a safe
and adequate supply of blood through voluntary blood donation. By its provisions, it has conferred the
power and authority to the Secretary of Health as to its execution, to be exercised under and in pursuance
of the law.
Congress may validly delegate to administrative agencies the authority to promulgate rules and
regulations to implement a given legislation and effectuate its policies. The Secretary of Health has been
given, under Republic Act No. 7719, broad powers to execute the provisions of said Act.

Doctrine of Exhaustion of Administrative Remedies

CRISTOBAL VS COURT OF APPEALS, June 22, 1998 GRN 125339

Facts: When Visayas Avenue became a national road, private respondent Ledesma, owner of the road
lot used as a passageway by petitioners, filed for a petition before the RTC of Quezon City for conversion
of his road lot into residential lot. The petition was approved and thereafter sold his property to private
respondent Pacione. Petitioners opposed because it was inconvenient for them to use the longer route
exit to Visayas Avenue. Trial Court dismissed the petition for easement of right of way and on appeal to
the CA, petitioners alleged that the conversion of the Road Lot into two (2) residential lots by Cesar
Ledesma, Inc., was violative of PD No. 957 and the titles issued as a consequence of the conversion
were null and void.
Respondent Court of Appeals affirmed the decision of the Trial Court dismissing petitioners’
petition for easement of right of way and stated that has no legal leg to stand on since plaintiff-appellants
cannot just introduce a new issue to an already settled one, especially for the time on appeal.
Issue: Whether the Court of Appeals properly rejected the contention of petitioners that the conversion
of a road lot into a residential lot should be lodged in Administrative bodies and not by the Courts.
Held: The Supreme Court ruled that petitioners’ contention was properly rejected by the appellate court.
Primarily, the issue of legality or illegality of the conversion of the road lot in question has long been laid
to rest in LRC Case No. Q-1614 which declared with finality the legality of the segregation subdivision
survey plan of the disputed road lot. Consequently, it is now too late for petitioners to question the validity
of the conversion of the road lot.
Finally, questions relating to non-compliance with the requisites for conversion of subdivision lots
are properly cognizable by the National Housing Authority (NHA), now the Housing and Land Use
Regulatory Board (HLURB), pursuant to Sec. 22 of PD 957 and not by the regular court. Under the
doctrine of primary administrative jurisdiction, where jurisdiction is vested upon an administrative body, no
resort to the courts may be made before such administrative body shall have acted upon the matter.

Quasi-Legislative Function: Fourth Requisite

De Jesus vs. COA

Facts: Petitioners are employees of the Local Water Utilities Administration (LWUA). They were
receiving honoraria as designated members of the LWUA Board Secretariat and the President
Qualification, Bids and Awards Committee. Meanwhile, RA 6758 took effect and provides for the
consolidation of allowances and additional compensation into standardized salary rates. To implement it,
DBM issued CCC No. 10 discontinuing without qualification, all allowances and fringe benefits granted on
top of basic salary. Aggrieved, petitioners appealed to COA, questioning the validity and enforceability of
DBM-CCC No.10 and that it is without force and effect because it was not published in the Official
Gazette.
Issue: Whether or not DBM-CCC No. 10 is valid and enforceable.
Held: Petition granted. DBM-CCC No. 10 is invalid.
Rationale: Publication in the Official Gazette or in a newspaper of general circulation in the Philippines is
required since DBM-CCC No. 10 is in the nature of an administrative circular. The purpose of which is to
enforce or implement an existing law. Stated differently, to be effective and enforceable, DBM-CCC No.
10 must go through the requisite publication in the Official Gazette or in a newspaper of general
circulation in the Philippines. It is not merely an interpretative or internal regulation for it tends to deprive
government workers of their allowances and additional compensation sorely needed to keep body and
soul together. At the very least, before the said circular under attack may be permitted to substantially
reduce their income, the government officials and employees concerned should be apprised and alerted
by the publication of subject circular in the Official Gazette or in the newspaper of general circulation in
the Philippines – to the end that they may have, and to ventilate their stance on the matter. This approach
is more in keeping with democratic precepts and rudiments of fairness and transparency.

Powers of Administrative Agency: Sufficient Standard Test

BATANGAS CATV, INC vs. COURT OF APPEALS, 439 SCRA 326

Facts: Sangguniang Panlungsod enacted Resolution No. 2107 granting petitioner a permit to construct,
install, and operate a CATV system in Batangas City. Under it petitioner is authorized to increase the
rates of its services to its maximum rate. Subsequently, petitioner increased its subscriber rates from
88pesos to 180pesos. As a result, respondent mayor wrote petitioner threatening to cancel its permit
unless it secures the approval of Sangguniang Panlungsod pursuant to Resolution No. 210.
Petitioner then filed a petition for injunction contending that the Sangguniang Panlungsod has no
authority to regulate because it is the National telecommunications Commission who has the power to
regulate the CATV operation in the Philippines. Petitioner won in the lower court but was reversed by the
appellate court on the basis of Batas Pambansa Bilang 337, otherwise known as the Local Government
Code of 1983. Section 177 (now Section 457 paragraph 3 (ii) of Republic Act 7160) substantially provides
of the powers of the Sanggunian Panlungsod to enact ordinances, Regulate, fix the license fee for, and
tax any business or profession being carried on and exercised within the territorial jurisdiction of the city
xxx. Under cover of the General Welfare Clause as provided in this section, Local Government Units can
perform just about any power that will benefit their constituencies. Thus, local government units can
exercise powers that are: (1) expressly granted; (2) necessarily implied from the power that is expressly
granted; (3) necessary, appropriate or incidental for its efficient and effective governance; and (4)
essential to the promotion of the general welfare of their inhabitants. Hence, this petition.
Issue: Whether or not the Sangguniang Panlungsod is authorized to exercise the regulatory function
solely lodged with the NTC E.O. No.205?
Held: Earlier, Pres. Marcos issued Letter of Instruction (LOI) No. 894 vesting upon the Chairman of the
Board of Communications direct supervision over CATV operations directing it to issue certificates,
establish and prescribe areas of operation xxx. Upon President Corazon C. Aquino’s assumption of
power, she issued E.O. No. 20522 opening the CATV industry to all citizens of the Philippines. It
mandated the NTC to grant Certificates of Authority to CATV operators and to issue the necessary
implementing rules and regulations. On September 9, 1997, President Fidel V. Ramos issued E.O. No.
43623 prescribing policy guidelines to govern CATV operation in the Philippines.
But lest we be misunderstood, nothing herein should be interpreted as to strip LGUs of their
general power to prescribe regulations under the general welfare clause of the Local Government Code. It
must be emphasized that when E.O. No. 436 decrees that the "regulatory power" shall be vested "solely"
in the NTC, it pertains to the "regulatory power" over those matters which are peculiarly within the NTC’s
competence, such as, the: (1) determination of rates, (2) issuance of "certificates of authority, (3)
establishment of areas of operation, (4) examination and assessment of the legal, technical and financial
qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6) regulation of
ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar
matters.26 Within these areas, the NTC reigns supreme as it possesses the exclusive power to regulate
-- a power comprising varied acts, such as "to fix, establish, or control; to adjust by rule, method or
established mode; to direct by rule or restriction; or to subject to governing principles or laws."
The general welfare clause is the delegation in statutory form of the police power of the State to
LGUs. Through this, LGUs may prescribe regulations to protect the lives, health, and property of their
constituents and maintain peace and order within their respective territorial jurisdictions. Like any other
enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily
because the CATV system commits the indiscretion of crossing public properties. Like any other
enterprise, CATV operation maybe regulated by LGUs under the general welfare clause. This is primarily
because the CATV system commits the indiscretion of crossing public properties. This recourse finds
application here. Thus, we hold that the NTC, under E.O. No. 205, has exclusive jurisdiction over matters
affecting CATV operation, including specifically the fixing of subscriber rates, but nothing herein precludes
LGUs from exercising its general power, under R.A. No. 7160, to prescribe regulations to promote the
health, morals, peace, education, good order or safety and general welfare of their constituents. In effect,
both laws become equally effective and mutually complementary.
WHEREFORE, the petition is GRANTED.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

EDUARDO P. CORSIGA vs. HON. QUIRICO G. DEFENSOR, 391 SCRA 267

Facts: Private respondent Ortizo was the senior engineer of B in the National Irrigation Administration
(NIA), Jalaur-Suague River Irrigation System Region VI. He is tasked to assist Irrigation Superintendent in
the said station. Sometime in June 1995, petitioner Eduardo P. Corsiga, then regional irrigation manager
of the NIA, Region VI, issued Regional Office Memorandum (ROM) No. 52, reassigning private
respondent to Aganan-Sta. Barbara River Irrigation System, likewise to assist the Irrigation
Superintendent thereat. But private respondent wrote petitioner contending that the policy of rotation only
applies to Department Managers, Irrigation Superintendents, Provincial Engineers and Division Manager
of Field Offices. Petitioner denied the request and so private respondent filed a petition for injunction.
Petitioner moved to dismiss the petition for lack of jurisdiction and non-exhaustion of
administrative remedies, but the motion was denied. Petitioner then elevated it to the Court of Appeals but
the same was denied saying that the doctrine of exhaustion of administrative remedies does not apply
where the controverted act is patently illegal, arbitrary, and oppressive. Regional Office Memorandum No.
52, according to the court, was illegal since it violated private respondent's constitutional right to security
of tenure. Private respondent's original appointment as Senior Engineer B in the NIA Jalaur River
Irrigation System, Region VI is a permanent one; thus, it entitled him to a security of tenure. He cannot,
therefore, be reassigned to another position that involves a reduction in rank without his consent. Hence,
this petition.
Issue: Whether or not respondent has a valid cause of action against petitioner for failure to exhaust
administrative remedies?
Held: Being an NIA employee covered by the Civil Service Law, in our view, private respondent should
have first complained to the NIA Administrator, and if necessary, then appeal to the Civil Service
Commission. As ruled in Abe-Abe vs. Manta, 90 SCRA 524 (1979), if a litigant goes to court without first
pursuing his administrative remedies, his action is premature, and he has no cause of action to ventilate
in court. Hence, petitioner asserts that private respondent's case is not ripe for judicial determination.
According to private respondent, the circumstances of the case required him to urgently act on
his reassignment since he might be administratively charged if he resisted petitioner's order, yet, at the
same time he could be in estopped to question the order had he yielded to it without protest. According to
private respondent, petitioner was guilty of bad faith; his real objective was to assign someone close to
him to replace private respondent. Petitioner's action was capricious, whimsical, arbitrary, and
discriminatory, said private respondent since he was the only one, from among the officials or employees
of the same rank, who was reassigned.
However, private respondent failed to reckon with the fact that the issue in Civil Case No. 22462
was not purely a question of law. Certain Facts needed to be resolved first. Did private respondent's
reassignment involve a reduction in rank? Private respondent claimed his transfer to a new station
violated the rule on reassignment for he was allegedly transferred to a lower position. But petitioner had
refuted this contention, adding that his order reassigning private respondent was a lawful exercise of
management prerogatives. Lastly, private respondent claimed urgency in that he had no other recourse
but to go to court, or he would be charged administratively. However, under Omnibus Rules Implementing
the Civil Service Law, a recourse is available to him by way of appeal which could be brought to the
agency head, with further recourse, if needed, to the Civil Service Commission.
WHEREFORE, the petition is GRANTED.

Quasi-Judicial Power: Notice and Hearing

DELANO T. PADILLA vs. HON. PATRICIA STO. TOMAS, 243 SCRA 155
Facts: A case was filed against petitioner Delano Padilla, former officer-in-charge of the Land
Transportation Office (LTO) of Bacolod City. . It was alleged that petitioner succeeded in having caused
and approved the registration and/or transfer of ownership of twelve (12) carnapped and stolen vehicles
despite prior knowledge that existing laws, rules and regulations were violated in the registration and
transfer thereof. As contended by complainant LTO, petitioner failed to require confirmation of the
Certificate of Registration and Official Receipts corresponding to the subject vehicles from the LTO district
offices which issued the same. Had he done so, no registration and/or transfer of the vehicles would have
been possible because all the supporting documents pertinent to them were spurious. Petitioner however
contended that the twelve (12) motor vehicles were covered by proper clearances, certificates and similar
documents issued by the Constabulary Highway Patrol Group (CHPG). The case was heard before the
DOTC but petitioner and his counsel failed to appear. The case was decided against him and ordered him
to be dismissed from office. Petitioner moved for reconsideration but the same was denied. Petitioner
appealed to the Civil Service Commission but it was also denied. Hence, this petition.
Issue: Whether or not petitioner’s right of due process was violated?
Held: Petitioner contends that his constitutional right to due process was violated when on April 20,
1989 the scheduled hearing proceeded despite his, and his counsel's absence. He claims that nobody
testified during the hearing and that the supporting documents were not presented or marked in evidence.
Petitioner's position cannot be sustained.
The essence of due process is that a party be afforded reasonable opportunity to be heard and to
submit any evidence he may have in support of his defense. In administrative proceedings such as the
one at bench, due process simply means the opportunity to explain one's side or the opportunity to seek a
reconsideration of the action or ruling complained of.
In the instant case, petitioner does not deny the fact that he was furnished a copy of the charges
against him wherein he was required to file an answer and to state whether he wanted a formal
investigation. Petitioner did file his answer. And petitioner also admitted that he was notified. Thereafter,
on account of the liberality of the AAB-DOTC, he was heard and was allowed to present his evidence. He
was not denied his right to due process. One may be heard, not only by verbal presentation but also,
sometimes more eloquently, through pleadings. "Due process is not semper et ubique judicial process."
Hence, a formal or trial-type hearing is not, at all times, necessary. So long as a party is afforded fair and
reasonable opportunity to explain his side, the requirement of due process is complied with.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit.

Necessity for Notice of Hearing

MACEDA VS ENERGY REGULATORY BOARD, 192 SCRA 363

Facts: On 10 September 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum Corporation, and
Petron Corporation proferred separate applications with the Energy Regulatory Board for permission to
increase the wholesale posted prices of petroleum products, and meanwhile, for provisional authority to
increase temporarily such wholesale posted prices pending further proceedings. On September 21, 1990,
the Energy Regulatory Board, in a joint (on three applications) order granted provisional relief and
authorizes said applicants a weighted average provisional increase of ONE PESO AND FORTY-TWO
CENTAVOS (P1.42) per liter in the wholesale posted prices of their various petroleum products, refined
and/or marketed by them locally. The petitioners, Senator Ernesto Maceda and Atty. Oliver Lozano
submits that the same was issued without proper notice and hearing in violation of Section 3, paragraph
(e), of Executive Order No. 172, and has been issued with grave abuse of discretion, tantamount to lack
of jurisdiction, and correctible by certiorari. Hence, this petition praying for injunctive relief, to stop the
Energy Regulatory Board from implementing its order, dated September 21, 1990, mandating a
provisional increase in the prices of petroleum and petroleum products.
Issue: Whether or not the Order of the Energy Regulatory Board mandating a provisional increase on
petroleum products was issued in violation of the Constitutional right to notice and hearing?
Held: The Court ruled in the negative. Senator Maceda and Atty. Lozano, in questioning the lack of
notice and hearing, have overlooked the provisions of Section 8 of Executive Order No. 172. As the Order
itself indicated, the authority for provisional increase falls within this provision. There is no merit in the
Senator’s contention that the “applicable” provision is Section 3, paragraph (e) of said Executive Order.
What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does
not preclude the Board from ordering, ex parte, a provisional increase, subject to its final disposition of
whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application.
Section 3 paragraph (e) is akin to a temporary restraining order or a writ or preliminary attachment issued
by the courts, which are given ex parte, and which are subject to the resolution of the main case.
Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate
exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e)
outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject
to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an
authority to increase provisionally, without need of a hearing, subject to the final outcome of the
proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional
authority – which is of course, the better procedure – however, it cannot be stigmatized later if it failed to
conduct one.

Quasi-Judicial Power: Notice and Hearing

Montemayor vs. CA
Facts: Petitioner EDILLO C. MONTEMAYOR assails the Decision of the Court of Appeals, dated April
18, 2001, affirming the decision of the Office of the President in Administrative Order No. 12 ordering
petitioner’s dismissal as Regional Director of the Department of Public Works and Highways (DPWH) for
unexplained wealth.
Petitioner’s dismissal originated from an unverified letter-complaint, Private respondent accused
petitioner, then OIC-Regional Director, Region III, of the DPWH, of accumulating unexplained wealth, in
violation of Section 8 of Republic Act No. 3019. Private respondent charged that in 1993, petitioner and
his wife purchased a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California, making
a down payment of US$100,000.00. He further alleged that petitioner’s in-laws who were living in
California had a poor credit standing due to a number of debts and they could not have purchased such
an expensive property for petitioner and his wife. Private respondent accused petitioner of amassing
wealth from lahar funds and other public works projects.
From May 29, 1996 until March 13, 1997, the PCAGC conducted its own investigation of the
complaint. While petitioner participated in the proceedings and submitted various pleadings and
documents through his counsel, private respondent-complainant could not be located as his Philippine
address could not be ascertained. In the course of the investigation, the PCAGC repeatedly required
petitioner to submit his Statement of Assets, Liabilities and Net Worth (SALN), Income Tax Returns (ITRs)
and Personal Data Sheet. Petitioner ignored these directives and submitted only his Service Record. He
likewise adduced in evidence the checks allegedly issued by his sister-in-law to pay for the house and lot
in Burbank, California. When the PCAGC requested the Deputy Ombudsman for Luzon to furnish it with
copies of petitioner’s SALN from 1992-1994, it was informed that petitioner failed to file his SALN for
those years.
After the investigation, the PCAGC, in its Report to the Office of the President, made the following
findings: The PCAGC concluded that the petitioner could not have been able to afford to buy the property
on his annual income of P168,648.00 in 1993 as appearing on his Service Record. It likewise found
petitioner’s explanation as unusual, largely unsubstantiated, unbelievable and self-serving. The PCAGC
noted that instead of adducing evidence, petitioner’s counsel exerted more effort in filing pleadings and
motion to dismiss on the ground of forum shopping. It also took against petitioner his refusal to submit his
SALN and ITR despite the undertaking made by his counsel which raised the presumption that evidence
willfully suppressed would be adverse if produced. The PCAGC concluded that as petitioner’s acquisition
of the subject property was manifestly out of proportion to his salary, it has been unlawfully acquired.
Thus, it recommended petitioner’s dismissal from service pursuant to Section 8 of R.A. No. 3019.
Petitioner’s Motion for Reconsideration was denied. His appeal to the Court of Appeals was
likewise dismissed.
Issue: whether he was denied due process in the investigation before the PCAGC
Held: On the issue of due process, petitioner submits that the PCAGC committed infractions of the
cardinal rules of administrative due process when it relied on Bundalian’s unverified letter-complaint. He
gripes that his counter-affidavit should have been given more weight as the unverified complaint
constitutes hearsay evidence. Moreover, petitioner insists that in ruling against him, the PCAGC failed to
respect his right to confront and cross-examine the complainant as the latter never appeared in any of the
hearings before the PCAGC nor did he send a representative therein.
We find no merit in his contentions. The essence of due process in administrative proceedings is
the opportunity to explain one’s side or seek a reconsideration of the action or ruling complained of. As
long as the parties are given the opportunity to be heard before judgment is rendered, the demands of
due process are sufficiently met. In the case at bar, the PCAGC exerted efforts to notify the complainant
of the proceedings but his Philippine residence could not be located. Be that as it may, petitioner cannot
argue that he was deprived of due process because he failed to confront and cross-examine the
complainant. Petitioner voluntarily submitted to the jurisdiction of the PCAGC by participating in the
proceedings before it. He was duly represented by counsel. He filed his counter-affidavit, submitted
documentary evidence, attended the hearings, moved for a reconsideration of Administrative Order No.
12 issued by the President and eventually filed his appeal before the Court of Appeals. His active
participation in every step of the investigation effectively removed any badge of procedural deficiency, if
there was any, and satisfied the due process requirement. He cannot now be allowed to challenge the
procedure adopted by the PCAGC in the investigation.
 Neither can we sustain petitioner’s contention that the charge against him was unsupported by
substantial evidence as it was contained in an unverified complaint. The lack of verification of the
administrative complaint and the non-appearance of the complainant at the investigation did not divest the
PCAGC of its authority to investigate the charge of unexplained wealth. Under Section 3 of Executive
Order No. 151 creating the PCAGC, complaints involving graft and corruption may be filed before it in any
form or manner against presidential appointees in the executive department. Indeed, it is not totally
uncommon that a government agency is given a wide latitude in the scope and exercise of its
investigative powers. The Ombudsman, under the Constitution, is directed to act on any complaint
likewise filed in any form and manner concerning official acts or omissions. The Court Administrator of
this Court investigates and takes cognizance of, not only unverified, but even anonymous complaints filed
against court employees or officials for violation of the Code of Ethical Conduct. This policy has been
adopted in line with the serious effort of the government to minimize, if not eradicate, graft and corruption
in the service.
It is well to remember that in administrative proceedings, technical rules of procedure and
evidence are not strictly applied. Administrative due process cannot be fully equated with due process in
its strict judicial sense for it is enough that the party is given the chance to be heard before the case
against him is decided.

Quasi-Judicial Power: Doctrine of Res Judicata

Montemayor vs. CA
Facts: Petitioner EDILLO C. MONTEMAYOR assails the Decision of the Court of Appeals, dated April
18, 2001, affirming the decision of the Office of the President in Administrative Order No. 12 ordering
petitioner’s dismissal as Regional Director of the Department of Public Works and Highways (DPWH) for
unexplained wealth.
Petitioner’s dismissal originated from an unverified letter-complaint, Private respondent accused
petitioner, then OIC-Regional Director, Region III, of the DPWH, of accumulating unexplained wealth, in
violation of Section 8 of Republic Act No. 3019. Private respondent charged that in 1993, petitioner and
his wife purchased a house and lot at 907 North Bel Aire Drive, Burbank, Los Angeles, California, making
a down payment of US$100,000.00. He further alleged that petitioner’s in-laws who were living in
California had a poor credit standing due to a number of debts and they could not have purchased such
an expensive property for petitioner and his wife. Private respondent accused petitioner of amassing
wealth from lahar funds and other public works projects.
Petitioner likewise pointed out that the charge against him was the subject of similar cases filed
before the Ombudsman. He attached to his counter-affidavit the Consolidated Investigation Report of the
Ombudsman dismissing similar charges for insufficiency of evidence.
After the investigation, the PCAGC, in its Report to the Office of the President, made the following
findings: The PCAGC concluded that the petitioner could not have been able to afford to buy the property
on his annual income of P168,648.00 in 1993 as appearing on his Service Record. It likewise found
petitioner’s explanation as unusual, largely unsubstantiated, unbelievable and self-serving. The PCAGC
noted that instead of adducing evidence, petitioner’s counsel exerted more effort in filing pleadings and
motion to dismiss on the ground of forum shopping. It also took against petitioner his refusal to submit his
SALN and ITR despite the undertaking made by his counsel which raised the presumption that evidence
willfully suppressed would be adverse if produced. The PCAGC concluded that as petitioner’s acquisition
of the subject property was manifestly out of proportion to his salary, it has been unlawfully acquired.
Thus, it recommended petitioner’s dismissal from service pursuant to Section 8 of R.A. No. 3019.
Petitioner’s Motion for Reconsideration was denied. His appeal to the Court of Appeals was
likewise dismissed.
Issue: Whether the earlier dismissal of similar cases before the Ombudsman rendered the
administrative case before the PCAGC moot and academic.
Held: we cannot sustain petitioner’s stance that the dismissal of similar charges against him before the
Ombudsman rendered the administrative case against him before the PCAGC moot and academic. To be
sure, the decision of the Ombudsman does not operate as res judicata in the PCAGC case subject of this
review. The doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the
exercise of administrative powers. Petitioner was investigated by the Ombudsman for his possible
criminal liability for the acquisition of the Burbank property in violation of the Anti-Graft and Corrupt
Practices Act and the Revised Penal Code. For the same alleged misconduct, petitioner, as a presidential
appointee, was investigated by the PCAGC by virtue of the administrative power and control of the
President over him. As the PCAGC’s investigation of petitioner was administrative in nature, the doctrine
of res judicata finds no application in the case at bar.
Quasi-Legislative Function: Nature

SHELL PHILIPPINES, INC. vs. CENTRAL BANK OF THE PHILIPPINES, G.R. No. L-51353, June 27,
1988
Facts: On May 1, 1970, Congress approved the Act imposing a stabilization tax on consignments abroad
(RA 6125).
Ten per centum of the F.O.B. peso proceeds of exports received on or after the date of effectivity
of this Act to June thirty, nineteen hundred seventy-one; Eight per centum of the F.O.B. peso proceeds of
exports received from July first, nineteen hundred seventy-one to June thirty, nineteen hundred seventy-
two.
In August, 1970, the Central Bank, through its Circular No. 309 provided that:
The stabilization tax shall begin to apply on January 1st following the calendar year during which
such export products shall have reached the aggregate F.O.B. value of more than US $5 million, and the
applicable tax rates shall be the rates prescribed in Schedule (b) of Section 1 of Republic Act No. 6125 for
the fiscal year following the reaching of the said aggregate value.
During 1971, appellee Shell, Philippines, Inc. exported seria residues, a by-product of petroleum
refining, to an extent reaching $5 million. On January 7, 1972, the Monetary Board issued its Resolution
No. 47 "subjecting petroleum pitch and other petroleum residues" to the stabilization tax effective January
1, 1972. Under the Central Bank Circular No. 309, implemented by Resolution No. 47, appellee had to
pay the stabilization tax beginning January 1, 1972, which it did under protest.
The appellee filed suit against the Central Bank before the Court of First Instance of Manila,
praying that Monetary Board Resolution No. 47 be declared null and void, and that Central Bank be
ordered to refund the stabilization tax it paid during the first semester of 1972. Its position was that,
pursuant to the provisions of RA 6125, it had to pay the stabilization tax only from July 1, 1972.
The lower court sustained appellee, and it declared Monetary Board Resolution No. 47 as void.
The Central Bank appeals.
Issue: Whether or not the Central Bank Circular No. 309, implemented by Resolution No. 47 is null and
void being contradictory to R.A. 6125.
Held: The assailed decision is affirmed but modified.
The trial court was correct in declaring that "Monetary Board Resolution No. 47 is void insofar as
it imposes the tax mentioned in Republic Act No. 6125 on the export seria residue of (plaintiff) the
aggregate annual F.O.B., value of which reached five million United States dollars in 1971 effective on
January 1, 1972." The said resolution runs counter to the provisions of R.A. 6125.
The rule or regulation should be within the scope of the statutory authority granted by the
legislature to the administrative agency. (Davis, Administrative Law, p. 194, 197, cited in Victorias Milling
Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to implement said
law, the basic law prevails because said rule or regulation cannot go beyond the terms and provisions of
the basic law (People v. Lim, 108 Phil. 1091).

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

DEPARTMENT OF AGRARIAN REFORM vs. APEX INVESTMENT AND FINANCING CORPORATION

(now SM Investment Corporation), G.R. No. 149422, April 10, 2003
Facts: Respondent Apex Investment and Financing Corporation (now SM Investments Corporation),
registered under the laws of the Philippines, owns several lots located at Barangay Paliparan,
Dasmariñas, Cavite. The Municipal Agrarian Reform Office (MARO) of Dasmariñas initiated compulsory
acquisition proceedings over those lots pursuant to Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988. The MARO issued a Notice of Coverage informing
respondent of the compulsory acquisition and inviting it to a meeting set on September 8, 1994; and
Notice of Acquisition. Copies of these notices were sent to respondent's office at 627 Echague Street,
Manila. However, respondent denied having received the same because it was no longer holding office
there.
Respondent learned of the compulsory acquisition proceedings from the December 11, 1997
issue of the Balita stating, that 23,614 square meters of their lot, has been placed under the compulsory
acquisition program. Forthwith, petitioner sent respondent a copy of the Notice of Land Valuation and
Acquisition, offering to pay compensation. Respondent filed with the PARO a Protest rejecting the offer of
compensation and contending that its lands are not covered by R.A. No. 6657 because they were
classified as residential.
 Respondent received a letter dated May 28, 1999 from petitioner requiring it to submit certified
true copies of the TCTs covering its lots and a Certification from the HLURB attesting that they are within
the residential zone of Dasmariñas based on HLURB Resolution No. R-42-A-3 dated February 11, 1981.
Respondent came to know that TCT No. T-868471 was cancelled and in lieu thereof, TCT No.
CLOA-2473 was issued in the name of Angel M. Umali, a farmer-beneficiary allegedly occupying the land.
This prompted respondent to file with the Court of Appeals a petition for certiorari and prohibition praying
that the compulsory acquisition proceedings over its landholdings be declared void and that TCT No.
CLOA-2473 issued to Angel Umali be cancelled.
In its comment, petitioner alleged that respondent failed to exhaust all administrative remedies
before filing its petition. Hence, the same should be dismissed. The Court of Appeals granted the petition
for certiorari. Petitioner filed a motion for reconsideration but was denied in the Resolution dated August
2, 2001. Hence, the instant petition for review on certiorari.
Issue: Whether or not the respondent corporation violated the doctrine of exhaustion of administrative
remedies.
Held: The challenged decision of the Court of Appeals is affirmed with modifications.
The Court has consistently held that the doctrine of exhaustion of administrative remedies is a
relative one and is flexible depending on the peculiarity and uniqueness of the factual and circumstantial
settings of a case. Among others, it is disregarded where, as in this case, (a) there are circumstances
indicating the urgency of judicial intervention; and (b) the administrative action is patently illegal and
amounts to lack or excess of jurisdiction.
In Natalia Realty vs. Department of Agrarian Reform, we held that the aggrieved landowners
were not supposed to wait until the DAR acted on their letter-protests (after it had sat on them for almost
a year) before resorting to judicial process. Given the official indifference which, under the circumstances
could have continued forever, the landowners had to act to assert and protect their interests. Thus, their
petition for certiorari was allowed even though the DAR had not yet resolved their protests. In the same
vein, respondent here could not be expected to wait for petitioner DAR to resolve its protest before
seeking judicial intervention. Obviously, petitioner might continue to alienate respondent's lots during the
pendency of its protest. Hence, the Court of Appeals did not err in concluding that on the basis of the
circumstances of this case, respondent need not exhaust all administrative remedies before filing its
petition for certiorari and prohibition.

Completeness Test

Velarde vs. SJS

Facts: Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the June 12,
2003 Decision and July 29, 2003 Order3 of the Regional Trial Court (RTC) of Manila (Branch 49).
The challenged Decision was the offshoot of a Petition for Declaratory Relief filed before the
RTC-Manila by herein Respondent Social Justice Society (SJS) against herein Petitioner Mariano "Mike"
Z. Velarde, together with His Eminence, Jaime Cardinal Sin, Executive Minister Eraño Manalo, Brother
Eddie Villanueva and Brother Eliseo F. Soriano as co-respondents. The Petition prayed for the resolution
of the question "whether or not the act of a religious leader like any of herein respondents, in endorsing
the candidacy of a candidate for elective office or in urging or requiring the members of his flock to vote
for a specified candidate, is violative of the letter or spirit of the constitutional provisions.
Issue: Did the RTC Decision conform to the form and substance required by the Constitution, the law
and the Rules of Court?
Held: The Constitution commands that "[n]o decision shall be rendered by any court without expressing
therein clearly and distinctly the Facts and the law on which it is based. No petition for review or motion
for reconsideration of a decision of the court shall be refused due course or denied without stating the
basis therefor."
Consistent with this constitutional mandate, Section 1 of Rule 36 of the Rules on Civil Procedure
similarly provides:
"Sec. 1. Rendition of judgments and final orders. – A judgment or final order determining the
merits of the case shall be in writing personally and directly prepared by the judge, stating clearly and
distinctly the Facts and the law on which it is based, signed by him and filed with the clerk of court."
In the same vein, Section 2 of Rule 120 of the Rules of Court on Criminal Procedure reads as
follows:
"Sec. 2. Form and contents of judgments. -- The judgment must be written in the official
language, personally and directly prepared by the judge and signed by him and shall contain clearly and
distinctly a statement of the Facts proved or admitted by the accused and the law upon which the
judgment is based.
 Pursuant to the Constitution, this Court also issued on January 28, 1988, Administrative Circular
No. 1, prompting all judges "to make complete findings of Facts in their decisions, and scrutinize closely
the legal aspects of the case in the light of the evidence presented. They should avoid the tendency to
generalize and form conclusions without detailing the Facts from which such conclusions are deduced."
"Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is
indisputably a paramount component of due process and fair play. It is likewise demanded by the due
process clause of the Constitution. The parties to a litigation should be informed of how it was decided,
with an explanation of the factual and legal reasons that led to the conclusions of the court.

Judicial Review: Doctrine of Exhaustion of Administrative Remedies

Industrial Enterprise Inc. vs. CA (184 SCRA 462)

Facts: 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 so-called "Giporlos Area."
IEI was later on advised that in line with the objective of rationalizing the country's over-all coal
supply-demand balance, the logical coal operator in the area should be the Marinduque Mining and
Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay
Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC. Thus, IEI and MMIC
executed a Memorandum of Agreement whereby IEI assigned and transferred to MMIC all its rights and
interests in the 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 before the Regional Trial Court of Makati 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. 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.
Issue: Whether or not the civil court has jurisdiction to hear and decide the suit for rescission of the
Memorandum of Agreement?
Held: No.
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".
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.

Powers of Administrative Agency: Sufficient Standard Test

Tatad vs. Secretary of Dept. of Energy (G.R. No. 124360, Nov. 5, 1997)
Facts: In March 1996, Congress enacted R.A. No. 8180, entitled the "Downstream Oil Industry
Deregulation Act of 1996," to deregulate the oil industry.
Under the deregulated environment, "any person or entity may import or purchase any quantity of
crude oil and petroleum products from a foreign or domestic source, lease or own and operate refineries
and other downstream oil facilities and market such crude oil or use the same for his own requirement,"
subject only to monitoring by the Department of Energy.
The deregulation process has two phases: the transition phase and the full deregulation phase.
The first phase of deregulation commenced on August 12, 1996. On February 8, 1997, the President
implemented the full deregulation of the Downstream Oil Industry through E.O. No. 372.
The pertinent portion of Sec. 15 of R.A. No. 8180 states:
Sec. 15. Implementation of Full Deregulation — Pursuant to section 5(e) of
Republic Act No. 7638, the DOE shall, upon approval of the President, implement the full
deregulation of the downstream oil industry not later than March 1997. As far as
practicable, the DOE shall time the full deregulation when the prices of crude oil and
petroleum products in the world market are declining and when the exchange rate of the
peso in relation to the US dollar is stable . . .
Petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, Flag Human
Rights Foundation, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contend that the words "as far
as practicable," "declining" and "stable" should have been defined in R.A. No. 8180 as they do not set
determinate or determinable standards for full deregulation.
Issue: Whether or not R.A. No. 8180 contains sufficient standards for implementation?
Held: Yes. It will be noted that Congress expressly provided in R.A. No. 8180 that full deregulation will
start at the end of March 1997, regardless of the occurrence of any event. Full deregulation at the end of
March 1997 is mandatory and the Executive has no discretion to postpone it for any purported reason.
Thus, the law is complete on the question of the final date of full deregulation. The discretion given to the
President is to advance the date of full deregulation before the end of March 1997. Sec. 15 lays down the
standard to guide the judgment of the President — he is to time it as far as practicable when the prices of
crude oil and petroleum products in the world market are declining and when the exchange rate of the
peso in relation to the US dollar is stable.
Furthermore, the dictionary meanings of these words ("as far as practicable," "declining" and
"stable") are well settled and cannot confuse men of reasonable intelligence. Webster defines
"practicable" as meaning possible to practice or perform, "decline" as meaning to take a downward
direction, and "stable" as meaning firmly established. The fear of petitioners that these words will result in
the exercise of executive discretion that will run riot is thus groundless.

Quasi-Legislative Function: Administrative Rule with Penal Sanctions

Tayug Rural Bank vs. Central Bank of the Phils. (G.R. No. L-46158, Nov. 28, 1986)
Facts: During the period from December 28, 1962 to July 30, 1963, Tayug Rural Bank, Inc. obtained 13
loans from the Central Bank of the Philippines. The loans were all covered by corresponding promissory
notes prescribing the terms and conditions of the aforesaid loans. No penal clause was included in the
promissory notes.
On December 23, 1964, the Central Bank issued Memorandum Circular No. DLC-8, informing all
rural banks that an additional penalty interest rate of ten per cent (10%) per annum would be assessed on
all past due loans beginning January 4, 1965. Said Memorandum Circular was actually enforced on all
rural banks effective July 4, 1965.
The Central Bank justified the imposition of the penalty by stating that it was legally imposed
under the provisions of Section 147 and 148 of the Rules and Regulations Governing Rural Banks
promulgated by the Monetary Board on September 5, 1958, under authority of Section 3 of Republic Act
No. 720, as amended.
Issue: Whether or not the Central Bank can validly impose the 10% penalty?

Held: No. Sec. 3 of R.A. No. 720 reads:

SEC. 3. In furtherance of this policy, the Monetary Board of the Central Bank of
the Philippines shall formulate the necessary rules and regulations governing the
establishment and operatives of Rural Banks for the purpose of providing adequate credit
facilities to small farmers and merchants, or to cooperatives of such farmers or
merchants and to supervise the operation of such banks.
Nowhere in any of the above-quoted pertinent provisions of R.A. 720 nor in any other provision of
R.A. 720 for that matter, is the monetary Board authorized to mete out on rural banks an additional
penalty rate on their past due accounts with Central Bank. While the Monetary Board possesses broad
supervisory powers, nonetheless, the retroactive imposition of administrative penalties cannot be taken as
a measure supervisory in character.
An administrative agency cannot impose a penalty not so provided in the law authorizing the
promulgation of the rules and regulations, much less one that is applied retroactively.

POWERS OF ADMINISTRATIVE AGENCY - SUFFICIENT STANDARD TEST

EMMANUEL PELAEZ vs. THE AUDITOR GENERAL, G.R. No. L-23825, December 24, 1965
Facts: From September 4, 1964 to October 29, 1964 the President of the Philippines issued executive
orders to create thirty-three municipalities pursuant to Section 68 of the Revised Administrative Code.
Public funds thereby stood to be disbursed in implementation of said executive orders.
Suing as private citizen and taxpayer, Vice President Emmanuel Pelaez filed in this Court a
petition for prohibition with preliminary injunction against the Auditor General. It seeks to restrain the
respondent or any person acting in his behalf, from passing in audit any expenditure of public funds in
implementation of the executive orders aforementioned.
Petitioner contends that the President has no power to create a municipality by executive order. It
is argued that Section 68 of the Revised Administrative Code of 1917, so far as it purports to grant any
such power, is invalid or, at the least, already repealed, in light of the Philippine Constitution and Republic
Act 2370 (The Barrio Charter).
Issue: Whether the act of the president constitutes a violation of valid delegation of power?
Held: The Supreme Court ruled that the authority to create municipal corporations is essentially
legislative in nature and "strictly a legislative function" or "solely and exclusively the exercise of legislative
power"; that "municipal corporations are purely the creatures of statutes." That although Congress may
delegate to another branch of the Government the power to fill in the details in the execution, enforcement
or administration of a law, it is essential, to forestall a violation of the principle of separation of powers,
that said law: (a) be complete in itself — it must set forth therein the policy to be executed, carried out or
implemented by the delegate and (b) fix a standard — the limits of which are sufficiently determinate or
determinable — to which the delegate must conform in the performance of his functions.2a Indeed, without
a statutory declaration of policy, the delegate would in effect, make or formulate such policy, which is the
essence of every law; and, without the aforementioned standard, there would be no means to determine,
with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority.
Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also — and this
is worse — to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act
of Congress, thus nullifying the principle of separation of powers and the system of checks and balances,
and, consequently, undermining the very foundation of our Republican system.
Section 68 of the Revised Administrative Code does not meet these well settled requirements for
a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any
policy to be carried out or implemented by the President. Neither does it give a standard sufficiently
precise to avoid the evil effects above referred to. That the better proof of the fact that the issuance of
said executive orders entails the exercise of purely legislative functions can hardly be given. That power
of control of the president over the officers of the executive departments, bureaus, or offices of the
national government is denied by the constitution to the executive, in so far as the local government is
concerned.
Likewise the supreme court ruled, that instead of giving the President less power over local
governments than that vested in him over the executive departments, bureaus or offices, it reverses the
process and does the exact opposite, by conferring upon him more power over municipal corporations
than that which he has over said executive departments, bureaus or offices.
The Executive Orders in question are declared null and void ab initio by the supreme court and
the respondent permanently restrained from passing in audit any expenditure of public funds in
implementation of said Executive Orders or any disbursement by the municipalities above referred to.

QUASI-JUDICIAL POWER - ADMIN. APPEAL AND REVIEW, DOCTRINE OF RES JUDICATA

Fortich vs. Corona (289 SCRA 624)

Facts: The strikers protested the March 29, 1996 Decision of the Office of the President (OP), issued
through then Executive Secretary Ruben D. Torres, which approved the conversion of a one hundred
forty-four (144)-hectare land from agricultural to agro-industrial/institutional area. This led the Office of the
President, through then Deputy Executive Secretary Renato C. Corona, to issue the so-called “Win-Win”
Resolution on November 7, 1997, substantially modifying its earlier Decision after it had already become
final and executory. The said Resolution modified the approval of the land conversion to agro-industrial
area only to the extent of forty-four (44) hectares, and ordered the remaining one hundred (100) hectares
to be distributed to qualified farmer-beneficiaries.
This case involves a 144-hectare land, owned by the Norberto Quisumbing, Sr. Management and
Development Corporation (NQSRMDC), one of the petitioners. In 1984, the land was leased as a
pineapple plantation to the Philippine Packing Corporation, now Del Monte Philippines, Inc. (DMPI), a
multinational corporation, for a period of ten (10) years under the Crop Producer and Grower’s
Agreement. The lease expired in April, 1994.
In October, 1991, during the existence of the lease, the Department of Agrarian Reform (DAR)
placed the entire 144-hectare property under compulsory acquisition. NQSRMDC resisted the DAR’s
action. In February, 1992, it sought and was granted by the DAR Adjudication Board (DARAB), through
its Provincial Agrarian Reform Adjudicator, a writ of prohibition with preliminary injunction.
Despite the DARAB order, the DAR Regional Director issued a memorandum, dated directing the
Land Bank to open a trust account in the name of NQSRMDC and to conduct summary proceedings to
determine the just compensation of the subject property. NQSRMDC objected to these moves and
filed on June 9, 1992 an Omnibus Motion to enforce the DARAB order of March 31, 1992 and to nullify
the summary proceedings undertaken by the DAR Regional Director and Land Bank on the valuation of
the subject property.
The DARAB, acted favorably on the Omnibus Motion by (a) ordering the DAR Regional Director
and Land Bank “to seriously comply with the terms of the order dated (b) nullifying the DAR Regional
Director’s memorandum and the summary proceedings conducted pursuant thereto; and (c) directing the
Land Bank “to return the claim folder of Petitioner NQSRMDC’s subject property to the DAR until further
orders.
In the meantime, Governor Carlos O. Fortich, passed Resolution No. 6dated, designating certain
areas along Bukidnon-Sayre Highway as part of the Bukidnon Agro-Industrial Zones where the subject
property is situated.
On November 14, 1994, the DAR, thru Secretary Garilao, issued an Order denying the instant
application for the conversion of the subject land from agricultural to agro-industrial and, instead, placed
the same under the compulsory coverage of CARP.
Governor Carlos O. Fortich of Bukidnon appealed the order of denial to the Office of the
President and prayed for the conversion/reclassification of the subject land as the same would be more
beneficial to the people of Bukidnon.
On June 29, 1995, filed with the Court of Appeals a petition for certiorari, prohibition with
preliminary injunction.In resolving the appeal, the Office of the President, through then Executive
Secretary Ruben D. Torres, issued a Decision approving the application of the petitioners. Thereafter
DAR filed a motion for reconsideration of the OP decision.
NQSRMDC filed a complaint with the Regional Trial Court (RTC) of Malaybalay, Bukidnon for
annulment and cancellation of title, damages and injunction against DAR and 141 others. The RTC then
issued a Temporary Restraining Order and a Writ of Preliminary Injunction, restraining the DAR and 141
others from entering, occupying and/or wresting from NQSRMDC the possession of the subject land.
On June 23, 1997, an Order was issued by then Executive Secretary Ruben D. Torres denying
DAR’s motion for reconsideration for having been filed beyond the reglementary period of fifteen (15)
days. The said order further declared that the March 29, 1996 OP decision had already become final and
executory. The DAR filed on July 11, 1997 a second motion for reconsideration of the June 23, 1997
Order of the President.
On August 12, 1997, the said writ of preliminary injunction issued by the RTC was challenged by
some alleged farmers before the Court of Appeals through a petition for certiorari and prohibition, praying
for the lifting of the injunction and for the issuance of a writ of prohibition from further trying the RTC case.
On October 9, 1997, some alleged farmer-beneficiaries began their hunger strike in front of the DAR
Compound in Quezon City to protest the OP Decision of March 29, 1996. On November 7, 1997, the
Office of the President resolved the strikers’ protest by issuing the so-called “Win/Win” Resolution penned
by then Deputy Executive Secretary Renato C. Corona.
A copy of the “Win-Win” Resolution was received by Governor Carlos O. Fortich and NQSRMDC
and they filed the present petition for certiorari, prohibition and injunction with urgent prayer for a
temporary restraining order and/or writ of preliminary injunction against then Deputy Executive Secretary
Renato C. Corona and DAR Secretary Ernesto D. Garilao.
A Motion For Leave To Intervene was filed by alleged farmer-beneficiaries, through counsel,
claiming that they are real parties in interest.
In seeking the nullification of the “Win-Win” Resolution, the petitioners claim that the Office of the
President come up purely political decision to appease the ‘farmers,’ by reviving and modifying the
Decision of 29 March 1996 which has been declared final and executory in an Order of 23 June 1997.
Petitioners further allege, respondent then Deputy Executive Secretary Renato C. Corona “committed
grave abuse of discretion and acted beyond his jurisdiction when he issued the questioned Resolution of
7 November 1997.
Issues: Whether the recourse of petitioners is proper or not?
Whether the petitioners committed a fatal procedural lapse when they failed to file a motion for
reconsideration of the assailed resolution before seeking judicial recourse?
Whether the act petitioners constitute forum shopping?
Whether the intervention filed by the farmer beneficiaries, meritorious?
Whether the final and executory decision dated March 29, 1996 can still be substantially modified
by the “win win resolution” ?
Held: First issue; to resolve the issue the S.C. draw a line between an error of judgment and an error of
jurisdiction. An error of judgment is one which the court may commit in the exercise of its jurisdiction,
and which error is reviewable only by an appeal. On the other hand, an error of jurisdiction is one where
the act complained of was issued by the court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is tantamount to lack or in excess of jurisdiction. This
error is correctable only by the extraordinary writ of certiorari. Furthermore the S.C. ruled that the remedy
prescribed in Rule 43 is inapplicable considering that the present petition contains an allegation that the
challenged resolution is “patently illegal and was issued with “grave abuse of discretion” and “beyond
respondent Secretary Renato C. Corona’s jurisdiction when said resolution substantially modified the
earlier OP Decision of March 29, 1996 which had long become final and executory; that the issue raised
involves an error of jurisdiction, not an error of judgment which is reviewable by an appeal; that the
appropriate remedy to annul and set aside the assailed resolution is an original special civil action for
certiorari, as what the petitioners have correctly done; that the writs prayed for should be allowed only
when there are special and important reasons which, clearly and specifically set out in the petition.
Second issue; the court stated that the said motion is not necessary when the questioned
resolution is a patent nullity.
Third issue; the supreme court ruled that the acts of the petitioner does not constitute forum
shopping, explaining that “there is forum-shopping whenever, as a result of an adverse opinion in one
forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. The principle
applies not only with respect to suits filed in the courts but also in connection with litigation commenced in
the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative
processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This
specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction.
Furthermore the court explained that the test for determining whether a party violated the rule against
forum shopping is where elements of litis pendentia are present or where a final judgement in one case
will amount to res judicata in the other, which are absent in the case at bar.
Fourth issue; the supreme court ruled that a real party in interest is a party who would be
benefited or injured by the judgment or is the party entitled to the avails of the suit. Real interest means a
present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate
or consequential interest; that undoubtedly, movants’ interest over the land in question is a mere
expectancy that they are not real parties in interest. Furthermore, the court ruled that the challenged
resolution upon which movants based their motion is null and void. Hence, their motion for intervention
has no leg to stand on.
Main issue; the supreme court ruled that when the Office of the President issued the Order dated
June 23,1997 declaring the Decision of March 29, 1996 final and executory, as no one has seasonably
filed a motion for reconsideration thereto, the said Office had lost its jurisdiction to re-open the case, more
so modify its Decision. Having lost its jurisdiction, the Office of the President has no more authority to
entertain the second motion for reconsideration filed by respondent DAR Secretary, which second motion
became the basis of the assailed “Win-Win” Resolution; that only one (1) motion for reconsideration is
allowed to be taken from the Decision of March 29, 1996. And even if a second motion for reconsideration
was permitted to be filed in “exceptionally meritorious cases,” still the said motion should not have been
entertained considering that the first motion for reconsideration was not seasonably filed, thereby allowing
the Decision of March 29, 1996 to lapse into finality. The orderly administration of justice requires that the
judgments/resolutions of a court or quasi-judicial body must reach a point of finality set by the law, rules
and regulations. Furthermore the court ruled that the assailed “Win-Win” Resolution which substantially
modified the Decision of March 29, 1996 after it has attained finality, is utterly void.
To sum up, the petition was granted and the challenged resolution is nullified and set aside; and
the Motion For Leave To Intervene filed by alleged farmer-beneficiaries isdenied.

Judicial Review: Eception to the Doctrine

Vda. De Tan vs. Veterans Backpay Commission (105 Phil 377)

Facts: On March 5, 1957, petitioner-appellee, Maria Natividad vda. de Tan filed with the Court of First
Instance of Manila a verified petition for mandamus seeking an order to compel the respondent-appellant
Veterans Back Pay Commission: (1) to declare deceased Lt. Tan Chiat Bee alias Tan Lian Lay, a
Chinese national, entitled to backpay rights, privileges, and prerogatives under Republic Act No. 304, as
amended by Republic Act No. 897; and (2) to give due course to the claim of petitioner, as the widow of
the said veterans, by issuing to her the corresponding backpay certificate of indebtedness.
Respondent Commission filed its answer in due time asserting certain special and affirmative
defenses, on the basis of which, the Commission unsuccessfully moved to dismiss the petition. The
petition is granted, ordering respondent Commission to give due course to the claim of herein petitioner to
the backpay to which her deceased husband was entitled as member of a duly recognized guerrilla
organization.
The respondent instituted this appeal averring once more, in its assignment of errors, the special
and affirmative defenses that the petitioner failed to exhaust available administrative remedies; that the
suit is, in effect, an action to enforce a money claim against the government without its consent; that
mandamus will not lie to compel the exercise of a discretionary function; and that the Republic Act Nos.
304 and 897 already referred to were never intended to benefit aliens.
Issue: Whether or not the petitioner should have first exhausted her administrative remedies by
appealing to the President of the Philippines before filing an action in court?
Held: The supreme court ruled that the claim that mandamus is not the proper remedy to correct the
exercise of discretion of the Commission, it may well be remembered that its discretion is limited to the
facts of the case in merely evaluating the evidence whether or not the claimant is a member of a guerrilla
force duly recognized by the United States Army; that nowhere in the law is the respondent Commission
given the power to adjudicate or determine rights after such facts are established; that the contention of
the Commission that the petitioner should have first exhausted her administrative remedies by appealing
to the President of the Philippines, and that her failure to do so is a bar to her action in court. The
respondent Commission is in estoppel to invoke this rule, considering that in its resolution, reiterating its
obstinate refusal to abide by the opinion of the Secretary of Justice, that the opinions promulgated by the
Secretary of Justice are advisory in nature, which may either be accepted or ignored by the office seeking
the opinion, and any aggrieved party has the court for recourse, thereby leading the petitioner to conclude
that only a final judicial ruling in her favor would be accepted by the Commission.
That neither is there substance in the contention that the petition is, in effect, a suit against the
government without its consent; that the relief prayed for is simply "the recognition of the petitioner-
appellee" and consists in "directing an agency of the government to perform an act, it is bound to
perform." Republic Act Nos. 304 and 897 necessarily embody state consent to an action against the
officers entrusted with the implementation of said Acts in case of unjustified refusal to recognize the rights
of proper applicants. The decision appealed from was affirmed.

Quasi-Legislative Function: Nature Function (Nature)

Ople vs. Torres
293SCRA141

Facts:
Petitioner Ople sought to invalidate Administrative Order No. 308 issued by president Fidel V.
Ramos entitled "Adoption of a National Computerized Identification Reference System" on two important
constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it
impermissibly intrudes on our citizenry's protected zone of privacy.
A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and
January 23, 1997. On January 24, 1997, petitioner filed the instant petition against respondents, then
Executive Secretary Ruben Torres and the heads of the government agencies, who as members of the
Inter-Agency Coordinating Committee, are charged with the implementation of A.O. No. 308. On April 8,
1997, The SC issued a temporary restraining order enjoining its implementation.
Issue: Whether or not the issuance of A.O. No. 308 by the president is an unconstitutional
usurpation of the legislative powers of the congress of the Philippines.
Held:
Yes.
Administrative power is concerned with the work of applying policies and enforcing orders as
determined by proper governmental organs. It enables the President to fix a uniform standard of
administrative efficiency and check the official conduct of his agents. To this end, he can issue
administrative orders, rules and regulations.
Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate
to be covered by an administrative order. An administrative order is:
 "Sec. 3. Administrative Orders.-- Acts of the President which relate to particular aspects of
governmental operation in pursuance of his duties as administrative head shall be promulgated
in administrative orders."
An administrative order is an ordinance issued by the President which relates to specific aspects in the
administrative operation of government. It must be in harmony with the law and should be for the sole
purpose of implementing the law and carrying out the legislative policy.
It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of
1987. It establishes for the first time a National Computerized Identification Reference System. Such a
System requires a delicate adjustment of various contending state policies-- the primacy of national
security, the extent of privacy interest against dossier-gathering by government, the choice of policies,
etc. Indeed, the dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important
freedom of thought. As said administrative order redefines the parameters of some basic rights of our
citizenry vis-a-vis the State as well as the line that separates the administrative power of the President to
make rules and the legislative power of Congress, it ought to be evident that it deals with a subject that
should be covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law because it confers no
right, imposes no duty, affords no protection, and creates no office. Under A.O. No. 308, a citizen cannot
transact business with government agencies delivering basic services to the people without the
contemplated identification card. No citizen will refuse to get this identification card for no one can avoid
dealing with government. It is thus clear as daylight that without the ID, a citizen will have difficulty
exercising his rights and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives
no right and imposes no duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation
and consequently erodes the plenary power of Congress to make laws. This is contrary to the
established approach defining the traditional limits of administrative legislation. As well stated by Fisher:
"x x x Many regulations however, bear directly on the public. It is here that administrative legislation must
be restricted in its scope and application. Regulations are not supposed to be a substitute for the general
policy-making that Congress enacts in the form of a public law. Although administrative regulations are
entitled to respect, the authority to prescribe rules and regulations is not an independent source of power
to make laws."

Marbella. CJ
Group 2
Quasi-Judicial Power: Right Against Self – Incrimination

Pascual vs Board of Medical Examiners

28SCRA345
Facts:

Arsenio Pascual, Jr., filed with the Court of First Instance of Manila an action for prohibition with
prayer for preliminary injunction against the Board of Medical Examiners. It was alleged that at the initial
hearing of an administrative case for alleged immorality, counsel for complainants announced that he
would present Pascual as his first witness, who was the respondent in such malpractice charge. Pascual
relied on the constitutional right to be exempt from being a witness against himself. The Board of
Examiners, took note of such a plea, at the same time stating that at the next scheduled hearing, Pascual
would be called upon to testify as such witness, unless in the meantime he could secure a restraining
order from a competent authority.
Pascual then alleged that to compel him to take the witness stand, the Board of Examiners was
guilty of grave abuse of discretion for failure to respect the constitutional right against self-incrimination,
the administrative proceeding against him, which could result in forfeiture or loss of a privilege, being
quasi-criminal in character. His action for prohibition was granted by the lower court which subsequently
rendered judgment in his favor.
Issue: Whether or not Pascual’s right against self incrimination was being violated by the Board of
Medical Examiners by compelling him to testify against himself.
Held:
Yes.
We found for the petitioner in accordance with the well-settled principle that "the accused in a
criminal case may refuse, not only to answer incriminatory questions, but, also, to take the witness stand."
The constitutional guarantee protects as well the right to silence. As far back as 1905, we had
occasion to declare: "The accused has a perfect right to remain silent and his silence cannot be used as a
presumption of his guilt." Only last year, in Chavez v. Court of Appeals, speaking through Justice
Sanchez, we reaffirmed the doctrine anew that it is the right of a defendant "to forego testimony, to
remain silent, unless he chooses to take the witness stand with undiluted, unfettered exercise of his own
free genuine will."
We hold that in an administrative hearing against a medical practitioner for alleged malpractice,
respondent Board of Medical Examiners cannot, consistently with the self-incrimination clause, compel
the person proceeded against to take the witness stand without his consent.

Marbella, CJ
Group 2
Judicial Review: Doctrine of Exhaustion of Administrative Remedies

Hon. Carale, et al vs. Abarintos & Pontejos

G.R. No. 120704
Facts:
Private respondent Pontejos was issued an original and permanent appointment "Labor and
Employment Development Officer in the National Labor Relations Commission. Petitioner Chairman of
the NLRC, issued an Administrative Order detailing/reassigning private respondent to the NLRC, Fourth
Division, Cebu City.
Private respondent filed a complaint before the Regional Trial Court of Cebu City against herein
petitioners for Illegal Transfer Tantamount To Removal Without Cause and an action for injunction which
was granted.
Petitioners filed a motion to dismiss arguing that it is the Civil Service Commission which has
exclusive jurisdiction over any question concerning personnel movement. Said motion and motion for
reconsideration was denied by reason of urgency of judicial intervention. Hence petition.
Issue: Whether or not the judge has jurisdiction to review the validity of the transfer order issued by
petitioner chairman of the NLRC since the controversy is within the original and exclusive jurisdiction of
the Civil Service Commission.
Held:
No.
Observance of the mandate regarding exhaustion of administrative remedies is a sound practice
and policy. It ensures an orderly procedure which favors a preliminary sifting process, particularly with
respect to matters peculiarly within the competence of the administrative agency, avoidance of
interference with functions of the administrative agency by withholding judicial action until the
administrative process had run its course, and prevention of attempts to swamp the courts by a resort to
them in the first instance. The underlying principle of the rule rests on the presumption that the
administrative agency, if afforded a complete chance to pass upon the matter, will decide the same
correctly. There are both legal and practical reasons for this principle. The administrative process is
intended to provide less expensive and more speedy solutions to disputes. Where the enabling statute
indicates a procedure for administrative review, and provides a system of administrative appeal, or
reconsideration, the courts, for reasons of law, comity and convenience, will not entertain a case unless
the available administrative remedies have been resorted to and the appropriate authorities have been
given an opportunity to act and correct the errors committed in the administrative forum.
Accordingly, the party with an administrative remedy must not merely initiate the prescribed administrative
procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial
intervention in order to give the administrative agency an opportunity to decide the matter by itself
correctly and prevent unnecessary and premature resort to the court.
In the instant case, Pontejos did not attempt to seek administrative relief, which was both available and
sufficient. Initially, he could have asked for reconsideration of the detail order, failing which, he could have
gone directly to the CSC, through the MSPB, which is empowered to:
(2) Hear and decide cases brought before it by offices and employees who feel aggrieved
by the determination of appointing authorities involving . . . transfer, detail, reassignment
and other personnel actions, as well as complaints against any officers in the government
arising from personnel actions of these officers or from violations of the merit system.
exceptions to the rule:
(1) where the question is purely legal,
(2) where judicial intervention is urgent,
(3) when its application may cause great and irreparable damage,
(4) where the controverted acts violate due process,
(5) failure of a high government official from whom relief is sought to act on the matter, and
(6) when the issue of non-exhaustion of administrative remedies has been rendered moot.

Marbella, CJ
Group2
Judicial Review: Appeal to the President

Suyat Jr. vs Hon. Ruben Torres

G.R. No. 133530
Facts:
A robbery incident took place at the residential house of Atty. Reynaldo V. Bautista located at
Cainta, Rizal, and allegedly committed by Randy Torres, Nelson Torres, Marlon Bonson, and Bernardo
Bautista. The three were caught and dertained.
Imelda Torres, mother of suspects Randy and Nelson Torres, and also the aunt of suspect
Marlon Bonson, followed up the case with the Prosecutor’s Office of Rizal. She met the reviewing
prosecutor, Prosecutor Suyat Jr. who demanded the sum of P20,000.00 for the dismissal of the case
where after negotiations came to P15,000.00.
Imelda coordinated with the Anti-Organized crime Division of the NBI which formed a team to
entrap prosecutor Suyat Jr.
Imelda and her daughter came with the money and after Suyat jr. accepted the money, they
signaled the NBI which caught him red-handed.
Rosalina A. Espina, in her capacity as Supervising Agent of the National Bureau of Investigation,
filed with the Department of Justice an unnumbered administrative complaint accusing Prosecutor Suyat,
Jr. of grave misconduct and receiving for personal use of a fee, gift or other valuable thing in the course of
official duties in violation of Anti-Graft laws. She prayed for the dismissal of Prosecutor Suyat, Jr. from the
government service after due hearing of the case.
Finding that there was prima facie case, Secretary Franklin M. Drilon of the Department of Justice
issued a formal charge against Prosecutor Suyat, Jr. for the said administrative charge as well as
memorandum placing him under preventive suspension for ninety (90) days effective from receipt thereof
and while the case was under formal investigation of State Prosecutor Leah T. Armamento.
From the several hearings of the case, and in the light of the contending parties’ evidences
Secretary Franklin M. Drilon of the Department of Justice recommended to the then Executive Secretary
Teofisto T. Guingona, Jr. of the Office of the President the immediate dismissal of Prosecutor Suyat, Jr.
from the government service with forfeiture of all benefits under the law who concurred and
recommended to President Fidel V. Ramos the approval of the proposed Administrative Order.
On November 26, 1993, the Office of the President of the Philippines thru then Executive
Secretary Teofisto T. Guingona, Jr. issued the first questioned order dismissing Prosecutor Suyat, Jr. CA
dismissed the petition for review of the petitioner.
Issue: Whether or not petitioner’s petition for certiorari to the CA was an appropriate remedy.
Held:
No.
Section 7 of AO No. 18, Series of 1987, prohibits the filing of a second motion for reconsideration of the
final order or decision of the Office of the President of the Philippines Thus, the filing by the petitioner of a
second motion for reconsideration of AO No. 95, being a prohibited pleading, did not suspend the period
to appeal the February 28, 1996 Order to the CA via a petition for review. Indubitably then, when the
petitioner filed his petition for certiorari with the CA after the President denied his second motion for
reconsideration, AO No. 95 of the President had become final and executory, beyond the jurisdiction of
the CA to alter, modify, or reverse.

Maria Regina Zamora

Group 2

Quasi-Legislative Function: Necessity for Notice of Hearing

TAXICAB OPERATORS OF METRO MANILA, INC. vs. BOARD OF TRANSPORTATION

117 SCRA 597

FACTS:
The respondent Board of Transportation issued respondent Board of Transportation (BOT) issued
Memorandum Circular No. 77-42 prohibiting the operation of cars which were more than six years old.
Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed
that the records of the case could not be located. Petitioner Ace Transportation Corporation and
Felicisimo Cabigao are two of the members of the Taxicab Operators of Metro Manila, Incorporated
(TOMMI) claimed the prohibition violated procedural due process.

ISSUE:
Whether or not the promulgation of the questioned memorandum circular without notice and
hearing violate petitioners’ constitutional right to procedural due process.

RULING:
NO. The Supreme Court ruled that the leeway accorded the Board of Transportation gives it a
wide range of choice in gathering necessary information or data in the formulation of any policy, plan or
program. It is not mandatory that a conference should first be called or that the persons who may be
affected be required to submit position papers or other documents. Dispensing with a public hearing prior
to the issuance of the memorandum circular does NOT violate due process. Previous notice and hearing
are required for judicial and quasi- judicial proceedings but not for rules promulgated to govern future
conduct.
 Maria Regina Zamora
Group 2

Judicial Review: Appeal to the President

TAN vs. DIRECTOR OF FORESTRY

125 SCRA 302

FACTS:
The Bureau of Forestry issued Notice No. 2087, advertising for public bidding a certain tract of
public forest land situated in Olongapo, Zambales. Herein etitioner-appellant Wenceslao Vinzons Tan
submitted his application after paying the necessary fees and posting the required bond therefore. Nine
other applicants submitted their offers before the deadline. The proposed area was awarded to petitioner.
Thereafter he was given an Ordinary Timber License. However, It was not signed by the Secretary of
Agriculture and Natural Resources as required.
One of the bidders, Ravago Commercial Company wrote a letter to the Secretary of Agriculture
and Natural Resources praying that the license issued in the name of petitioner be cancelled or revoked
on the ground that the grant thereof was irregular, anomalous and contrary to existing forestry laws, rules
and regulations. The Secretary of Agriculture and Natural Resources revokes Tan’s timber license. His
motion for reconsideration was denied. Hence, this petition. Petitioner-appellant, in his petition, alleged
that he has exhausted all his administrative remedies to no avail as respondents-appellees have failed,
neglected, refused and continue to refuse to allow petitioner-appellant to continue operation in the area
covered by his timber license.

ISSUE:
Whether or not petitioner has exhausted all administrative remedies before filing his petition to the
Supreme Court.

HELD:
NO. The Supreme Court affirmed the decision of the CFI. Petitioner did not appeal the order of
the respondent Secretary of Agriculture and Natural Resources to the President of the Philippines, who
issued Executive Proclamation No. 238 withdrawing the area from private exploitation, and establishing it
as the Olongapo Watershed Forest Reserve. Considering that the President has the power to review on
appeal the orders or acts of the respondents, the failure of the petitioner-appellant to take that appeal is
failure on his part to exhaust all available administrative remedies.

Maria Regina Zamora

Group 2
Judicial Review: Appeal to the President

Calo vs. Fuertes

5 SCRA 399

FACTS:
In a previous case between the same parties, the Director of Lands rendered a decision
dismissing petitioner’s claim and contest against the Homestead Application of Fuertes. Petitioner’s
motion for reconsideration was denied by the Director of Lands. Despite modification of the said ruling by
the Secretary of Agriculture and Natural Resources, Calo was still dissatisfied and filed a Motion for
Reconsideration. Said Secretary denied the motion. Calo appealed to the President of the Philippines but
he withdrew it before the President of the Philippines could act thereon. Petitioner instead filed before the
CFI of Agusan petition for writs of certiorari and prohibition with preliminary injunction to stop the
enforcement of the decisions of the Director of Lands and the Secretary of Agriculture and natural
Resources. The lower court dismissed the case for failure to state a cause of action, for lack of jurisdiction
and for not exhausting all the administrative remedies available to him in the ordinary course of law. The
Court of Appeals affirmed the said decision. Hence, this petition.

ISSUE:
Whether or not petitioner has exhausted all administrative remedies available to him.

RULING:
NO. The Supreme Court ruled that the withdrawal of the appeal taken to the President of the
Philippines is tantamount to not appealing at all thereto. Such withdrawal is fatal, because the appeal to
the President is the last step he should take in an administrative case. Furthermore, a special civil action
for certiorari and prohibition under Rule 67 of the Rules of Court lies only when "there is no appeal, nor
any plain, speedy, and adequate remedy in the ordinary course of law." In the case at bar, appeal from an
opinion or order by the Secretary of Agriculture and Natural Resources to the President of the Philippines
is the plain, speedy and adequate remedy available to the petitioner.

Nicole L.Herrera
Group 2
Judicial Review: Question Maybe Subject of Judicial Review

Ortua v. Singson Encarnation

G.R. No. 39919, Jan.30, 1934
59 Phil 440

Facts:
Petitioner filed an application with the Bureau of Lands for the purchase of a tract of public land
situated in the municipality of San Jose, Province of Camarines Sur. His application was rejected,
allowing him, however, to file a sale or lease application for the portion of the land classified to be suited
for commercial purposes. Two motions for reconsideration were filed but denied.
One condition for the purchase of a tract of public agricultural land, provided by the Public Land
Law, is that the purchaser shall be a citizen of lawful age of the Philippines or the U.S. It was conceded by
the Director of Lands that presumptively Ortua was a Filipino but certain acts of Ortua were pointed to as
demonstrating that he had forfeited his citizenship.

Issue:
Whether or not Courts have the right to review decisions of the Bureau of Lands.

Held:
The Court ruled in the affirmative. The Director of Lands has been made by law a quasi judicial
officer. As such officer he makes findings of fact, even passes upon questions of mixed fact and law, and
considers and decides the qualifications of applicants for the purchase of public lands. The decisions of
the Director of Lands on the construction of the Public Land Law are entitled to great respect by the
courts.
A decision rendered by the Director of Lands and approved by the Secretary of Agriculture, upon
a question of fact is conclusive and not subject to be reviewed by the courts, in the absence of showing
that such decision was rendered in consequences of fraud, imposition, or mistake, other than error of
judgment in estimating the value or effect of evidence, regardless of whether or not it is consistent with
the preponderance of evidence, so long as there is some evidence upon which the finding in question
could be made.
 The decision of the Director of Lands approved by the Secretary of Agriculture on a question of
law is in no sense conclusive upon the courts, but is subject to review. Any action of the Director of Lands
which is based upon a misconstruction of the las can be corrected by the courts. The question whether or
not Ortua is a Filipino citizen was reversed. The Court ruled that Ortua is a Filipino citizen, that he had a
sort of dual citizenship.

Nicole L. Herrera
Group 2

Quasi-Legislative Function: Nature

Peralta v. Civil Service Commission (CSC)
212 SCRA 425

Facts:
Petitioner was appointed Trade-Specialist II in the Department of Trade and Industry (DTI). Upon
receiving his initial salary, he noticed that since he had no accumulated leave credits, DTI deducted from
his salary the amount corresponding to his absences during the cover period, inclusive of Saturdays and
Sundays.
Petitioner sent a memorandum to the Chief General Administrative Service inquiring as to the law
on salary deductions, if the employee has no leave credits. He was told that “when an employee is on
leave without pay on a day before or on a day immediately preceding a Saturday, Sunday or Holiday such
Saturday, Sunday or Holiday shall also be without pay.” The same answer was given by the Civil Service
Commission Chairman.
Petitioner argued that a rereading of the General Leave Law as contained in the Revised
Administrative Code and other pertinent laws, fails to disclose a specific provision which supports the
CSC rule at issue. Nevertheless, respondent CSC ruled against petitioner’s favor in both Resolution Nos.
90-497 and 90-797.
During the pendency of this petition, the respondent CSC promulgated Resolution No, 91-540,
amending the questioned policy, following petitioner’s line of argument.

Issue:
Validity of the CSC’s policy mandating salary deductions corresdponding to the intervening
Saturdays, Sundays, or Holidays where an employee without leave credits was absent on the
immediately preceding working day.

Held:
The policy was declared invalid. The construction by CSC of RA 2625 is not in accordance with
the legislative intent. RA 2625 specifically provides that government employees are entitled to 15 days
sick leave with full pay and 15 days vacation leave of absence with full pay, exclusive of Saturdays,
Sundays and Holidays in both cases. Thus, the law speaks of the granting of a right and the law does not
provide for a distinction between those who have accumulated leave credits and those who have
exhausted their leave credits in order to enjoy such right.
Government employees, whether or not they have accumulated leave credits, are not required by
law to work on Saturday, Sunday and Holidays and thus they can not be declared absent on such non
working days. They cannot and should not be deprived of their salary corresponding to said non-working
days just because they were absent without pay on the day immediately prior to, or after said non-working
days. A different rule would constitute a deprivation of property without due process.

Nicole Herrera
Group 2
Quasi-Judicial Power: Notice and Hearing

Civil Service Commission (CSC) v. Hernandez

G.R. No. 151095

Facts:
The Assistant Schools Division Superintendent of the DECS-CAR (Cordillera Administrative
Region) sent a letter to Velasquez, informing him of the alleged infractions committed by respondent
Hernandez, such as soliciting, accepting, and receiving sums of money in exchange for transfer of
promotion of complainant teachers. Velasquez convened a fact-finding committee to determine the
veracity of the alleged violations of Hernandez.
The Committee issued an Investigation Report recommending the filing of administrative and
criminal complaints against Hernandez. The complainants filed a formal charge to the office of the
Provincial Prosecutor of Abra for grave misconduct and other related laws. It indicted Hernandez for
violation of the Anti-Graft and Corrupt Practices Act and direct bribery. The decision was modified by the
Office of the Deputy Ombudsman by withdrawing the criminal case against direct bribery. In the
Administrative case filed against Hernandez, the CSC found the latter guilty of dishonest and grave
misconduct and ordered Hernandez’ dismissal. The CA reversed the resolutions of the CSC.

Issue:
Whether or not the CSC violated Hernandez’ right to due process in administrative proceedings.

Held:
The Court found respondent’s claim untenable. The essence of due process is that a party be
afforded a reasonable opportunity to be heard and to present any evidence he may have in support of his
defense or simply an opportunity to be heard. As applied to administrative proceedings, an opportunity to
seek a reconsideration of the action of ruling complained of. One may be heard, not solely by verbal
presentation, but also and perhaps even many times more creditably than oral argument, through
pleadings. Technical rules of procedure and evidence are not even strictly applied to administrative
proceedings, and administrative due process cannot be fully equated to due process in its strict judicial
sense.
Hernandez had been amply accorded the opportunity to be heard. She was required to answer
the formal charge against her and given the chance to present evidence in her behalf. She actively
participated in the proceedings and even cross-examined the witnesses against her. Clearly, based on
the above jurisprudential pronouncements the CA’s finding that Hernandez was denied due process is
without basis.
Administrative proceedings are governed by the “substantial evidence rule.” A finding of guilt in
an administrative case would have to be sustained for as long as it is supported by substantial evidence
that the respondent has committed the acts stated in the complaint or formal charge. This is different from
the quantum of proof required in criminal proceedings which necessitates a finding of guilt of the accused
beyond reasonable doubt.

Maria Dianne Tan

Group 2
 DOCTRINE OF PRIOR RESORT
DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES

Commissioner of Customs v. Navarro

G.R. No. L-33146 May 31, 1977

FACTS:
The Commissioner of Customs and the Collector of Customs sought to nullify and set aside the order of
respondent Judge Navarro, issuing a writ of preliminary injunction as prayed for by private respondents
Juanito Flores and Asiatic Inc. as importers of cartons of fresh fruits, restraining petitioners from
proceeding with the auction sale of such perishable goods. Classified as non-essential consumer
commodities, they were banned by the Central Bank Circulars Nos. 289, 294 and 295 as prohibited
importation subject to forfeiture proceedings by petitioners. Petitioners pointed out how violative was the
assumption of jurisdiction by respondent Judge over an incident of a pending seizure and forfeiture
proceeding which, as held in a number of decisions, was a matter falling within the exclusive competence
of the customs authorities. The Supreme Court issued a resolution requiring respondents to file an
answer and at the same time issuing a writ of preliminary injunction as prayed for by petitioners to prevent
the challenged order of respondent Judge from being implemented. Instead of preparing an answer, they
just submitted a manifestation stating that "after an intensive and serious study of the merit of the case,
the respondents have decided to abandon its interest in the case." The rationale behind such a move was
ostensibly the desire to avoid additional expenses, in view of the fact that "the shipments, being
perishable, have already deteriorated." It is difficult to avoid the suspicion that the real reason was that
the points of law raised by petitioners could not be refuted.

ISSUES:
1. Whether courts have jurisdiction over cases lodged into administrative bodies? No.
2. Whether petitioners have exhausted all administrative remedies? Yes. Certiorari lies.

RULING:
The question of seizure and forfeiture is for the administrative in the first instance and then the
Commissioner of Customs. This is a field where the doctrine of primary jurisdiction controls. Thereafter,
an appeal may be taken to the Court of Tax Appeals. A court of first instance is devoid of competence to
act on the matter. There is further judicial review, but only by this Court in the exercise of its certiorari
jurisdiction.

The controlling principle was set forth anew in Ponce Enrile v. Vinuya. Thus: "The prevailing doctrine is
that the exclusive jurisdiction in seizure and forfeiture cases vested in the Collector of Customs precludes
a court of first instance from assuming cognizance over such a matter." In Papa v. Mago, the opinion of
Justice Zaldivar for the Court emphatically asserted the doctrine anew in the following language: ‘It is the
settled rule, therefore, that the Bureau of Customs acquires exclusive jurisdiction over imported goods, for
the purposes of enforcement of the customs laws, from the moment the goods are actually in its
possession or control, even if no warrant of seizure or detention had previously been issued by the
Collector of Customs in connection with seizure and forfeiture proceedings.’ In the present case, the
Bureau of Customs actually seized the goods in question on November 4, 1966, and so from that date the
Bureau of Customs acquired jurisdiction over the goods for the purposes of the enforcement of the tariff
and customs laws, to the exclusion of the regular courts. Much less then would the Court of First Instance
of Manila have jurisdiction over the goods in question after the Collector of Customs had issued the
warrant of seizure and detention on January 12, 1967. And so, it cannot be said that the issuance of said
warrant was only an attempt to divest the respondent Judge of jurisdiction over the subject matter of the
case. The court presided by respondent Judge did not acquire jurisdiction over the goods in question
when the petition for mandamus was filed before it, and so there was no need of divesting it of
jurisdiction. Not having acquired jurisdiction over the goods, it follows that the Court of First Instance of
Manila had no jurisdiction to issue the questioned order of March 7, 1967 releasing said goods.

The petition likewise took pains to point out that the reliance by respondent Judge on Commissioner of
Customs v. Alikpala was misplaced. This Court, recognizing that the judiciary in the Philippines is vested
with both legal and equitable powers, did not deem it proper to set aside an injunction issued by the lower
court addressed to the customs authorities to stop the sale at public auction of imported fruits. The
warrants of seizure were issued in view of Central Bank Circulars Nos. 294 and 295, which provide that
'no-dollar imports not covered by Circular No. 247 shall not be issued any release certificates and shall be
referred to the Central Bank for official transmittal to the Bureau of Customs for appropriate seizure
proceedings. Evidently, in the opinion of the Collector of Customs himself, even in the light of those
circulars there exists no legal impediment to the release of the subject importations under bond, otherwise
he would not have agreed thereto, although he changed his requirement from surety bond to cash. In any
case, as pointed out by private respondents, the said importations had been ordered before Central Bank
Circulars 294 and 295 were promulgated, and since, the orders were made in accordance with previous
practice there could be no bad faith or intent to violate those circulars." Unfortunately, in this case
respondent Judge missed those significant distinctions. The importation in question was clearly violative
of the above Circulars Nos. 289, 294 and 295. Also petitioner Collector of Customs in this case was, in
accordance with law, definitely opposed to the release of the importation in question. He could not have
authorized it without being held liable for violating the Tariff and Customs Code and the applicable
doctrines of this Court. The petition therefore did not exaggerate matters when it emphasized that
respondent Judge, in issuing the writ of preliminary injunction sought to be nullified, acted in a manner
contrary to and in violation of the law, assuming jurisdiction over a matter beyond his competence.

Maria Dianne Tan

Group 2

NECESSITY FOR NOTICE OF HEARING

Lina, Jr. v. Carino

221 SCRA 515 (1993)

FACTS:
Petitioner disputes the legal authority of respondent to issue DECS Order No. 30, entitled “Guidelines on
Tuition and/or other School Fees in Private Schools, Colleges and Universities for School Year 1991-
1992.” DECS Order No. 30 allows private schools to increase tuition and other school fees, subject to the
guidelines there set out. Petitioner denies the legal authority of respondent to issue DECS Order No. 30,
considering that the authority to promulgate rules and regulations relating to the imposition of school fees
had been transferred to the State Assistance Council (SAC). Petitioner also contends that DECS Order
No. 30 is inconsistent with Section 10 of R.A. No. 6728. In DECS Order No. 30, respondent exempted
increases in school fees other than tuition fees from application of the consultation requirement. Upon the
other hand, Section 10 of R.A. No. 6728 provides that “in any proposed increase in the rate of tuition fee,
there shall be appropriate consultations conducted by the school administration with the duly organized
parents and teachers association and faculty associations with respect to secondary schools and with
student governments or councils, alumni and faculty associations with respect to colleges x x x.”
According to petitioner, Section 10 covers increases in all types of school fees, which increase must first
comply with the requirement of consultation before promulgation in order that prohibitive and burdensome
fees may be avoided. In fine, petitioner asks us to declare DECS Order No. 30 null and void on two
grounds: (1) that respondent does not have the legal authority to issue that Order, and (2) that DECS
Order No. 30 violates Section 10 of R.A. No. 6728 which established a comprehensive requirement of
consultation.

The Solicitor General, representing respondent maintains that the power to prescribe maximum tuition
and other school fees remains vested in the DECS Secretary. He further contends that DECS Order No.
30 conforms substantially with the consultation requirement of R.A. No. 6728 except item 1 (a) which
unqualifiedly allows private colleges and universities to raise the tuition fee in the tertiary level to not more
that P80.00 per unit without prior consultation. He therefore urges that DECS Order No. 30 be upheld,
save only paragraph 1 (a) thereof which he considers to be inconsistent with the consultation
requirement.

ISSUE:
Whether an increase in other fees other than tuition fees as provided for in DECS Order No. 30
requires prior consultation?

RULING:
No. Petitioner contends that Section 1 (d) (which provides that an increase in other fees need not require
prior consultation) of DECS Order No. 30 is inconsistent with Section 10 of R.A. No. 6728. We have
earlier pointed out that petitioner’s stand is inconsistent with the very language used in Section 10 of R.A.
No. 6728 which states in relevant part that: “in any proposed increase in the rate of tuition fees, there
shall be appropriate consultations –.” Petitioner’s argument here is, however, essentially an invocation of
“justice and equity”. The Court believes that petitioner’s argument – cogent though it may be as a social
and economic comment – is most appropriately addressed, not to a court which must take the laws as it is
actually written, but rather to the legislative authority which can, if it wishes, change the language and
content of the law. As Section 10 of R.A. No. 6728 now stands, we have no authority to strike down
paragraph 1 (d) of DECS Order No. 30 as inconsistent with the requirement of Section 10.

Maria Dianne Tan

Group 2

QUASI-LEGISLATIVE FUNCTION
A. NATURE

Sierra Madre Trust v. Secretary of Agriculture and Natural Resources

G.R. Nos. L-32370 & 32767 April 20, 1983

FACTS:
Petitioner filed with the Bureau of Mines an Adverse Claim against LLA No. V-7872 of the Jusan Trust
Mining Company over six (6) lode mineral claims. The adverse claim that the six (6) lode mineral claims
encroached and overlapped the eleven (11) lode mineral claims of petitioner. It prayed for an order or
decision declaring the six (6) lode mineral claims of Jusan Trust Mining Company, null, void and illegal
and denying lode lease application LLA No. V-7872 over said claims. Likewise, petitioner filed with the
Bureau of Mines an Adverse Claim against LLA No. V-9028 of the J&S Partnership over six (6) lode
mineral claims. The adverse claim alleged that the six (6) lode mineral claims encroached and overlapped
the thirteen (13) lode mineral claims of petitioner. It prayed for an order or decision declaring the six (6)
lode mineral claims of J&S Partnership, null, void and illegal and denying lode lease application of LLA
No. V-9028 over the said claims. The Director of Mines rendered a decision holding that respondents
have the preferential right over said claims and the adverse claims of petitioner are dismissed. The
Secretary of Agriculture and Natural Resources also rendered a decision holding that the appeal
interposed by the appellant petitioner is dismissed and the decision of the Director of Mines affirmed. The
adverse claims of petitioner against respondents were based on the allegation that the lode lease
applications of the latter “encroached and overlapped” the former’s mineral claims. The Director of Mines
found that there exists no conflict or overlapping of claims. And this finding was affirmed by the Secretary
of Agriculture and Natural Resources.

ISSUE:
Whether the decision and/or findings of the Director of Mines as affirmed by the Secretary of
Agriculture and Natural Resources conclusive and thus entitled to great respect?

RULING:
Yes. We see no reason why We have to answer the questions in this petition considering that there is no
justiciable issue between the parties. The officers of the Executive Department tasked with administering
the Mining Law have found that there is neither encroachment nor overlapping in respect of the claims
involved. Accordingly, whatever may be the answers to the questions will not materially serve the
interests of the petitioner. In closing it is useful to remind litigation prone individuals that the interpretation
by officers of laws which are entrusted to their administration is entitled to great respect.' In his decision,
the Secretary of Agriculture and Natural Resources said: "This Office is in conformity with the findings of
the Director of Mines that the mining claims of the appellees were validly located, surveyed and
registered.”

BANGCOY, Paolo Martin S.

Group 2
Powers of Administrative Agency: Sufficient Standard Test
ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES, petitioner,
vs.
HOME DEVELOPMENT MUTUAL FUND, respondent.

FACTS:
On 1 September 1995, the HDMF Board of Trustees, pursuant to Section 5 of Republic Act No. 7742,
issued Board Resolution No. 1011, Series of 1995, amending and modifying the Rules and Regulations
Implementing R.A. No. 7742. As amended, Section 1 of Rule VII provides that for a company to be
entitled to a waiver or suspension of Fund coverage, it must have a plan providing for both
provident/retirement and housing benefits superior to those provided under the Pag-IBIG Fund.
On 16 November 1995, PETITIONER filed with the respondent an application for Waiver or Suspension
of Fund Coverage because of its superior retirement plan. In support of said application, PETITIONER
submitted to the HDMF a letter explaining that the 1995 Amendments to the Rules are invalid.
In a letter dated 18 March 1996, the President and Chief Executive Officer of HDMF disapproved
PETITIONER's application on the ground that the requirement that there should be both a provident
retirement fund and a housing plan is clear in the use of the phrase "and/or," and that the Rules
Implementing R.A. No. 7742 did not amend nor repeal Section 19 of P.D. No. 1752 but merely implement
the law.
PETITIONER's appeal with the HDMF Board of Trustees was denied for having been rendered moot and
academic by Board Resolution No. 1208, Series of 1996, removing the availment of waiver of the
mandatory coverage of the Pag-IBIG Fund, except for distressed employers.
On 31 March 1997, PETITIONER filed a petition for review before the Court of Appeals. On motion by
HDMF, the Court of Appeals dismissed the petition on the ground that the coverage of employers and
employees under the Home Development Mutual Fund is mandatory in character as clearly worded in
Section 4 of P.D. No. 1752, as amended by R.A. No. 7742. There is no allegation that petitioner is a
distressed employer to warrant its exemption from the Fund coverage.

ISSUE:

Whether or not the Amendments to the Rules and Regulations Implementing RA No. 7742, and the
subsequent repeal of Section 19 of PD No. 1752 are within the delegated power of the Board.

HELD:

We find for the petitioner. It is without doubt that the HDMF Board has rule-making power as provided in
Section 51 of RA No. 7742 and Section 13 of PD No. 1752. However, it is well-settled that rules and
regulations, which are the product of a delegated power to create new and additional legal provisions that
have the effect of law, should be within the scope of the statutory authority granted by the legislature to
the administrative agency. It is required that the regulation be germane to the objects and purposes of
the law, and be not in contradiction to, but in conformity with, the standards prescribed by law.

In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995
Amendments to the Rules and Regulations Implementing RA No. 7742 that employers should have both
provident/retirement and housing benefits for all its employees in order to qualify for exemption from the
Fund, it effectively amended Section 19 of PD No. 1752. And when the Board subsequently abolished
that exemption through the 1996 Amendments, it repealed Section 19 of PD No. 1752. Such amendment
and subsequent repeal of Section 19 are both invalid, as they are not within the delegated power of the
Board. The HDMF cannot, in the exercise of its rule-making power, issue a regulation not consistent with
the law it seeks to apply. Indeed, administrative issuances must not override, supplant or modify the law,
but must remain consistent with the law they intend to carry out. Only Congress can repeal or amend the
law.
 BANGCOY, Paolo Martin S.
Group 2
Quasi-Judicial Power: Administrative Appeal and Review

SGMC REALTY CORPORATION, petitioner,

vs.
OFFICE OF THE PRESIDENT (OP), RIDGEVIEW REALTY CORPORATION, SM INVESTMENTS
CORPORATION, MULTI-REALTY DEVELOPMENT CORP., HENRY SY SR., HENRY SY JR., HANS T.
SY, MARY UY TY and VICTOR LIM, respondents.

FACTS:

On March 29, 1994, petitioner filed before the Housing and Land Use Regulatory Board (HLURB) a
complaint for breach of contract, violation of property rights and damages against private respondents.
After the parties filed their pleadings and supporting documents, the arbiter rendered a decision
dismissing petitioner's complaint as well as private respondents' counterclaim.
Petitioner then filed a petition for review with the Board of Commissioners of the HLURB which, however,
dismissed said petition. On October 23, 1995, petitioner received a copy of said decision of the Board of
Commissioners. On November 20, 1995, petitioner filed an appeal with public respondent. After the
parties filed their memorandum, they filed their respective draft decisions as ordered by public
respondent.
On June 18, 1996, public respondent, without delving into the merits of the case, dismissed the appeal.
Petitioner contends that the period of appeal from the HLURB to the Office of the President is thirty (30)
days from receipt by the aggrieved party of the decision appealed from in accordance with Section 27 of
the 1994 Rules of Procedure of HLURB and Section 1 of Administrative Order No. 18, series of 1987, of
the Office of the President.
ISSUE:
Whether or not public respondent committed grave abuse of discretion in ruling that the reglementary
period within which to appeal the decision of HLURB to public respondent is fifteen days.

HELD:
We find petitioner’s contention bereft of merit.
As pointed out by public respondent, the aforecited administrative order allows aggrieved party to file its
appeal with the Office of the President within thirty (30) days from receipt of the decision complained of.
Nonetheless, such thirty-day period is subject to the qualification that there are no other statutory periods
of appeal applicable. If there are special laws governing particular cases which provide for a shorter or
longer reglementary period, the same shall prevail over the thirty-day period provided for in the
administrative order.
We note that indeed there are special laws that mandate a shorter period of fifteen (15) days within which
to appeal a case to public respondent. An example of this is Section 2 of Presidential Decree No. 1344
states that decisions of the National Housing Authority shall become final and executory after the lapse of
fifteen (15) days from the date of its receipt. The latter decree provides that the decisions of NHA is
appealable only to the Office of the President. Further, we note that the regulatory functions of NHA
relating to housing and land development has been transferred to Human Settlements Regulatory
Commission, now known as HLURB.8 Thus, said presidential issuances providing for a reglementary
period of appeal of fifteen days apply in this case.
In this case, petitioner received a copy of the decision of HLURB on October 23, 1995. Considering that
the reglementary period to appeal is fifteen days, petitioner has only until November 7, 1995, to file its
appeal. Unfortunately, petitioner filed its appeal with public respondent only on November 20, 1995 or
twenty-eight days from receipt of the appealed decision, which is obviously filed out of time.
As the appeal filed by petitioner was not taken within the reglementary period, the prescriptive period for
perfecting an appeal continues to run. Consequently, the decision of the HLURB became final and
executory upon the lapse of fifteen days from receipt of the decision. Hence, the decision became
immutable; it can no longer be amended nor altered by public respondent. Accordingly, inasmuch as the
timely perfection of an appeal is a jurisdictional requisite, public respondent has no more authority to
entertain the petitioner's appeal. Otherwise, any amendment or alteration made which substantially
affects the final and executory judgment would be null and void for lack of jurisdiction.

BANGCOY, Paolo Martin S.

Group 2
Judicial Review: Exception to the Doctrine
JUAN LORENZO B. BORDALLO, RESTITUTO G. DE CASTRO and NOEL G. OLARTE, petitioners,
vs.
THE PROFESSIONAL REGULATIONS COMMISSION and THE BOARD OF MARINE DECK
OFFICERS, respondents.
FACTS:

On February 24, 1998, President Fidel V. Ramos approved Republic Act No. 8544 entitled "An Act
Regulating the Practice of the Merchant Marine Profession in the Philippines," otherwise known as the
"Philippine Merchant Marine Officers Act of 1998."

Section 2 of R.A. No. 8544 declares it the policy of the State to "institutionalize radical changes as
required by international and national standards to insure that only qualified, competent and globally
competitive Marine Deck/Engineer Officers as determined through licensure examinations shall be
allowed entry to the practice of the Merchant Marine profession." Section 17 of the said law lays down the
requirements for an examinee to be qualified as having passed the examination: “To be qualified as
having passed the board examination for Marine Deck/Engineer Officer, a candidate must obtain a
weighted general average of seventy percent (70%), with no grade lower than sixty percent (60%) in any
given subject. An examinee who obtains a weighted general average rating of seventy (70%) but obtains
a rating below sixty percent (60%) in any given subject must take the examination in the subject or
subjects where he obtained a grade below sixty percent (60%)”

Significantly, the passing rating prescribed by the above provision (70%) is lower than that prescribed by
Presidential Decree No. 97 (Regulating the Practice of the Marine Professions in the Philippines),
otherwise known as the Philippine Merchant Marine Officers Law. Section 9 thereof sets a passing rating
of seventy-five percent (75%).
R.A. No. 8544 also provides for the creation of the Board of Marine Desk Officers. The Board is
empowered to adopt and promulgate the law's Implementing Rules and Regulations.
On April 25, 26 and 27, 1998, respondent Board of Marine Deck Officers conducted the examination for
deck officers. Petitioner Juan Lorenzo Bordallo took the examination for Chief Mate, petitioner Restituto
de Castro for Second Mate, and petitioner Noel Olarte for Third Mate. At that time, the Board had not yet
issued the syllabi and the rules and regulations pursuant to Republic Act No. 8455.
Subsequently, petitioners received notices from respondent Professional Regulatory Commission (PRC)
that they failed in their respective examinations. Petitioners secured certifications from the PRC their
respective ratings. None of the petitioners obtained a general weighted average of 75%, although all of
them had general weighted averages of more than 70%. None of them had a rating of less than 60% in
any of the subjects.
On May 21, 1998, petitioners filed a petition before the Board of Marine Deck Officers claiming that, in
accordance with Section 17 of R.A. No. 8544, they should be considered as having passed the April 1998
Examination for Deck Officers. The Board of Marine Deck Officers denied the petition.
Petitioners received a copy of the Board's Order on February 9, 1999. On February 25, 1999, petitioners
filed before the Court of Appeals a petition for mandamus, naming the PRC and the Board of Marine Deck
Officers as respondents.
The Court of Appeals denied the petition because petitioners did not appeal from the adverse order of the
Board of Marine Deck Officers to the PRC but went straight to the Court of Appeals on mandamus.
ISSUE:
Whether or not the resort to mandamus in the Court of Appeals was invalid.
HELD:
We do not agree that the resort to mandamus in the Court of Appeals was unwarranted. As a rule, where
the law provides for the remedies against the action of an administrative board, body, or officer, relief to
courts can be sought only after exhausting all remedies provided. The rule on exhaustion of
administrative remedies is not absolute but admits of exceptions. One of these exceptions is when the
question is purely legal, such as the one presented in the case at bar. The failure of petitioners to appeal
to the PRC, therefore, is not fatal to petitioners' cause.

BANGCOY, Paolo Martin S.

Group 2
Judicial Review: Exception to the Doctrine
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 Muntinglupa, and JOHN DOES, respondents.
FACTS:
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.
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. Consequently, upon representations made by Bunye
with the Municipal Council, the latter approved on 1 August 1988 Resolution No. 45 abrogating the
contract.
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.
The writ applied for having been denied, 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, We
remanded the same to the Court of Appeals which docketed it as C.A.-G.R. No. L-16930.
Thereafter, the following transpired which subsequently gave rise to these petitions:
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, allegedly through force, violence and intimidation, forcibly broke open the
doors of the offices of petitioners located at the second floor of the KBS Building, new Muntinlupa Public
Market, purportedly to serve upon petitioners the Order of respondent Secretary of Agriculture dated 28
October 1988, and to implement the same, by taking over and assuming the management of KBMBPM,
disbanding the then incumbent Board of Directors for that purpose and excluding and prohibiting the
General Manager and the other officers from exercising their lawful functions as such.
Petitioners filed a petition, praying that upon the filing of the petition, respondents, their agents,
representatives or persons acting on their behalf be ordered to refrain, cease and desist from enforcing
and implementing the questioned Order or from excluding the individual petitioners from the exercise of
their rights as such officers and, in the event that said acts sought to be restrained were already partially
or wholly done, to immediately restore the management and operation of the public market to petitioners,
order respondents to vacate the premises and, thereafter, preserve the status quo; and that, finally, the
challenged Order be declared null and void.
In the Resolution of 9 October 1988, We required the respondents to Comment on the petition. Before
any Comment could be filed, petitioners filed on 2 January 1989 an Urgent Ex-Parte Motion praying that
respondent Atty. Rogelio Madriaga, who had assumed the position of Chairman of the Management
Committee, be ordered to stop and/or cancel the scheduled elections of the officers of the KBMBPM on 6
January 1989 and, henceforth, desist from scheduling any election of officers or Members of the Board of
Directors thereof until further orders on the Court. The elections were, nevertheless, held and a new
board of directors was elected. So, on 19 January 1989, petitioners filed a supplemental motion 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. He denies the factual allegations
in the petition and claims that petitioners failed to exhaust administrative remedies.
ISSUE:
Whether or not the doctrine of exhaustion of administrative remedies is applicable in the case at bar.
HELD:
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. 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, or where the questioned act is patently illegal,
arbitrary or oppressive. Such is the claim of petitioners which, as hereinafter shown, is correct.
 ALBARICO, Allesandra Fay V.
Group 2

Quasi-Legislative Function: Necessity for Notice of Hearing

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,

vs.
THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent.

FACTS:

On February 21, 1987, the Task Force on Private Higher Education created by the Department of
Education, Culture and Sports submitted a report entitled "Report and Recommendations on a Policy for
Tuition and Other School Fees."
The DECS took note of the report of the Task Force and on the basis of the same, the DECS,
through the respondent Secretary of Education, Culture and Sports issued an Order authorizing, inter alia,
the 15% to 20% increase in school fees as recommended by the Task Force. The petitioner sought a
reconsideration of the said Order, apparently on the ground that the increases were too high. Thereafter,
the DECS issued Department Order No. 37 dated April 10, 1987 modifying its previous Order and
reducing the increases to a lower ceiling of 10% to 15%, accordingly. Despite this reduction, the
petitioner still opposed the increases.
Petitioner maintains that the questioned Department Order was issued in violation of the due
process clause of the Constitution in asmuch as the petitioner was not given due notice and hearing
before the said Department Order was issued.
Petitioner maintains that students and parents are interested parties that should be afforded an
opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that the
questioned Order constitutes a denial of substantive and procedural due process of law.

ISSUE:
Whether or not the questioned Department Order was issued in violation of the due process
clause of the Constitution in asmuch as the petitioner was not given due notice and hearing before the
said Department Order was issued.

HELD:
The function of prescribing rates by an administrative agency may be either a legislative or an
adjudicative function. If it were a legislative function, the grant of prior notice and hearing to the affected
parties is not a requirement of due process. As regards rates prescribed by an administrative agency in
the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such
rates. When the rules and/or rates laid down by an administrative agency are meant to apply to all
enterprises of a given kind throughout the country, they may partake of a legislative character. Where the
rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its
function is quasi-judicial in character.
The assailed Department Order prescribes the maximum school fees that may be charged by all private
schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not
essential to the validity of its issuance.

ALBARICO, Allesandra Fay V.

Group 2

Judicial Review: Doctrine of Finality of Administrative Action

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA) (PSLINK-TUCP), petitioner,

vs.
PERLITA BATHAN-VELASCO Officer in Charge, Bureau of Labor Relations,
ALERT AND CONCERNED EMPLOYEES FOR BETTER SSS (ACCESS), SOCIAL SECURITY
SYSTEM, respondents.

FACTS:
On September 28, 1989, respondent Alert and Concerned Employees for Better Social Security
System (ACCESS) filed with the Bureau of Labor Relations a petition for certification election to determine
the sole and exclusive bargaining representative of the rank and file employees of respondent Social
Security System (SSS).
Petitioner Social Security System Employees Association (SSSEA) (PSLINK-TUCP) was one of
the contending parties in the certification election, with respondent Alert and Concerned Employees for
Better SSS (ACCESS) as the other party.
On October 11, 1991, the certification elections were held, with ACCESS garnering 1,378 votes,
SSSEA obtaining 1,116 votes, and "No Union" collecting 40 votes.
On September 29, 1992, SSSEA filed an Election Protest and/or Motion to Nullify Certification
Elections in the SSS Regional Office After October 11, 1991.
On November 18, 1992, respondent Velasco denied the Election Protest and/or Motion to Nullify
Certification Elections in the Regional Offices After October 11, 1991, declared ACCESS the winner in the
certification election, and certified ACCESS as the sole and exclusive bargaining representative of all the
rank and file employees of SSS for the purpose of negotiating an agreement with the latter.

ISSUE:
Whether or not the decision of the Administrative Agency as regards factual issues has the effect
of finality.
HELD:
The issues raised by petitioner call for a review of the factual findings of public respondent.
Petitioner argues that the certification election should not have proceeded because of the pendency of a
formal charge of a company — initiated, dominated, or supported union with the Bureau of Labor
Relations. Petitioner further contends that no certification election was held in the regional offices of
respondent SSS on October 11, 1991, resulting in incomplete certification election, thereby rendering null
and void the proclamation of ACCESS as the winner of the election.
Factual issues are not proper subject of an original petition for certiorari before the Supreme
Court, as its power to review is limited to questions of jurisdiction or grave abuse of discretion of judicial or
quasi-judicial tribunals or officials. Judicial review does not extend to an evaluation of the sufficiency of
the evidence upon which the proper labor officer or office based his or its determination.

ALBARICO, Allesandra Fay V.

Group 2

Powers of Administrative Agency: Completeness Test

THE SOLICITOR GENERAL, RODOLFO A. MALAPIRA, STEPHEN A. MONSANTO, DAN R.
CALDERON, and GRANDY N. TRIESTE, petitioners
vs.
THE METROPOLITAN MANILA AUTHORITY and the MUNICIPALITY OF MANDALUYONG,
respondents.

FACTS:
Ordinance No. 7, Series of 1988, of Mandaluyong, was issued authorizing the confiscation of
driver's licenses and the removal of license plates of motor vehicles for traffic violations.
On May 24, 1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991,
authorizing itself "to detach the license plate/tow and impound attended/ unattended/ abandoned motor
vehicles illegally parked or obstructing the flow of traffic in Metro Manila."
The provision appears to be in conflict with the decision of the Court in Gonong case, where it
was held that the license plates of motor vehicles may not be detached except only under the conditions
prescribed in LOI 43. Additionally, the Court has received several complaints against the confiscation by
police authorities of driver's licenses for alleged traffic violations, which sanction is, according to the said
decision, not among those that may be imposed under PD 1605.
The Metropolitan Manila Authority defended the said ordinance on the ground that it was adopted
pursuant to the powers conferred upon it by EO 392. It particularly cited Section 2 thereof vesting in the
Council (its governing body) the responsibility among others of:
1. Formulation of policies on the delivery of basic services requiring coordination or consolidation for the
Authority; and
2. Promulgation of resolutions and other issuances of metropolitan wide application, approval of a code of
basic services requiring coordination, and exercise of its rule-making powers.

ISSUE:
Whether or not there was a valid delegation of legislative power in as much as the statute
complied with the completeness test.

HELD:
The Metro Manila Authority sustains Ordinance No. 11, Series of 1991, under the specific
authority conferred upon it by EO 392, while Ordinance No. 7, Series of 1988, is justified on the basis of
the General Welfare Clause embodied in the Local Government Code. It is not disputed that both
measures were enacted to promote the comfort and convenience of the public and to alleviate the
worsening traffic problems in Metropolitan Manila due in large part to violations of traffic rules.
The Court holds that there is a valid delegation of legislative power to promulgate such measures, it
appearing that the requisites of such delegation are present. These requisites are. 1) the completeness of
the statute making the delegation; and 2) the presence of a sufficient standard.
Under the first requirement, the statute must leave the legislature complete in all its terms and provisions
such that all the delegate will have to do when the statute reaches it is to implement it. What only can be
delegated is not the discretion to determine what the law shall be but the discretion to determine how the
law shall be enforced. This has been done in the case at bar.
As a second requirement, the enforcement may be effected only in accordance with a sufficient standard,
the function of which is to map out the boundaries of the delegate's authority and thus "prevent the
delegation from running riot." This requirement has also been met. It is settled that the "convenience and
welfare" of the public, particularly the motorists and passengers in the case at bar, is an acceptable
sufficient standard to delimit the delegate's authority.
But the problem before us is not the validity of the delegation of legislative power. The question we must
resolve is the validity of the exercise of such delegated power.

NICO B. VALDERRAMA
GROUP 2
Quasi-Legislative Function: Nature

WILMER GREGO vs. COMMISSION ON ELECTIONS

G.R. NO. 125955, June 19, 1997

FACTS:
On October 31, 1981, Humberto Basco was removed from his position as Deputy Sheriff by the
Commission on Elections (COMELEC) upon finding of serious misconduct in an administrative complaint
lodged against him. By virtue of such order, Basco was dismissed from service with forfeiture of all
retirement benefits and with prejudice to reinstatement to any position in the national or local government,
including its agencies and instrumentalities, or government-owned or controlled corporations.
Subsequently, Basco ran as a candidate for Councilor in the 2 nd District of the City of Manila during the
January 18, 1988 local elections where he won and assumed office. After his term, he sought reelection
in the May 11, 1992 synchronized national elections where he succeeded. However, his victory was
challenged by his opponents namely, Cenon Ronquillo and Honorio Lopez II, who filed cases against
Basco citing the COMELEC ruling mentioned earlier that dismissed Basco from public service. These
challenges were dismissed and paved the way for Basco’s continued stay. During the May 8, 1995 local
elections, Basco sought for a third and final term where he emerged 6th in a battle for six councilor seats.
On May 13, 1995, Wilmer Grego, a registered voter of the 2 nd District of the City of Manila, filed a petition
to disqualify Basco, suspend his proclamation and declare Romualdo Maranan as the 6 th duly elected
Councilor in replacement of Basco. On the same day, the Chairman of the Manila City Board of
Canvassers (BOC) was duly furnished with a copy of the petition. The COMELEC conducted a hearing of
the case on May 14, 1995, where it ordered the parties to submit their respective memoranda. On May
17, 1995, the Manila City BOC proclaimed Basco as a duly elected councilor. Basco immediately took his
oath of office before the Honorable Ma. Ruby Bithao-Camarista of the Manila Metropolitan Trial Court-
Branch I. Greco contends that pursuant to Section 6 of RA 6646, COMELEC “may” during the pendency
of a disqualification case, order the suspension of the proclamation of the candidate in question whenever
the evidence of guilt is strong. Moreover, he cited Section 5, Rule 25 of the COMELEC Rules of
Procedure that says, the candidate’s proclamation “shall” be suspended notwithstanding the fact that he
received the winning number of votes in such election.

ISSUE:
Whether or not the COMELEC acted in accordance with the law when it promulgated its rules
(COMELEC Rules of Procedure) regarding disqualification cases when it used the word “shall” when RA
6466 only provided the word “may” in suspending a candidate’s proclamation.
RULING:
The Supreme Court reiterated that the power administrative officials to promulgate rules and
regulations in the implementation of a statute is necessarily limited only to carrying into effect what is
provided in the legislative enactment. The regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law and for the purpose of carrying into effect
its general provisions. By such regulations, the law itself can not be extended. So long, however, as the
regulations relate solely to carrying into effect the provision of the law, they are valid. The Supreme Court
ruled that since Section 6 of RA 6646, the law which Section 5 of Rule 25 of the COMELEC Rules of
Procedure seeks to implement, employed the word “may”, it is therefore, improper and highly irregular for
the COMELEC to have used instead the word “shall” in its rules. Further, it stated that in case of
discrepancy between the basic law and a rule or regulation issued to implement said law, the basic law
prevails because said rule or regulations cannot go beyond the terms and provisions of the basic law.

NICO B. VALDERRAMA
GROUP 2

Quasi-legislative Function: Right Against Self-Incrimination

MANUEL CABAL vs. RUPERTO KAPUNAN

G.R. NO. L-19052, December 29, 1962

FACTS:
On or about August 1961, Col. Jose Maristela of the Philippine Army filed with the Secretary of
National Defense a letter-complaint charging Manuel Cabal, then Chief of Staff of the Armed Forces of
the Philippines, with “graft, corrupt practices, unexplained wealth, conduct unbecoming of an officer and
gentleman, dictatorial tendencies, giving false statements of his assets and liabilities in 1958 and other
equally reprehensible acts. On September 6, 1961, the President of the Philippines created a committee
of five members consisting of three former justices and two generals to investigate the chare of
unexplained wealth contained in the said letter-complaint and submit its report and recommendations as
soon as possible. At the beginning of the investigation, on September 15, 1961, the Committee, upon
request of complainant Col. Maristela, considered Cabal to take the witness stand and be sworn to as
witness for Col. Maristela in support of his charge of unexplained wealth. Cabal objected personally and
invoked his constitutional right against self-incrimination. The Committee insisted that Cabal take the
witness stand and be sworn to, subject to his right to refuse to answer such questions as may be
incriminatory. Still, Cabal refused. The Committee was therefore obliged, in a communication dated
September 18, 1961 to refer the matter to the City Fiscal of Manila. On September 28, 1861, the City
Fiscal charged Cabal with contempt under Section 580 of the Revised Administrative Code with the Court
of First Instance of Manila.

ISSUE:
Whether or not Cabal’s constitutional right against self-incrimination applies in the investigation
conducted by the committee.

RULING:
The Supreme Court ruled that since the proceedings instituted by the committee are deemed
criminal or penal. Hence, the exemption of Cabal from the obligation to be a witness against himself is
available to him. The purpose of the investigation is to apply the provisions of Anti-Graft Law or RA 1379
which authorizes the forfeiture of the State of property of a public officer or employee which is manifestly
out of proportion to his salary as such public officer or employee and his other lawful income and the
income from legitimately acquired property. Such forfeiture has been held by the Supreme Court to
partake a nature of a penalty. The rule protecting a person from being compelled to furnish evidence
which would incriminate him exists not only when he is liable criminally to prosecution and punishment but
also when his answer would tend to expose him to a forfeiture. In the case at bar, the investigation is
deemed to be criminal in nature notwithstanding the fact that the procedure is civil. Thus, Cabal can
invoke his constitutional right against self-incrimination.
 NICO B. VALDERRAMA
GROUP 2

Judicial Review: Effect on Compliance

ELMER ESPINA vs. COURT OF APPEALS

G.R. NO. 97903, August 24, 1998

FACTS:
Elmer Espina and Miguel Cotiamco were candidates for director of Leyte IV Electric Cooperative
(LEYECO IV), representing the Baybay South District. On May 23, 1990, Espina filed with the LEYECO
IV District Election Committee (DECOM) a petition to disqualify Cotiamco on the ground that Cotiamco
was not a bonafide member of the LEYECO IV. The DECOM endorsed the petition to the National
Electrification Administration (NEA) on May 26, 1990. On May 27, 1990, the election for the position of
director of the LEYECO IV, Baybay South District was held where Cotiamco garnered 636 votes while
Espina got 599 votes. Accordingly, Cotiamco was proclaimed winner by the DECOM and sworn in as
member of the board on June 6, 1990. On June 27, 1990, the NEA remanded the petition for
disqualification filed by Espina to the DECOM for proper disposition on the ground that the latter had
original jurisdiction over the case. After hearing, the DECOM rendered a decision on July 28, 1990
disqualifying Cotiamco. Consequently, Espina took his oath and assumed office. Cotiamco appealed to
the NEA on October 1, 1990. The NEA found that Cotiamco was a bonafide member of the LEYECO IV.
It reversed the DECOM and declared Cotiamco duly elected director of LEYECO IV, Baybay South
District. On October 23, 1990, Espina filed with the Court of Appeals a petition for certiorari and
prohibition with an urgent prayer for the issuance of a temporary restraining order and a writ of preliminary
and permanent injunction. Cotiamco moved for the dismissal on the ground of lack of jurisdiction of the
Court of Appeals, failure of Espina to exhaust administrative remedies and lack of merit of the petition.
On March 15, 1991, the Court of Appeals upheld the order of the NEA. It found the order of the NEA
dated October 1, 1990 issued in the exercise of its power of supervision and control over electric
cooperatives, and that the findings of the NEA were supported by substantial evidence. Espina then filed
a petition to the Supreme Court to review the ruling of the Court of Appeals.

ISSUE:
Whether or not Espina’s failure to exhaust administrative remedies warrants the dismissal of his
petition for review

RULING:
The Supreme Court said that the rule of exhaustion of administrative remedies is not absolute but
admits of exceptions. One of these exceptions is when only a question of law is involved and nothing of
an administrative in nature is to be done or can be done. The case at bar, the issue whether private
respondent Cotiamco is a member of the cooperative is one which calls for the interpretation and
application of both the law creating the NEA and the by-laws of the LEYECO IV. Moreover, the
exhaustion of administrative remedies can be disregarded if there was a grave abuse of discretion. The
ruling of the NEA that Cotiamco is a bonafide member of the cooperative and for that reason was
qualified to be a director contravenes both the provisions of PD 269 and the by-laws of the LEYECO IV. It
was an error for the Court of Appeals to affirm such ruling which was clearly rendered with grave abuse of
discretion.
 NICO B. VALDERRAMA
GROUP 2
Quasi-Legislative Function: Necessity for Notice of Hearing

COMMISSION OF INTERNAL REVENUE vs. COURT OF APPEALS

G.R. NO. 119322, June 4, 1996

FACTS:
On June 1, 1993, the President of the Philippines issued a Memorandum creating a Task Force
to investigate the tax liabilities of manufacturers engaged in tax evasion scheme, such as selling products
through dummy marketing corporations to avoid payment of correct internal revenue tax, to collect from
any tax liabilities discovered from such investigation and to file the necessary criminal actions against
those who may have violated the tax code. The task force was composed of the Commissioner of
Internal Revenue, a representative of the Department of Justice and a representative of the Executive
Secretary. On July 1, 1993, the Commissioner issued a Revenue Memorandum Circular No. 37-93
reclassifying best selling cigarettes bearing the brands “Hope”, “More” and “Champion” as cigarettes of
foreign brands subject to a higher rate of tax without notice of hearing to Fortune Tobacco Corporation
who sells the mentioned brands. On August 3, 1993, Fortune questioned the validity of the
reclassification of said brands as violative of its right to due process and equal protection of law.
Parenthetically, the Court of Appeals ruled on September 8, 1993 that the reclassification made by the
Commissioner is of “doubtful legality” and enjoined its enforcement.

ISSUE:
Whether or not Revenue Memorandum Circular No. 37-93 is valid despite the lack of notice of
hearing to Fortune Tobacco Corporation
RULING:
The Supreme Court ruled that the Revenue Memorandum Circular No. 37-93 which reclassified
the cigarette brands and subjected them to higher tax rate, is invalid for lack of notice, publication and
public hearing. A revenue regulation, even if quasi-legislative in nature should observe due process.
The subject revenue memorandum circular affects a private entity which is about to suffer from the
consequences of such circular. Therefore, the private entity, which is Fortune Tobacco Corporation in the
case at bar, should be given the opportunity to be notified and be heard before they can be covered by
the circular. Administrative regulations in general are not required to strictly follow the constitutional
requirement on notice of hearing. However, the rule is not absolute. In case an administrative regulation
affects a particular entity and separable from the general public, notice of hearing should be required in
the observance of the due process. Revenue Memorandum Circular No. 37-93 is not a administrative
regulation for the general public but pertains only to Fortune Tobacco Corporation. Hence, notice of
hearing is required, otherwise, it is invalid.

Quasi-Legislative Function: Second Requisite

Voltaire Acosta
Group 2

Cebu Oxygen and Acetylene Co., Inc. Vs. Drilon

176 SCRA 24
Facts:
Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central Visayas
Employees Association (COAVEA) entered into a collective bargaining agreement (CBA) covering the
years 1986 to 1988. Pursuant thereto, the management gave salary increases:
On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, as follows:
Sec. 2. The statutory minimum wage rates of workers and employees in the private
sector, whether agricultural or non-agricultural, shall be increased by ten pesos (P10.00)
per day, except non-agricultural workers and employees outside Metro Manila who shall
receive an increase of eleven pesos (P11.00) per day: Provided, that those already
receiving above the minimum wage up to one hundred pesos (Pl 00.00 shall receive an
increase of ten pesos (Pl 0.00) per day. Excepted from the provisions of this Act are
domestic helpers and persons employed in the personal service of another.
The Secretary of Labor issued the pertinent rules implementing the provisions of Republic Act No. 6640.
Section 8 thereof provides:
Section 8. Wage Increase Under Individual/Collective Agreements. — No wage increase
shall be credited as compliance with the increase prescribed herein unless expressly
provided under valid individual written/collective agreements; and, provided further, that
such wage increase was granted in anticipation of the legislated wage increase under the
act. Such increases shall not include anniversary wage increases provided on collective
agreements.
In sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage
increases negotiated under a collective bargaining agreement against such wage increases mandated by
Republic Act No. 6640.
Accordingly, petitioner credited the first year increase of P200.00 under the CBA and added the difference
of P61.66 (rounded to P62.00) and P31.00 to the monthly salary and the 13th month pay, respectively, of
its employees from the effectivity of Republic Act No. 6640 on December 14,1987 to February 15, 1988.
On February 22, 1988, a Labor and Employment Development Officer, commenced a routine inspection
of petitioner's establishment. Upon completion of the inspectio, and based on payrolls and other records,
he found that petitioner committed violations of the law:
1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two (2)
months representing 208 employees who are not receiving wages above P100/day
2. Under payment of 13th month pay for the year 1987, representing 208 employees who
are not receiving wages above P 100/day
On April 7, 1988, respondent Assistant Regional Director, issued an Order instructing petitioner to pay its
208 employees the aggregate amount of P 131,248.00,
In sum, the Assistant Regional Director ordered petitioner to pay the deficiency of P200.00 in the monthly
salary and P 231.00 in the 13th month pay of its employees for the period stated. Petitioner protested the
Order of the Regional Director on the ground that the anniversary wage increases under the CBA can be
credited against the wage increase mandated by Republic Act No. 6640. Hence, petitioner contended that
inasmuch as it had credited the first year increase negotiated under the CBA, it was liable only for a
salary differential of P 62.00 and a 13th month pay differential of P31.00. Petitioner argued that the
payment of the differentials constitutes full compliance with Republic Act No. 6640. Apparently, the
protest was not entertained. Petitioner brought the case immediately to this Court without appealing the
matter to the Secretary of Labor and Employment. This Court issued a temporary restraining order
enjoining the Assistant Regional Director from enforcing his Order. The thrust of the argument of
petitioner is that Section 8 of the rules implementing the provisions of Republic Act No. 6640 particularly
the provision excluding anniversary wage increases from being credited to the wage increase provided by
said law is null and void on the ground that the same unduly expands the provisions of the said law.
Issue:
Whether or not an Implementing Order of the Secretary of Labor and Employment (DOLE) can provide for
a prohibition not contemplated by the law it seeks to implement.
Held:
This petition is impressed with merit.
As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which
prohibits the employer from crediting the anniversary wage increases provided in collective bargaining
agreements, it is a fundamental rule that implementing rules cannot add or detract from the provisions of
law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the crediting of
CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The
implementing rules cannot provide for such a prohibition not contemplated by the law. Administrative
regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. The
law itself cannot be expanded by such regulations. An administrative agency cannot amend an act of
Congress. 3 Thus petitioner's contention that the salary increases granted by it pursuant to the existing
CBA including anniversary wage increases should be considered in determining compliance with the
wage increase mandated by Republic Act No. 6640, is correct. However, the amount that should only be
credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage
increase for 1986 had already accrued in favor of the employees even before the said law was enacted.
Petitioner therefor correctly credited its employees P62.00 for the differential of two (2) months
increase and P31.00 each for the differential in 13th month pay, after deducting the P200.00 anniversary
wage increase for 1987 under the CBA. Indeed, it is stipulated in the CBA that in case any wage
adjustment or allowance increase decreed by law, legislation or presidential edict in any particular year
shall be higher than the foregoing increase in that particular year, then the company (petitioner) shall pay
the difference.
Petition is hereby GRANTED.

Voltaire Acosta
Group 2
Quasi-Judicial Power: Notice and Hearing
Cruz Vs. Civil Service Commission
370 SCRA 650

Facts:
The Chairperson of the Civil Service Commission (CSC), received a letter from Carmelita
Esteban, claiming that, during the examinations for non-professional in the career civil service on July 30,
1989 in Quezon City, Zenaida C. Paitim, the Municipal Treasurer of Norzagaray, Bulacan, falsely
pretending to be the examinee, Gilda Cruz, a co-employee in the said office, took the examinations for the
latter. Carmelita Esteban requested the CSC to investigate the matter.
Erlinda A. Rosas, Director IV of the Commission, issued a Memorandum to Eliseo Gatchalian, the
Director of the Management Information Office of the Commission, requesting the latter to furnish her with
the picture seat plan of the room where Gilda G. Cruz was during the said examination, to ascertain the
veracity of the letter-complaint. Erlinda Rosas wrote a Memorandum to Civil Service Commissioner
Thelma P. Gaminde, declaring that based on the record, she found a prima facie case against Zenaida
Paitim and Gilda G. Cruz.
On the basis of said memorandum, a fact finding investigation was conducted. A "Formal Charge" for
"Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service" signed by
Bella Amilhasan, Director IV of the Civil Service Commission Regional Office No. 3 was filed against
Gilda Cruz and Zenaida C. Paitim, with the Civil Service Commission.
The petitioners filed their Answer to the charge entering a general denial of the material averments of the
"Formal Charge." They also declared that they were electing a formal investigation on the matter. The
petitioners subsequently filed a Motion to Dismiss averring that if the investigation will continue, they will
be deprived of their right to due process because the Civil Service Commission was the complainant, the
Prosecutor and the Judge, all at the same time.
Director Bella A. Amilhasan issued an order denying the motion. The subsequent motion for
reconsideration of said order was likewise dismissed.
Dulce J. Cochon, Attorney III of the CSC was thereby directed to conduct the formal administrative
investigation of petitioners' case.
On November 16, 1995, Dulce J. Cochon issued an "Investigation Report and Recommendation" finding
the Petitioners guilty of "Dishonesty" and ordering their dismissal from the government service.
The Civil Service Commission finding the petitioners guilty of the charges and ordered their dismissal
from the government
Petitioners then went up to the Court of Appeals assailing the resolution of the CSC.
the Court of Appeals dismissed the petition before it. The motion for reconsideration was, likewise,
denied.
Hence, this petition.
Issue:
Whether or not the constitutional right of the petitioners to due process was violated.
Held:
Supreme Court find no merit in the petition.
There is no question that petitioner Zenaida Paitim, masquerading herself as petitioner Gilda Cruz, took
the civil service examinations in her behalf. Gilda Cruz passed the examinations. On the basis of a tip-off
that the two public employees were involved in an anomalous act, the CSC conducted an investigation
and verified that the two employees were indeed guilty of dishonesty. Thus, in accordance with the CSC
law, the petitioners merited the penalty of dismissal.
Petitioners' contention that they were denied due process of law by the fact that the CSC acted as
investigator, complainant, prosecutor and judge, all at the same time against the petitioners is untenable.
The CA correctly explained that the CSC is mandated to hear and decide administrative case instituted by
it or instituted before it directly or on appeal including actions of its officers and the agencies attached to it
pursuant to Book V, Title 1, Subtitle A, Chapter 3, Section 12, paragraph 11 of the Administrative Code of
1987 which states:
(11) Hear and decide administrative cases instituted by or brought before it directly or on appeal,
including contested appointments, and review decisions and actions of its offices and of the
agencies attached to it. Officials and employees who fail to comply with such decisions, orders, or
rulings shall be liable for contempt of the Commission. Its decisions, orders, or rulings shall be
final and executory. Such decisions, orders, or rulings may be brought to the Supreme Court on
certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof;
The fact that the complaint was filed by the CSC itself does not mean that it could not be an impartial
judge. As an administrative body, its decision was based on substantial findings. Factual findings of
administrative bodies, being considered experts in their field, are binding on the Supreme Court. The
records clearly disclose that the petitioners were duly investigated by the CSC and found that:
After a careful examination of the records, the Commission finds respondents guilty as charged.
The photograph pasted over the name Gilda Cruz in the Picture Seat Plan (PSP) during the July
30, 1989 Career Service Examination is not that of Cruz but of Paitim. Also, the signature over
the name of Gilda Cruz in the said document is totally different from the signature of Gilda Cruz.
Wherefore, the petition is Denied. The assailed decision of the Court of Appeals is Affirmed.
 Voltaire Acosta
Group 2
Doctrine of Res Judicata
FELIPE YSMAEL, JR. & CO., INC., petitioner,
vs.
THE DEPUTY EXECUTIVE SECRETARY, respondents.
673 SCRA 190
Facts:
Soon after the change of government in February 1986, petitioner sent a letter to the Office of the
President, and another letter to Minister Ernesto Maceda of the Ministry of Natural Resources [MNR],
seeking: (1) the reinstatement of its timber license agreement which was cancelled during the Marcos
administration; (2) the revocation of TLA No. 356 which was issued to Twin Peaks Development and
Realty Corporation without public bidding and in violation of forestry laws, rules and regulations; and, (3)
the issuance of an order allowing petitioner to take possession of all logs found in the concession area
Petitioner made the following allegations:
(a) That on October 12, 1965, it entered into a timber license agreement designated as TLA No. 87 with
the Department of Agriculture and Natural Resources, wherein it was issued an exclusive license to cut,
collect and remove timber except prohibited species within a specified portion of public forest land located
in the municipality of Maddela, province of Nueva Vizcaya * from October 12, 1965 until June 30, 1990;
(b) That on August 18, 1983, the Director of the Bureau of Forest Development, Director Edmundo
Cortes, issued a memorandum order stopping all logging operations in Nueva Vizcaya and Quirino
provinces, and cancelling the logging concession of petitioner and nine other forest concessionaires,
pursuant to presidential instructions and a memorandum order of the Minister of Natural Resources
Teodoro Pena
(c) That on August 25, 1983, petitioner received a telegram from the Bureau,requesting to stop all
logging operations to conserve remaining forests and to pull-out all their machineries and equipments
within 30 days
(d) That after the cancellation of its timber license agreement, it immediately sent a letter addressed to
then President Ferdinand Marcos which sought reconsideration of the Bureau's directive, citing in support
thereof its contributions to alleging that it was not given the forest conservation and opportunity to be
heard prior to the cancellation of its logging 531, but no operations
(e) That barely one year thereafter, approximately one-half or 26,000 hectares of the area formerly
covered by TLA No. 87 was re-awarded to Twin
Peaks Development and Reality Corporation under TLA No. 356 which was set to expire on July 31,
2009, while the other half was allowed to be logged by Filipinas Loggers, Inc. without the benefit of a
formal award or license; and,
(f) That the latter entities were controlled or owned by relatives or cronies of deposed President Ferdinand
Marcos. Acting on petitioner's letter, the MNR through then Minister Ernesto Maceda issued an order
dated July 22, 1986 denying petitioner's request. The Ministry ruled that a timber license was not a
contract within the due process clause of the Constitution, but only a privilege which could be withdrawn
whenever public interest or welfare so demands, and that petitioner was not discriminated against in view
of the fact that it was among ten concessionaires whose licenses were revoked in 1983.
Petitioner moved for reconsideration of the aforestated order reiterating, among others. its request that
TLA No. 356 issued to private respondent be declared null and void. The MNR however denied this
motion
Petitioner's supplemental motion for reconsideration was likewise denied. Meanwhile, per MNR
Administrative Order No. 54, series of 1986, issued on November 26, 1986, the logging ban in the
province of Quirino was lifted.
Petitioner subsequently appealed from the orders of the MNR to the Office of the President. In a
resolution, the Office of the President, denied petitioner's appeal for lack of merit.Petitioner's motion for
reconsideration was denied.
Hence, petitioner filed directly with this Court a petition for certiorari, with prayer for the issuance of a
restraining order or writ of preliminary injunction. On October 13, 1987, it filed a supplement to its petition
for certiorari. Thereafter, public and private respondents submitted their respective comments, and
petitioner filed its consolidated reply thereto. In a resolution, the Court resolved to give due course to the
petition.
Issue:
Whether or not Res Judicata is applicable in the case at bar.
Held:
It is an established doctrine in this jurisdiction that the decisions and orders of administrative agencies
have upon their finality, the force and binding effect of a final judgment within the purview of the doctrine
of res judicata. These decisions and orders are as conclusive upon the rights of the affected parties as
though the same had been rendered by a court of general jurisdiction. The rule of res judicata thus forbids
the reopening of a matter once determined by competent authority acting within their exclusive jurisdiction
In the case at bar, petitioner's letters to the Office of the President and the MNR [now the Department of
Environment and Natural Resources (DENR, sought the reconsideration of a memorandum order issued
by the Bureau of Forest Development which cancelled its timber license agreement in 1983, as well as
the revocation of TLA No. 356 subsequently issued by the Bureau to private respondents in 1984.
But as gleaned from the record, petitioner did not avail of its remedies under the law, i.e. Section 8 of
Pres. Dec. No. 705 as amended, for attacking the validity of these administrative actions until after 1986.
By the time petitioner sent its letter dated April 2, 1986 to the newly appointed Minister of the MNR
requesting reconsideration of the above Bureau actions, these were already settled matters as far as
petitioner was concerned [See Rueda v. Court of Agrarian Relations, 106 Phil. 300 (1959); Danan v.
Aspillera G.R. No. L-17305, November 28, 1962, 6 SCRA 609; Ocampo v. Arboleda G.R. No. L-48190,
August 31, 1987, 153 SCRA 374].
No particular significance can be attached to petitioner's letter dated September 19, 1983 which petitioner
claimed to have sent to then President Marcos, seeking the reconsideration of the 1983 order issued by
Director Cortes of the Bureau. It must be pointed out that the averments in this letter are entirely different
from the charges of fraud against officials under the previous regime made by petitioner in its letters to
public respondents herein. In the letter to then President Marcos, petitioner simply contested its inclusion
in the list of concessionaires, whose licenses were cancelled, by defending its record of selective logging
and reforestation practices in the subject concession area. Yet, no other administrative steps appear to
have been taken by petitioner until 1986, despite the fact that the alleged fraudulent scheme became
apparent in 1984 as evidenced by the awarding of the subject timber concession area to other entities in
that year.
WHEREFORE, the present petition is DISMISSED.
SO ORDERED.