[G.R. No. 98310. October 24, 1996.

]
MATUGUINA INTEGRATED WOOD PRODUCTS, INC. vs. The HON. COURT OF APPEALS,

FACTS

In 1973, license was issued to Milagros Matuguina to operate logging businesses under her group
Matuguina Logging Enterprises. MIWPI was established in 1974 with 7 stockholders. Milagros Matuguina
became the majority stockholder later on. Milagros later petitioned to have MLE be transferred to MIWPI.
Pending approval of MLE’s petition, Davao Enterprises Corporation filed a complaint against MLE before
the District Forester (Davao) alleging that MLE has encroached upon the area allotted for DAVENCOR’s
timber concession. The Investigating Committee found MLE guilty as charged and had recommended the
Director to declare that MLE has done so. MLE appealed the case to the Ministry of Natural Resources. Â
During pendency, Milagrosa withdrew her shares from MIWPI.

Later, MNR Minister Ernesto Maceda found MLE guilty as charged. Pursuant to the finding,
DAVENCOR and Philip Co requested Maceda to order MLE and/or MIWPI to comply with the ruling to pay
the value in pesos of 2352.04 m3 worth of timbers. The Minister then issued a writ of execution against
MIWPI. MIWPI filed a petition for prohibition before the Davao RTC. The RTC ruled in favor of MIWPI and
has ordered to enjoin the Minister from pursuing the execution of the writ. DAVENCOR appealed and the
CA reversed the ruling of the RTC.

MIWPI averred that it is not a party to the original case (as it was MLE that was sued – a separate
entity). That the issuance of the order of execution by the Minister has been made not only without or in
excess of his authority but that the same was issued patently without any factual or legal basis, hence, a
gross violation of MIWPI’s constitutional rights under the due process clause.

ISSUE

Whether or not MIWPI’s right to due process has been violated.

RULING

The SC ruled in favor of MIWPI. Generally accepted is the principle that no man shall be affected
by any proceeding to which he is a stranger, and strangers to a case not bound by judgment rendered by
the court. In the same manner an execution can be issued only against a party and not against one who
did not have his day in court.

There is no basis for the issuance of the Order of Execution against the MIWPI. The same was
issued without giving MIWPI an opportunity to defend itself and oppose the request of DAVENCOR for
the issuance of a writ of execution against it. In fact, it does not appear that MIWPI was at all furnished
with a copy of DAVENCOR’s letter requesting for the Execution of the Minister’s decision against it. MIWPI
was suddenly made liable upon the order of execution by the respondent Secretary’s expedient
conclusions that MLE and MIWPI are one and the same, apparently on the basis merely of DAVENCOR’s
letter requesting for the Order, and without hearing or impleading MIWPI. Until the issuance of the Order
of execution, MIWPI was not included or mentioned in the proceedings as having any participation in the
encroachment in DAVENCOR’s timber concession. This action of the Minister disregards the most basic
tenets of due process and elementary fairness. The liberal atmosphere which pervades the procedure in
administrative proceedings does not empower the presiding officer to make conclusions of fact before
hearing all the parties concerned.